3/2018 JM GROUP INTERIM REPORT JANUARY SEPTEMBER 2018

Transcription

1 3/218 JM GROUP INTERIM REPORT JANUARY SEPTEMBER 218

2 POSITIVE DEVELOPMENT IN SALES IN STOCKHOLM GOOD PROFITABILITY CONTINUED JANUARY SEPTEMBER 218 Revenue decreased to SEK 12,11m (12,457) and operating profit decreased to SEK 1,443m (1,73. The operating margin decreased to 12. percent (13.9). Profit includes a loss in JM Construction of SEK 61m (24) Profit before tax decreased to SEK 1,387m (1,958). Profit after tax decreased to SEK 1,79m (1,588) Return on equity for the past twelve months decreased to 27.7 percent (39.7). Earnings per share during the nine-month period amounted to SEK 15.5 (22.4) Consolidated cash flow including net investment in properties amounted to SEK 456m (1,868) The number of residential units sold decreased to 1,712 (2,416) and housing starts decreased to 2,97 (2,69) JULY SEPTEMBER 218 Revenue amounted to SEK 3,832m (3,813) and operating profit decreased to SEK 411m (543). The operating margin decreased to 1.7 percent (14.2). A negative revaluation in the JM Construction business unit resulted in a loss of SEK 61m (5) Profit before tax decreased to SEK 39m (528). Profit after tax decreased to SEK 33m (41 Consolidated cash flow including net investment in properties was SEK 234m (574) The number of residential units sold decreased to 613 (68 and housing starts decreased to 68 (97 The operations in JM Construction will be assessed during the fourth quarter with regard to future focus and scope Including gains of SEK 275m from the sale of the participations in Småa AB in 217 ACCORDING TO SEGMENT REPORTING SEK M / Revenue 12,11 12,457 3,832 3,813 16,562 17,8 Operating profit 1,443 1, ,81 2,369 Operating margin, % Profit before tax 1,387 1, ,8 2,579 Cash flow from operating activities 456 1, ,13 Return on equity, % Equity/assets ratio, % Earnings per share, SEK Number of residential units sold 1,712 2, ,396 3,1 Number of housing starts 2,97 2, ,28 3,873 Number of residential units in current production 8,243 7,739 8,2 Revenue according to IFRS 11,474 12,713 3,65 4,62 16,36 17,275 Operating profit according to IFRS 1,397 1, ,46 2,456 Earnings per share according to IFRS, SEK IFRS 15 Revenue from Contracts with Customers is applied to the consolidated income statement and balance sheet, which means that revenue and profit and loss for JM s operations outside of Sweden, JM International, are reported according to the completed contract method. Segment reporting and project management are reported according to the percentage of completion method. The consolidated statements in accordance with IFRS are presented on pages For definitions of key financial figures, see the document entitled Definitions of key financial figures at jm.se/investors. Unless otherwise specified, the analysis and comments in this interim report are based on JM s segment reporting. Cover photo: Bergerløkka, Asker, Norway 2

3 GROUP The housing market in Stockholm is cautious, but stabilization continued in the third quarter. The cautious market applies in particular to new production of residential units with a long time until occupancy, although the willingness to sign a contract early in the process has improved in recent quarters. Sales of our residential units in Stockholm showed positive development in the third quarter, in particular given the limited supply for occupancy in the near future. Sales in the third quarter were at the same level as in the second quarter. Housing starts in Stockholm during the quarter were supported by a normal level of reservations, and profitability continues to be good in the current production volume. The planned housing start in the third quarter of a project in Stockholm that has a high reservation rate was deferred pending a final agreement regarding municipal development work. Part of our contracting operations in Stockholm have profitability problems, which means that we will evaluate in the fourth quarter the future focus and scope of the contracting business. Our housing operations in the rest of Sweden are showing good profitability in a largely stable market, where sales in the third quarter increased slightly compared to the second quarter. Housing starts in the third quarter were slightly lower than in the second quarter. In Norway, the level of activity on the housing market was good, and the housing market in Finland was stable during the third quarter. Our business in the foreign operations has continued to develop well in 218, including good land acquisitions that is gradually broadening the geographic scope of the housing business. Sales in our foreign operations in the third quarter were slightly lower than in the second quarter, in part due to the limited number of housing starts in Norway. We are planning to increase the number of housing starts in Norway in the fourth quarter assuming continued stable sales growth and well-functioning planning processes. We have noted that the supply of residential development properties in Stockholm is relatively high, and JM has a very good position to take advantage of the possibilities for acquisitions that may arise. In the rest of Sweden, competition for land declined slightly during the year. JM s strong financial position also supports our decision to prioritize the start of new housing projects. During the quarter, one of the projects we started is a large project in Norway, Bergerløkka, with a first phase of 12 residential units in popular Asker. It is centrally located close to Sandvika and Oslo. Asker Municipality is planning to build more than 1,6 residential units here in a new residential area, and JM is one of several companies that has been entrusted with the development of the area. JM will be responsible for the development of in total around 57 residential units in the area. In September, we invited decision-makers and partners to JM s Urban Development Day. The objective, in addition to the exchange of information, was to increase awareness about JM as a competent urban and social developer: that JM is a long-term actor with a wide range of skills and primarily builds tenant-owner apartments but also rental apartments, freehold apartments, commercial premises, and residential care accommodation. We also highlighted our sustainability work and Trygg Bostadsrättsförening (Safe Tenant-Owner Association), an industry initiative that JM and other housing companies stand behind to strengthen consumer protection on the tenant-owned apartment market. This mark of quality assurance identifies and describes critical key performance indicators so the housing customer can easily compare the economic commitments associated with newly produced apartments. The initiative benefits households, serious housing producers and lenders and contributes to the development of an efficient market for new production. We are well-positioned with a good project portfolio that we continue to improve for the housing of the future, at the same time as our strong balance sheet offers us freedom. Johan Skoglund, President and CEO Råsunda 11, Solna 3

