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JM AB (publ)
Postal address
Visitors’ address
Telephone
Fax
Internet
A N N U A L R E P O RT
SE-169 82 Stockholm
Telegrafgatan 4, Solna
+46 8 782 87 00
+46 8 782 86 00
www.jm.se
2003
-03
Cover: Kanbergslunden, Linköping
JM ANNUAL REPORT 2003
PRESENTING JM
JM’s business concept is to create attractive living and working environments
that satisfy individual needs both today and in the future.
“We are reducing our costs and working increasingly efficiently with
product design and production. At the same time,we are broadening
our range of homes to meet customer demands in more segments.”
Johan Skoglund, President and CEO
JM AB (publ)
Postal address
Visitors’ address
Telephone
Fax
Internet
SE-169 82 Stockholm
+46 8 782 87 00
+46 8 782 86 00
www.jm.se
2003
-03
PRESENTING JM
ADDRESSES
HEAD OFFICE AND
SOUTH REGION
Denmark
STOCKHOLM OFFICE
Halmstad
JM Danmark A/S
JM AB
Brogatan 1, SE-302 43 Halmstad
Vester Farimagsgade 37
Tel. +46 35 10 63 60, fax +46 35 10 67 45
DK-1606 Copenhagen V
Tel. +45 33 45 70 00, fax +45 33 45 70 70
SE-169 82 Stockholm
Tel. +46 8 782 87 00, fax +46 8 782 86 00
Helsingborg
www.jm.se
Prästgatan 24, SE-252 24 Helsingborg
www.jmdanmark.dk
Tel. +46 42 28 98 90, fax +46 42 13 82 24
Norway
REGIONAL AND LOCAL OFFICES
Lund (regional office)
Bærumsveien 473,
EAST REGION
Åldermansgatan 13
Postboks 33
Uppsala
Box 21, SE-221 00 Lund
N-1306 Bærum
Sylveniusgatan 2
Tel. +46 46 30 00 00, fax +46 46 30 01 38
Tel. +47 67 17 60 00, fax +47 67 17 60 01
Byggholt AS (head office)
JM is one of the Nordic region’s leading housing developers.Operations
focus on new production of homes in attractive areas of growth markets,
with the main focus on metropolitan areas and university towns in
KEY FIGURES
SEKm
Net sales
Operating profit
Profit after financial items
Project development margin (%)
Earnings per share (SEK)
Dividend per share (SEK)
Return on equity (%)
1)
Sweden,Norway,Denmark and Belgium.
JM is also involved in development of residential properties,and
conducts limited project development of commercial premises,primarily
in the Greater Stockholm area.
JM 1999–2003
2003
7,787
478
267
2.4
6.60
51)
5.5
2002
8,872
652
368
5.4
8.50
10
6.8
2001
8,642
1,964
1,629
11.8
36.30
14
30.1
1999 Property portfolio in Skåne and Gothenburg sold.
Operations focused to project development.
Establishment in Denmark.
New financial targets and change of name to JM AB.
2000 Growth-oriented operational targets.
Principal owner Skanska sells its shareholding.
Major property sales in Stockholm.
Proposed by the Board
GEOGRAPHIC BREAKDOWN OF NET SALES
2001 Continued focus on project development.
Continued major property sales.
Share buy-backs.
Stockholm
53%
2002 Good sales result, investment properties.
Rest of Sweden
26%
Continued strategic reduction of property portfolio.
Share buy-backs.
New President and CEO.
Problems in Stockholm projects.
Sweden
Belgium
Norway
Sweden
Denmark
2003 Focus on routines for improved control and oversight.
Norway
Denmark
SEKm
12,000
SEKm
1,200
10,000
1,000
8,000
800
6,000
600
Bergen
Box 60228, SE-216 09 Malmö
Damsgårdsveien 125
Jönköping
Tel. +46 40 16 98 80, fax +46 40 16 98 98
Postboks 178
N-5847 Bergen
Herkulesvägen 6, SE-553 03 Jönköping
Tel. +47 55 15 53 00, fax +47 55 15 53 01
Tel. +46 36 12 03 40, fax +46 36 12 03 66
Linköping (regional office)
AB Borätt
Skien
Brigadgatan 24, SE-581 31 Linköping
Sjöängsvägen 17
Lundegate 4C
Tel. +46 13 37 14 00, fax +46 13 37 14 09
Box 956, SE-191 29 Sollentuna
Postboks 45
Tel. +46 8 626 66 30, fax +46 8 626 98 20
N-3701 Skien
www.boratt.se
Tel. +47 35 54 33 50, fax +47 35 54 33 60
Seniorgården AB
Tønsberg
Trädgårdsgatan 15, SE-645 31 Strängnäs
Tel. +46 21 81 20 00, fax +46 152 222 59
Sjöängsvägen 17
Ålyveien 19
Västerås
Postboks 2053
Signalistgatan 17, SE-721 31 Västerås
Tel. +46 8 626 66 30, fax +46 8 626 98 20
N-3103 Tønsberg
Tel. +46 21 81 20 00, fax +46 21 81 20 10
www.seniorgarden.se
Tel. +47 33 30 03 00, fax +47 33 30 03 33
Örebro
O.Timblads Målerifirma AB
Seniorbo AS
Vasastrand 11, SE-703 54 Örebro
Strandbergsgatan 53, SE-112 51 Stockholm
4,000
400
2,000
200
Programme for group-wide pre-construction routines.
Continued sale of fully developed properties.
Major acquisition of residential properties for development.
Good sales trend, homes.
Kjørbokollen 30
Tel. +46 19 10 29 40, fax +46 19 10 29 15
Tel. + 46 8 619 51 00, fax +46 8 618 16 01
N-1337 Sandvika
www.timblad.se
Tel. +47 67 55 19 40, fax +47 67 55 19 41
WEST REGION
www.seniorbo.no
Gothenburg
Gårdatorget 2, SE-412 50 Gothenburg
SUBSIDIARIES ABROAD
Vikevåg Bolig AS
Tel. +46 31 703 57 00, fax +46 31 335 88 70
Belgium
Gamle Forusveien 12
JM Construction S.A.
N-4033 Stavanger
Avenue Louise 287, Bte 1
Tel: +47 51 81 58 50, fax +47 51 81 58 01
B-1050 Brussels
www.vikevaag.no
Tel. +32 2 646 11 12, fax +32 2 646 96 26
0
www.jmconstruction.be
0
1999
2000
Net sales, SEKm
JM AB (publ) has its registered office in Stockholm
Company reg. no. 556045-2103
Övägen 6, Limhamn
International
21%
NET SALES AND PROFIT AFTER TAX
company and is listed on the Stockholm Stock Exchange.
Malmö
CENTRAL REGION
Strängnäs
The Group is divided into five business units:JM Residential Stockholm,
JM had 2,368 employees at the end of 2003. JM AB is a public limited
Tel. +46 18 66 03 00, fax +46 18 66 03 10
SUBSIDIARIES IN SWEDEN
Belgium
JM Residential Sweden, JM Production, JM Commercial and JM International.
www.byggholt.no
Box 1334, SE-751 43 Uppsala
2001
2002
Profit after tax, SEKm
2003
Production: JM and Inte Rio
Text: JM, BBD Financial Communications and NewSec
Translation: Morton Communications
Photography: Torbjörn Bergkvist and Nina Broberg
Illustrations: Leif Åbjörnsson
Architects' drawings: AIX, Cinnober Arkitekter and FFNS Arkitekter
Repro and printing: SILKOREKORD, Stockholm 2004
Paper: Incada Silk 220 g (cover), Scandia 2000 130 g (inside pages) and Silverblade Art 170 g (JM in pictures)
ADDRESSES
HEAD OFFICE AND
SOUTH REGION
Denmark
STOCKHOLM OFFICE
Halmstad
JM Danmark A/S
JM AB
Tel. +46 35 10 63 60, fax +46 35 10 67 45
Tel. +45 33 45 70 00, fax +45 33 45 70 70
SE-169 82 Stockholm
Tel. +46 8 782 87 00, fax +46 8 782 86 00
Helsingborg
www.jm.se
www.jmdanmark.dk
Tel. +46 42 28 98 90, fax +46 42 13 82 24
Norway
Bærumsveien 473,
EAST REGION
Åldermansgatan 13
Postboks 33
Uppsala
N-1306 Bærum
Sylveniusgatan 2
Tel. +46 46 30 00 00, fax +46 46 30 01 38
Tel. +47 67 17 60 00, fax +47 67 17 60 01
KEY FIGURES
SEKm
Net sales
Operating profit
1)
JM 1999–2003
2003
7,787
478
267
2.4
6.60
51)
5.5
2002
8,872
652
368
5.4
8.50
10
6.8
2001
8,642
1,964
1,629
11.8
36.30
14
30.1
Share buy-backs.
Stockholm
53%
Rest of Sweden
26%
Share buy-backs.
Sweden
Belgium
Norway
Sweden
Denmark
Norway
Denmark
SEKm
12,000
SEKm
1,200
10,000
1,000
8,000
800
6,000
600
Bergen
Box 60228, SE-216 09 Malmö
Damsgårdsveien 125
Jönköping
Tel. +46 40 16 98 80, fax +46 40 16 98 98
Postboks 178
N-5847 Bergen
Tel. +47 55 15 53 00, fax +47 55 15 53 01
Tel. +46 36 12 03 40, fax +46 36 12 03 66
AB Borätt
Skien
Sjöängsvägen 17
Lundegate 4C
Tel. +46 13 37 14 00, fax +46 13 37 14 09
Postboks 45
Tel. +46 8 626 66 30, fax +46 8 626 98 20
N-3701 Skien
www.boratt.se
Tel. +47 35 54 33 50, fax +47 35 54 33 60
Seniorgården AB
Tønsberg
Tel. +46 21 81 20 00, fax +46 152 222 59
Sjöängsvägen 17
Ålyveien 19
Västerås
Postboks 2053
Tel. +46 8 626 66 30, fax +46 8 626 98 20
N-3103 Tønsberg
Tel. +46 21 81 20 00, fax +46 21 81 20 10
www.seniorgarden.se
Tel. +47 33 30 03 00, fax +47 33 30 03 33
Örebro
Seniorbo AS
4,000
400
2,000
200
Kjørbokollen 30
Tel. +46 19 10 29 40, fax +46 19 10 29 15
Tel. + 46 8 619 51 00, fax +46 8 618 16 01
N-1337 Sandvika
www.timblad.se
Tel. +47 67 55 19 40, fax +47 67 55 19 41
WEST REGION
www.seniorbo.no
Gothenburg
SUBSIDIARIES ABROAD
Vikevåg Bolig AS
Tel. +46 31 703 57 00, fax +46 31 335 88 70
Belgium
Gamle Forusveien 12
N-4033 Stavanger
Tel: +47 51 81 58 50, fax +47 51 81 58 01
B-1050 Brussels
www.vikevaag.no
Tel. +32 2 646 11 12, fax +32 2 646 96 26
0
0
1999
2000
Net sales, SEKm
Övägen 6, Limhamn
International
21%
Malmö
CENTRAL REGION
Strängnäs
Tel. +46 18 66 03 00, fax +46 18 66 03 10
Belgium
www.byggholt.no
2001
2002
2003
CONTENTS
2
CEO’S COMMENTS
6
SHARE DATA
8
BUSINESS CONCEPT, GOALS AND STRATEGIES
10
CORPORATE GOVERNANCE
13
BOARD OF DIRECTORS AND SENIOR EXECUTIVES
16
JM’S CORE BUSINESS
19
MARKET OVERVIEW HOUSING
25
MARKET OVERVIEW RESIDENTIAL AND COMMERCIAL PROPERTIES
30
OPPORTUNITIES AND RISKS
33
FINANCIAL ITEMS
35
ENVIRONMENT
38
HUMAN RESOURCES
40
THE BRAND
P1– P12
Marielundsviken, Mariefred
P4
JM IN PICTURES
41
BUSINESS UNITS
46
BOARD OF DIRECTORS’ REPORT
53
INCOME STATEMENT
54
BALANCE SHEET
56
CASH FLOW STATEMENT
58
STATEMENT OF SHAREHOLDERS’ EQUITY
59
ACCOUNTING AND VALUATION PRINCIPLES
62
NOTES TO THE FINANCIAL STATEMENTS
77
PROPOSED DISPOSITION OF EARNINGS
77
AUDITORS’ REPORT
78
PROJECT DEVELOPMENT – NET SALES AND PROFIT
79
FIVE-YEAR SUMMARY
81
QUARTERLY OVERVIEW – GROUP
82
QUARTERLY OVERVIEW – BUSINESS UNITS
83
DEFINITIONS
85
JM’S PROPERTIES
91
TABLES, ILLUSTRATIONS AND DIAGRAMS
92
NOTICE OF ANNUAL GENERAL MEETING
j m d e l åj rms raanp np uo ar tl rj ae pn ou ra tr i 2– 0m0a3r s 2 0 0 2
1
2
CEO’S COMMENTS
Focus on profitability
have high customer value, we will reduce the number of
components, consolidate our purchasing volumes to fewer
suppliers and reduce the time spent on pre-construction and
production.
In 2003 the focus was on building the foundations for a
more efficient and more profitable JM.
DEVELOPMENT IN 2003
At the end of 2002, deficiencies came to light in control,
oversight and implementation of a number of projects in
Stockholm. These events led to a total review of JM’s operations and working methods.
MARKING TIME
All major projects were examined in detail during the year.
Several projects were revised, and all in all this led to a very
low number of production starts during the first nine
months of the year.
IMPROVED CONTROL AND OVERSIGHT
A lot of effort has been put into improving the internal structures for control and oversight. Among other things we have
introduced new routines for project oversight and follow up
of costs, new decision-making routines ahead of project and
production starts, and new monitoring routines for projects
with a significant financial impact. Several key project decisions are now centralised to business unit management,
group management and in certain cases to the Board.
COSTS MUST BE REDUCED
For most of the 1990s through to 2001, JM was able to
increase its revenues substantially due to major price increases for homes, particularly in Stockholm. Our costs,
however, went up even more. To sum up, substantially
increased costs, too great an emphasis on exclusive apartments and rapid growth meant that JM’s profitability was
swiftly undermined, despite basically good conditions in the
market.
MORE STANDARDISED PRE-CONSTRUCTION
I expect that JM’s new pre-construction routines, which
were developed and implemented during 2003, will lead to
lower costs with no loss of quality. By using more standard
solutions for those parts of housing construction that do not
With a profit from project development that amounted to
SEK 182m, 2003 – like 2002 – was a weak year. This weak
result was mainly attributable to a number of major projects
in the Stockholm area. Over the next few years, project quality will steadily improve as newly started projects form a
larger proportion of project volume. Operating profit
amounted to SEK 478m, underpinned by continued successful sales of fully developed properties.
There are several bright spots, however. We beat our previous sales record in 2003 and the strong inflow of customers
meant that we could substantially increase the number of
housing starts in the fourth quarter, which had a positive
impact on both net sales and cash flow. The improved cash
flow meant that the interest-bearing net debt could be
reduced by SEK 1.4 billion in the final quarter of 2003.
The fourth quarter was also something of a turning point
for JM’s Stockholm operations. There were almost 600 housing starts, compared with a total of 380 for the first nine
months. JM Residential Stockholm showed a profit in the
final quarter of 2003 and could thus break its negative earnings trend.
Furthermore, we can see that the measures adopted relating to project oversight, control and follow-up of costs are
starting to yield results. With a volume of 2,700 production
starts in 2003, we remained at the 2002 level, with the
important difference that projects are now better planned
and the reservation rate at production start is higher.
Major acquisitions of residential properties in Nacka and
C O S T- C U T T I N G P RO G R A M M E
• Fewer platforms and components.
• Greater standardisation in product design.
• Group-wide pre-construction process will reduce the number
of errors.
• Training.
• New purchasing strategy.
3
CEO’S COMMENTS
Vaxholm outside Stockholm provide a new market segment
for project development. This has also helped to reduce
exposure to the commercial property market. Acquisition of
the Norwegian project development company Vikevåg, based
in Stavanger, has further strengthened our position in the
Norwegian market.
Number
25,000
20,000
15,000
10,000
STRATEGIC DEVELOPMENT
These acquisitions are excellent examples of the new strategic plan adopted by JM. The strategic plan also means an
even clearer focus on housing development, a broadening of
the product range as regards both form of tenure and price
band, and a focus on growth outside Stockholm. Furthermore, the size of the building rights portfolio in the balance
sheet will be adjusted to reflect four years’ planned production.
Historically, JM has realised substantial values through the
sale of fully developed commercial properties. This type of
value creation will in future be more clearly linked to residential properties. The residential portfolio we have
acquired contains excellent development opportunities in the
form of densification through new construction and through
conversion to tenant-owned apartments. Furthermore, the
portfolio has low vacancy rates and stable cash flows.
Liljekonvaljen,Värmdö
DEMOGRAPHIC GROWTH AND
NEW HOUSING, COUNTY OF STOCKHOLM
5,000
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Demographic growth in the County of Stockholm
Number of housing starts in multi-family dwellings (information for 2003 is preliminary)
Source: Statistics Sweden, SCB
SHAREHOLDER VALUE
JM’s share price development between the all-time-high in
2002 until the beginning of 2004 has been weak, and the target that JM’s shareholders should receive a total return that
is higher than companies with similar operations and risk
profiles has not been met.
Profitable growth is a basic prerequisite for building
shareholder value over time. JM’s profitability depends on
P8
jm annual report 2003
4
CEO’S COMMENTS
M O R E E F F I C I E N T P R E - C O N S T RU C T I O N
JM must be able to efficiently produce attractive homes
of high quality at the lowest possible total cost. New
procedures for pre-construction were introduced in
2003.
Each housing estate or residential property is designed and produced on the basis of requirements where position, demand in
the local market, detailed planning requirements and other factors are taken into consideration.
With its new pre-construction procedures, JM is now introducing a more industrial way of working and production methods for its housing development. Fewer components and
consistent and proven processes throughout the entire organisation and in project development phases will lead to lower
costs, shorter lead times and improved quality.
This change means that pre-construction decisions will be
made centrally, which will in turn guide the planning work carried out internally at JM and by external consultants.The preconstruction procedures have been drawn up by some 60 of
JM’s most qualified quantity surveyors, project managers and
craftsmen and are based on well-tried and cost-effective
choices of materials and working methods.
One basic prerequisite is that the new procedures do not have a
negative impact on customer relations and market offerings.
Pre-construction decisions therefore take into account parameters such as “customer values” i.e. insulation standard, window
design and exterior, as well as “non-customer values” such as
wall elements, joists, installations, roofing, etc. Based on this division, a more expensive component can be included provided it
in some way creates added value for the customer. In other
cases more expensive components or solutions are chosen to
reduce the risk of error and costly supplementary work,
increase useful economic life and reduce operating costs.
