Interimreport Q32017……
JM Group
Revenue: SEK 16.8 billion 1)
Total assets: SEK 14.4 billion 2)
No. of building rights: 34,800
No. of employees: 2,540
Market Cap: SEK 14.5 billion 3)
Norway Sweden
Belgium
Finland
1) 12-month period2) According to segment reporting3) SEK 208 per share
18 % 3 %
0 %
79 %
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0
2
4
6
8
10
12
14
16
18
20
0
500
1 000
1 500
2 000
2 500
2012 2013 2014 2015 2016 Okt/Sept2016/2017
Operating profit Operating margin
Group Summary 1)
January – September 2017
• Revenue increased toSEK 12,457m (11,456)
• Operating profit increased toSEK 1,731m (1,414)
• Operating margin increased to13.9 percent (12.3)
• Gains of property sales SEK 14m (15)
1) According to segment reporting
%SEK m
2) 12-month period1)
2)
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Group Summary 1)
January – September 2017
• Profit before tax increased to SEK 1,958m 2) (1,379)
• Earnings per share increased to SEK 22.40 (14.50)
• Return on equity increased to 39.7 percent (30.7)
• Cash flow from operations was SEK 1,868m (1,589)
1) According to segment reporting2) Of which SEK 275m from the sale of participations in Småa AB
Friisgatan, Malmö 90 residential units
Solstrålen, Stockholm 138 residential units
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Group Summary January – September 2017
• Number of residential units sold 2,416 (2,918)
• Lower level residential units sold – cautious market in Stockholm
• Number of housing starts 2,690 (2,830)
• Lower level of housing starts in Norway during the nine-month period in line with plan - proportionately more starts during the fourth quarter
• Good level of housing starts in Stockholm to normal level of reservations – stable profitability
• Residential building rights portfolio 34,800 (30,900)
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Kajplats 1, Västerås 82 residential units
Entréen hus 1, Oslo, Norway 58 residential units
Operating profit
January - September
According to segment reporting, SEK m 2017 2016
JM Residential Stockholm 1,041 908
JM Residential Sweden 488 354
JM International 188 137
JM Property Development 24 12
JM Construction 23 33
Group-wide expenses -33 -30
Total 1,731 1,414
Taituri, Ebo, Finland 39 residential units
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• The housing market in Stockholm was cautious during the third quarter. In rest of Sweden demand has been stable
• During the third quarter, the market in Norway weakened, demand in Finland continued to improve
• After a cautious period during the third quarter, demand for JM’s residential units in Stockholm improved during the end of the quarter. Great interest in the rest of Sweden
• Housing operations in the rest of Sweden – stronger revenue, profit and margin
• The percentage of sold/reserved residential units in relation to ongoing production 71 % (82) – good level
Cautious market in Stockholm –stable market in the rest of Sweden
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Prices on the existing home marketTenant-owned apartment prices in cities, existing home market Q3 2008 – Q3 2017SEK/sq.m.
Source: Mäklarstatistik and WSP
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
90 000
100 000
Q42008
Q42009
Q42010
Q42011
Q42012
Q42013
Q42014
Q42015
Q42016
Stockholm Inner city Stockholm Nearby suburbs Gothenburg Malmö
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Lower level of residential units sold
1230 1153955 951 975 1001
650790
460
370399
322 343
193
183
0 00
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 2016 2017
Numberof units
Q1 – Q3 Q4
JM Residential Stockholm JM Residential Sweden JM International JM Property Development
54
1,600
1,273
843
1,552
1,318
973
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Somewhat lower level of housing starts
1 197 1 111 1 119860
978 1 051
554741
520
470 634
368358
228
136782
877
54
229
00
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 2016 2017
JM Residential Stockholm JM Residential Sweden JM International JM Property Development
Numberof units
1,667
1,228
1,745
1,336
Q1 – Q3 Q4
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Vattenkvarnen, SöderdalenJärfälla
No. of residential units 1,250
Housing starts Q3 2017 123
Completed in 2030
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NilsMalmö
No. of residential units 127
Housing starts Q3 2017 127
Completed in 2019
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TillyHelsinki, Finland
No. of residential units 150
Housing starts Q3 2017 41
Completed in 2018
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Average number of housing starts per phase, units in apartment blocks
122
92
34
72
0
20
40
60
80
100
120
140