4 MARKET, SALES AND HOUSING STARTS JANUARY SEPTEMBER 218 The housing market in Stockholm is cautious, but stabilization continued in the third quarter. Housing starts in Stockholm were supported by a normal level of reservations, and profitability continued to be good in the current production volume. The housing operations in the rest of Sweden are showing good profitability in a market that is primarily stable. In Norway, the level of activity on the housing market was good with a slight increase in prices, and the housing market in Finland was stable. The geographic scope of JM s housing business is gradually expanding. Population growth in our main markets, coupled with continued low interest rates, supports demand for housing. The number of residential units sold in the form of signed contracts decreased to 1,712 (2,416), and sales in the third quarter were at the same level as in the second quarter, 613 and 619 residential units, respectively. The percentage of sold or reserved homes in relation to current production amounts to 59 percent (7, with an interval of 6-65 percent considered normal. The percentage has increased slightly from 58 percent in the second quarter. JM Residential Stockholm sold 565 residential units (955), JM Residential Sweden sold 678 (1,, JM International sold 469 (46) and JM Property Development sold (). The number of housing starts amounted to 2,97 (2,69) 2), and housing starts in the third quarter were lower than in the second quarter, 68 and 847 residential units, respectively. In the third quarter, no rental apartments were started compared to 128 in the second quarter. JM Residential Stockholm started production on 662 residential units (1,119), JM Residential Sweden on 783 (1,5, JM International on 524 (52) and JM Property Development on 128 (). In addition to demand, planning processes continue to be an important criterion for the rate of housing starts. The number of residential units in current production increased to 8,243 (7,739), of which 681 are rental units and residential care units (416). Of which rental units and residential care units (). 2) Of which 128 rental units and residential care units (). OPERATING PROFIT BY BUSINESS SEGMENT, SEK M / JM Residential Stockholm 757 1, ,154 1,438 JM Residential Sweden JM International JM Property Development JM Construction Group-wide expenses Total 1,443 1, ,81 2,369 Of which property sales OPERATING MARGIN BY BUSINESS SEGMENT, % / JM Residential Stockholm JM Residential Sweden JM International JM Construction SEK m 6 REVENUE GROUP SEK m 18 OPERATING PROFIT AND OPERATING MARGIN SEK m GROUP % According to segment reporting 215 Revenue per quarter month period Operating profit per quarter (SEK m) 12-month period operating profit (SEK m) According to segment reporting month period margin (%) 4

5 REVENUE, OPERATING PROFIT AND OPERATING MARGIN JANUARY SEPTEMBER 218 Consolidated revenue in accordance with segment reporting decreased to SEK 12,11m (12,457). Revenue restated according to IFRS decreased to SEK 11,474m (12,713). Operating profit according to segment reporting decreased to SEK 1,443m (1,73, and the operating margin decreased to 12. percent (13.9). Operating profit restated according to IFRS decreased to SEK 1,397m (1,87). The restatement is related to JM International and had an effect on earnings of SEK 46m (76). Profit includes a loss in JM Construction of SEK 61m (24). During the nine-month period, properties were sold for SEK 83m (15) with gains of SEK 1m (14). Rental income from JM s project properties increased to SEK 45m (28). Net rental income increased to SEK 28m (17). JULY SEPTEMBER 218 Consolidated revenue according to segment reporting for the third quarter amounted to SEK 3,832m (3,813). Revenue restated according to IFRS decreased to SEK 3,65m (4,62). Operating profit according to segment reporting decreased to SEK 411m (543), and the operating margin decreased to 1.7 percent (14.2). Operating profit restated according to IFRS decreased to SEK 384m (582). The restatement is related to JM International and had an effect on earnings of SEK 27m (39). Profit includes a loss in JM Construction of SEK 61m (5). During the third quarter, properties were sold for SEK 11m () with gains/losses of SEK 1m (). Rental income from JM s project properties increased to SEK 16m (1). Net rental income increased to SEK 11m (7). RESIDENTIAL BUILDING RIGHTS JANUARY SEPTEMBER 218 The number of available building rights amounted at the end of the nine-month period to 36,7 (34,8), of which 2,3 (18,1) are recognized in the balance sheet. Capital tied up in building rights (development properties in the balance sheet) for residential units increased to SEK 8,47m (6,924). JM acquired development properties for residential units during the nine-month period for SEK 2,248m (1,214), of which SEK 1,32m relates to JM Residential Stockholm, SEK 285m to JM Residential Sweden and SEK 643m to JM International. RESIDENTIAL UNITS IN CURRENT PRODUCTION 9/3/218 9/3/217 12/31/217 Number of residential units in current production 2) 8,243 7,739 8,2 Percentage of sold residential units in current production, % 3) Percentage reserved residential units in current production, % Percentage sold and reserved residential units in current production, % Of which rental units and residential care units in current production in JM Property Development are not included in the percentage of sold and reserved residential units in current production Including residential units in projects where costs incurred are only reported as project properties under construction ) Beginning with production start-up through final occupancy according to plan. 3) Percentage of sold residential units expressed as binding contract with the end customer. UNSOLD UNITS 9/3/218 9/3/217 12/31/217 Completed production, number of unsold units The number of unsold residential units in the balance sheet reported as Participations in tenant-owners associations, etc After final occupancy according to plan. Number 2 5 HOUSING STARTS GROUP Number 5 Number 1 RESIDENTIAL UNITS IN CURRENT PRODUCTION % Housing starts per quarter month period JM Residential Stockholm JM Residential Sweden JM International Total Percentage sold/reserved, Group(%) Normal level sold/reserved (6-65%) Including rental units and residential care units in JM Property Development not included in percentage of sold/reserved 5

6 FINANCIAL ITEMS JANUARY SEPTEMBER 218 Net financial items were somewhat lower than in the previous year, excluding the sale in 217 of the participations in Småa AB. The total interest-bearing loan stock according to segment reporting increased to SEK 2,395m (1,834), of which the provision for pensions comprised SEK 1,375m (1,297). At the end of the nine-month period, the average interest rate for the total interest-bearing loan stock including pension liabilities was 2.5 percent (2.5). The average term for fixed-rate loans excluding the pension liability was.2 years (.2). Consolidated available liquidity was SEK 4,654m (5,357). Aside from cash and cash equivalents of SEK 1,854m (2,557), this includes unutilized overdraft facilities and credit lines totaling SEK 2,8m (2,8), where credit agreements for SEK 2,4m had an average maturity of 3.3 years (1.7). Interest-bearing net liabilities according to segment reporting totaled SEK 541m ( 727) at the end of the nine-month period. Non-interest-bearing liabilities for completed property acquisitions amounted to SEK 1,23m (543). Of these liabilities, SEK 324m (394) were current. The valuation of financial assets and liabilities shows that there is no material difference between the carrying amount and the fair value. SEK M / Financial income Financial expenses Financial income and expenses Of which gains from the sale of participations in Småa AB ACCORDING TO SEGMENT REPORTING, SEK M / Interest-bearing net liabilities(+)/receivables( ) at beginning of period Change in interest-bearing net liabilities/receivables 1,331 1, ,268 1,225 Interest-bearing net liabilities(+)/receivables( ) at end of the period SEK m CASH FLOW GROUP SEK m INTEREST-BEARING NET LIABILITIES(+)/RECEIVABLES(-) GROUP times , , , sept Cash flow per quarter 12-month period Interest-bearing net liabilities(+)/receivables(-) Total cash flow for the period According to segment reporting Debt/equity ratio 6