The new pre-construction procedures will increase productivity, quality and customer benefit. The new pre-construction
decisions also lay the foundation for greater savings within purchasing since purchasing volumes will be more focused towards
a lower number and more standardised components.
Examples show that the savings potential can amount to
between 10 and 20% on individual components, by consolidating volumes to a few suppliers and reducing time spend in preconstruction and production.
The new pre-construction procedures for apartment blocks
became effective in December 2003.
EXAMPLE OF WORKING DRAWING
Embedded plastic tube ø 60 to
be filled with expanding mortar
Top edge prefab upright
= top edge flat bearing surface
GOALS FOR NEW
PRE-CONSTRUCTION PROCEDURES
• Fewer errors – increased customer benefit.
• Fewer platforms and components.
• Lower purchasing costs, material and
consultants.
• Shorter lead times.
• More cost-effective production.
Dowel ø 25 length 700 mm
protrudes 400 over upright top
Prefab upright
Working drawing from the new pre-construction procedures
which shows jointing of prefabricated concrete uprights
through a floor.
CEO’S COMMENTS
5
our ability to offer attractive and well-built homes at competitive prices and at the lowest possible total cost. I feel
confident that we can achieve this.
Broadening our product range means that more people
will be able to afford to buy a JM home. This does not mean,
however, that we will be renouncing quality, margins or our
long-term approach. The houses we build will stand for a
very long time.
Since we already operate in the most attractive Nordic
markets, it is natural for us primarily to seek growth through
organic expansion in existing locations. Of course this does
not rule out acquisitions, if good opportunities should arise.
TOWARDS SIMPLER REVENUE RECOGNITION
The Swedish Construction Federation is preparing a new
industry recommendation for revenue recognition of residential production conducted by the companies. The new
principle, which is planned to be adopted by JM with effect
from the 2005 financial year, is based on revenue being
recognised as the end customers sign purchasing contracts.
This will facilitate analysis of our business and make revenue
recognition more conservative.
PROSPECTS FOR 2004
JM focuses on building homes on attractive sites in areas with
good economic growth. The long-term trend with more people
moving to cities and university towns in the Nordic countries
is continuing. These housing markets, as well as surrounding
municipalities and other areas with good communications, are
showing positive development. We anticipate substantial and
lasting demand for homes developed by JM in the foreseeable
future. We have a well positioned building rights portfolio
with approximately 23,400 residential units in attractive
locations.
We will continue to give priority to our markets in Sweden,
Norway, Denmark and Belgium. Some shifting of position will
take place to reduce JM’s dependence on the Stockholm market, although without forgoing the potential we have in our
largest market. Major projects outside Stockholm include the
Dockan area in the port of Malmö, Sannegårdshamnen in
Gothenburg, and Industristaden in Uppsala. In Oslo, development is under way of the station area in Grefsen.
We expect a stable, possibly slightly weaker price trend.
Even if revenues remain unchanged, a greater degree of stan-
dardisation, increased use of joint platforms, reduced purchasing costs and a clearer focus on costs will propel JM
towards improved profitability.
We will also further strengthen our customer and market
orientation. The level of service in our business will be developed and the proportion of satisfied customers will rise.
JM already has a strong brand, satisfied customers, longterm operations and employees with a high level of competence. I feel that there is strength in the company and a strong
determination to achieve our goals.
Stockholm, March 2004
Johan Skoglund
President and CEO
6
S H A R E D ATA
Some recovery
SHARE BUY-BACK PROGRAMME
SHARE CAPITAL
JM shares are listed on the A list of the Stockholm Stock
Exchange (Stockholmsbörsen). The share capital amounts to
SEK 112.3m represented by 28.1 million shares each with a par
value of SEK 4 and equal voting rights. A trading block amounts
to 200 shares.
SHAREHOLDER TARGET
JM prioritises active management of the consolidated balance sheet. To the extent the visible equity ratio and interest
coverage are assessed as exceeding the optimal capital structure on a continuing basis, capital will be transferred to
shareholders in a form that is appropriate at the time.
In 2003, in accordance with its mandate from the 2002
Annual General Meeting, JM repurchased 1,400,000 of its
own shares at an average price of SEK 110 per share. At the
Annual General Meeting in April 2003 it was decided to
eliminate through cancellation the 2,300,000 shares repurchased by the company since the previous annual general
meeting. The share capital therefore decreased by SEK 9.2m.
JM’s shareholders should receive a higher total return, i.e. dividends and price appreciation on JM shares, than shareholders
in companies with similar operations and risk profiles.
OWNERSHIP STRUCTURE AT 31 DECEMBER 2003
SHARE PRICE TREND AND RETURN
JM shares are included in Stockholmsbörsen’s index
“SX4040 Real Estate”. In 2003, JM’s share price fell 34.6%,
compared with an increase of 24.7% for the SX4040. Dividend yield, i.e. proposed dividend in relation to share price
at year-end, was 4.7%.
TRADING AND MARKET CAPITALISATION
In 2003 JM shares were traded to a total value of SEK 2.6 billion. Average daily trading was approximately SEK 10m (14).
The turnover rate, i.e. the liquidity of the shares on Stockholmsbörsen, was 85.6% during the year compared with an
average for the entire stock exchange of 114.7%. The company’s
market capitalisation amounted to SEK 3.0 billion at year-end.
Size of
holding
No. of
shareholders
% of all
shareholders
1–500
Total no.
of shares
owned
% of
share
capital
4,231
79.0
580,670
2.1
501–1,000
515
9.6
438,103
1.6
1,001–5,000
369
6.9
882,978
3.1
5,001–20,000
117
2.2
1,282,408
4.6
20,001–100,000
64
1.2
3,115,778
11.1
100,001–
57
1.1
21,765,470
77.5
5,353
100.0
28,065,407
100.0
Total
SHARE PRICE TREND 1 JANUARY 2003 – 29 FEBRUARY 2004
Trading volume
(000s)
SEK
220
OWNERSHIP STRUCTURE
200
The number of shareholders at 29 February 2004 was 4,987.
The ten largest Swedish shareholders account for 48% of the
share capital and foreign shareholders for 28%.
180
1,500
160
140
1,000
DIVIDEND POLICY
120
Over time, the dividend should reflect the earnings trend in
the total operating activities. The average dividend over a
business cycle should correspond to 50% of consolidated
profit after tax. Capital gains from property sales are a natural part of JM’s project development operations and therefore included in the calculation of dividends.
500
100
80
Jan Feb Mar Apr May Jun Jul
Aug Sep Oct Nov Dec Jan Feb
04
03
SAX All Share index No. of shares traded Source: SIX
JM
SX4040 Real Estate
7
S H A R E D ATA
SHARE DATA
2003
2002
2001
2000
1999
Share price at 31 Dec
106
162
217.50
209
164
Highest price during the year
162
272
263
238
174
Lowest price during the year
82
150
182
143
111
Dividend yield at 31 Dec (%)
4.7
6.2
6.4
4.8
4.1
2,975
4,889
6,523
6,947
5,452
6.60
8.50
36.30
25.40
13.30
Market value
114
118
212
289
277
Book value
101
94
157
194
206
SEK per share
Market capitalisation at 31 Dec (SEKm)
Earnings after tax, total 1)
Investment properties
Shareholders’ equity (reported)
117
Dividend
5.00 2)
121
128
113
95
10.00
14.00
10.00
6.75
Dividend as a % of profit after tax
75
118
37
39
50
P/E ratio at 31 Dec
16
19
6
8
12
28,065,407
29,463,614
29,989,363
33,241,000
33,241,000
6.60
8.50
36.10
25.10
13.20
Number of shares, 31 Dec
1)
Earnings after tax after full dilution
2)
Proposed by the Board.
Excluding 900,000 repurchased shares.
3)
SHAREHOLDERS AT 29 FEBRUARY 2004
3)
CHANGES IN SHARE CAPITAL 1998–2003
Shareholder
% of shares
SEB funds and foundations
Gamla Livförsäkrings AB SEB Trygg Liv
11.1
New issue,
Year
SEKm
9.1
1998
2.41)
AFA Försäkringar
5.9
2001
1.51)
Handelsbanken funds
4.4
2002
0.21)
Stefan Persson Placering AB
4.3
2003
0.0
Alecta
4.2
Fourth National Pension Fund
2.7
Eikos
2.6
Länsförsäkringar Liv Försäkrings AB
Länsförsäkringar – funds
2.0
Robur funds
1.9
Livförsäkrings AB Skandia
Foreign shareholders
28.0
Other shareholders
23.8
Total
100.0
Number of shareholders at 29 February 2004: 4,987.
Number of shares at 29 February 2004 amounts to 28,065,407.
1)
Redemption
of shares,
SEKm
–13.3
1)
–9.2
Number of
shares
Par value/ Share capital,
share, SEK
SEKm
33,241,000
4
133.0
30,289,363
4
121.2
30,363,614
4
121.4
28,065,407
4
112.2
Conversion of debenture loan.
STOCKBROKERS WHO CONTINUOUSLY MONITOR JM
Company
Analyst
ABG Sundal Collier
Fredrik Grevelius
Alfred Berg Fondkommission
Lars-Åke Bokenberger
CAI Cheuvreux Nordic
Tomas Ramsälv
D. Carnegie
Fredrik Skoglund
Deutsche Bank
David Halldén
Enskilda Securities
Erik Nyman
Handelsbanken Securities
Jonas Eixmann
Merrill Lynch
Bernd Stahli
Nordea Securities
Jonas Andersson
Swedbank Markets
Tobias Kaj
8
B U S I N E S S C O N C E P T, G O A L S A N D S T R AT E G I E S
Strategy for high total return
BUSINESS CONCEPT
To create attractive living and working environments that satisfy individual needs both today and in the future.
The business concept means that JM is a project developer
of housing and to a selective extent of commercial premises.
JM gives priority to high quality and a holistic approach in its
design. The aim is to create living and working environments
that will remain attractive over time.
duction resources and will therefore maintain a limited
but effective construction and contracting business. However, the company’s own efficiency must always be examined in relation to costs of external production resources.
• Continued volume growth will be generated both organically and through acquisitions, with the priority of
strengthening the Group’s position in existing markets.
Growth will be achieved subject to good profitability and
a market-leading position.
PROFITABILITY TARGET
VISION
After-tax return on visible equity to amount to 10–15% over a
business cycle.
This target reflects the long lead times and cyclical nature
of JM’s business.
JM shall be a leading developer of high-quality housing projects in the Nordic region.
AMBITION FOR GROWTH
OBJECTIVE FOR SHAREHOLDER VALUE
The goal is to give shareholders a higher total return, dividends plus JM share price appreciation, than other companies
with similar operations and risk profiles.
JM aims to grow over time but housing starts will take place in
response to secured demand as well as quality assured preconstruction and production planning.
DIVIDEND TARGET
The average dividend over a business cycle should correspond
to 50% of consolidated profit after tax.
STRATEGY
In order, within the framework of the business concept, to
achieve its vision and meet its shareholder value objective, JM
has the following strategies:
• JM will develop housing in growth areas with good demographic and socio-economic conditions over time. These
are currently metropolitan areas as well as university and
college towns primarily in Sweden, Norway, Denmark and
Belgium.
• The focus must be clearly on high quality and eco-compliant homes and workplaces with a high customer value and
in attractive locations.
• JM will focus on cash flows and effective utilisation of
the balance sheet. This will be achieved by maintaining a
high rate of start-ups, implementation and sales of property
projects.
• Homes will mainly be sold for private ownership, but may
also include rentals.
• Project development of commercial properties will be limited and primarily support housing development.
• JM should internally secure a certain proportion of pro-
ASSETS AND CAPITAL STRUCTURE
JM’s ambition is to maintain over time an optimal composition of assets and capital structure, suitable for the company’s project development activities.
The building rights portfolio will be continuously optimised with regard to demand trends, planned production
and tied-up capital. The balance sheet should normally not
contain development properties exceeding four years’ production expressed in number of building rights.
The balance sheet item investment properties will entirely
comprise project assets and mainly consist of residential
properties for project development, in the form of conversion
to tenant-owner apartments or densification. JM’s aim is
that the balance sheet should not contain any fully developed
commercial properties, these should be sold as soon as possible following completion.
The cyclical nature of commercial project development
and a varying supply of residential properties for sale means
that the item investment properties can vary in size.
9
B U S I N E S S C O N C E P T, G O A L S A N D S T R AT E G I E S
The visible equity ratio should amount to 35% over a business cycle. To the extent the visible equity ratio and interest
coverage are assessed as exceeding the optimal capital structure on a lasting basis, capital will be transferred to shareholders in a form that is appropriate at the time.
The equity ratio target is a simplified consequence of a
more extensive analysis where shareholders’ equity has been
allocated to the balance sheet’s different asset classes and
types of operations taking assessed operating risk into
account. A falling proportion of fully developed investment
properties requires a higher equity ratio.
Since project development demands ongoing, effective capital allocation in a partly cyclical market, a dynamic approach
to financial strength and interest coverage is required. The
assessment is that the present equity ratio target provides
appropriate financial stability over a business cycle.
REQUIRED RATE OF RETURN
In order to generate the highest possible shareholder value,
JM must have good knowledge of which investments are profitable and achieve the Group’s required rate of return. Every
investment in a project must therefore generate a return that
covers its cost of capital. The investment’s cash flow is calculated and discounted on the basis of a required rate of return.
If the net present value of these cash flows is positive, the
investment creates value. Return requirements are set for
JM’s various operations where JM’s average required rate of
return can be simplified as a balance of JM’s costs for shareholders’ equity and borrowed capital as follows:
cost of capital, shareholders , equity
• Risk-free return – average return on a five-year government bond is approximately 5%.
• Risk premium – for the risk the investor takes when investing in JM shares, the risk premium is estimated at 5%.
• The required rate of return on equity (risk-free return plus
risk premium) – 10%.
cost of capital, borrowed capital
• Risk-free return – see above 5%.
• Risk premium which is paid on loan financing – 1%.
• Tax deduction – since interest expenses reduce the profit on
which tax is paid, the actual cost is lower, with corporate
tax at 28% the interest expense after tax is reduced by 28%
to 4.3%.
capital structure
• Debt/equity ratio – JM’s target is an equity ratio of 35%
over a business cycle. In the individual projects, the debt/
equity ratio is assumed, on average, to be 1.0.
The Group’s weighted cost of capital (WACC) and therefore
its basic required rate of return is 7.2%. This means that the
Group’s average investments must generate cash flow after
payment of all operating expenses and tax, but before interest expenses, of at least 7.2% of the basic investment in order
to be profitable.
FINANCIAL TARGETS
%
Return on equity, 5-year weighted
Target
10–151)
2003
2002
2001
2000
1999
6
17
19
14
13
Dividend, as a % of profit after tax
50
75
118
37
39
50
Equity ratio
35
36
34
30
31
28
Project development margin 3)
10
2.4
5.4
11.8
10.3
6.5
2)
Over a business cycle with effect from 2004.
2)
As proposed by the Board.
3)
Operating margin as of 2004.
1)
10
C O R P O R AT E G O V E R N A N C E
Structure for governance
and reporting
This section provides a description of the structure and
procedures for the Board and Executive Management,
and shows how responsibility and authority are delegated within the organisation.
THE COMPOSITION OF THE BOARD
In 2003, JM’s Board comprised seven members, without
deputies, who were elected by the Annual General Meeting,
and two members with two deputies who were appointed by
the employee organisations.
NOMINATION
Nominations of Board members ahead of an election at an
Annual General Meeting are made through a Nomination
Committee comprising representatives for the four largest
shareholders in the company, at any time, as well as the Chairman of the Board. The composition of the Nomination Committee is announced at the end of the fourth quarter at the
latest. Composition is not affected by any changes in ownership structure between the date of presentation of the Nomination Committee and the next Annual General Meeting.
The key task of the Nomination Committee is to present
the Annual General Meeting with proposals for Board members and fees to Board members as well as, when so required,
to propose election of auditors. Ahead of the 2004 Annual
General Meeting, the Nomination Committee comprised:
Mats Tunér (SEB fonder), chairman, Marianne Nilsson
(Robur fonder), Anders Algotsson (AFA Försäkringar), Kjell
Norling (Handelsbanken fonder) as well as the Chairman of
the Board, Per Westlund. Proposed nominations to the Board
are specified in the notice of the Annual General Meeting.
THE WORK OF THE BOARD
The work of the Board concentrates on strategic issues such
as operational focus, finance and financial position, control
and efficiency, as well as decisions on production starts,
investments and sales of development land and fully developed properties above certain ceiling amounts.
Eleven Board meeting were held during the year, including
one statutory meeting.
The duties of the Chairman of the Board are estimated to
amount to approximately 60 working days per year and about
20 working days for non-executive Board members. The
Chairman of the Board makes an annual evaluation of the
work of the Board with the Board members.
REPORTING
The President is responsible for ensuring that the Board
receives reports and information that are of a quality that
allows the Board to make well-founded decisions and qualified
assessments. Economic and financial reports are presented at
each scheduled Board meeting. Quarterly and year-end
reports comprise the basic reporting and are complemented
with information from the business units obtained from JM’s
internal reporting system. The President is also charged with
reporting to each Board meeting the total purchase price for
acquired and sold properties and on decisions for investment
in properties. Before each meeting, Board members are provided with documentation of which to base their decisions.
COMPENSATION AND AUDIT COMMITTEES
A Compensation Committee and an Audit Committee were
appointed in February 2003. Each committee comprises
three members of the Board. The committees are, with a few
exceptions, preparatory bodies in relation to the Board.
Until the 2004 Annual General Meeting, the Compensation
Committee comprises Per Westlund (chairman), Per Olofsson
and Lennart Sundén, with the President as a co-opted member. The President does not participate in matters concerning
his own compensation. Four meetings were held during the
year. Work has included an external evaluation where compensation levels and principles for members of Executive Management were compared with both the building trade and the
total private labour market. The Compensation Committee
has also developed new, stricter principles for variable compensation. Details of compensation principles for senior executives can be found on page 38 (Human Resources).
Until the 2004 Annual General Meeting, the Audit Committee comprises Berthold Lindqvist (chairman), Elisabet
Annell and Björn Björnsson. The company’s two auditors and
11
the President are co-opted members. Eight meetings were
held in 2003. Work has focused on measures for better control and oversight, initially directed at weaknesses in the
existing organisation, as well as measures that management
wished to adopt. The committee then established a programme for control and oversight. The committee has,
through an extra assignment to the auditors, verified that
measures adopted and routines have been introduced and
applied, and that they have had the desired effect.
A specification of salary and pension terms for the President
as well as compensation to Executive Management is provided on page 75 (Notes to the Financial Statements). Where
applicable the Annual General Meeting decides on the introduction of incentive programmes for employees in the form
of stock option or convertible debenture programmes.