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Stockholm Sweden International Average value, total
Number
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7,7391) residential units in current production
0%
20%
40%
60%
80%
100%
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
Q4 Q12014
Q2 Q32014
Q4 Q12015
Q2 Q32015
Q4 Q12016
Q2 Q32016
Q4 Q12017
Q2 Q32017
NumberPercentage sold/reserved implicates low risk
in current production in Q3 2017
Percentage of sold/reserved in current production, Group (%)
JM InternationalJM Residential SwedenJM Residential Stockholm
Normal level sold/reserved
Total
1) Including 416 rental and residential care units within JM Property Development – not included in percentage sold/reserved
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30 Sept2017
30 Sept2016
31 Dec2016
Number of residential units 1) 7,739 7,793 7,984
Number of residential units sold 4,515 5,004 4,959
Number of residential units reserved 686 1,078 886
Sold residential units, % 62 67 65
Reserved residential units, % 9 15 12
Sold/reserved residential units, % 71 82 77
Completed production, no. of unsold units 2) 86 81 70
- including in the balance sheet 67 62 641) Including rental and residential care units within
JM Property Development – not included in percentage sold/reserved 416 338 4162) After final occupancy according to plan
Residential units in current productionJM Group
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JM Residential StockholmJanuary - September Full-year
SEK m 2017 2016 2016
Revenue 5,331 5,144 7,162
Operating profit 1,041 908 1,295
Operating margin, % 19.5 17.7 18.1
Number of available building rights 13,300 12,400 13,000
Number of residential units in current production 3,837 3,564 3,786
1) Of which property sales 6 - -
• Cautious demand
• Lower sales during the quarter – more normalized at the end of the quarter
• Stable profitability
• Cash flow is in balance taking into consideration decrease in development properties
Kajplats Kvarnholmen, Stockholm 104 residential units
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JM Residential Sweden
• Stable demand
• Good sales
• Stronger revenue, profit and margin
• Cash flow in balance
January - September Full-yearSEK m 2017 2016 2016
Revenue 3,215 2,823 3,820
Operating profit 1) 488 354 480
Operating margin, % 15.2 12.5 12.6
Number of available building rights 10,100 9,400 9,700
Number of residential units in current production 2,196 2,300 2,240
1) Of which property sales - 37 37Österport, Västerås 70 residential units
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JM International
• Weakening market in Norway during the quarter - demand in Finland continued to improve
• Low level of housing starts in Norway in line with plan - proportionately more starts during the fourth quarter assuming normal planning processes and demand
• Cash flow strengthens by temporary decrease in working capital
January - September Full-yearSEK m 2017 2016 2016
Revenue 2,653 2,541 3,477of which JM Norway 2,278 2,241 3,056
Operating profit 1) 188 137 204of which JM Norway 179 158 227
Operating margin, % 7.1 5.4 5.9of which JM Norway 7.9 7.1 7.4
Number of available building rights 10,500 7,900 8,900
Number of residential units in current production 1,290 1,591 1,5421) Of which property sales - -23 -23
Entréen, Oslo, Norway 58 residential units
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JM Property Development
• The completed Dalénum rental project, Lidingö consisting of 97 apartments is held in JM’s balance sheet
• Ongoing production in three rental projects in JM’s balance sheet:‐ Tjärtunnan, Stureby, 187 apartments ‐ Spaken, Hägernäs, Täby, 136 apartments ‐ Alphyddan, Nacka, 93 student apartments
• 416 rental units and residential care units in current production
January - September Full-yearSEK m 2017 2016 2016
Revenue 48 96 142
Operating profit 1) 24 12 30
Number of available building rights 900 1,200 900
Number of residential units in current production 416 338 416
1) Of which property sales 8 1 1
Rental unit project Spaken in Hägernäs, Täby
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JM ConstructionJanuary - September Full-year
SEK m 2017 2016 2016
Revenue 1) 1,601 1,211 1,665
Operating profit 23 33 43
Operating margin, % 1.4 2.7 2.6
1) Of which internal 391 359 514
• Good demand but tough competition
• Good orders
• Increased revenue
• Lower profit and margin
• A long-term project is underway to raise profitability
• Cash flow in balance
Lindes Backe, Stockholm
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Available building rights portfolio
1) Rounded to the nearest hundred2) Of which 900 and 1,200 building rights for rental units and residential care units3) West region4) East region
No. of building rights 1)