7 CASH FLOW JANUARY SEPTEMBER 218 Cash flow from operating activities according to segment reporting was SEK 456m (1,868) during the nine-month period. Net investments in development properties resulted in a cash flow of SEK 597m (113). Holdings of repurchased residential units resulted in a cash flow of SEK 3m ( 64). Consolidated cash flow attributable to project properties (sales minus investment) during the nine-month period was SEK 322m ( 288). Increased operating capital had a negative impact on the cash flow. JULY SEPTEMBER 218 Cash flow from operating activities was SEK 234m (574) during the third quarter. Net investments in development properties resulted in a cash flow of SEK 24m (6). Holdings of repurchased residential units resulted in a cash flow of SEK 16m (7). Consolidated cash flow attributable to project properties (sales minus investment) during the third quarter was SEK 88m ( 98). Increased operating capital had a negative impact on the cash flow. RISKS AND UNCERTAINTIES JM s risk and risk management policies are presented in the 217 Annual Report on pages No significant changes have occurred to change these reported risks. HOLDINGS OF TREASURY SHARES At the end of August, the Annual General Meeting resolution to reduce the share capital by SEK 1,476,421 for 1,476,421 shares held by the company was taken into effect. The company has thereafter no holdings of treasury shares. PERSONNEL The number of employees at the end of the nine-month period was 2,61 (2,54). The number of wage-earners was 1,4 (1,6), and the number of salaried employees was 1,66 (1,534). Current staffing is considered well balanced for the current project volume and some adjustments are made on a regular basis. Demand on the labor market is strong for qualified project development skills. 7

8 BUSINESS SEGMENTS JM RESIDENTIAL STOCKHOLM The JM Residential Stockholm business segment develops residential projects in Greater Stockholm. Operations include acquisitions of development properties, planning, pre-construction, production and sales of residential units. The average prices on the existing home market increased slightly during the third quarter. The supply of homes continued to be high, in particular in some local markets. Competition for well-situated land for housing is judged to be relatively low at the same time as the supply of properties for housing development is relatively high. However, prices of building rights are still at a level that requires selective acquisition. The housing market in Stockholm continued to be cautious during the third quarter, particularly with regard to new production. However, the market continued to stabilize during quarter. Customers are showing strong interest in JM s projects, and sales improved during the quarter, sales being at the same level as the second quarter. The willingness of customers to sign a contract early in the process also improved during the third quarter. Residential units available for sale in the business segment largely have planned occupancy in 219/22, with the majority falling in 22. Housing starts in Stockholm during the third quarter were supported by a normal level of reservations, and profitability continued to be good in the current production volume. The planned housing start during the quarter of a project that has a high reservation rate was deferred pending a final agreement regarding municipal development work. The business segment s revenue decreased to SEK 4,434m (5,33. The decreased revenue in the third quarter is due to lower sales and a lower number of housing starts over the past year. Operating profit decreased to SEK 757m (1,4. Profit was burdened by the lower sales. The operating margin was 17.1 percent (19.5). Cash flow during the nine-month period is in balance taking into consideration the increase in development properties. Production was started in the third quarter on 27 residential units in apartment buildings and single-family homes in Solna and Järfälla. During the third quarter, JM purchased building rights corresponding to about 6 residential units in Järfälla. SEK M / Revenue 4,434 5,331 1,429 1,613 6,254 7,151 Operating profit 757 1, ,154 1,438 Operating margin, % Average operating capital 5,139 4,45 Return on operating capital, % Operating cash flow 395 1, ,63 Carrying amount, development properties 5,2 3,941 4,46 Number of available building rights 13,5 13,3 13,4 Number of residential units sold ,152 Number of housing starts 662 1, ,443 Number of residential units in current production 3,447 3,837 3,842 Number of employees 93 2) Of which property sales ) Of which 42 employees who previously belonged to JM Construction. OPERATING PROFIT AND OPERATING MARGIN SEK m JM RESIDENTIAL STOCKHOLM % 6 3 SEK m 2 CASH FLOW JM RESIDENTIAL STOCKHOLM Operating profit per quarter (SEK m) 12-month period margin (%) Cash flow per quarter 12-month period 8

9 JM RESIDENTIAL SWEDEN The JM Residential Sweden business segment develops residential projects in growth areas in Sweden, excluding Greater Stockholm. Operations include acquisitions of development properties, planning, pre-construction, production and sales of residential units. Contracting operations are also conducted to a limited extent. The average prices on the existing home market did not change or increased slightly in the business segment during the third quarter. The supply on certain local markets continues to be large. Competition for land for residential purposes has eased slightly. Interest in JM s projects is stable, and customers willingness to sign a contract early in the process is at a normal level. Business segment revenue amounted to SEK 3,254m (3,215), and operating profit increased to SEK 55m (488). The operating margin increased to 16.9 percent (15.2). The profit and the margin improved as a result of strong demand and an increase in prices in previous years. Sales in the third quarter increased slightly compared to the second quarter. A temporary increase in operating capital had a negative impact on cash flow for the nine-month period. Production was started in the third quarter on 23 residential units in apartment buildings in Uppsala, Västerås and Linköping, which is slightly lower than in the second quarter. During the third quarter, JM purchased building rights in Örebro corresponding to 88 residential units. SEK M / Revenue 3,254 3, ,348 4,39 Operating profit Operating margin, % Average operating capital 1, 892 Return on operating capital, % Operating cash flow Carrying amount, development properties 1,44 1,486 1,54 Number of available building rights 1,4 1,1 1,1 Number of residential units sold 678 1, ,32 Number of housing starts 783 1, ,143 1,411 Number of residential units in current production 2,471 2,196 2,351 Number of employees Of which property sales OPERATING PROFIT AND OPERATING MARGIN SEK m JM RESIDENTIAL SWEDEN % SEK m 1 1 CASH FLOW JM RESIDENTIAL SWEDEN Operating profit per quarter (SEK m) 12-month period margin (%) Cash flow per quarter month period 9