REMUNERATION TO THE BOARD AND MANAGEMENT
PRESIDENT’S RIGHT OF DECISION
Remuneration to Board members is decided by the Annual
General Meeting based on proposals from the Nomination
Committee. As decided by the 2003 Annual General Meeting, the Chairman of the Board receives a fee of SEK
425,000. Non-executive Board members each receive a fee of
SEK 200,000. The Annual General Meeting also decided on
fees to the Compensation and Audit Committees with a
The Board has delegated to the President the right of decision for purchases and sales of properties (to a maximum
value of SEK 100m) and investments in properties (up to SEK
400m). Other cases are decided by the Board. The Board has
also delegated to the President the right of decision for production starts for housing projects up to a total project cost,
excluding the purchase price for the property, of SEK 400m.
These amounts are chosen to meet the Board’s need to exercise control and management’s need of freedom of action.
The President has the right to further delegate some of the
above decision rights to business unit managers.
AU D I T C O M M I T T E E –
DUTIES AND RESPONSIBILITIES
• Evaluation of external auditors for recommendation to the
Board and Annual General Meeting (in consultation with the
Nomination Committee).
• Approval of fees and remuneration to auditors for special
assignments.
• Review of audit plans in the short and long term.
• Quality assessment of internal control systems and routines.
• Reporting and review of areas or projects of special interest.
• Examination and review of closing accounts and interim reports.
• Reporting and presenting to the Board on observations
made at reviews with auditors and management.
• Initiating more extensive work within selected areas.
C O M P E N S AT I O N C O M M I T T E E –
DUTIES AND RESPONSIBILITIES
• Preparing proposals regarding salary, pension benefits and
other terms for the company’s President.
• Preparing proposals regarding general principles for compensation to other employees,particularly variable compensation.
• Preparing proposals for any incentive programmes if these
are based on share price development.
• Deciding on salary and other terms for Executive Management (excluding the President), provided these are based on
general principles adopted by the Board.
total of SEK 200,000. These fees have been divided equally
between the six committee members.
MANAGEMENT’S WORK
Managerial responsibility includes always working to ensure
that guidelines from the Board and President are followed.
JM’s operations are divided into five business units each
with a manager who has ultimate responsibility and reports
to the President.
Executive Management (EM) comprises all heads of business units and staff heads and meets at least once a month.
Group-wide matters (quality, environment, employees, communications, etc.) are handled by EM jointly. Business matters (such as production starts, investments) are handled by
business area managers, the President, the CFO and the senior legal adviser.
The President has delegated to the business area managers
the right of decision for purchases of properties (up to SEK
10m), infrastructure investments related to projects (up to
SEK 10m) and production starts of projects (up to SEK 150m).
These decisions are taken by the business unit managers in the
business committee. For companies in the JM International
business unit, decisions are made by the board of each company, with corresponding decision-making guidelines.
12
CONTROL AND REPORTING STRUCTURE
Within JM a large number of projects are in production at
any given time. It is not unusual for a project to involve more
than 100 people with an estimated order value of more than
SEK 100m. Every project is run by a project manager who is
responsible for the project’s revenues and expenses. The
project manager reports to the regional manager who is
directly subordinate to the business unit manager. All these
people have profit responsibility. The business unit manager
is responsible for deciding the revenue level in the project.
Follow-up of sold and reserved units takes place on a
monthly basis, with reporting to regional manager, business
unit manager and the President. Complete reviews and reconciliation of each project’s revenues and expenses are performed every quarter. A selection of major projects is
reviewed by the auditors and presented in the Audit Committee every quarter.
During 2003 a large number of measures were adopted to
improve control and governance of JM’s operations. A number of important project decisions have been centralised,
mainly to Executive Management, but also to the Board.
Considerably stricter project oversight routines have been
introduced, particularly in the Stockholm regions. Formalised “decision gateways” now precede the important project decisions: start of pre-construction, sales start and proRöllingby 2, Åkersberga
duction start. Decisions to begin work on a project are now
always made by business unit management or Executive
Management, or by the Board for major projects.
New monitoring routines have been introduced for large
projects. Accounts are presented quarterly by the business
unit manager and regional manager to the President, Vice President and CFO. Assessment data includes the financial history
of the project, future anticipated revenues and expenses and
the current sales and reservations situation. Special control
groups have been set up for the very largest projects. The
assignments of external auditors have also been extended.
EFFICIENCY AND STRATEGY
Internal efficiency and JM’s future development and direction are also questions that have engaged the Board and Executive Management during the year. A programme to reduce
production costs has been launched. This includes both a
group-wide pre-construction process (see page 4) and development of long-term, strategic purchasing routines.
The Board has also established JM’s strategic direction for
the years ahead. This strategy, which is based on the company’s strengths within project development of homes,
includes development of the product range in order to attract
more customer segments and a focusing of the property portfolio towards residential properties for project development.
P1
B OA R D O F D I R E C TO R S A N D S E N I O R E X E C U T I V E S
13
B OA R D O F D I R E C TO R S
Top row from left: Per Westlund, Elisabet Annell, Björn Björnsson, Berthold Lindqvist. Middle row from left: Per Olofsson, Johan Skoglund, Lennart Sundén,
Jonatan Sundelin. Bottom row from left: Magnus Rehbinder, Leif Lundell, Johan Wegin.
EXECUTIVE MANAGEMENT
Top row from left: Johan Skoglund, Magnus Key, Zdravko Markovski, Claes Magnus Åkesson. Middle row from left: Urban Lilja, Caroline Burén, Lennart Henriz,
Göran Malmberg. Bottom row from left: Sören Bergström, Sten Hamberg.
14
BOARD OF DIRECTORS
Per Westlund
Chairman of the Board
Member of the Board since 1998.
Shares in JM: 3,000
Born 1944. M.Sc.Eng. and M.B.A.
Chairman of the Swedish Society of Civil Engineers.
Board member of Svenska Kaolin AB and Svenska
Ostindiska Companiet AB, and the Royal Swedish
Academy of Engineering Sciences, IVA.
Former positions: Executive Vice President Skanska.
Elisabet Annell
Shares in JM: 700
Born 1945. M.Pol.Sc.
CEO of Univero Group (former Temo Group).
Board member of Axel Johnson International AB,Danderyds Sjukhus AB,IBS AB, AB Sardus,TV4 AB,Catella Holding AB,Livförsäkrings AB Skandia,Nordic Growth Market
NGM AB and member of the Securities Council.
Former positions: President and Senior Consultant at
SMG Sweden AB, President and Senior Consultant at
SIFO Management Group AB, President and Consultant
at Tönnerviks Revision AB.Vice President and Consultant at Svenska Management Gruppen AB (Mgruppen).
Björn Björnsson
Shares in JM: 2,000
Born 1946. M.Pol.Sc.
Financial consultant. Board member of Billerud AB, Bure
Equity AB,Teracom AB, Försäkrings AB Skandia and
Öhman Kapitalförvaltning AB.
Former positions/assignments: President Lancelot Asset
Management AB and President Export-Invest AB.
Per Olofsson
Shares in JM: 500
Born 1940. B.Sc.
Chairman of the Board of Sync BPI AB, MPI Teknik AB
and Springboard Capital AB. Board member of Kreatel
Communications AB,Vitea AB, KTH Executive School
AB and Webanalys AB.
Former positions: President of the Federation of
Swedish Industries,Vice President of IBM Worldwide
Healthcare Solutions Industry, President of IBM Nordic
AB and President of IBM Svenska AB.
Lennart Sundén
Shares in JM: 1,500
EMPLOYEE REPRESENTATIVES
Leif Lundell
Born 1939, electrician.
Shares in JM: 1,044
Number of warrants: 0
Magnus Rehbinder
Born 1944, mining engineer.
Deputy member of the Board since 2003.
Shares in JM: 100
Jonatan Sundelin
Born 1970, construction worker.
Deputy member of the Board since 2003.
Shares in JM: 0
President and CEO of Swedish Match AB. Board member of FöreningsSparbanken AB and Arnold André
GmbH & Co. KG.
Johan Wegin
Born 1965, construction engineer.
Shares in JM: 0
Former positions: Head of Electrolux Industrial Operations for White Goods in Europe and head of Electrolux
Global Vacuum Cleaners and Small Appliances.
SECRETARY TO THE BOARD
Johan Skoglund
Shares in JM: 5,000
Number of warrants: 5,000
Urban Lilja
Born 1952, Senior Legal Adviser at JM AB.
Secretary to the Board since 1996.
Shares in JM: 25,000
Born 1952. M.Sc.Eng. and M.B.A.
Born 1962. M.Sc.Eng.
President and CEO of JM. Chairman of the Board of AB
Borätt and Seniorgården AB. Board member of AB
Bostadsgaranti, Försäkrings AB Bostadsgaranti, Mentor
Sverige AB and SMÅÅ AB.
Former positions in JM Group: Site Engineer,
President’s Assistant, Project Manager, Regional
Manager and Business Unit Manager.
AUDITORS
Öhrlings PricewaterhouseCoopers AB
Bertil Johanson
Senior Auditor, Authorised Public Accountant
Ulf Westerberg
Authorised Public Accountant
Berthold Lindqvist
Shares in JM: 0
Shareholdings pertain to personal holdings and shares
owned by immediate family members at 31 January 2004.
Born 1938. Honorary Doctor of Medicine, Engineer.
All warrants were acquired through purchases in 2001.
Chairman of the Board of Munters AB. Board member
of Securitas AB,Trelleborg AB, Probi AB and Novotek
Sverige AB.
Former positions: President of Gambro AB and Executive Vice President of Sonesson AB.
EXECUTIVE MANAGEMENT
Johan Skoglund
President and CEO
JM employee since 1986
Shares in JM: 5,000
Born 1962. M.Sc.Eng., KTH 1986. Master of Science
Programme Stockholm School of Economics 1998.
Site engineer 86– 89, president’s assistant 89–91,
project manager 91– 96, regional manager Outer City
96– 97, regional manager Stockholm South 97–99,
regional manager Commercial Properties 99–00, head
of Sweden business unit 00–01, head of JM Residential
business unit 01– 02. President and CEO 02–.
Chairman of the Board of AB Borätt and Seniorgården
AB. Board member of AB Bostadsgaranti, Försäkrings
AB Bostadsgaranti, Mentor Sverige AB and SMÅÅ AB.
Magnus Key
Executive Vice President
JM International and JM Residential Sweden
Born 1944. M.Sc.Eng., Chalmers 1968
Employed at Skanska 68 –73.
Site engineer, head of department and regional manager
in Luleå 73 –85, acting production manager in
Stockholm 85 –89, vice president, production manager,
President JM Byggnads AB 89–01. Executive Vice
President and head of international operations 01–.
Head of JM Residential Sweden from 1 April 2003.
Chairman of the Stockholm Association of Building
Contractors. Board member of Sveriges Byggindustrier
and Arkitektkopia.
Caroline Burén
Corporate Communications
Shares in JM: 0
Sten Hamberg
JM Commercial
Shares in JM: 9,000
Born 1961. B.A., Uppsala University 1989. DIHR 1991.
Born 1951. LL.B., Uppsala University 1976.
Project manager assistant Stockholm Convention Bureau
88–90, communication officer Nynäs Petroleum 92–93 and
communication manager Nynäs Naphthenics AB 93–01.
Assistant lawyer HSBs Riksförbund 76–80. Company
lawyer JM 80–85, president AB Borätt 85–00, president
AB Seniorgården 90–00, development manager 95–00
and head of Business Development/Properties business
unit 00–01. Head of JM Commercial business unit 01–.
Director of Corporate Communications JM AB 01–.
Göran Malmberg
Human Resources
Shares in JM: 0
Born 1945. LL.B., Stockholm University 1974.
Labour legislation lawyer Apoteket AB 82–87, negotiator/
lawyer Employer Organisation SFA 87–89 and personnel
manager Helsingborgs Hamn AB.
Director of Human Resources JM AB 91–.
JM PRODUCTION
Mikael Matts, Production, Greater Stockholm
Bertrand Hennings, Production, Stockholm Inner City
John Eklund, Production Stockholm Central
Mats Åkerlind, JM Stombyggnad AB and JM Inredning AB
Johan Lundqvist, JM Byggledning
Gunnar Josefson, Purchasing
Anders Rahm, Contracting
Ove Sandin, Civil Engineering
Anders Brännström, JM Fasad
Nils-Erik Häggström, O.Timblads Målerifirma AB
Asst. supervisor 78–81, project manager 81–84, director’s assistant 84–86, manager/production manager
Octopus Energy/Industri AB Ventilator (both JM Group)
86–87, data processing manager/development manager
88–91, marketing manager AB Projektgaranti 91–94,
vice president and regional manager AB Projektgaranti
94–98 and quality and environmental manager 98–99.
Head of Business Development 00–.
Born 1964. M.Sc.Eng-, KTH 1987.
Employed within the Ericsson Group 87–98: responsible for financial co-ordination 87–93, Assistant
Treasurer 93–94, senior controller, Asia/China/Middle
East market unit 94 –96, head of finance and treasury
Malaysia 96–97 and regional controller Asia 97–98.
Supervisor/site engineer 87–80,contractor engineer and
purchaser 90–92,project planning manager 93–94,project
manager 94–00.regional manager Uppland 00–01 and
regional manager East 01–02.Head of JM Residential business unit 02–03.Head of JM Residential Stockholm from
1 April 2003.
Lawyer Swedish Association of Registered
Physiotherapists 81– 82, lawyer Friman & Carlander
advokatbyrå 82 – 86, company lawyer Celsius Industrier
AB 86 – 89 and company lawyer Akzo Nobel AB 89– 96.
Chief Legal Counsel JM AB 96–. Secretary to JM’s
Board of Directors.
Birgitta Seman, AB Borätt
Christer Lindmark, Seniorgården AB
Born 1953. M.Sc.Eng., KTH 1978.
Born 1959. M.B.A., Stockholm School of Economics 1984.
Born 1952. LL.B., Lund University 1978.
Articled clerk Borås District Court 78–81.
JM RESIDENTIAL STOCKHOLM
Magnus Berg, Stockholm Inner City Region
Per Johansson, Stockholm Central Region
Patrik Andersson, Stockholm South City Region
Robert Jaaniste, Stockholm North Region
JM RESIDENTIAL SWEDEN
Anette Frumerie, East Region
Mats Karlsson, Central Region
Anders Lundberg,West Region
Anders Wahrer, South Region
Zdravko Markovski
JM Residential Stockholm
JM employee since 1987.
Shares in JM: 2,000
Urban Lilja
Legal Affairs and Development
OTHER SENIOR EXECUTIVES
Lennart Henriz
Business Development (Quality and Environment/IT)
Shares in JM: 7,240
Claes Magnus Åkesson
Finance and Treasury
Chief Financial Officer JM AB 98–.
15
Sören Bergström
JM Production
Shares in JM:0
Number of warrants:2,000
Born 1956.M.Sc.Eng.,KTH, Master of Science
Programme Stockholm School of Economics 1996.
Executive Management Programme Stockholm School of
Economics 2001.
Project manager 88–96,president JM Stombyggnad 97–00,
president JM Inredning 98–00, president JM Värmdöstrand AB 00–02 and regional manager Stockholm South
00–02.Head of JM Production business unit 02–.
Chairman of the Board of O.Timblads Målerifirma AB.
JM COMMERCIAL
Eva Eriksson, Project Development/Transactions
Lars-Olof Höglund, Property Management
Jarl-Inge Stormo, Property Management – Technical
Services
JM INTERNATIONAL
Eilert Flågan, Byggholt AS, Norway
(resigned as President 30 June 2003)
Thor Olaf Askjer, Byggholt AS, Norway
(became President on 1 July 2003)
Morten G. Fossum, JM Danmark A/S, Denmark
Göran Sjöborg, JM Construction SA, Belgium
GROUP-WIDE FUNCTIONS
Peter Kindstrand, Financial Manager
Eva Nilsson, Group Treasurer
Benny Berglund,Tax and Acquisitions
Tomas Wiik, IT Manager
Shareholdings pertain to personal holdings and shares
owned by immediate family members at 31 January 2004.
All warrants were acquired through purchases in 2001.
16
Valuation creation at JM
JM has many years of experience and considerable expertise in project development, and plays a leading role in customer orientation as well as quality and environmental
work.These are important prerequisites for a successful
project development company.
housing project. Before production can start customers
must have reserved a certain proportion of the planned residential units. Projects are multi-year and JM’s involvement
continues approximately two years after occupancy, when
management responsibility for the property is transferred
to the tenant-owner co-operative.
HOUSING PROJECTS JM
Advance reservations
required for production start
Market survey
Pricing
PROJECT DEVELOPMENT
Reservations
Housing development projects involve a continuous process
of acquiring, developing, selling and once again acquiring
new properties. Projects are often capital-intensive and
involve a number of phases in which value can be added.
Project
conception
Sales
Planning
Appeals
Detailed
plan/building
permit
Customisation
Occupancy/Living
Pre-construction
Production
Management for
tenant-owner co-operative
PROJECT DEVELOPMENT PHASES
0
Conception phase
ACQUISITION
Management
Project
conception
Planning
Occupancy
Pre-construction
Production
SALE/LEASE
1
Financing
JM’s strategy is to maintain a high sales rate in order to
release capital for new strategic investments.
2
3
Market process
4
5
6
Year
7
Production process
HOW LAND VALUES ARISE
Land and building rights can be said to be the options of the
property market. When the sales price for a tenant-owned
unit or the market rent for commercial premises do not provide a return on the construction investment, the building
right has a very low value. When the sales price/market rent
is high, the building right acquires a high value. Land value is
in principle the residual value between the value of the completed building and the production cost of the building.
Small fluctuations in the sales price can lead to major variations in land value. The example below, a fictitious housing
project in a Stockholm suburb, shows that an increase in the
sales price of SEK 2,000 per sq.m. (9%) means that the land
value increases by approximately SEK 1,000 per sq.m. or 33%.
SENSITIVITY CALCULATION, LAND VALUE
PROCESS FOR HOUSING PROJECTS
Sales price SEK/sq.m.
Housing development projects involve a close interplay between market and production processes. Market surveys
are conducted regularly to analyse customer preferences
with regard to type of housing, design and local services.
These surveys are an important basis for decision both
ahead of land acquisitions and before project starts.
The illustration below presents the different phases of a
Construction cost SEK/sq.m.
23,000
25,000
–17,000
–17,000
Land value scope
6,000
8,000
Development risk 1)
–3,000
– 4,000
Residual land value
3,000
4,000
1)
Development risk, i.e. the risk associated with market development, planning issues,
environmental considerations and final production costs, approximately 50% of estimated surplus value of project.
17
The sales price for tenant-owned units alternatively market
rent for premises must exceed a certain critical level for new
construction to be viable. Below this critical level, the land
value will be low while the land value increases fast with rising sales prices/rents once the critical level has been reached.
P RO P E RT Y T E R M S
JM works with two property types 1): investment properties and development
properties. Investment properties comprise residential properties for further
development and commercial properties. Development properties mainly relate
to land that can be developed for future production.