Region 09/30/2017 09/30/2016
Stockholm 14,2002)
13,6002)
Malmö/Lund 3,300 3,500
Gothenburg 3) 3,300 2,700
Uppsala 4) 3,500 3,200
Norway 7,700 5,800
Helsinki 2,600 1,900
Belgium 200 200
Total 34,800 30,900
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SEK m 2014 2015 2016Jan-sep
2017
Opening balance 5,988 6,802 7,067 7,121
Plus 2,273 2,695 1,903 1,214
Minus -1,459 -2,430 -1,849 -1,351
Closing balance 6,802 7,067 7,121 6,984
Unchanged level of development properties Building rights in Balance Sheet
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Project properties
Properties under development 634 510 583
Fully developed rental unit properties 1) 224 - -
Fully developed commercial properties 20 44 19
Total 878 554 602
SEK m 09/30/2017 09/30/2016 12/31/2016
1) Dalénum, Lidingö, 97 apartments
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Approx. 4 years production in Balance Sheet
No. of building rights 1)
09/30/2017In Balance
SheetHousing
starts 2)Average
period, years 3)
JM Residential Stockholm 7,700 1,753 4.4
JM Residential Sweden 6,000 1,409 4.3
JM International 4,300 656 6.6
JM Property Development 100 229 0.4
Group 18,100 4,047 4.5
1) Residential building rights2) 12-month period3) Guideline value 5 years
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67 unsold residential units inBalance Sheet, SEK 267m
SEK m
240 233
205
269 267
0
100
200
300
Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
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Cash flow
Cash flow statement, SEK m Q3
2016Q4
2016Q1
2017Q2
2017Q3
2017
From operating activities 1) 2) 3) 102 368 1,001 293 574
From investing activities -2 -1 307 -3 -1
From financing activities -207 -25 -209 -697 -225
Total cash flow for the quarter -107 342 1,099 -407 348
Cash and cash equivalentsend of period 1,177 1,520 2,619 2,211 2 557
1) Of which net investment project properties -57 -72 -86 -104 -98
2) Of which net investment development properties 7 -501 122 -15 6
3) Of which paid tax -90 -89 -99 -121 -93
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According to segment reporting
Strong financial position and liquidity
• Equity/Assets ratio 1) 39 percent (38)
• Available liquidity was SEK 5,357m (3,977) of which cash and cash equivalents SEK 2,557m (1,177)
• Unutilized overdraft facilities and credit lines SEK 2,800m (2,800)
• Credit lines of SEK 2,400m have an average maturity of 1.7 years (1.7)
• Buy-back of own shares for SEK 125m during the third quarter
SEK m times
1) According to segment reporting2) Non interest-bearing deferred payments for property acquisitions amounted to SEK 543m (513)
Net interest-bearing liability(+)/receivable(-) 1)
-727
-1
-0,5
0
0,5
1
1,5
-1 000
-500
0
500
1 000
1 500
2013 2014 2015 2016 Sept 30,2017
Net interest-bearing liability(+)/receivable(-) Debt/equity ratio
1)
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Net financial itemsJanuary - September
SEK m 2017 2016
Financial income 1 15
Sale of participations in Småa AB 275 -
Financial income 276 15
Interest expenses -25 -26
Interest expense pensions -24 -24
Financial expenses -49 -50
Net financial items 227 -35
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Components of profit/loss – housing business Percentage of completion method (gross) Q3 2017 (Q2 2017)
Cost-based effectSEK 372m (391)
Revaluation effectSEK 402m (367)+ +
=Profit/loss
for the periodSEK 725m (823)
Sales effectSEK -49m (65)
Recognized expenses ×contribution margin (for the current period).
Changed assessment about forecast total contribution margin and/or total cost of a project that involves revaluation of recognized profit/loss from earlier periods.
Change in the relationship between stage of completion and sales rate in a period (incoming – outgoing)(Adjustment of accumulated profit for unsold homes).
Always positive Usually positive Positive/negative
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Revaluation effects – housing business
The net of positive and negative revaluation effects in residential projects during Q3 2017 totaled SEK 402m, which indicates a continued stable assessment
of market conditions for the actual forecast period.
Business segment Stockholm SwedenInterna-
tional Total
Q2 2017 158 171 38 367
Q3 2017 203 142 57 402
Mkr Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
Group 327 373 414 367 402
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JM today• Customer focused – strong brand
• 34,800 building rights in attractive locations
• Fundamentally favorable prospects
• Sustainable urban planning
• Efficient management system
• Investments in digital support
• Strong balance sheet – focus on cash flow
• Well balanced risk profile
• Skills development prioritized
2017-10-2632 │ │ ytf
The project Nils, Malmö