10 JM INTERNATIONAL The JM International business segment develops residential projects in Norway and Finland. Revenue and profit for the business segment is reported according to the percentage of completion method. Contracting operations are also conducted to a limited extent in Norway, and as of 218 they are reported in the JM Construction business segment. Comparative figures have been restated. Business segment revenue amounted to SEK 2,486m (2,336), and operating profit was SEK 221m (187). The operating margin was 8.9 percent (8.). Cash flow during the nine-month period is burdened by investments in development properties. Sales in the business segment in the third quarter were slightly lower than in the second quarter, in part due to the limited number of housing starts in Norway where sales are reported at the earliest in combination with housing starts. NORWAY Prices on the existing home market in Norway were stable during the third quarter, and the level of activity was good. The time to a signed contract is somewhat longer than in previous years. JM Norway s revenue amounted to SEK 2,88m (1,96, and operating profit was SEK 23m (178). The operating margin was 9.7 percent (9.. During the third quarter, 111 residential units (16) were sold and production began on 122 units (137). Housing starts during the third quarter consist of residential units in apartment buildings in Oslo Municipality and Asker outside of Oslo as well as single-family homes in Skien. The number of residential units in current production amounted to 1,264 (1,112). The lower level of housing starts during the nine-month period is in line with the yearly planning, in which proportionately more starts are planned during the fourth quarter, assuming continued stable sales development and well-functioning planning processes. During the third quarter, JM purchased building rights corresponding to 236 residential units in Tønsberg and Drammen. Available building rights correspond to 8,7 residential units (7,7). SEK M / Revenue 2,486 2, ,412 3,262 - of which JM Norway 2,88 1, ,94 2,777 Operating profit of which JM Norway Operating margin, % of which JM Norway Average operating capital 2,58 2,175 Return on operating capital, % Operating cash flow Carrying amount, development properties 2,54 1,497 1,545 Carrying amount, project properties Number of available building rights 12,1 1,5 1,5 Number of residential units sold Number of housing starts Number of residential units in current production 1,644 1,29 1,454 Number of employees Of which property sales OPERATING PROFIT AND OPERATING MARGIN SEK m JM INTERNATIONAL % 1 1 SEK m 8 CASH FLOW JM INTERNATIONAL Operating profit per quarter (SEK m) 12-month period margin (%) Cash flow per quarter month period 1

11 FINLAND The housing market in the Helsinki region was stable during the third quarter. The housing market is in balance and activity is good. During the third quarter, 52 residential units (3) were sold and production began on 121 units (97). Housing starts during the third quarter consisted of residential units in apartment buildings in the Greater Helsinki area. The number of residential units in current production amounted to 38 (178). No building rights were acquired during the third quarter. Available building rights correspond to 3,2 residential units (2,6). BELGIUM JM closed its operations in Belgium in 217. JM is still the owner of one development property and one residential unit that are for sale. During the third quarter, residential units () were sold. Available building rights correspond to 2 residential units (2). Höyhensaari, Helsinki, Finland 11

12 JM PROPERTY DEVELOPMENT The JM Property Development business segment primarily develops rental units, residential care units and commercial properties in Greater Stockholm. The business segment's entire portfolio comprises project development properties. This business segment also includes as of January 1, 218, which offers economic and technical management services to tenant-owners associations as well as home services. Business segment revenue was SEK 49m (48), of which rental income was SEK 45m (28). Operating profit was SEK 5m (24). The operating profit was burdened by start-up costs for the new business operation Net rental income for project properties increased to SEK 28m (16). Cash flow during the nine-month period is negative due to ongoing investments in project properties. Within the Dalénum area on Lidingö, the occupancy rate in the remaining commercial buildings that will not be demolished is 91 percent. Within the Bolinder area in Kallhäll, Järfälla, the occupancy rate in the buildings that will not be demolished is 94 percent. The Dalénum rental project and its 97 apartments were completed in 216. All apartments are rented out. Production is ongoing for five rental apartment projects: Tjärtunnan in Stureby, Stockholm, 187 residential units with occupancy in 218; Alphyddan in Sickla, Nacka, 93 student apartments with occupancy planned for 218; Spaken in Hägernäs, Täby, 136 residential units with occupancy planned for 218/219; Alba Lilium, Bredäng, Stockholm, 137 residential units with occupancy planned for 219; and Manegen in Täby, 128 residential units with occupancy planned for 22. SEK M / Revenue Operating profit Average operating capital 1,16 8 Return on operating capital, % Operating cash flow Carrying amount, development properties Carrying amount, project properties 1, ,67 Number of available building rights 2) Number of residential units sold 2) Number of housing starts 2) Number of residential units in current production 2) Number of employees Of which property sales ) Refers to rental units and residential care units. SEK m OPERATING PROFIT JM PROPERTY DEVELOPMENT SEK m CASH FLOW JM PROPERTY DEVELOPMENT Operating profit per quarter (SEK m) Cash flow per quarter month period 12

13 JM CONSTRUCTION The JM Construction business segment carries out construction work for external and internal customers in Greater Stockholm and Oslo. Contracting operations conducted in Norway are reported in the JM Construction business segment as of January 1, 218. Comparative figures have been restated. Demand in the contracting market in Stockholm is good in terms of the civil engineering market. With regard to house-related activities, competition for assignments has increased. Demand in the contracting market in Oslo is also good. Business segment revenue amounted to SEK 2,13m (1,918), of which the operations in Norway amounted to SEK 469m (327), and the operating profit decreased to SEK 61m (24). Two projects in the Swedish house-related operations were subject to strong, negative revaluations primarily due to major revisions and as a consequence, higher production costs and delays. Due to weak profitability for an extended period of time, the operations in JM Construction will be assessed in the fourth quarter 218 regarding future focus and scope. An increase in operating capital had a negative impact on cash flow for the nine-month period. The business segment received a number of assignments during the third quarter, of which the largest was a collaboration on the engineering work in Orminge for Nacka Municipality. The largest ongoing assignments are a new operational area at Arlanda Airport (Swedavia), land work in the Stockholm Norvik freight harbor in Nynäshamn (Ports of Stockholm), new production of a school (Vallentuna Municipality), new production of apartment buildings in Norra Djurgårdsstaden (HSB and Riksbyggen) and new production of apartment buildings in Tyresö (Småa and Riksbyggen). The largest ongoing project in the Norwegian operations is the new production of residential units in apartment buildings in Strømmen, Oslo (JM Norway). SEK M / Revenue 2,13 1, ,963 2,751 Operating profit Operating margin, % Operating cash flow Carrying amount, development properties Number of employees Of which internal OPERATING PROFIT AND OPERATING MARGIN SEK m JM CONSTRUCTION % 4 4 SEK m 2 CASH FLOW JM CONSTRUCTION Operating profit per quarter (SEK m) 12-month period margin (%) Cash flow per quarter 12-month period 13