LAND VALUES IN THE PLANNING PROCESS
Land value development is affected by general macroeconomic
factors, primarily inflation and interest rates, general development in the region and the planning process. The planning
process is highly dependent on how active the property owner
is. Project development companies such as JM can influence
future land usage and value through co-operation with the
municipality concerned.
During the planning process, the land value rises in stages
as the project takes form and elements of uncertainty are eliminated in co-operation between JM and the municipality concerned. The value creation factors to be handled are use,
scope, timetable and allocation of costs. The full land value is
attained when the detailed plan is approved and a building permit has been obtained.
Type of property
Definition
Fully developed properties – for sale
Properties under construction – production has started
Properties for further development – planned projects
Development properties Land with residential building rights
Land with commercial building rights
Developed properties for further development into
residential projects or investment properties
A schedule of JM’s investment properties and a selection of major development
properties is provided on pages 85–90.
1)
With effect from the first quarter of 2004 these will be grouped together as
properties for resale. Investment properties will be called project properties.
cases JM creates growth in value through densification, conversion into tenant-owner co-operatives, planned demolition, or conversion and extension. In this way usage can be
changed, utilisation increased, accessibility improved and
attractiveness enhanced for customers and tenants.
METHOD FOR REVENUE RECOGNITION
Most of JM’s operations relate to housing project development
to be sold as tenant-owned or freehold units. In order to calculate the ongoing result in these projects, in common with the
rest of the industry JM applies the percentage of completion
method. This principle is based on the approach that profits in
a project should be recognised in pace with its implementation. The intention is to create a direct link between the financial reporting and the operations conducted during the
period. Revenue recognition is increased as the project pro-
LAND VALUE DURING PLANNING PROCESS
Land value
Detailed planning
General
planning
PERCENTAGE OF COMPLETION
Amount
Detailed plan
Anticipated recognised
revenue
Building Planning
permit phase
Value development during the planning process can be considerable when raw land is converted into a finished building
right. JM influences this through its expertise and active
participation. Normally it takes between one and five years
before a detailed plan can be adopted. Good long-term planning in operations and active work on both existing and
potential development properties are important.
JM also acquires developed properties that can be further
developed into attractive homes or modern offices. In such
Profits
General plan
Net profit
Costs
Raw land
Time
Year 1
Year 2
Year 3
18
gresses and the final result can be defined with greater certainty. The example on the previous page provides a general
description.
Development land is included in the costs on which percentage of completion is based. Recalculation effects can
arise if the project needs to be revalued as regards anticipated sales revenues or production costs.
In 2003, the Swedish Construction Federation has conducted an inquiry together with Sweden’s leading housing
producers relating to taking up as revenue, revenue recognition and balance sheet handling of housing production under
own management. A new industry recommendation is being
drawn up which is based on revenue recognition on the basis
of sold homes, in the form of contracts signed with end customers, as well as accumulated costs. The new accounting
principles, which will be introduced with effect from the
2005 accounting year also follow the international accounting principles IAS, which according to an EU directive are a
requirement with effect from 2005. See further page 59
(Accounting and valuation principles).
opment. The graph below shows the corresponding payment
flows.
When JM acquires land it is booked in the balance sheet.
When production starts the land is transferred from the balance sheet into the appropriate project phase. The land is
sold to a tenant owner co-operation formed by JM in conjunction with the start of production once a purchasing and
contractor agreement has been signed between JM and the
co-operative. JM invoices the co-operative regularly while
the project is under way in accordance with an agreed payment plan. The co-operative finances the land acquisition
and contract work through a building loan.
Any residential units that remain unsold in the co-operative following final settlement of contract work are purchased by JM at the price specified in the co-operative’s
financial plan. JM then sells the residential units at market
prices.
VALUE CHAIN
Value
Sales decision
Price decision
(commercial premises)
FOCUS ON CASH FLOW
Management
Efficient cash flow management is essential since JM’s projects are capital-intensive and long term. JM’s organisation is
built up to support and stimulate an optimal cash flow
approach in all project phases and thus achieve maximised
value development in the Group. While a project is under
way a number of decisions are made which have a major
impact on cash flow, see the Value Chain diagram on the
right. The arrows indicate the main phases in project devel-
Building decision
Construction
Price decision (residential units)
Concept and
planning
Acquisition
decision
Time
CASH FLOW IN HOUSING DEVELOPMENT
Toc pays for land
JM invoices toc
Final invoice
JM sells any acquired
residential units
Payments in
Payments out
JM acquires land
Acquisition decision
Production costs
Contractor and purchase contract signed between JM and toc.
Production start decision
toc = tenant-owner co-operative
JM acquires any unsold
residential units
19
M A R K E T O V E RV I E W H O U S I N G
Housing market 2003
Development in the housing market depends on a number of factors.These include not only the region’s demographic development and the age structure of the population but also demand regarding the size and location of
homes. Infrastructure investments and commuter patterns also have an impact.
GROWTH CREATES ATTRACTIVE HOUSING MARKETS
So far the highest demographic growth has clearly occurred
in the Stockholm region while there has been a substantial
movement of people away from the thinly populated rural
areas. The population growth rate in Greater Stockholm has
slowed in recent years. Demographic growth remains strong
in the Gothenburg, and Malmö/Lund regions. University
towns such as Uppsala, Linköping, Jönköping and Umeå are
other examples of places with demographic growth.
TREND INDICATORS
Demographic
growth
Employment
Housing
production started
Growth in the
local economy
Greater
Stockholm
Gothenburg
Malmö/Lund
Oslo
Copenhagen
Increase compared
with 2002
Stable development compared
with 2002
Decrease compared
with 2002
In growth areas, housing vacancies are low and prime locations almost non-existent. According to the National Board
of Housing, Building and Planning’s most recent housing
market survey, the housing shortage is now spreading further
around Greater Stockholm, Greater Gothenburg and Skåne.
60 per cent of the Swedish population lives in one of the 100
municipalities with a housing shortage. A shortage of small
and medium-sized apartments is most common but several
municipalities also report a shortage of medium-sized and
large apartments. New proposals have been made by the government designed to stimulate housing construction. These
include lower VAT on small apartments and a change to the
present subsidies system. However, this will not be sufficient
for more than a marginal increase in housing construction.
Forecasts for population development and housing construction indicate continued imbalances and an increasing shortage of housing in many of the growth regions.
JM develops housing in several regions and must follow the
local market and development. The table on the left shows
trends for the key parameters for JM’s largest markets.
PRICE TREND – SECOND-HAND MARKET
Prices for tenant-owned apartments rose in most markets
over the past year. In Sweden as a whole the price rise has
been between 8 and 10%. Among the major cities, there were
substantial price increases in Malmö and Gothenburg during the year. These increases are explained by a high number
of people moving into these areas and low mortgage rates.
Average prices for tenant-owned apartments have risen for
a number of years and this increase is expected to continue
in 2004. In Sweden, an average of 22% of disposable income
goes to housing. The corresponding figure for Greater Stockholm is 25%.
Price increases also occurred in Norway and Denmark in
2003. In Copenhagen demand for housing is very high due to
a large influx of people to the Copenhagen area in recent
years. This high demand, combined with low interest rates,
led to price increases of about 5% in 2003. In Norway,
demand for housing is high primarily in Oslo, Bergen and
Trondheim. Prices in these cities rose by an average of 4% in
2003. Both Norway and Denmark forecast weak price increases in 2004 as well, mainly due to high demand and continued low interest rates.
PRICE TREND TENANT-OWNED APARTMENTS
SEK, NOK, DKK/sq.m.
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1998
1999
Stockholm inner city
2000
Greater Stockholm
2001
Gothenburg
2002
Malm
O
ö slo
2003
Copenhagen
Source: Svensk Fastighetsförmedling, the Association of Swedish Real Estate Agents,
NEF, EFF, Finn.no, ECON and Sadolin & Albæk
20
JM’S HOUSING IN SWEDEN
In terms of size, JM’s residential units have been distributed
in a similar manner in recent years. However, the number of
apartments smaller than 100 sq.m. rose slightly in 2003.
BREAKDOWN AT SALES START OF
JM’S RESIDENTIAL UNITS BY SIZE BAND, SWEDEN
BREAKDOWN AT SALES START OF
JM’S RESIDENTIAL UNITS BY PRICE BAND 1), SWEDEN
%
60
50
40
30
%
35
20
30
10
25
0
20
15
10
SEK 1–2m
2003
1) Price
SEK 2–3m
SEK 3– 4m
>SEK 4m
= stake
COMPETITORS
5
0
<SEK 1m
2002
30–50
2002
51–70
71–90
91–110
111–130
131–150
>150
Size, sq.m.
2003
JM’s work with more cost-effective pre-construction, purchasing and production has led to cost reductions. This has
made it possible for JM, with increased profitability, to
reduce its prices for homes in all sizes which has led to higher
demand.
AVERAGE PRICE 1) AT SALES START
FOR JM’S RESIDENTIAL UNITS, SWEDEN
SEK/unit
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
1)
1999
2000
Stockholm
Rest of Sweden
2001
2002
2003
Price = stake
In 2003 the proportion of homes priced at up to SEK 2m
increased to approximately 80% (62) of units on which sales
had started. Only 1% cost over SEK 4m. Most buyers of JM’s
homes have their own initial funding. Approximately 80% of
buyers come from another tenant-owned apartment or house
while approximately 20% come from rental apartments.
JM’s competitors for new housing production in Sweden
mainly comprise nationwide players such as NCC, Peab and
Skanska, but also include local players.
JM’S HOUSING OUTSIDE SWEDEN
norway
Through Byggholt and its subsidiaries, JM is one of the more
prominent players in the fragmented Norwegian housing market. JM’s market share amounts to approximately 10%, with
some upward and downward variations in sub-markets. The
competitive situation also varies between sub-markets. In all
regions where JM operates the local housing co-operative is a
significant player. Other major players include nationwide
companies Block Watne, Skanska and Veidekke and, in the
Oslo area, NCC and Selvåg. A number of financial players are
also involved in housing development projects.
denmark
Following low housing production in the 1990s, construction
has gathered pace in recent years, but is still far from sufficient
to meet requirements. Almost 800 residential units were completed in the municipalities of Copenhagen and Frederiksberg in
2003. JM is a significant player with a market share of 10–15%.
The main competitors in housing development are Kuben, NCC
Ejerboliger, Nordicom and Sjælsø Group. JM was chosen as
company of the year by the Erhvervsejendom magazine.
belgium
Demand for good homes in attractive locations in the Brussels
region is increasing in pace with the continued inflow of peo-
21
conditional acquisition, JM meets its future land requirements
at a lower cost and the land does not need to be reported over a
long period in the balance sheet before new construction
starts. In many cases, JM is able to decide both if and when the
land should be purchased. These decisions often depend on
how planning work is progressing, i.e. the size of the building
rights and the current market situation. Development properties are located Sweden, Norway, Denmark and Belgium. The
majority are in Greater Stockholm, where JM owns and has
access to land for approximately 10,300 residential units.
JM’s total available building rights portfolio by region is
shown below. This table excludes the approximately 3,700
building rights that are in the balance sheet but which JM
intends to sell.
ple. The number of inhabitants rose in 2003 for the eighth
consecutive year. Housing customers comprise both EUattached foreign citizens and local residents. Acquisition of
homes for personal use dominates but the proportion of customers who invest in order to rent out is increasing – Brussels’
total housing portfolio is dominated by apartments acquired
for renting. New housing in the Brussels region is stable with
approximately 2,000 units per year. JM’s market share is
approximately 5–10%. Major players include Jacques Delens,
Hansen, Soficom and Wilma.
HOUSING STARTS
The tempo of JM’s project development has been high for
several years and the number of housing starts has exceeded
the number sold. This circumstance changed in 2003 when
the number of signed contracts continued to rise, 3,200
(2,500), and exceeded the number of housing starts which
remained at the 2002 level, approximately 2,700 residential
units. This is a desirable development which reduces risk
exposure in a more uncertain market climate and a result of
the higher requirements for the proportion of reserved units
prior to housing starts.
JM’S TOTAL AVAILABLE BUILDING RIGHTS PORTFOLIO
Region
Number of building rights
Greater Stockholm
10,300
Malmö/Lund/Helsingborg
2,550
Greater Gothenburg
2,250
Uppsala
1,600
Västerås/Linköping/Jönköping
1,000
Oslo/Stavanger/Bergen
4,500
JM’S RESIDENTIAL BUILDING RIGHTS
Copenhagen
1,100
JM invests continuously in land that can be developed for
future production. The building rights portfolio contains
approximately 16,000 residential units that are reported in
JM’s balance sheet. In addition, JM has access to a further some
3,700 building rights in the balance sheet. These are included in
the basis for the independent valuation of the building rights
portfolio commissioned by JM, but since they are designated to
be sold, JM does not include them in its reported available
building rights portfolio. Furthermore, building rights for
about 7,400 residential units are available through conditional
acquisition, co-operation agreements or postponed payments
where settlement has not yet been made. These building rights
are not reported in the balance sheet. By buying land through
Brussels
100
23,400
Total (approximately)
DIFFERENT PLANNING PHASES
The number of building rights at different phases is constantly
changing. The diagrams on the next page show how the building rights in the balance sheet (excluding conditional acquisitions) are distributed in different regions and planning phases.
Raw land, which is unzoned, is not included since the number
of building rights for these properties is not yet defined.
The detailed planning phase covers the time from when
work starts on the detailed plan until a building permit application is submitted. The high number of residential units at
NUMBER OF BUILDING RIGHTS REPORTED IN THE BALANCE SHEET
Raw land
General plan
Greater Stockholm
30 hectares
1,100
3,900
2,400
2,300
Rest of Sweden
22 hectares
1,400
1,700
1,000
1,600
2 hectares
200
1,700
1,600
800
54 hectares
2,700
7,300
5,000
4,700
International
Total
Detailed planning Adopted detailed plan Building permit phase
22
NUMBER OF RESIDENTIAL UNITS AT
DIFFERENT PLANNING PHASES, GREATER STOCKHOLM
NUMBER OF RESIDENTIAL UNITS
AT DIFFERENT PLANNING PHASES, REST OF SWEDEN
Number of units
Number of units
8,000
6,000
7,000
5,000
6,000
4,000
5,000
3,000
4,000
3,000
2,000
2,000
1,000
1,000
0
0
2001 2002 2003
2001 2002 2003
General plan
Detailed plan
2001 2002 2003 Planning
Building permit phase
the detailed planning phase means that JM is well placed to
maintain a high level of housing starts over the next few years.
It normally takes between one and five years for a detailed
plan to be adopted. After adoption, it can take more time
before production can start. For this reason good long-term
planning is essential, and it is important to work actively with
existing development properties and to invest in new ones.
The map on the opposite page shows some of JM’s ongoing
housing projects in the Stockholm region. The projects correspond to approximately 5,300 new homes.
LOCATIONS CLOSE TO WATER AND GOOD COMMUNICATIONS
A shortage of housing which means increased prices for houses
and tenant-owned apartments, has led to people increasingly
seeking homes further out from the largest towns. Infrastructure expansion such as the Mälarbanan train service and
2001 2002 2003
2001 2002 2003
General plan
Detailed plan
2001 2002 2003 Planning
Building permit phase
extension of the X2000 high-speed train have greatly reduced
journey times on many routes, making it easier to commute.
This enlargement of the regions has mainly started in the
Mälar Valley but is also taking place in the Öresund and
Gothenburg area and means that new markets have become
attractive. JM’s building rights portfolio attempts to meet customers’ increased demand for good communications. Locations close to water are also in high demand when choosing a
new home. The diagram below shows the commuting times to
the city centre (travelling time in minutes) from JM’s planned
housing developments in Greater Stockholm and the Mälar
Valley as well as the proportion of homes close to water.
From approximately 80% of JM’s building rights commuting time to the centre of Stockholm by public transport takes
less than 30 minutes. Just over half of JM’s planned residential units are in locations close to water.
JM’S PLANNED HOUSING IN GREATER STOCKHOLM – TRAVELLING TIMES TO CITY CENTRE 1) AND LOCATIONS CLOSE TO WATER
Number of residential units
4,500
Average commuting time in Greater Stockholm
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Examples
of JM's
projects
10
Gärdet
Liljeholmen
Close to water
20
Essinge Udde
Torsvik
Hägersten
15
Kungsholmen
Årstadal
Telefonplan
Not close to water
1)
25
Frösunda
Årsta
30
Långbro
Lidingö
35
Tyresö
Värmdö
Travelling time in minutes to Stockholm's Central Station by public transport.
40–50
Täby
Södertälje
>50
Sigtuna
Österåker
Number of
minutes
Source: SL Trafikupplysning
23
E4
Upplands-M A R K E T O V E R V I E W H O U S I N G
Väsby
Vallentuna
E18
MAJOR ONGOING HOUSING PROJECTS IN GREATER STOCKHOLM 1)
E18
33
35
Täby
Jakobsberg
Sollentuna
E18
36
E18
Danderyd
E4
Sundbyberg
38
Solna
Lidingö
Stockholm
32
Nacka
37
34
E4
31
Älvsjö
Project
Municipality
Number of
remaining building rights
31
Långbro
Stockholm
550
32
Essinge Udde
Stockholm
450
33
Bolinder Strand
Järfälla
400
2001–2009
34
Liljeholmskajen
Stockholm
2,400
2001–2012
35
Hägernäs
Täby
500
2001–2009
36
Silverdal
Sollentuna
150
2001–2008
37
Västra Daggkåpan
Nacka
190
2000 –2007
38
Norra Frösunda
Solna
660
2001–2011
1)
5,300
Numbered according to the specification of JM’s properties, starting on page 86.
Development period
41
2000 –2010
2001–2008
24
M A R K E T VA L UAT I O N – R E S I D E N T I A L BU I L D I N G R I G H T S
At year-end 2003, NewSec Analys performed a valuation of all
JM’s residential development properties. The appraisals are
made based on an assumed sales price for the properties at
actual cash values, whereby future development gains are not
taken into account.The valuations were based on the location,
attractiveness, scope and type of building planned, the stage in
the planning process and the time remaining until production
starts.
The assessed market value of JM’s residential development
properties amounts to SEK 4,785m (5,132).The corresponding
book value is SEK 3,439m (3,779).The approximately 7,400 residential units available through conditional acquisitions were not
included in the appraisal.
site in the housing market concerned and includes good communications, proximity to commercial services as well as locations close to water. Class B is a good to normal location in the
respective housing market. Class C indicates a housing location
slightly further from communications and commercial services,
while D locations are in peripheral areas in the housing market.
The phases of the planning process have also been classified by
NewSec into four planning phases: raw land, general plan,
detailed plan and building permit. The diagrams below show a
breakdown of the value of JM’s development properties into different locations and planning phases. The detailed planning
phase covers the period from the start of detailed planning
work until application for a building permit.