14 GROUP SEGMENT REPORTING CONDENSED CONSOLIDATED INCOME STATEMENT ACCORDING TO SEGMENT REPORTING, SEK M / Revenue 12,11 12,457 3,832 3,813 16,562 17,8 Production and operating costs 9,791 9,989 3,22 3,47 13,45 13,648 Gross profit 2,22 2, ,112 3,36 Selling and administrative expenses ,41 1,5 Gains/losses on the sale of property Operating profit 1,443 1, ,81 2,369 Financial income and expenses Profit before tax 1,387 1, ,8 2,579 Taxes Profit for the period 1,79 1, ,685 2,194 Other comprehensive income Comprehensive income for the period 1,14 1, ,754 2,184 Earnings per share, diluted, SEK Average number of shares, diluted 69,836,391 71,62,512 69,95,321 7,677,51 7,135,947 7,844,23 Net profit for the period. CONDENSED CONSOLIDATED BALANCE SHEET ACCORDING TO SEGMENT REPORTING, SEK M 9/3/218 9/3/217 12/31/217 ASSETS Non-current assets Project properties 1, ,74 Development properties 8,59 6,984 7,543 Participations in tenant-owners associations, etc Current receivables 3,94 3,524 3,698 Cash and cash equivalents 1,854 2,557 2,572 Total current assets 15,914 14,21 15,196 Total assets 16,135 14,421 15,45 EQUITY AND LIABILITIES 2) Equity 6,52 5,653 6,178 Non-current interest-bearing liabilities Other non-current liabilities Non-current provisions 2,994 2,45 2,656 Total non-current liabilities 3,898 2,888 3,132 Current interest-bearing liabilities Other current liabilities 4,78 5,564 5,654 Current provisions Total current liabilities 5,717 5,88 6,95 Total equity and liabilities 16,135 14,421 15,45 Of which receivables from property sales ) Of which liabilities for property acquisition 1,

15 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY JANUARY SEPTEMBER FULL-YEAR ACCORDING TO SEGMENT REPORTING, SEK M Opening balance at beginning of period 6,178 5,158 5,158 Total comprehensive income for the period 1,14 1,534 2,184 Dividend Conversion of convertible loan Equity component of convertible debentures Buy-back of shares Closing balance at the end of the period 6,52 5,653 6,178 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ACCORDING TO SEGMENT REPORTING, SEK M / Cash flow from operating activities before change in working capital and taxes 1,679 1, ,776 3,95 Paid tax Investment in development properties, etc. 2,727 1, ,61 2,494 Payment on account for development properties, etc. 2) 2,133 1, ,511 2,38 Investment in project properties Sale of project properties Change in current liabilities/receivables Cash flow from operating activities 456 1, ,13 Cash flow from investing activities 33 3) ) Loans raised Amortization of debt Buy-back of shares Dividend Cash flow from financing activities 274 1, ,259 Cash flow for the period 73 1, ,54 Cash and cash equivalents at end of the period 1,854 2,557 1,854 2,557 1,854 2,572 Of which investment in participations in tenant-owners associations and freehold residential units ) Of which the sale of participations in tenant-owners associations and freehold residential units ) Of which SEK 31m refers to the sale of the participations in Småa AB. GROUP KEY FIGURES ACCORDING TO SEGMENT REPORTING, % / Operating margin Return on equity Return on capital employed Debt/equity ratio, multiple Equity/assets ratio

16 ACCORDING TO SEGMENT REPORTING REVENUE BY COUNTRY SEK M / Sweden 9,56 9,84 2,778 2,989 12,531 13,279 Norway 2,557 2, ,523 3,244 Finland Belgium Total 12,11 12,457 3,832 3,813 16,562 17,8 REVENUE BY BUSINESS SEGMENT SEK M / JM Residential Stockholm 4,434 5,331 1,429 1,613 6,254 7,151 JM Residential Sweden 3,254 3, ,348 4,39 JM International 2,486 2, ,412 3,262 JM Property Development JM Construction 2,13 1, ,963 2,751 Elimination Total 12,11 12,457 3,832 3,813 16,562 17,8 OPERATING PROFIT BY BUSINESS SEGMENT SEK M / JM Residential Stockholm 757 1, ,154 1,438 JM Residential Sweden JM International JM Property Development JM Construction Group-wide expenses Total 1,443 1, ,81 2,369 OPERATING MARGIN BY BUSINESS SEGMENT % / JM Residential Stockholm JM Residential Sweden JM International JM Construction AVERAGE OPERATING CAPITAL BY BUSINESS SEGMENT OCT SEPT FULL-YEAR SEK M 217/ JM Residential Stockholm 5,139 4,45 JM Residential Sweden 1, 892 JM International 2,58 2,175 JM Property Development 1,16 8 RETURN ON OPERATING CAPITAL BY BUSINESS SEGMENT OCT SEPT FULL-YEAR % 217/ JM Residential Stockholm JM Residential Sweden JM International JM Property Development

17 ACCORDING TO SEGMENT REPORTING OPERATING CASH FLOW BY BUSINESS SEGMENT SEK M / JM Residential Stockholm 395 1, ,63 JM Residential Sweden JM International JM Property Development JM Construction DEVELOPMENT PROPERTIES BY BUSINESS SEGMENT CARRYING AMOUNT, SEK M 9/3/218 9/3/217 12/31/217 JM Residential Stockholm 5,2 3,941 4,46 JM Residential Sweden 1,44 1,486 1,54 JM International 2,54 1,497 1,545 JM Property Development JM Construction Total 8,59 6,984 7,543 AVAILABLE RESIDENTIAL BUILDING RIGHTS BY BUSINESS SEGMENT NUMBER 9/3/218 9/3/217 12/31/217 JM Residential Stockholm 13,5 13,3 13,4 JM Residential Sweden 1,4 1,1 1,1 JM International 12,1 1,5 1,5 JM Property Development Total 36,7 34,8 34,8 Including those carried in the balance sheet (development properties) JM Residential Stockholm 8, 7,7 7,8 JM Residential Sweden 6,4 6, 6,1 JM International 5,7 4,3 4,6 JM Property Development Total 2,3 18,1 18,7 RESIDENTIAL UNITS SOLD BY BUSINESS SEGMENT NUMBER / JM Residential Stockholm ,152 JM Residential Sweden 678 1, ,32 JM International JM Property Development Total 1,712 2, ,396 3,1 HOUSING STARTS BY BUSINESS SEGMENT NUMBER / JM Residential Stockholm 662 1, ,443 JM Residential Sweden 783 1, ,143 1,411 JM International JM Property Development Total 2,97 2, ,28 3,873 RESIDENTIAL UNITS IN CURRENT PRODUCTION NUMBER 9/3/218 9/3/217 12/31/217 JM Residential Stockholm 3,447 3,837 3,842 JM Residential Sweden 2,471 2,196 2,351 JM International 1,644 1,29 1,454 JM Property Development Total 8,243 7,739 8,2 Refers to rental units and residential care units. 17

18 ACCORDING TO SEGMENT REPORTING PROJECT PROPERTIES, GROUP CARRYING AMOUNT, SEK M 9/3/218 9/3/217 12/31/217 Properties under development 1, Completed rental unit properties Completed commercial properties Total 1, ,74 DEVELOPMENT PROPERTIES, GROUP CARRYING AMOUNT, SEK M / Opening balance at beginning of period 7,543 7,121 8,869 6,892 6,984 7,121 New purchases 2,248 1, ,51 2,17 Transferred to production 1,298 1, ,526 1,534 Other Closing balance at the end of the period 8,59 6,984 8,59 6,984 8,59 7,543 GROUP FIVE-YEAR OVERVIEW ACCORDING TO SEGMENT REPORTING, SEK M Revenue 17,8 15,752 14,447 13,869 12,652 Operating profit 2,369 2,11 1,59 1,716 1,576 Profit before tax 2,579 1,951 1,518 1,641 1,517 Total assets 15,45 12,848 12,23 12,545 11,394 Cash flow from operating activities 2,13 1, Interest-bearing net liabilities (+)/receivables ( ) , Operating margin, % Return on equity, % Equity/assets ratio, % Earnings per share, SEK Dividend per share, SEK Number of available building rights 34,8 32,5 31,1 29,4 27,7 Number of residential units sold 3,1 3,843 3,77 3,195 3,265 Number of housing starts 3,873 4,187 3,731 3,445 2,953 Number of residential units in current production 8,2 7,984 7,212 6,375 5,69 Board proposal 18

19 GROUP QUARTERLY OVERVIEW ACCORDING TO SEGMENT REPORTING, SEK M INCOME STATEMENT Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Revenue 3,832 4,125 4,54 4,551 3,813 4,399 4,245 Production and operating costs 3,22 3,324 3,265 3,659 3,47 3,513 3,429 Gross profit Selling and administrative expenses Gains/losses on the sale of property Operating profit Financial income and expenses Profit before tax Taxes Profit for the period BALANCE SHEET 9/3 6/3 3/31 12/31 9/3 6/3 3/31 ASSETS Non-current assets Project properties 1,423 1,335 1,193 1, Development properties 8,59 8,869 8,67 7,543 6,984 6,892 6,922 Participations in tenant-owners associations, etc Current receivables 3,94 3,813 3,828 3,698 3,524 3,477 3,173 Cash and cash equivalents 1,854 2,78 2,564 2,572 2,557 2,211 2,619 Total current assets 15,914 16,417 16,51 15,196 14,21 13,64 13,67 Total assets 16,135 16,643 16,722 15,45 14,421 13,853 13,822 EQUITY AND LIABILITIES Equity 6,52 6,285 6,664 6,178 5,653 5,381 5,725 Non-current interest-bearing liabilities Other non-current liabilities Non-current provisions 2,994 2,85 2,846 2,656 2,45 2,371 2,321 Total non-current liabilities 3,898 3,791 3,766 3,132 2,888 2,744 2,73 Current interest-bearing liabilities Other current liabilities 4,78 5,682 5,831 5,654 5,564 5,184 4,932 Current provisions Total current liabilities 5,717 6,567 6,292 6,95 5,88 5,728 5,367 Total equity and liabilities 16,135 16,643 16,722 15,45 14,421 13,853 13,822 CASH FLOW STATEMENT Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 From operating activities ,1 From investing activities From financing activities Total cash flow for the period ,99 Cash and cash equivalents at end of period 1,854 2,78 2,564 2,572 2,557 2,211 2,619 INTEREST-BEARING NET LIABILITIES/RECEIVABLES Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Interest-bearing net liabilities(+)/receivables( ) at beginning of period Change in interest-bearing net liabilities/receivables ,213 Interest-bearing net liabilities(+)/receivables( ) at end of the period DEVELOPMENT PROPERTIES Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Carrying amount at beginning of period 8,869 8,67 7,543 6,984 6,892 6,922 7,121 New purchases , Transferred to production Other Carrying amount at end of period 8,59 8,869 8,67 7,543 6,984 6,892 6,922 KEY RATIOS Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Operating margin, % Debt/equity ratio, multiple Equity/assets ratio, % Earnings per share, SEK Number of available building rights 36,7 36, 34,9 34,8 34,8 34,6 33,6 Number of residential units sold Number of housing starts , Number of residential units in current production 8,243 7,814 7,672 8,2 7,739 7,641 7,91 19

20 BUSINESS SEGMENT QUARTERLY OVERVIEW ACCORDING TO SEGMENT REPORTING, SEK M JM RESIDENTIAL STOCKHOLM Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Revenue 1,429 1,53 1,475 1,82 1,613 1,878 1,84 Operating profit Operating margin, % Average operating capital 5,139 4,919 4,663 4,45 4,374 4,354 4,345 Return on operating capital, % 2) Operating cash flow Carrying amount, development properties 5,2 5,185 5,229 4,46 3,941 4,74 4,121 Number of available building rights 13,5 13,6 13,3 13,4 13,3 13, 12,8 Number of residential units sold Number of housing starts Number of residential units in current production 3,447 3,387 3,51 3,842 3,837 3,598 3,714 Of which property sales JM RESIDENTIAL SWEDEN Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Revenue 92 1,65 1,269 1, ,153 1,146 Operating profit Operating margin, % Average operating capital 1, Return on operating capital, % 2) Operating cash flow Carrying amount, development properties 1,44 1,476 1,394 1,54 1,486 1,225 1,322 Number of available building rights 1,4 1,3 1,2 1,1 1,1 1, 9,8 Number of residential units sold Number of housing starts Number of residential units in current production 2,471 2,28 2,21 2,351 2,196 2,279 2,169 Of which property sales JM INTERNATIONAL Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Revenue Operating profit Operating margin, % Average operating capital 2,58 2,444 2,273 2,175 2,16 2,74 2,28 Return on operating capital, % 2) Operating cash flow Carrying amount, development properties 2,54 2,156 1,932 1,545 1,497 1,533 1,394 Carrying amount, project properties Number of available building rights 12,1 11,4 1,6 1,5 1,5 1,7 1,1 Number of residential units sold Number of housing starts Number of residential units in current production 1,644 1,466 1,399 1,454 1,29 1,348 1,62 Of which property sales JM PROPERTY DEVELOPMENT Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Revenue Operating profit Average operating capital 1,16 1, Return on operating capital, % 2) Operating cash flow Carrying amount, development properties Carrying amount, project properties 1,418 1,33 1,185 1, Number of available building rights 3) Number of residential units sold 3) Number of housing starts 3) Number of residential units in current production 3) Of which property sales ) Refers to rental units and residential care units. JM CONSTRUCTION Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Revenue Operating profit Operating margin, % Operating cash flow JM OTHER Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Revenue (elimination) Operating profit (Group-wide expenses) ) Calculated on 12-month rolling profits and average capital. 2