Market value breakdown is as follows:
MARKET VALUE,
RESIDENTIAL BUILDING RIGHTS, REST OF SWEDEN
SEKm
Market value
Book value
Greater Stockholm
2,921
2,219
Rest of Sweden
1,088
700
700,000
776
520
600,000
4,785
3,439
International
Total
Market value
SEK 000s
500,000
Some of the development properties have old existing buildings
that generate operating net and are planned to be renovated or
demolished in the future. The valuation of these buildings is
based on current rental revenue and future use taking costs for
essential conversion and extension into account. The market
value of these buildings amounts to SEK 116m (287) and is
included in the above summary.
NewSec has assessed the properties’ locations and attractiveness in four classes, A–D. An A location represents a prime
400,000
MARKET VALUE,
RESIDENTIAL BUILDING RIGHTS, GREATER STOCKHOLM
MARKET VALUE,
RESIDENTIAL BUILDING RIGHTS, INTERNATIONAL
Market value
SEK 000s
Market value
SEK 000s
3,000,000
300,000
200,000
100,000
0
03
01 02
Raw land
Class A
01 02 03 01 02 03 01 02 03
Detailed plan Building permit
General plan
Class B
Class C
Class D
Planning
phase
800,000
700,000
2,500,000
600,000
2,000,000
500,000
1,500,000
400,000
300,000
1,000,000
200,000
500,000
100,000
0
0
03
01 02
Raw land
Class A
01
02 03
General plan
Class B
03
01 02
Detailed plan
Class C
01 02 03
Building permit
Planning
phase
03
01 02
Raw land
Class D
Class A
01
02 03
General plan
Class B
03
01 02
Detailed plan
Class C
01 02 03
Building permit
Class D
Planning
phase
25
M A R K E T O V E RV I E W
R E S I D E N T I A L A N D C O M M E R C I A L P R O P E RT I E S
The commercial
property market 2003
Growth in the Swedish economy has been weak since
autumn 2000. The economic slowdown has had no impact on residential properties with rental apartments.
The downturn has mainly affected commercial premises.
ing rights and improving the property portfolio in Älta. An
“open house” was held for the residents in Älta together with
Älta’s local authority where JM presented visions for the
design of the Älta shopping centre. The intention was to
encourage participation in this development work. In December the residents were invited to express their views on the
proposals and opinions in general. All information and JM’s
four proposals can be accessed on the municipal website.
In Vaxholm, JM has also started work on developing and
densifying the portfolio. Initially, the municipality was contacted to discuss and outline opportunities to create additional building rights. In both Nacka and Vaxholm many tenants have shown an interest in conversion to tenant owner-
MARKET FOR RESIDENTIAL PROPERTIES
Älta
väge
n
Stensö
skola
Oxelväg
en
Stavsborgsskolan
Flaten
JM’s holdings in Älta, following acquisitions in 2003, amount
to approximately 1,000 apartments.
VA X H O L M
Stockh
en
olmsväg
In spring 2003 JM carried out a major property deal with
Tornet. JM sold commercial properties in Mörby Centrum
totalling approximately 56,000 sq.m. and at the same time
purchased approximately 1,000 apartments in Älta, Nacka.
By exercising a call option issued by Tornet in conjunction
with this deal, JM also acquired about 1,100 apartments in
Vaxholm during the summer.
The deal meant that JM sold fully developed properties and
at the same time acquired large housing areas with both valueadded and development potential. JM has thus acquired an
opportunity to improve and densify attractive areas while the
two attractive housing portfolios with their low vacancies generate reliable cash flows. JM’s aim is to increase attractiveness,
develop new building rights, improve services, increase accessibility and create secure environments.
In autumn 2003 JM started work on developing new build-
Ältasjön
n
äge
RESIDENTIAL PORTFOLIO FOR PROJECT DEVELOPMENT
Ä LTA
v
sö
re
Ty
In growth regions the housing shortage is expected to continue
and in many cases increase. A weak market should therefore
not have any negative impact on well situated residential properties. Rental levels in properties with rented apartments are
controlled by a utility value system, a principle that means
that rental development is linked to the cost development in
the municipal housing company in the location concerned.
Opportunities for large increases in value in the short term are
small, as is the risk of a major fall in value. When investing in
rental apartments there is only a risk in places with no growth
and which also suffer from company closures or relocations,
which can lead to increased vacancies.
Kungsgatan
Söderhamnen
Pålsundet
In 2003, JM acquired 28 residential properties in Vaxholm
with approximately 1,100 apartments.
V
26
ship, which JM favours and sees as a natural part of the
development of the residential portfolios.
MARKET FOR COMMERCIAL PROPERTIES
Commercial project development conducted by JM is concentrated to Stockholm and, to a limited extent, Brussels.
The market is cyclical and strongly dependent on national
and regional growth.
In 2003 vacancies continued to rise throughout the Stockholm area due to higher unemployment and continued space
efficiency. Tenants are demanding modern, space-efficient
offices and the differences between old-fashioned and modern
premises became increasingly clear in 2003, with regard to
both rental levels and vacancy rates. Today it is difficult to
lease out old-fashioned premises regardless of location. These
premises need to undergo major conversion or be leased out at
considerably lower rents in order to be competitive. Often
companies choose to move to modern premises with high space
efficiency where the cost per employee is reduced even though
the rent in SEK/sq.m. is higher than for unmodernised office
premises. All sub-markets in Greater Stockholm noted rent
reductions in 2003. At most, market rent fell between 10 and
15% for unmodernised premises in the city or inner suburbs.
At year-end 2002 the vacancy rate for offices in Stockholm
city centre was approximately 8% (7) and conversion vacancies were approximately 5% (4). Vacancies in Greater Stockholm continued to rise during the year and at year-end 2003
MARKET RENTAL SPREAD, STOCKHOLM
SEK/sq.m.
7,000
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
the vacancy rate was approximately 15%. There are considerable variations, however, with Kista being hit hardest while
parts of the inner city fared better. A number of large office
projects were completed in 2003 in Kista, Solna, the city centre and Södermalm, with total space of about 200,000 sq.m.
Current forecasts indicate stronger GDP growth in 2004
but the upward turnaround in the Swedish economy is predicted to be delayed until the second half of 2004. Vacancies
are expected to continue to rise slightly at the beginning of
2004 and a general turnaround in rental development can
take place in spring 2005 at the earliest.
2003 saw continued major interest from foreign property
investors, primarily for commercial properties. As in 2002, German pension funds and American venture capital funds were
the most active. The main characteristics of the sold properties
are attractive locations in the city centre or inner suburbs, modern or totally converted and with tenants with long leases.
Demand for functional offices in the EU district and in the
administrative centre of Brussels remains high. New additions are limited and new leases are mainly for totally renovated or newly built office premises. In total leasing in 2003
exceeded the previous year’s level and EU enlargement will
have a noticeable impact. In attractive districts the vacancy
rate is about 4% and rents have reached new all-time highs.
JM’S INVESTMENT PROPERTIES
JM’s portfolio of investment properties is divided into fully
developed properties, properties under construction and
properties for further development. The last-named consist
of existing properties where JM plans densification, change
of form of tenure, planned demolition, conversion or extension to change usage, raise utilisation, improve accessibility
or in some other way enhance the value of the property.
Investment properties for further development and under
construction show fluctuating rental revenues and operating
nets depending on the different phases of the project. In
order to provide an accurate picture of the entire property
portfolio, these properties are separated from fully developed properties.
1,000
500
JM’S PROPERTY SALES
0
Golden
triangle
1998
* Top rent
1999
City
2000
Rest of
inner city
2001
2002
Good inner
suburbs
2003
Source: NewSec
The property market shows a cyclical development, i.e. has
regular market fluctuations where both rents and property
values vary substantially due to supply and demand. Each
27
INVESTMENT PROPERTIES
Acquisitions
2003
Properties for
further development
Properties under
construction
Fully developed
properties
Sales
2003
162,951
194,962
34,712
42,434
105,126
Rest of Sweden
0
4,463
0
7,513
0
International
0
0
14,691
6,465
5,100
162,951
199,425
49,403
56,412
110,226
Rentable space, sq.m.
Greater Stockholm
Total
Further information on each property is provided in the list of properties on pages 85–90.
RENTAL REVENUES
JM’S PROPERTY SALES
Rental
revenues
SEKm
4,500
Management phase
4,000
3,500
Rental phase
3,000
Planning/preconstruction phase
2,500
2,000
1,500
Construction phase
1,000
500
0
1999
2000
2001
2002
2003
Time
Capital gains
Book values
Properties for
further development
Properties
under construction
Fully developed
properties
business cycle can last up to ten years. It is therefore important for a property developer to both acquire properties for
development and sell fully developed properties at the right
time. In 2003, JM sold properties for a total of SEK 2,219m.
These sales provided a total capital gain of SEK 411m.
The largest deal was when JM sold the Svärdet properties
in Mörby and acquired approximately 2,100 residential units
in Nacka and Vaxholm at the same time.
Other major property deals included the sale of the newly
developed hotel property on Vasagatan, Pennfäktaren 10,
and a totally renovated office property in central Brussels.
PROPERTIES UNDER CONSTRUCTION – PRODUCTION STARTED
Ongoing commercial project development continues to be
conducted with considerable caution, due to the strategy to
await developments in a market with falling demand. Two
PROPERTY SALES IN 2003
Contract date
Property/location
Purchaser
Date vacated
Purchase price,
SEKm
Space, sq.m.
Capital gain,
SEKm
20 January
Jakobsberg 34:6/Järfälla
Kungsleden AB
1 April
129
7,055
0
5 February
Pennfäktaren 10/Stockholm
Vital Forsikring ASA
11 March
575
14,152
57
12 March
Glaucus 4 and 5/Stockholm
Fastighets AB Kannan
30 April
55
2,417
7
14 March
Pilen 30/Stockholm
Fastighets AB Linco
11 April
180
21,237
68
Svärdet 7 etc./Danderyd
Fastighets AB Tornet
8 May
931
56,025
235
Avenue des Arts 21/Brussels
MEAG
4 June
132
5,100
22
Läraren 4/Stockholm
AFA Trygghetsförsäkringsaktiebolag
15 December
70
4,240
Development properties JM Värmdöstrand
Fagerdala World Foam/Landvik & Dahl etc.
31 March
4 June
21 November
Other properties
Total
92
7
13
55
2
2,219
411
28
major office projects, Barnängen and Skogskarlen, and a
small office project in Lidingö are in the final phase. Leasing
is under way and currently 64% of the space is leased.
In Brussels, an office property is under development in a
central location in the Leopold district. The property has
not been leased out.
PROPERTIES FOR FURTHER DEVELOPMENT – PLANNED PROJECTS
Development work is under way for several properties in JM’s
portfolio. This work includes matters related to planning,
design, and assessments of the economic climate and market.
Today, most of the properties for further development comprise the residential portfolios in Älta and Vaxholm.
In addition to properties for further development, JM also
has available commercial building rights amounting to
approximately 200,000 sq.m.
FULLY DEVELOPED PROPERTIES – FOR SALE
The portfolio of fully developed properties decreased in 2003
from SEK 2,109m to SEK 515m as a result of sales. The
remaining portfolio is concentrated to Stockholm’s inner city
and northern suburbs and Uppsala, and mainly comprises
commercial properties. JM’s portfolio of fully developed
properties outside Sweden consists of properties in Belgium
and Norway.
Most of the leases in JM’s portfolio of fully developed properties run for 3–5 years. 47% of rental revenues are from leases
which run until the end of 2007 or longer. Vacancies in JM’s
portfolio of fully developed commercial properties and residential properties for further development amount to 4% (10)
of annual rents and 4% (10) of space. The occupancy rate for
the Swedish office projects under construction amounts to
approximately 65% of annual rents and 64% of space.
Barnängshuset, Stockholm
29
M A R K E T VA L UAT I O N – I N V E S T M E N T P RO P E RT I E S
NewSec made an assessment of the market value of all JM’s
investment properties at year-end 2003. The valuations were
performed as regular cash flow analyses where the market value
is calculated as the sum of the present value of annual net payment flows during the calculation period and the present value
of the market value (residual value) in the event of a sale at the
end of the calculation period. The valuations were performed
for each individual property based on present lease circumstances and an assessment of market rents, operating and maintenance costs and the special circumstances of each asset.Based
on the market situation in the sub-market concerned,long-term
vacancy and direct yield requirements were assessed.All valuations were performed in accordance with the Swedish Property
Index (SFI) rules.
The basis for the valuations are surveys conducted in
2002–2003 and individual assessment of each property’s prerequisites.
In assessments of the market value of properties which are
under construction or are intended for further development, the
market value was based on market revenues and costs in a completed state,minus the assessed remaining construction costs and
with deductions for uncertainty,risk and reasonable project gains.
The following value factors were used in the assessment of
market value:
Sub-market
Stockholm
Rest of Sweden
Residential properties,
Greater Stockholm
Market
rent offices,
SEK/sq.m.
Market value is broken down as follows:
SEKm
Fully developed properties
Properties under construction
4–10
7.5–8.5
800–1,500
3–10
7.5–10
–
0–1
5–6.25
Book value
640
515
856
776
Properties for further development
1,709
1,542
Total
3,205
2,833
The market value of JM’s commercial development properties
amounted to SEK 226m (108) at year-end.The book value was
SEK 187m (87).
MARKET VALUES 2003
Estimated
Direct yield
long-term requirement for
vacancy, % residual value, %
1,700–2,200
Market value
The large spreads of assessed market rent are due to variations as
regards the standard, location and attractiveness of the premises.
Overall, JM’s investment properties are appraised at a market
value of SEK 3,205m at year-end 2003.The book value was SEK
2,833m.
Residential,
north Greater Stockholm, 26%
Residential,
south Greater Stockholm, 23%
Commercial,
Stockholm inner city, 15%
Commercial,
north Greater Stockholm, 23%
Commercial,
rest of Sweden, 4%
Commercial,
International, 10%
30
O P P O RT U N I T I E S A N D R I S K S
region, is expected to provide a continued stable price trend
for housing, even taking temporary economic uncertainty into
account. After falling for a number of years, housing expenditure’s share of households’ disposable income rose in 2003, see
diagram below. This increase was caused by both lower disposable income and higher housing expenditure.
Risk management – an
integrated part of JM’s core
business
Value creation within JM is clearly linked to the company’s ability to manage the risks in its operations. Controlled risk-taking contributes to increased profitability.
MACROECONOMIC RISKS
economic trend
The general business climate affects both demand for new
housing and price levels. JM’s project development is concentrated to areas that are assessed as having the best opportunities for long-term economic growth. Systematic efforts are
made to monitor economic development and its effects on
the business.
consumer spending power
JM’s housing is in a segment where a large group of households
have sufficient regular income to finance their purchases. The
consumer spending power trend, combined with a continued
influx of people to metropolitan areas throughout the Nordic
HOUSING EXPENDITURE IN RELATION TO DISPOSABLE INCOME
%
25
general interest rate situation
The general interest rate situation is both a risk and an
opportunity for JM since it affects, among other things:
• Interest expenses for the Group’s net borrowing (see page
34).
• The required rate of return at property valuations (see
page 29).
• The sales price of both housing and commercial properties.
• Demand, particularly for housing.
The greatest threat which could lead to a decline in price and
demand is an interest rate hike.
MARKET RISKS
housing
Demand for new housing is mainly affected by demographic
growth and economic development in the area, consumer
spending power, prices and price development in the socalled second-hand market. The final price that JM receives
depends on local demand, the location and attractiveness of
the residential units and the current interest rate situation.
JM gives priority to attractive locations, preferably close to
water, in places with good opportunities for growth.
JM works closely with prospective home buyers in order
to ensure that planned projects meet demand and to secure
a high level of advance reservations.
24
23
22
21
20
19
1999
Greater Stockholm
2000
2001
Sweden incl. Greater Stockholm
2002
2003
Housing expenditure represents an average for all forms of tenure (freehold, tenant-owned and
tenancy). Where applicable rents, charges, amortisation and operating costs are included.
Adjustments have been made for tax effects and any housing allowance. Any wealth tax is not
included in the calculation.
Source: Temaplan
commercial premises
JM’s project development of commercial premises is primarily focused on projects that support housing development
projects. It is important to create stable revenue flows in the
property. A well-composed tenant structure, combined with
the right location and high quality in the property, are of
major importance when it comes to a sale.
project development portfolio
JM has building rights available for future production corresponding to 23,400 residential units, of which approximately
31
16,000 are booked as an asset in the balance sheet, and 7,400
properties available through conditional acquisition outside
the balance sheet. The residential building rights portfolio
had a book value of SEK 3.4 billion at year-end 2003.
In addition, JM has a further some 3,700 building rights at
its disposal in the balance sheet. These are included in the
basis for the independent valuation of the building rights
portfolio commissioned by JM, but are designated to be sold
and JM therefore does not include them in its reported available building rights portfolio.
The future net capital outlay for acquisition of the 7,400
building rights available through conditional acquisition, cooperation agreements or postponed payments is assessed to
amount to approximately SEK 1,500m. It is possible to continue to partition and sell development land from acquired
land without affecting the number of building rights.
The portfolio of properties for future project development
should correspond to approximately four years’ planned production. Its size and composition provides great potential
and a theoretical risk. Lead times are long from project conception to final sale and major projects can represent order
values of several billion Swedish kronor. Projects are started,
however, in phases. JM does not start a project until a certain
proportion of the residential units has been reserved.
guarantee commitments for tenant-owner co-operatives
JM primarily develops homes that are sold to tenant-owner
co-operatives formed by JM (JM also handles sales to end customers). In pace with project completion, the tenant-owner
co-operative is invoiced for accumulated costs in the project.
In order to finance production, the tenant-owner co-operative raises a building loan. JM issues a guarantee for the
part of the building loan that exceeds the co-operative’s
future long-term loans. The long-term loans are secured by
mortgage deeds taken out by the co-operative itself.
JM’s guarantee commitments cease when the building
loan is redeemed when tenants move in. The theoretical risk
of JM becoming liable to pay in accordance with its guarantee commitment is reduced by the reservations requirement
prior to production starts.
competitive scenario
JM’s competitors in project development are both major
national players and smaller local project development com-
panies. JM tries to distinguish itself through a large number
of factors that interact efficiently within the company. These
include the overall corporate culture, agility, expertise in
acquisitions, decision-making, project implementation, quality profile and sales.
OPERATING RISKS
cost control and internal oversight
Effective cost control in project development is very important. A number of measures were adopted in 2003 to
improve internal oversight and control. These are described
more fully on page 46.
The main volume in JM’s operations is attributable to
housing development projects in Sweden. Related costs for
2003 amounted to approximately SEK 4,800m.
Direct salaries/wages, direct materials and costs for subcontractors account for 15%, 19% and 37% respectively of
JM’s project costs.
In order to ensure quality requirements and production
competence and contribute to effective cost control, JM
maintains some construction contractor resources. These
resources are limited, however, which makes JM dependent
on cost development at subcontractors.
In general resources are contracted well ahead of time,
which means that JM normally has a controlled cost situation. The number of projects, their volume, development
phase and utilisation of subcontractors vary from year to
year. This and many other factors affect the total cost base
and the breakdown between cost groups.
SENSITIVITY ANALYSIS BY
COST CATEGORY, HOUSING DEVELOPMENT PROJECTS
Category
Share of costs1)
Change
Effect
Salaries/wages
15%
+/–10%
+/– SEK 72m
Materials
19%
+/–10%
+/– SEK 91m
8%
+/–10%
+/– SEK 38m
Developer’s costs
10%
+/–10%
+/– SEK 48m
Pre-construction
4%
+/–10%
+/– SEK19m
Overheads
7%
+/–10%
+/– SEK 34m
Land
+/– SEK 178m
+/–10%
37%
Subcontracting
1)
Share of cost base for project development of housing in Sweden was SEK 4,800m in
2003.
Land pertains to the acquisition cost for land. Developer’s costs are costs not directly
related to contracting, such as interest on loans, municipal connection charges and registration of title. Pre-construction mainly relates to costs for technical consultants.
Overheads refer to incidental expenses for setting up the building site and rents for
leased fixed assets such as plant and equipment.
32
revenue recognition method
JM’s current result is obtained using the percentage of completion method in ongoing projects (see page 17). JM applies a conservative percentage of completion method, but this still makes
high demands on well-considered assessments from those
responsible for revenues and costs within the organisation.
Conservative revenue recognition has increased in the early
phases following the negative project revaluations that were
required in the 2002 annual accounts due to project deficiencies in Stockholm. A more strict model for revenue recognition
will be introduced with effect from 2005 (see page 18).
POLITICAL RISKS
What and how much can be built, and when housing starts can
take place, very much depend on planning work. JM is dependent on good co-operation with the municipality concerned
and on planning work not being delayed due to political decisions. Political decisions related to infrastructure development, and the introduction of new laws and regulations, can
have a positive or negative impact on operations. JM’s experience of project development and long-term relationships with
municipal authorities mean that JM can reduce the political
risks. Acquisition of building rights subject to an approved
detailed plan are another factor.
RISK ASSESSMENT
JM continuously evaluates the proportion of unreserved and
unsold residential units in relation to ongoing production.
The proportion of unreserved or unsold units should not be
too high, but nor should it be too low since value creation at
JM is linked to a high and controlled rate of project start-ups.
In 2003, the proportion of unreserved and unsold residential
units decreased, so the risk in JM was reduced.
JM aims to have all residential units sold by final inspection. Units that remain unsold after completion and final
inspection are potentially a major risk in terms of value,
since JM undertakes to purchase unsold homes from the tenant-owner co-operatives it has formed.
S E N S I T I V I T Y A N A LYS I S – BU I L D I N G R I G H T S P O RT F O L I O
One way to reflect the dynamics in the building rights portfolio
is to perform a sensitivity analysis where all anticipated cash
flows from the portfolio are calculated at present value. Below
are a number of simplified assumptions designed to reveal the
present value of JM’s building rights portfolio, at a number of
assumed sales prices.
23,400 residential building rights are evenly distributed over a
8-year production period.The initial investment is excluded since
the calculation is intended to show the value of the portfolio.
However,investments not yet made of approximately SEK 1,500m
for conditional acquisitions or deferred payments are included in
the analysis as a future constant outgoing cash flow during the
period.
JM’s standard residential unit is assumed to be 88 sq.m., the
assumed tax rate is 28% and the discount rate is 7.2%.The calculation does not take possible inflation into account and is not a
forecast.
The table shows the assumed revenue and project expenses
per sq.m. of apartment space excluding VAT. If a specific revenue/project expense per sq.m. is assumed to apply to the entire
building rights portfolio and outgoing cash flow for conditional
acquisitions is taken into account, a value is created, expressed as
present value.The analysis shows a strong leverage effect in value
creation depending on the company’s ability to manage both revenues and expenses effectively, and not least the general trend for
house prices during the period. A price or cost change of SEK
1,000 per sq.m. corresponds to about SEK 1,100m or almost SEK
40 per share according to the basis for this calculation.
SENSITIVITY ANALYSIS, PRESENT VALUE IN SEKm
FOR JM’S RESIDENTIAL BUILDING RIGHTS
SENSITIVITY ANALYSIS, PRESENT VALUE IN SEK/SHARE
FOR JM’S RESIDENTIAL BUILDING RIGHTS
Revenue/sq.m., SEK 19,000
20,000
21,000
22,000
23,000
Expenses/sq.m., SEK
Revenue/sq.m., SEK 19,000
20,000
21,000
22,000
23,000
Expenses/sq.m., SEK
14,000
5,100
6,200
7,300
8,400
9,500
14,000
182
221
260
299
338
15,000
4,000
5,100
6,200
7,300
8,400
15,000
143
182
221
260
299
16,000
2,900
4,000
5,100
6,200
7,300
16,000
103
143
182
221
260
17,000
1,800
2,900
4,000
5,100
6,200
17,000
64
103
143
182
221
18,000
700
1,800
2,900
4,000
5,100
18,000
25
64
103
143
182
33
FINANCIAL ITEMS
Strong financial base
JM’s finance unit is responsible for the Group’s short- and
long-term financing,liquidity planning,cash management
and financial risk management.The division of responsibility, organisation and control of the Group’s overall
financing activities are regulated by a finance policy
established by the Board of Directors.
FINANCE POLICY
The finance policy specifies the objectives for finance operations, overall responsibility and specific rules and limits. The
objectives for the finance operations are to:
• Support operating activities in residential and commercial
project development.
• Optimise use of capital and cash flow management.
• Control and manage the financial risks to which JM is
exposed.
between JM AB and subsidiaries, and to external suppliers,
have so far been so limited that currency hedging has not been
required. JM AB has hedged NOK 85m of the net investment in
Byggholt AS through matching borrowing in Norwegian kroner.
Derivative instruments may only be used in order to minimise risks.
JM is working to adapt its financial risk management
ahead of introduction of IAS 39 – Financial Instruments.
FINANCE STRATEGY
JM’s basic finance strategy is to clearly link cash flows from
projects in progress and investment properties to the company’s management of borrowing and interest rate risks. This
strategy provides the best control of financial risks.
In order to maintain flexible administration and costeffective debt management, existing loan agreements are
guaranteed by JM’s excellent creditworthiness, which means
that no mortgage deeds are provided.
LOAN STRUCTURE
SEKm
2,500
%
25
2,000
20
1,500
15
1,000
10
500
5
FINANCIAL RISK MANAGEMENT
The Group’s financial risks primarily consist of interest rate
risk, financing risk, liquidity risk and, to a limited extent,
currency risk. The choice of maturities and fixed interest
spread is governed by several factors, such as capital tied up
in ongoing projects, business risk, anticipated dates for sale of
properties, the terms of leases in investment properties and
the Group’s financial position in general. These factors are
summarised in the Board’s established guidelines for fixed
interest spread and maturity structure with scope for deviations within certain limits based on the current market situation. There are also rules for handling interest rate risk in
building loans during the construction period and recommendations for final financing of tenant-owner co-operatives.
Cash is kept at a low level and any surplus liquidity may
only be invested in banks defined by JM and in Swedish
fixed-income securities without currency risk. Payment preparedness is maintained through overdraft facilities and
committed credit lines.
Currency risk on transactions is eliminated as far as possible.
Currency hedging against balance sheet exposure is carried out
on a selective basis. Transaction volumes in foreign currency
0
0
2004
2005
Loan amount, SEKm
2006
PRI liability, SEKm
2007
2008–
Average interest, %
CAPITAL AND LOAN STRUCTURE
At year-end 2003 the equity ratio was 36% (34) which is in
line with the Group’s equity ratio target of 35%.
The debt/equity ratio at year-end was 0.8 times (1.0) and
the interest coverage ratio was 2.1 times (2.1). The loan-tovalue ratio in the property portfolio, i.e. interest-bearing liabilities in relation to the estimated market values of investment properties plus the book values of development
properties, amounted to 37% (53).
JM strives for efficient use of capital with a higher asset
turnover. Efficiency is achieved with increased net sales combined with reduced total assets due to the sale of properties.
The JM Group’s interest-bearing liabilities at 31 Decem-
34
FINANCIAL ITEMS
INTEREST-BEARING NET DEBT AND DEBT/EQUITY RATIO
ASSET TURNOVER AND INTEREST COVERAGE RATIO
Times
6
SEKm
6,000
Times
6
0.75
5
5,000
5
0.70
4
4,000
4
0.65
3
3,000
3
0.60
2
2,000
2
0.55
1
1,000
1
0
0
Times
0.80
0.50
1999
2000
Asset turnover, times
2001
2002
Interest coverage ratio, times
0
1999
2000
Interest-bearing net debt, SEKm
2003
ber 2003 amounted to SEK 2,986m (4,313), of which SEK
451m (433) comprised PRI pension liabilities. The average
interest on the debt during the year was 5.4% (5.9). The average interest rate on the interest-bearing loans, excluding PRI,
was 5.5% (5.9) at year-end. Most of the loans redeemed during the year had short fixed interest terms and therefore carried low interest. At the same time, the average fixed interest
term has increased from 2.3 to 2.5 years. In 2004, SEK
2,319m (90%) of JM’s loan stock will be restructured. A 1
percentage point change in interest rates corresponds to
changed interest expenses of approximately SEK 5m, including the effect from risk-minimising derivative contracts, on
the portion of the loan stock restructured in 2004.
In 2003 JM sold properties for approximately SEK 2,200m.
The sales proceeds were used for redemption of loans in conjunction with the sales. At the same time, new loans were
raised to finance acquisitions of development properties in
Sweden and in foreign subsidiaries. The net change in inter-
2001
2002
Debt/equity ratio, times
2003
est-bearing liabilities amounted to SEK –1,327m (–1,617).
Net financial items improved by SEK 73m in 2003. Capitalisation of interest expenses related to commercial project
development amounted to SEK 1m (12). The lower interestbearing debt made a positive contribution to improved net
financial items.
The long-term rate (5-year interest rate swap) fell heavily in
the spring and early summer 2003 and then climbed upwards
again to end at roughly the same level as at the beginning of the
year. The short rate was approximately 3.9% at the beginning of
the year and had then fallen to approximately 2.9% by year-end
without any significant upswings during the year.
NET FINANCIAL ITEMS, JM GROUP
SEKm
2003
2002
39
38
26
Interest expenses
–250
–322
–361
Net financial items
–211
–284
–335
Interest income
2001
INTEREST-BEARING LIABILITIES AND AVERAGE INTEREST RATES AT 31 DECEMBER 2003
Year for
interest conversion
Loan amount,
SEKm
Average interest,
%
Share of
total loans, %
Committed credit
lines, SEKm
Committed credit
lines, %
2004
1,019
6.2
40
800
18
2005
410
4.5
16
2006
300
4.9
12
1,800
40
2007
206
6
8
2008 and later
Total
PRI 2004
Total incl. PRI
Average fixed interest term (years)
600
5.2
24
1,900
42
2,535
5.5
100
4,500
100
451
5.1
2,986
5.5
2.5
Fixed interest terms include derivatives.
E N V I RO N M E N T
Caring for the environment
The building sector is responsible for a significant part
of society’s energy and materials utilisation, and therefore has a major environmental impact. The sector is
also of major importance for a well-functioning society
since it contributes to key infrastructure such as
homes, offices and roads. JM’s aim is to meet these
requirements without jeopardising the ability of future
generations to meet theirs: a long-term sustainable
development.
35
CONTROL OF THE ENTIRE CHAIN
Acting simultaneously as developer, planner, contractor and
manager, gives JM control over the entire construction
process. This creates good opportunities to minimise the
environmental impact of the buildings throughout their
entire life cycle, from land acquisition to finished building
and on to management and demolition.
Opportunities are greatest during planning and pre-construction. During this phase the environmental impact a
building or structure will have during its total life cycle is
determined. Decisions made during this period have repercussions for a very long time. This applies in particular to
T H E G RO U P ’ S Q UA L I T Y A N D
E N V I RO N M E N TA L P O L I C Y
SUSTAINABLE AND PROFITABLE EFFORTS
Back in 1994, JM was the first construction company in
Europe to sign an environmental policy. The company has
subsequently integrated its environmental work into its
business process, with the aim of creating a more long-term
approach and credibility. This has provided competitive
advantages and led to several respected environmental
funds, including Banco’s Swedish environmental fund and
Robur environmental fund, investing in the company for
many years. During the year, JM also earned a high rating in
Folksam’s annual environmental survey, the Climate Index.
JM has long been involved in the building sector’s concerted efforts to be more sustainable from an ecological perspective. This work has mainly been carried out via the Ecocycle Council for the Building Sector, where an ambitious
environmental programme was adopted during the year
designed to involve the entire sector. One sector-wide project that deserves special mention is the Building Industry’s
Phasing Out of Especially Hazardous Substances, called
BASTA in Sweden, which is supported by the EU. The intention is, within a few years, to build up a qualification system
for phasing out especially hazardous substances within the
building sector. JM is one of six partners involved in the
development of BASTA.
In September, JM also pledged support for the commitments
of the “Bygga Bo” dialogue. This involves a number of companies,
municipalities and the government in a joint undertaking to
carry out certain measures within the areas of effective use of
energy, effective use of resources and a healthy indoor climate.
JM shall promote long-term quality and environmental management in all its operations.The company shall focus on customer needs and strive for sustainable development of society.
To accomplish this, we shall:
• Preserve and contribute environmental and aesthetic values to the urban and natural landscapes.
• Produce buildings with a healthy living and working environment.
• Work in a structured and systematic manner that leads to
continual improvements in environmental and quality performance.
• Prevent the production and dispersal of pollutants and promote resource conservation and closed cycles.
• Actively contribute to development of knowledge and raise
employee awareness of quality and environmental issues.
• Apply environmental standards that are more rigorous than
existing legal requirements.
Q UA L I T Y A N D
E N V I RO N M E N TA L O B J E C T I V E S
• We shall focus on quality, the environment and ethics so
that every customer and project is a good reference.
• Our projects shall be structured, implemented and managed so as to minimise energy consumption and its impact
on the environment.
• We shall reduce the volume and hazardousness of waste.
• We shall use materials and methods that reduce environmental impact and contribute to a healthy indoor and
working environment.
36
ENVIRONMENTAL IMPACT OF PROJECT DEVELOPMENT
ACQUISITION
PLANNING
BUILDING SITE
FINISHED BUILDING
DEMOLITION
TIME IN PROCESS:
MONTHS
TIME IN PROCESS:
1/2 YEAR – YEARS
TIME IN PROCESS:
1/2 YEAR – YEARS
TIME IN PROCESS:
50 – 100 YEARS
TIME IN PROCESS:
MONTHS
JM'S INFLUENCE
ON THE PROCESS:
MAJOR
MINOR
SCOPE TO PREVENT
ENVIRONMENTAL IMPACT:
MAJOR
THE ENVIRONMENT:
MINOR
two of JM’s significant environmental aspects: energy consumption when the buildings are in use, and the use of certain building materials. Other significant environmental
aspects are handling of building waste, use of transport and
machinery, and handling contaminated land.
EFFECTIVE CONTROL
The Group has a quality and environmental policy as well as
quality and environmental objectives, while each operation
within the Group has drawn up a quality and environmental
programme with quantifiable and timetabled quality and environmental targets. In addition to objectives and programmes
at an overall level, project programmes and environmental consequence analyses are conducted at project level. Follow-up
includes checks, environmental rounds, inspections, exception reports and key performance indicators (KPIs).
With the aid of process-oriented operational control systems, the operations receive control and support in their
daily quality and environmental work. Internal audits are
used to check how the requirements of the operational control system are met in the project.
Since JM has a major indirect environmental impact via its
external partners – consultants, subcontractors and suppliers – demands are also made on them to have the required
environmental routines. JM’s principal suppliers are subject
to special environmental assessments.
MINOR
MODERATE
MAJOR
Each of JM’s operations has a quality and environment council that formulates targets. Practical work is co-ordinated by
a quality and environmental manager, who is also responsible
for the operational control system together with the different process owners. Each geographic region has a quality and
environment co-ordinator who functions as an internal auditor and support. The Group’s Quality and Environment
department is responsible for overall co-ordination.
A extensive review of both the operational control system
and audit methods was conducted during the year in order
to ensure good control towards long-term profitability,
lower business risks and uniform company processes.
In addition, extensive work has been started to change the
company’s pre-construction and purchasing routines. The
intention is to use fewer and well-tried solutions and thus
increase control over choice of materials and methods. As
part of ongoing efforts to “industrialise” operations – without forgoing customer requirements – a more consistent and
effective control of energy measures and other environmental activities is being sought.
Ongoing training and active development work are conducted both internally and in co-operation with other players in
order to raise competence and involvement among employees.
The requirements in the quality and environmental management standards ISO 9001 and ISO 14001 are essentially
met as a result of the way JM works.
37
ENERGY EFFICIENCY
FAC T S E N V I RO N M E N T
2003
2002
2001
80
103
59
105
160
110
13,900
14,540
–
Environmentally assessed framework
agreement partners
Internal quality and environmental audits
within residential project development
Carbon dioxide emissions JM (tonnes)
Carbon dioxide emissions JM (tonnes/SEKm)
2.2
2.3
–
Investment properties with
district heating (%)
89 1)
100
96
1,600
Products in the environmental database
2,165
2,000
Projects with KPIs (%)
88
93
84
Projects with KPIs
42
41
42
1)
Others are acquired housing with direct electric heating.
A building’s energy consumption is by far JM’s most significant environmental aspect. In order to minimise energy
requirements, high energy efficiency is planned back at the
drawing board. Mandatory procedures include use of lowenergy lamps, low-energy white goods, low-flush toilets,
water-saving taps, and low-energy fans. Other measures vary
depending on the project and may include extra well-insulated windows, bespoke ventilation, individual measurement
of hot water consumption or systems for renewable energy
such as solar panels, solar cells and ground heat.
Eco-labelled electricity is mandatory on all building sites.
GOOD CHOICE OF MATERIALS
ECO-COMPLIANT HOMES
The residential buildings built by JM meet a number of specified requirements for methods and technical solutions.
These requirements are intended to reduce the environmental impact of the buildings and to create conditions for a
healthy indoor climate.
A healthy indoor climate is characterised by qualities such
as ease of cleaning, building materials, acoustics and air quality. Dust-collecting surfaces are minimised and noise is kept
out using sound-proofed apartment doors without letterboxes. The entire property has three-phase, five-wire wiring
and fuse boxes located away from bedrooms and living room
in order to minimise exposure to electromagnetic fields.
In order to steer use of building materials towards lower
environmental impact, JM has had a unique internal system
for eco-evaluation for a number of years. Only materials that
are approved may be used. Products that are evaluated
include paints, glues, jointing compounds, and floor and roof
materials. The results are stored in JM’s environmental product database.