21 GROUP IFRS CONDENSED CONSOLIDATED INCOME STATEMENT ACCORDING TO IFRS, SEK M / Revenue 11,474 12,713 3,65 4,62 16,36 17,275 Production and operating costs 9,3 1,169 3,2 3,257 12,959 13,828 Gross profit 2,174 2, ,77 3,447 Selling and administrative expenses ,41 1,5 Gains/losses on the sale of property Operating profit 1,397 1, ,46 2,456 Financial income and expenses Profit before tax 1,341 2, ,973 2,666 Taxes Profit for the period 1,37 1, ,648 2,259 Other comprehensive income Items that will be reclassified as income Translation differences from the translation of foreign operations Items that will not be reclassified as income Restatement of defined-benefit pensions Tax attributable to other comprehensive income Comprehensive income for the period 1,51 1, ,78 2,256 Net profit for the period is attributable to shareholders of the Parent Company 1,37 1, ,648 2,259 Comprehensive income for the period is attributable to shareholders of the Parent Company 1,51 1, ,78 2,256 Earnings per share, basic, attributable to shareholders of the Parent Company, SEK Earnings per share, diluted, attributable to shareholders of the Parent Company, SEK Number of outstanding shares at end of period 69,583,262 7,24,33 69,583,262 7,24,33 69,583,262 69,583,262 Average number of shares, basic 69,583,262 7,866,77 69,583,262 7,458,945 69,93,318 7,642,592 Average number of shares, diluted 69,836,391 71,62,512 69,95,321 7,677,51 7,135,947 7,844,23 Net profit for the period. CONDENSED CONSOLIDATED BALANCE SHEET ACCORDING TO IFRS, SEK M 9/3/218 9/3/217 12/31/217 ASSETS Non-current assets Project properties 1, ,74 Development properties 8,59 6,984 7,543 Participations in tenant-owners associations, etc Work in progress 2,98 1,98 2,291 Current receivables 3,259 2,813 2,949 Cash and cash equivalents 1,854 2,557 2,572 Total current assets 18,249 15,479 16,738 Total assets 18,47 15,69 16,947 2) EQUITY AND LIABILITIES Equity 6,332 5,511 6,43 Non-current interest-bearing liabilities Other non-current liabilities Non-current provisions 2,95 2,362 2,619 Total non-current liabilities 3,854 2,845 3,95 Current interest-bearing liabilities 3,3 1,744 1,728 Other current liabilities 5,133 5,478 5,972 Current provisions Total current liabilities 8,284 7,334 7,89 Total equity and liabilities 18,47 15,69 16,947 Pledged assets Contingent liabilities 8,771 1,58 9,993 Of which project financing JM International 2,574 1,54 1,857 2) Of which liabilities for property acquisition 1,

22 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY JANUARY SEPTEMBER FULL-YEAR ACCORDING TO IFRS, SEK M Opening balance at beginning of period 6,43 4,951 4,951 Total comprehensive income for the period 1,51 1,599 2,256 Dividend Conversion of convertible loan Equity component of convertible debentures Buy-back of shares Closing balance at the end of the period 6,332 5,511 6,43 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ACCORDING TO IFRS, SEK M / Cash flow from operating activities before change in working capital and taxes 1,633 2, ,741 3,182 Paid tax Investment in development properties, etc. 2,727 1, ,61 2,494 Payment on account for development properties, etc. 2) 2,133 1, ,511 2,38 Investment in project properties Sale of project properties Change in current liabilities/receivables 1, , Cash flow from operating activities 1,152 2, ,43 Cash flow from investing activities 33 3) ) Loans raised Amortization of debt Loans raised, project financing 1, , Amortization of debt, project financing ,182 Buy-back of shares Dividend Cash flow from financing activities 422 1, ,649 Cash flow for the period 73 1, ,54 Cash and cash equivalents at end of the period 1,854 2,557 1,854 2,557 1,854 2,572 Of which investment in participations in tenant-owners associations and freehold residential units ) Of which the sale of participations in tenant-owners associations and freehold residential units ) Of which SEK 31m refers to the sale of the participations in Småa AB. ACCOUNTING PRINCIPLES This interim report for the nine-month period of 218 was prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The consolidated accounts were prepared in accordance with the International Financial Reporting Standards (IFRS). Since the Parent Company is an enterprise within the EU, only EU-approved IFRS are applied. The Parent Company s accounts were prepared in accordance with RFR 2. The accounting principles and methods of calculation for the Group have not changed compared to the description on pages of the 217 Annual Report with two exceptions: IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments apply as of January 1, 218. However, the transition to IFRS 15 and IFRS 9 has not had any impact on the Group s or the Parent Company s performance and financial position. For more information about JM s implementation of and principles for IFRS 15 and IFRS 9, refer to pages in the 217 Annual Report. JM APPLIES THE FOLLOWING NEW STANDARDS AS OF 218 IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS IFRS 15 refers to the recognition of revenue from contracts and the sale of some non-financial assets. JM s accounting of the reporting of the project development of residential units in Sweden continues to occur with the application of the percentage of completion method. The contracts with the tenant-owners association are entered into simultaneously, are priced as a single unit and are assessed to constitute a performance obligation. Since JM is contractually obligated to deliver a specific building and during the course of the project is entitled to payment, the assessment is made that revenue must be reported over time, i.e. using the percentage of completion method. With regard to corresponding business in Norway and Finland, the assessment is made that there is no entitlement to payment, which means that, in the same manner as today, revenue must be reported at a specific point in time, i.e. completion. 22

23 The revenue in JM Construction is also reported using the percentage of completion method since the construction is carried out on land that the customer controls. As a whole, IFRS 15 has not changed JM s revenue recognition principles. IFRS 9 FINANCIAL INSTRUMENTS IFRS 9 refers to the reporting of financial instruments. It contains rules for classification and measurement of financial assets and liabilities, impairment of financial instruments and hedge accounting. JM makes the assessment that IFRS 9 could affect the measurement of some receivables, but the effect is not considered material. For more information about JM s application of IFRS 15 and IFRS 9, refer to pages in the 217 Annual Report. NEW STANDARDS ENTERING INTO EFFECT AFTER 218 IFRS 16 LEASES This standard will replace IAS 17 Leases and all related interpretations. It requires lessees to report assets and liabilities that are attributable to all lease contracts, with the exception of contracts that are shorter than 12 months and/or refer to small amounts. Reporting for lessors in all material respects will be unchanged. The standard must be applied as of January 1, 219. IFRS 16 will affect JM in part in terms of agreements regarding rental of the buildings in which JM conducts its operations. JM is also currently conducting a review of the agreements with suppliers regarding equipment rentals. These agreements refer in many cases to smaller amounts, may include service components and normally are in reference to relatively short periods of time. The analysis and evaluation has been initiated. Additional information will be presented before the first quarter 219. SEGMENT REPORTING JM s contracting operations in Norway are reported in the JM Construction business segment as of 218. Comparative figures for the business segments JM International and JM Construction have been restated. REVENUE RECOGNITION OF HOUSING DEVELOPMENT IN SWEDEN In April 218, Nasdaq Stockholm AB (Stock Exchange) submitted questions to a number of listed housing developers regarding the implementation of IFRS 15 Revenue from Contracts with Customers and the basis for the assessment of whether or not the tenant-owner associations are independent. JM answered these questions on May 7. On October 9, the Stock Exchange wrote a joint letter to the listed housing developers stating it is the Stock Exchange s current assessment that the tenant-owners associations cannot be considered to be independent. It is thus the individual buyer of the tenant-owned apartment, not the association, who is the customer, and according to the Stock Exchange this means that revenue must be reported at a single point in time and not over time (gradually). Before the Stock Exchange determines its final position, it will gather feedback from concerned companies. JM does not share the Stock Exchange s assessment but rather considers the association to be independent and that it is JM s contract with the association that is to be evaluated according to IFRS 15. The effect of a potential translation has not yet been determined. Such a change does not affect JM s segment reporting, project management or the risk profile of the business. JM considers segment reporting to most accurately reflect the economic implications of JM s business at the same time as it correlates well with the Group s internal governance, which is based on the Group s cash flows, risk profile and capital allocation. PARENT COMPANY CONDENSED INCOME STATEMENT, PARENT COMPANY JANUARY SEPTEMBER FULL-YEAR SEK M Net sales 7,89 8,616 11,62 Production and operating costs 6,19 6,638 8,878 Gross profit 1,79 1,978 2,724 Selling and administrative expenses Gains/losses on the sale of property Operating profit 1,233 1,456 2,39 Financial income and expenses Profit before appropriations and tax 1,288 1,746 2,349 Appropriations Profit before tax 1,288 1,746 2,182 Taxes Profit for the period 1,27 1,432 1,894 23