Building materials are assessed from a life cycle perspective. This includes examining their content of hazardous
substances that might affect the working, living and outdoor
environments. Use of thermoplastics and products that have
a high organic solvent content is avoided, as are lead/lead
alloys, short-chained phthalates, chlorinated paraffin, bromide flame retardants and other substances hazardous to
health and the environment.
ENVIRONMENTAL KPIs – FOLLOW-UP OF TARGETS
Target 2005
Newly produced homes’ estimated energy requirement,
normal home adjusted (kWh/sq.m. UFA)
110 1)
2003
2002
2001
131
124
137
Newly produced homes’ estimated carbon dioxide emissions
from energy consumption (kg CO2/sq.m. UFA)
Reduction
7
9
–
Energy consumption offices (kWh/sq.m. UFA)
Reduction
102
113
98
Landfilled waste (kg/sq.m. GFA)
Proportion of landfilled waste (%)
6
8
10
11
Reduction
29
36
42
Target adjusted. Applies to newly planned homes.
See also www.jm.se for diagrams and additional information.
1)
38
HUMAN RESOURCES
High priority for
employee development
JM’s focus on project development places high demands
on employee competence.Significant efforts are made to
increase employees’ knowledge, develop good leaders
and support professional and personal development.
Investments in employee competence primarily have a
business-support purpose.
PERSONNEL STRUCTURE
At year-end 2003, JM had 2,368 employees, comprising 1,090
salaried employees and 1,278 wage-earners. A total of 296
people, 97 salaried employees and 199 wage-earners, left the
company following the issue of redundancy notices. Some 120
employees chose to leave the company during the year. The
average age of employees has decreased in recent years, to 44
for salaried employees and 40 for wage-earners. The proportion of graduates among salaried employees was 25% (26).
EMPLOYEE DEVELOPMENT
In its personnel policy JM has defined competence as knowledge, willingness and ability. These parameters form the
basis of the performance reviews between manager and
employee, and are the foundations on which employee development is conducted. In general JM works with a philosophy
that practical work is the main source of individual development. Courses organised by the company are also a key part
of competence development.
JM has a number of programmes designed to motivate employees, increase equal opportunities and strengthen its image
as the industry’s best employer. For example, JM encourages
employees to take out parental leave. Compensation for loss of
income during parental leave is offered for up to six months,
with up to 80% of salary regardless of income. During 2003, 63
employees used this opportunity, 30 of whom were men.
Surveys indicate without exception considerable job
enjoyment among employees. An open organisation where
individual employees are seen and given responsibility and
authority at an early state, as well as investments in competence development are frequent assessments.
MANAGEMENT SUPPLY
JM mainly uses internal recruitment to meet requirements
for managers and leaders. Internal recruitment provides
good opportunities for individual development within the
company while the corporate culture is strengthened and
knowledge of “the business” is retained. External influences
are important, however, and it is up to managers and leaders
at JM to ensure that these are brought into the organisation
also in other ways than through recruitment.
All JM’s managers are also tasked with identifying future
managers. Management development has a clear hands-on profile. People identified as future managers and leaders are gradually given more and more responsibility and complementary
education is provided if required. A three-year trainee programme is one way of ensuring future leadership supply.
COMPENSATION POLICY
Approximately 270 of JM’s managers and leaders are included
in a profit-based salary system. Total salary comprises a fixed
and variable component, with a maximum result for the variable component which, depending on position, varies between two and seven monthly salaries. Apart from being
based on financial results, which has the greatest importance,
the variable salary component is also based on the results of
customer surveys and individual target attainment.
ETHICAL GUIDELINES
JM drew up group-wide ethical guidelines in 2002 which
were implemented in 2003. These guidelines have been
developed to support individual employees in their professional role, both as regards decisions relating to their work
and codes of conduct for relationships with other employees,
suppliers and customers. JM’s ethics committee provides
ongoing support to the organisation and is responsible for
continuous development of these guidelines.
EQUAL OPPORTUNITIES
For several years JM has been making active efforts to
achieve a more even gender distribution. The proportion of
women among salaried employees has increased steadily and
amounted to 36% at the end of 2003, an increase of 1 per-
39
HUMAN RESOURCES
centage point compared with 2002. Almost half of the people
who have attended JM’s trainee programme and 15% of the
Group’s senior executives are women.
for measures designed to allow the employee to return to
work as soon as possible. Treatment is provided by therapists, psychologists, physiotherapists, naprapaths and when
required vocational guidance.
WELLNESS PROGRAMMES
JM works actively with preventive health care in order to
avoid absence due to illness and industrial injuries. Internally, absence due to illness among salaried employees and
wage-earners is reported separately. In 2003 long-term
absence due to illness among salaried employees was 1.7%,
and 4.6% among wage-earners.
In addition to regular company health care all employees
are offered a number of wellness programmes such as exercise,
treatment from a naprapath, physiotherapy, massage, and
information about the correlation between diet and health.
Stress-related illness has become an increasingly common
reason for salaried employees being on the long-term sick list
(45%) in recent years. In order to reduce stress-related absence
due to illness, JM works to prevent this based on an individual
perspective and on a manager/leader perspective. All employees have an opportunity to attend stress management training
and JM’s managers are trained to identify symptoms of stress
among their employees at an early stage.
Among wage-earners injuries from falls and strain-related
injuries are the main reasons for long periods on the sick-list
(75%). JM tries to reduce such injuries through continuous
and consistent efforts in the working environment on the
sites and through job rotation. One wellness concept which
has gradually been introduced is daily warming up exercises
and stretching during working hours, body-building and fitness training outside working hours, and access to treatment
from a naprapath at the workplace. “Building gymnastics”
take place on most of JM’s building sites.
Studies of JM’s wage-earners compared with workers at
sites outside the wellness programme have shown both a
reduction in industrial injuries and that JM’s employees are
in far better physical shape. JM’s ultimate aim is to reduce
both strain-related injuries and accidents to zero.
REHABILITATION
JM’s rehabilitation work is based on co-operation between
the central personnel function, the manager responsible, the
person on the sick-list and the care providers. JM works
actively during the illness process by initiating and paying
NUMBER OF EMPLOYEES
Number
3,000
2,500
2,000
1,500
1,000
500
0
1999
2000
Salaried employees
2001
2002
2003
Wage-earners
ABSENCE DUE TO ILLNESS
%
6
5
4
3
2
1
0
2002
2003
Salaried employees, sick pay period
Wage-earners, sick pay period
Salaried employees > 21 days
Wage-earners > 21 days
2003
2002
5.4
5.6
55.4
55.6
Women’s absence due to illness/
Women’s total normal working hours, %
4.1
4.3
Men’s absence due to illness/
Men’s total normal working hours, %
5.6
5.8
Breakdown of absence due to illness by age
Employees aged –29
Employees aged 30–49
Employees aged 50–
4.8
4.4
7.4
4.4
4.8
7.6
2,398
2,582
ABSENCE DUE TO ILLNESS
Total absence due to illness/
All employees’ total normal working hours, %
Absence due to illness during consecutive period of
at least 60 days/Total absence due to illness, %
Number of employees included in calculation
In all cases the calculation is based on the number of worked or non-worked hours.
40
THE BRAND
Increased marketing efforts
The purpose of JM’s brand-building activities and longterm profiling campaigns is to maintain and enhance
interest in JM’s housing and commercial premises, and
thus make a positive contribution to sales.
POSITIONING
As the market’s leading player, it is in JM’s interest to promote higher demand in general for newly built homes. The
second-hand market, homes that are not newly built, is the
main competitor. JM therefore seeks to highlight the advantages of buying a new home, such as opportunities to have a
say in choice of materials, fittings and layout. The slogan
“Room for enjoyment” summarises the values that JM represents and symbolises the optimal benefit JM wishes to offer
its customers.
BRAND INVESTMENTS
JM has increased its brand investments in recent years in
order to support planned volume growth and adopt a clear
position in the light of greater competition in housing development projects. Brand investments were increased considerably in 2003.
Co-ordinating brand campaigns with ongoing sales activities provides more value per invested advertising krona.
Poster campaigns, film and TV commercials and radio spots
complement project catalogue mail shots and newspaper
advertisements.
On four occasions in 2003 these integrated campaigns
were conducted before and in direct connection with JM’s
regular customer activity the Grand Viewing Day. Apart
from a substantial increase in the number of visitors on
viewing days and hits on JM’s website, significant sales
results could be noted.
MARKET WINDOW WWW.JM.SE
The Internet is an increasingly important search engine for
prospective home buyers and a natural first direct contact
with JM. Further development of JM’s website, with a focus
on user friendliness and consistent property presentations,
has been carried out.
SPONSORING AND SOCIAL RESPONSIBILITY
For JM it is important that sponsoring activities are brandbuilding and have a link to JM’s own operations. JM also has a
responsibility to contribute to positive social development.
JM has made the assessment that sport, culture and social
responsibility are appropriate areas for sponsoring. By sponsoring Mentor, a foundation dedicated to giving young people
a drug-free upbringing, JM is involved in the Hjulsta school
in north Stockholm. JM is also principal sponsor of the
Millesgården museum on Lidingö. Sponsoring costs totalled
SEK 2.6m in 2003.
AWARDS
High ratings or mentions in industry competitions are important for JM’s image to the outside world. In 2003 two of JM’s
senior living projects received awards. The Swedish Association of Architects’ Housing award was given to the Opus 1
project in Ljunghusen. The Hammarskogen project in Järfälla, north of Stockholm, received an award in 2003 for good
building culture from Järfälla town planning office.
STRENGTH IN THE BRAND
Knowledge of and attitudes to JM are good. Surveys show
that JM is the supplier of choice in its target group – more
people name JM than any other company when asked who
they would turn to in order to buy a newly built home.
Some of JM’s profile-creating advertising in 2003.
P1
JM in pictures
Project: Röllingby 2 • Place: Åkersberga • Municipality: Österåker • Type of housing: Apartments • Number: 33 • Size: 2–4 rooms, 61–119 sq.m.
Location: Close to nature • Communications: Bus, commuter trains • Distance to Stockholm: 30 km • Completion: 2003
Architect: FFNS Arkitekter
P2
Project: Solhem • Place: Spånga • Municipality: Stockholm • Type of housing: Apartments • Number: 102 • Size: 1–5 rooms, 45–120 sq.m.
Location: Central • Communications: Bus, commuter trains • Distance to Stockholm: 10 km • Completion: December 2003
Architect: Brunnberg och Forshed Arkitektkontor
P3
Project: Fyrtornen • Place: Gothenburg • Municipality: Gothenburg • Type of housing: Apartments • Number: 56 • Size: 2–3 rooms, 61–106 sq.m.
Location: Close to water • Communications: Bus, boat • Distance to Gothenburg: 6 km • Completion: 2003 • Architect: Abako Arkitektkontor
P4
Project: Kanbergslunden • Place: Linköping • Municipality: Linköping • Type of housing: Apartments • Number: 35 • Size: 3–5 rooms, 92–143 sq.m.
Location: Central • Communications: Bus, train • Distance to Linköping: 0 km • Completion: Summer 2003 • Architect: Brunskog Arkitekter
Project: Marielundsviken • Place: Mariefred • Municipality: Strängnäs • Type of housing: Detached houses • Number: 16 • Size: 5 rooms, 130–145 sq.m.
Location: Close to water • Communications: Bus, train • Distance to Stockholm: 70 km • Completion: Summer 2003 • Architect: AIX
P5
Project: Paradsängen • Place: Hässelby strand • Municipality: Stockholm • Type of housing: Apartments • Number: 117 • Size: 1–4 rooms, 39–98 sq.m.
Location: Close to water • Communications: Underground • Distance to Stockholm: 10 km • Completion: Spring 2003 • Architect: Sundell Arkitekter
P6
Project: Fontaines de Woluwé • Place: Woluwé-St-Lambert • Municipality: Woluwé-St-Lambert • Type of housing: Apartments • Number: 147
Size: 3–6 rooms, 97–221 sq.m. • Location: Park • Communications: Bus, underground • Distance to Brussels: 4 km • Completion: 2004
Architect: Beauvoir & Croisette Desnoyer
P7
Project: Lillegrund • Place: Amager • Municipality: Copenhagen • Type of housing: Terraced houses • Number: 43 • Size: 3–5 rooms, 119–126 sq.m.
Location: Central • Communications: Bus, underground • Distance to Copenhagen: 0 km • Completion: Autumn 2003
Architect: Peter Fournais Tegnestue
P8
Project: Basbergrønningen · Place: Ringshaug · Municipality: Tønsberg · Type of housing: Apartments · Number: 16 · Size: 3–7 rooms, 77–168 sq.m.
Location: Close to forest · Communications: Bus · Distance to Tønsberg: 5 km · Completion: Autumn 2003 · Architect: Jørn Eskeland
Project: Liljekonvaljen • Place: Värmdö • Municipality: Värmdö • Type of housing: Detached houses • Number: 32 • Size: 159–167 sq.m.
Location: Close to water • Communications: Bus • Distance to Stockholm: 25 km • Completion: 2004 • Architect: Cinnober Arkitekter
P9
Project: Södra Udden, Bolinder Strand • Place: Kallhäll • Municipality: Järfälla • Type of housing: Apartments • Number: 95 • Size: 1–4 rooms, 52–110 sq.m.
Location: Close to water • Communications: Bus, commuter trains • Distance to Stockholm: 25 km • Completion: 2003 • Architect: Wingårdhs
P10
Project: Karlberga Park • Place: Södertälje • Municipality: Södertälje • Type of housing: Apartments • Number: 42 • Size: 2–4 rooms, 68–124 sq.m.
Location: Close to water • Communications: Bus • Distance to Stockholm: 50 km • Completion: Winter 2003 • Architect: ÅWL Arkitekter AB
P11
Project: Västra Linné • Place: Gothenburg • Municipality: Gothenburg • Type of housing: Apartments • Number: 81 • Size: 2–5 rooms, 64–139 sq.m.
Location: Central • Communications: Bus, tram • Distance to Gothenburg: 0 km • Completion: August 2003
Architect: Semrén & Månsson Arkitektkontor AB
P12
Project: Vita Byn • Place: Mölle • Municipality: Höganäs • Type of housing: Apartments • Number: 29 • Size: 2–4 rooms, 65–112 sq.m.
Location: Close to the sea • Communications: Bus • Distance to Helsingborg: 70 km • Completion: Autumn 2002 • Architect: Möller Arkitekter
41
B U S I N E S S U N I T S – J M R E S I D E N T I A L S TO C K H O L M
Strong sales increase
FAC T S – J M R E S I D E N T I A L S TO C K H O L M
The business unit develops mainly residential projects in preferred areas of Greater Stockholm. Operations comprise acquisition of attractively located development properties as well as
planning, pre-construction, building and selling homes.
EARNINGS DEVELOPMENT
The business unit’s net sales fell 11% to SEK 3,218m (3,623)
and earnings excluding property sales amounted to SEK
–44m (–14). The capital gain from property sales amounted
to SEK 22m (9). No write-downs of properties were carried
out compared with SEK 155m in the previous year.
OPERATING PROFIT
NET SALES
SEKm
4,000
SEKm
600
3,000
400
2,000
200
1,000
0
PROJECT DEVELOPMENT
During the year, housing starts totalled 966 (1,262) and 1,547
(1,044) residential units were sold. Housing starts in inner
suburbs took place in Nacka, a second phase with 34 units by
Danvikstrand and conversion of the former ABB building into
140 residential units and a pre-school, in Täby/Hägernäs
Strand, two phases with a total of 69 residential units, and in
Långbro Park, a second phase with 32 residential units. Production started on two major projects in Frösunda and Västra
Skogen in Solna, with 96 and 86 residential units respectively.
Three phases with a total of 26 single-family homes went into
production in Österåker, two projects totalling 89 residential
units started production in Gustavsberg, and in Värmdö production started on 32 single-family homes and 23 apartments
in two projects. In Stockholm, production started on a sixth
phase with 35 residential units in Lilla Essingen. In addition,
production starts included 96 sheltered housing units in
Östermalm and a further phase of 75 residential units in
Bolinder Strand.
0
–200
2001
2002
2003
JM Residential Stockholm became a separate business unit
during the year, when the JM Residential business unit was
divided into two new business units. A new regional division
has created four small regions, in place of the earlier two.
Smaller units create closer links between business unit management and the individual projects.
BUILDING RIGHTS
Approximately 10,300 building rights (11,500) were available at year-end. During the year JM sold building rights
with completed detailed plans for housing in Årstadal,
2002
2003
SUMMARY OF RESULTS
SEKm
2003
2002
Net sales
3,218
3,623
97
131
–141
–145
Gross profit
Selling and administrative expenses
Gains on the sale of properties
Write-downs of properties
Operating loss
22
9
–
–155
–22
–160
KEY FIGURES
2003
2002
Margin, %
–1.4
– 0.4
Return on operating capital, %
–0.7
– 4.6
192
192
96
350
Number of employees
Number of acquired building rights
ORGANISATION DEVELOPMENT
2001
Number of housing starts
Number of building rights at end of period
Book value of development properties, SEKm
Book value of investment properties, SEKm
Number of sold residential units
966
1,262
10,300
11,500
2,219
2,330
74
213
1,547
1,044
Rågsved and Långbro. These deals will lead to a time shift in
the building rights portfolio, making it better adjusted for
planned production starts. The sales were made to players
that are not regarded as competitors to JM.
42
BUSINESS UNITS – JM RESIDENTIAL SWEDEN
Slightly weaker trend
FAC T S – J M R E S I D E N T I A L S W E D E N
Net sales decreased in 2003 by 5% to SEK 2,092m (2,205).
Earnings excluding property sales and write-downs
decreased to SEK 105m (178). This lower result was partly
attributable to slower sales of large residential units in
Gothenburg. The capital loss from property sales amounted
to SEK 7m (4 gain). No write-downs were made of properties
compared with SEK 2m in 2002.
The business unit develops mainly residential projects in preferred growth areas in Sweden, excluding Greater Stockholm.
Operations comprise acquisition of attractively located development properties as well as planning, pre-construction, building and selling homes. Contract work is also conducted to a
limited extent.
NET SALES
OPERATING PROFIT
SEKm
2,500
SEKm
300
2,000
200
1,500
1,000
PROJECT DEVELOPMENT
100
500
Production started on a total of 958 residential units (1,010)
and 958 units (883) were sold. There were 141 housing starts
in Uppsala during the year, including a first phase of 50 residential units out of a total of approximately 320 in the Industristaden project. In Vallentuna, three phases started with a
total of 75 residential units, in Sigtuna a phase with 23 singlefamily homes started, and in Upplands Väsby production
started on 23 senior units. Three production starts took
place in Linköping: two phases of 83 residential units on Kanberget as well as a first phase of 48 units in the Garnison area.
A final phase with 27 residential units started in the old rail
yard area in Strängnäs. In Örebro, construction started on 45
apartments and 20 single-family homes, and 49 residential
units were started in central Jönköping.