24 PARENT COMPANY, CONTINUED CONDENSED BALANCE SHEET, PARENT COMPANY SEK M 9/3/218 9/3/217 12/31/217 Assets Non-current assets 1,478 1,194 1,221 Current assets 1,72 9,368 1,155 Total assets 12,18 1,562 11,376 Equity and liabilities Equity 3,314 2,713 3,5 Untaxed reserves 2,36 2,17 2,36 Provisions 1,55 1,3 1,334 Non-current liabilities Current liabilities 4,219 4,434 4,292 Total equity and liabilities 12,18 1,562 11,376 Pledged assets Contingent liabilities 8,923 1,228 1,162 RECONCILIATION BETWEEN SEGMENT REPORTING AND IFRS CONSOLIDATED INCOME STATEMENT SEK M / Revenue for the period (segment reporting) 12,11 12,457 3,832 3,813 16,562 17,8 Restatement JM International Revenue for the period (IFRS) 11,474 12,713 3,65 4,62 16,36 17,275 Operating profit/loss for the period (segment reporting) 1,443 1, ,81 2,369 Restatement JM International Operating profit/loss for the period (IFRS) 1,397 1, ,46 2,456 Profit/loss for the period (segment reporting) 1,79 1, ,685 2,194 Restatement JM International Profit/loss for the period (IFRS) 1,37 1, ,648 2,259 CONSOLIDATED BALANCE SHEET SEK M 9/3/218 9/3/217 12/31/217 Balance sheet total (segment reporting) 16,135 14,421 15,45 Restatement JM International Reclassification project financing JM International 2,214 1,54 1,396 Reclassification project financing JM International, non-interest-bearing Balance sheet total (IFRS) 18,47 15,69 16,947 Billing on account to customers CONSOLIDATED EQUITY SEK M 9/3/218 9/3/217 12/31/217 Equity (segment reporting) 6,52 5,653 6,178 Restatement JM International Equity (IFRS) 6,332 5,511 6,43 GROUP KEY FIGURES % 9/3/218 9/3/217 12/31/217 Equity/assets ratio (segment reporting) Equity/assets ratio (IFRS) CONSOLIDATED CASH FLOW SEK M / Cash flow from operating activities (segment reporting) 456 1, ,13 Reclassification project financing JM International Cash flow from operating activities (IFRS) 1,152 2, ,43 24

25 CONSOLIDATED INTEREST-BEARING NET LIABILITIES/RECEIVABLES SEK M 9/3/218 9/3/217 12/31/217 Interest-bearing net liabilities (+)/receivables ( ) at end of period (segment reporting) Reclassification project financing JM International 2,214 1,54 1,396 Interest-bearing net liabilities (+)/receivables ( ) at end of period (IFRS) 2, REVENUE PER BUSINESS SEGMENT ACCORDING TO IFRS 15 SEK M / JM Residential Stockholm 4,434 5,331 1,429 1,613 6,254 7,151 JM Residential Sweden 3,254 3, ,348 4,39 JM International 1,949 2, ,886 3,529 JM Property Development JM Construction 2,13 1, ,963 2,751 Elimination Total 11,474 12,713 3,65 4,62 16,36 17,275 Stockholm, October 25, 218 JM AB (publ) Johan Skoglund President and Chief Executive Officer REVIEW REPORT JM AB (PUBL), CORPORATE IDENTITY NUMBER INTRODUCTION We have reviewed the condensed interim financial information (interim report) of JM AB as of September 3, 218 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review. SCOPE OF REVIEW We conducted our review in accordance with the International Standard on Review Engagements ISRE 241, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. CONCLUSION Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company. Stockholm, October 25, 218 PricewaterhouseCoopers AB Håkan Malmström Authorized Public Accountant Auditor in charge Ann-Christine Hägglund Authorized Public Accountant 25

26 JM IN BRIEF BUSINESS CONCEPT With people in focus and through constant development, we create homes and sustainable living environments. VISION We are laying the foundations for a better life. BUSINESS JM is one of the leading developers of housing and residential areas in the Nordic region. Operations focus on new production of homes in attractive locations, with the main focus on expanding metropolitan areas and university towns in Sweden, Norway and Finland. We are also involved in project development of commercial premises and contract work, primarily in the Greater Stockholm area. JM should promote long-term sustainability work in all its operations. Annual sales total approximately SEK 17 billion and the company has around 2,6 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 1 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 5 percent of consolidated profit after tax. Capital gains from property sales are a natural part of JM s project development operations and therefore are included in the calculation of dividends. JM's financial targets are defined based on segment reporting. DISCLOSURES This information is information that JM AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out below, at 8. CET on October 25, 218. PRESS RELEASES, 218 July 2 JM acquiring property in Espoo, Helsinki July 13 Interim report January June 218 August 31 Notification of reduction share of capital in JM AB September 24 JM AB's Nomination Committee for the 219 Annual General Meeting FOR MORE INFORMATION PLEASE CONTACT: Claes Magnus Åkesson, CFO, Head of IR Tel FINANCIAL CALENDAR February 1, 219 Year-end report 218 March 28, 219 Annual General Meeting April 26, 219 Interim Report January - March July 12, 219 Interim Report January - June October 24, 219 Interim Report January - September JM s Annual Reports, Interim Reports and other financial information are available at jm.se/investors 26