Production starts in south Sweden included the first phase
with 94 residential units in the Dockan area in Malmö harbour, 40 single-family homes in Bunkeflostrand, 22 single-family homes in Videdal in Malmö and 32 residential units in central Vellinge. In Halmstad, a second phase with 48 residential
units started by the Nissan river. The first phase of 21 singlefamily homes out of a total of over 100 started in Staffanstorp.
Work also started on 33 residential units in Ladugårdsmarken in Lund and on phase two with 18 residential units in
Kävlinge. A first phase with 10 out of a total of 25 single-family
homes in Partille, a second phase with 20 single-family homes
in Kungsbacka and 19 single-family homes in Tuve also started.
0
0
2001
2002
2003
2001
2002
2003
SUMMARY OF RESULTS
SEKm
2003
2002
Net sales
2,092
2,205
Gross profit
Losses/gains on the sale of properties
Operating profit
217
306
–112
–128
–7
4
–
–2
98
180
2003
2002
KEY FIGURES
5.0
8.1
10.2
16.7
Number of employees
526
580
Number of acquired building rights
170
350
958
1,010
7,400
8,400
700
808
Margin, %
86
85
958
883
ing the year, when the JM Residential business unit was
divided into two new business units.
BUILDING RIGHTS
JM Residential Sweden became a separate business unit dur-
At year-end 2003 the business unit had approximately 7,400
building rights (8,400) available for future production.
43
B U S I N E S S U N I T S – J M P RO D U C T I O N
Improved margins
FAC T S – J M P RO D U C T I O N
Net sales decreased according to plan and amounted to SEK
701m (1,166). Operating profit amounted to SEK 34m (–27).
The business unit’s lower external volumes are attributable to a lower proportion of external contracting work. Phasing out of unprofitable units and the sale of non-strategic
operations contributed to an improved margin.
The business unit carries out construction work for external
and internal customers in the Greater Stockholm area.
Reported net sales and operating profit include the revenueearning construction work. Other sales and earnings, i.e. from
internal residential projects, are reported in the JM Residential
Stockholm business unit.
NET SALES
OPERATING PROFIT
SEKm
2,000
SEKm
100
1,500
50
1,000
PROJECTS
0
Major ongoing external contracts include new construction
of premises for the University College of Film, Radio, Television and Theatre on Stockholm’s Valhallavägen, conversion of
the Swedish Patent and Registration Office’s premises on
Valhallavägen for Vasakronan and construction work for the
shopping centre in Gustavsberg for KF Fastigheter.
Internal construction projects include three conversions:
the ABB building in Nacka, Packhusen in Gustavsberg and
J&W’s former offices at Torsviks Torg, Lidingö. New construction already in progress includes a new 12,000 sq.m. office
along the Bergshamra link road with a view over Brunnsviken.
500
0
–50
2001
2002
2003
2001
2002
2003
SUMMARY OF RESULTS
SEKm
Net sales
Gross profit
Operating profit/loss
2003
2002
701
1,166
67
33
–33
– 60
34
–27
2003
2002
KEY FIGURES
The operations in Lindqvist Rör, with some 30 employees,
were sold during the year. The sale had no earnings impact.
Margin, %
OPERATIONAL DEVELOPMENT
Extensive measures were carried out within the business
unit in order to achieve higher productivity. These included
employee training as well as further development of processes, routines, decision-making systems and follow-up.
Number of employees
1)
4.9
–2.3
1,206 1)
1,425
Of whom, 809 employees work for internal customers.
5
5
44
BUSINESS UNITS – JM COMMERCIAL
Focus turns to housing
FAC T S – J M C O M M E R C I A L
The business unit develops commercial property projects in
Greater Stockholm.The business unit also manages JM’s commercial properties and is responsible for the purchase and sale
of the Group’s investment properties.
Operating profit for 2003 amounted to SEK 358m (634), of
which property sales accounted for SEK 374m (513). Operating net amounted to SEK 95m (284). In line with the strategy
to reduce the portfolio of fully developed properties, sales
and earnings from property management are decreasing.
NET SALES
OPERATING PROFIT
SEKm
600
SEKm
1,250
1,000
400
750
500
200
PROPERTY TRANSACTIONS
During the year the business unit completed property sales
for a total of SEK 2,219m, with a capital gain of SEK 411m.
These included the sale of the hotel property Pennfäktaren
10 for SEK 575m and the major deal with Tornet. In this
deal, JM sold all the Svärdet properties, the offices in
Mörby, Danderyd, for SEK 931m with a capital gain of SEK
235m. At the same time, 2,100 residential units were
acquired in Nacka and Vaxholm for SEK 1,422m.
PROJECT DEVELOPMENT
Work has started on detailed plans for densification of the
residential areas acquired by JM in Nacka and Vaxholm.
There is also considerable interest in conversion of existing
rental units into tenant-owned apartments in these areas. At
year-end discussions were under way with four tenantowner co-operatives in Nacka and Vaxholm, comprising
approximately 250 apartments.
In the Barnängen block in Södermalm a 9,000 sq.m. industrial property is being converted into modern offices where
tenants already moved in include the architect firms Nyréns
and Sweco FFNS. Conversion is also under way of offices and
retail space in the Västerbotten block in Torsvik, Lidingö.
In 2003, JM signed a lease with the transport and logistics
company DHL for the newly built office property Norra
Brunnsviken in Solna. The lease runs for five years and comprises approximately 7,400 sq.m., corresponding to twothirds of the property. The tenants moved in during the first
quarter of 2004.
In ongoing commercial projects, leases have so far been
signed for approximately 16,000 sq.m. out of a total of
25,000 sq.m.
250
0
0
2001
2002
2003
2001
2002
2003
SUMMARY OF RESULTS
SEKm
Net sales
Gross profit
2003
2002
227
424
98
278
–51
–58
374
513
– 63
–99
Operating profit
358
634
2003
2002
KEY FIGURES
Margin, %
20.7
51.9
14.3
16.8
93
77
2,405
2,158
Number of employees
Investments in properties, SEKm
Number of sold properties
187
87
1,686
345
17
10
BUILDING RIGHTS
JM possesses land for commercial project development on
prime sites in Norra Frösunda, Solna, and the Lustgården
block in Kungsholmen where production can start as soon as
demand is guaranteed. JM’s building rights for commercial
premises total approximately 200,000 sq.m. with a book
value of SEK 187m.
45
B U S I N E S S U N I T S – J M I N T E R N AT I O N A L
Norwegian operations
expanding
FAC T S – J M I N T E R N AT I O N A L
The business unit develops and sells residential properties in
Norway, Denmark and Belgium. In Belgium, JM also develops
centrally located commercial property projects.
Net sales increased in 2003 to SEK 1,683m (1,530). Sales for
the operations in Norway amounted to SEK 985m (1,114).
Operating profit in 2003 amounted to SEK 72m (90). During
the year housing starts totalled 790 (439) and 684 residential
units (584) were sold. At year-end 2003 the business unit had
approximately 5,700 building rights (5,650) at its disposal.
NET SALES
OPERATING PROFIT
SEKm
2,000
SEKm
150
1,500
100
1,000
50
500
0
0
2001
2002
2003
2001
2002
2003
SUMMARY OF RESULTS
NORWAY
SEKm
2003
2002
Operations are conducted in the Oslo area, Tønsberg, Skien
and Bergen. Market presence was broadened during the year
through the acquisition of the Stavanger-based project development company Vikevåg Bolig, which has been incorporated as an independent subsidiary.
Housing started totalled 409 (396) and 482 residential
units (424) were sold. 140 residential units in several large
phases in the Rolvrud Skog project, in Lørenskog outside
Oslo, were completed. 58 residential units in Sinsentoppen I
(Oslo) and 45 residential units in Evjeveien (Bærum) were
also completed. Seniorbo completed 74 units in Nyhagen
(Oslo). The available building rights portfolio at year-end
comprised 4,500 residential units (4,350).
Net sales
1,683
1,530
156
164
–106
–71
Gross profit
22
–3
Operating profit
72
90
2003
2002
3.0
6.1
KEY FIGURES
Margin, %
6.8
9.2
Number of employees
271
305
790
439
5,700
5,650
DENMARK
520
641
Due to combined acquisitions and sales of development
properties, operations now focus on Copenhagen and Frederiksberg. A homes shop was opened in central Copenhagen.
Housing starts totalled 242 (43) and 152 residential units
(85) were sold. The projects are primarily centrally located in
Copenhagen’s harbour area and in a large area in Havnestad
by Islands Brygge. JM in Denmark had a total of 1,100 residential building rights (1,100) at its disposal at year-end.
268
318
684
584
BELGIUM
The operations in Belgium are concentrated to the Brussels
region and focus on project development of both housing and
commercial premises. Housing starts totalled 139 (0). Since
only a limited number of residential units were available for
sale, only 50 units (75) were sold.
The 5,100 sq.m. office property Arts 21 converted by JM
was sold to the German property fund MEAG for SEK 133m
with a capital gain of SEK 22m. Conversion of the 11,000
sq.m. office project Science 14 in the Leopold district is
under way. The building rights portfolio corresponded to
approximately 100 residential units (200) at year-end.
46
B O A R D O F D I R E C T O R S ’ R E P O RT
The Board of Directors and the President of JM AB (publ)
hereby submit the annual report and consolidated financial
statements for 2003.
been 16%. The Group’s changed return target is 10–15% over
a business cycle. Earnings per share for 2003 amounted to
SEK 7. In the fourth quarter, net debt could be decreased by
SEK 1,400m due to the improved cash flow.
SUMMARY OF THE GROUP
MARKET AND SALES
CONSOLIDATED INCOME STATEMENT
JM’s net sales decreased in 2003, mainly due to a lower number of housing starts in the first nine months of the year.
However, the housing market in Stockholm, which is important to JM, stabilised in the second half of the year, after the
previously reported period of reduced demand.
The improved market, a broader product range which
includes homes in lower price bands, and intensified sales
efforts, contributed to a substantial increase in the number
of sold residential units in the form of signed contracts of
27% during the year to 3,189 (2,511). The good sales during
the fourth quarter, combined with a stable reservation rate,
allowed JM to start production of a large number of residential units during the fourth quarter. This had a positive
impact on both net sales and cash flow. The negative earnings
trend for JM Residential Stockholm could thus be broken.
Despite the substantially increased sales of homes, earnings for the full year 2003 were lower than in 2002, which
was mainly due to low margins in older ongoing residential
projects in Stockholm. At the same time, revenue recognition
is conservative for newly started projects. Earnings were also
reduced by the lower sales.
The earnings trend for JM’s other operations was stable,
although earnings in Norway declined compared with the
previous year due to a lower average revenue level for residential units sold during the year.
SEKm
2003
2002
2001
Net sales
7,787
8,872
8,642
–7,152
–7,960
–7,022
IMPROVED CONTROL AND OVERSIGHT
During 2003, JM introduced a new structure for stricter control and project oversight routines, particularly for newly
started residential projects in the Group. This involved extensive work throughout 2003 which is now essentially completed.
This also led to postponement of production starts to the latter
part of the year. Our efforts to increase internal efficiency and
reduce costs continue to have high priority.
LOWER NET DEBT
The Group’s return on equity for 2003 amounted to 6%.
Over the past five calendar years, the average return has
Costs for production and management
Gross profit
635
912
1,620
–505
–527
–545
411
523
928
Property write-downs
–63
–256
– 39
1,964
Operating profit
478
652
Net financial items
–211
–284
–335
Tax on profit for the year
–80
–115
– 485
Net profit for the year
187
253
1,144
NEW CONTROL AND
PROJECT OVERSIGHT ROUTINES
In 2003 a large number of measures were adopted to improve
control and governance of JM’s operations. Decisions on
starting-up and overall design of projects are now always
made in business unit management or group management,
or, for major projects, by the Board. The assignments of
external auditors have been widened.
New and formalised monitoring routines have been introduced with a special focus on large projects. The business
area and regional managers submit quarterly reports to the
President, Vice President and CFO. Assessment data includes the financial history of the project, future anticipated
revenues and expenses and the sales and reservations situation. Selected major projects are subject to a more in-depth
examination by auditors and are reported to JM’s Audit
Committee on a regular basis. Special oversight groups have
also been set up for the very largest projects.
Project oversight routines have been tightened up considerably. This applies in particular to the JM Residential Stockholm
business unit and JM Production, including well-documented
reviews that are carried out in conjunction with pre-construction and production start. A special project inspection group
has also reviewed all projects within JM Residential Stockholm
where production started during 2003 in order to quality
assure the transfer to the new project oversight routines.
During 2003 major work was carried out to develop a groupwide pre-construction process designed to achieve greater
efficiency and lower costs while retaining high quality and
high customer values.
STRATEGIC DEVELOPMENT
In line with the aim of further streamlining operations
towards residential project development, the strategy for the
Group’s market orientation, product range, geographical
spread, building rights portfolio and holding of investment
properties has been sharpened.
JM will increase its customer and market orientation.
Customer satisfaction will be further increased and the service content of JM’s business will be further developed.
The product range is being broadened both as regards
type of homes and homes in lower price bands without
renouncing quality homes in attractive locations.
Geographically, the focus will continue to be to operate in
growth markets and for expansion to mainly take place in the
Nordic countries.
The Group’s investment properties will entirely comprise
properties intended for project development and will as far
as possible consist of residential properties. Project development of commercial properties will be limited and primarily
support residential development.
UPDATED FINANCIAL TARGETS
JM’s margin target has been restated from the earlier project
development margin of 10% by 2005 to an operating margin
of 10%. The new margin target includes profit from property
sales, operating net and group-wide expenses. The changeover to a new margin target is a natural consequence of the
completed extensive sales of the older property portfolio
where the Group’s income statement and balance sheet can
now entirely be seen as attributable to project operations.
Housing starts will take place in pace with secured demand and quality assured pre-construction and production
planning.
The profitability target for return on equity after tax has
been changed to 10–15% over a business cycle from the previous five-year weighted average of 15%.
The targets for a dividend share of 50% of net profit and
an equity ratio of 35% over a business cycle remain unchanged.
47
MARKET TRENDS
STOCKHOLM – RESIDENTIAL
House prices stabilised in the second half of the year, in both
the second-hand market and in JM’s projects. Demand for
JM’s homes is good in both ongoing and new projects. A
slightly sluggish trend can still be noted for sales of larger,
more expensive homes.
STOCKHOLM – COMMERCIAL
The Stockholm property market is characterised by continued
falls in rental levels and high vacancies. The greatest impact of
this is on older office premises. Demand and rental levels in
newly developed, space-efficient offices in locations with good
communications are relatively good.
REST OF SWEDEN – RESIDENTIAL
Market prices remain stable. Demand is favourable in JM’s
ongoing projects and interest in newly started projects is
substantial. Demand and prices depend entirely, however, on
the attractiveness and location of individual projects. Sales
processes for large homes in Gothenburg are more drawn out
than previously.
INTERNATIONAL
Demand for homes in Norway was weaker in the first half of
the year, but this trend then reversed due to an improved business climate and falling interest rates. A more stable employment situation and interest rates at an historically low level
contributed to increased interest in JM’s projects during the
second half. Sales of large homes in Oslo were somewhat slow.
In Denmark, the housing market in Copenhagen was characterised by stable demand and unchanged prices during the
year. The introduction of interest-only loans helped to stimulate demand.
In Belgium, JM is experiencing continued high demand for
both functional offices and high-standard homes in attractive
locations. The limited number of new homes and low interest
rates mean that prices continue to rise in most municipalities.
NET SALES
The JM Group’s net sales in 2003 amounted to SEK 7,787m
(8,872), a decrease of 12% compared with the previous year.
The lower net sales were mainly attributable to a lower
number of housing starts in Sweden and reduced external
48
contract work for JM Production. A lower average revenue
level for residential development also reduced net sales.
The lower number of housing starts in the Swedish operations is mainly attributable to the JM Residential Stockholm
business unit, where net sales decreased by 11%.
The JM Residential Sweden business unit reported more
stable development. Net sales decreased by 5%.
Net sales in the JM Production business unit fell sharply.
This reduction was planned and is due to the lower proportion of external contract work.
In the JM Commercial business unit net sales decreased
considerably due to continued sales of the property portfolio.
JM International showed an increase in net sales of 10%.
Weaker volume development in Norway was balanced by
higher net sales in both Denmark and Belgium.
JM International’s operating profit decreased to SEK 72m
(90). This less favourable result is due to a lower average revenue level for homes sold in Norway during the year as well
as low margins in Denmark.
NET SALES BY BUSINESS UNIT
SEKm
2003
2002
2001
3,218
3,623
3,471
JM Residential Sweden
2,092
2,205
1,943
701
1,166
1,797
JM Production
JM Commercial
227
424
516
JM International
1,683
1,530
1,485
Eliminations
Total
–134
–76
–570
7,787
8,872
8,642
2003
2002
2001
OPERATING PROFIT BY BUSINESS UNIT
OPERATING PROFIT
SEKm
The JM Group’s operating profit decreased by 27% in 2003
to SEK 478m (652).
This result includes gains from property sales of SEK
411m (523).
The JM Residential Stockholm business unit’s operating
loss was SEK 22m (–160). This negative result was mainly
due to a lower number of production starts, but was also due
to weak earnings in a number of ongoing projects. More conservative revenue assessment in early phases of ongoing projects, re-planning costs and increased marketing and sales
efforts also contributed to the negative earnings.
The JM Residential Sweden business unit reported an
operating profit of SEK 98m (180). This lower result was
partly attributable to more sluggish sales of large residential
units in Gothenburg.
The JM Production business unit’s operating profit amounted to SEK 34m (–27). Phasing out of unprofitable units and the
sale of non-strategic operations contributed to an improved
margin. The negative result in 2002 was attributable to a provision for risk of loss in one major project. This provision for risk
of loss was reversed in the fourth quarter of 2003 with no earnings impact, following settlement of an outstanding dispute.
JM Commercial’s operating profit amounted to SEK 358m
(634), of which SEK 374m (513) was attributable to gains
from property sales. The lower earnings for the business
unit, adjusted for property sales, are attributable to lower
volumes due to the continued sale of the property portfolio.
–22
–160
544
98
180
227
JM Production
34
–27
96
JM Commercial
358
634
1,050
JM International
72
90
111
Group-wide expenses
–62
–65
– 64
Total
478
652
1,964
2003
2002
2001
–1.4
–0.4
13.6
7.7
MARGIN BY BUSINESS UNIT
%
5.0
8.1
JM Production
4.9
–2.3
5.0
JM Commercial
20.7
51.9
61.6
JM International
3.0
6.1
7.4
NET FINANCIAL ITEMS
Net financial items amounted to SEK –211m (–284), an improvement of SEK 73m compared with the previous year.
Capitalisation of interest expenses related to commercial
project development amounted to SEK 1m (12). Interest
expenses decreased, mainly due to a lower average debt. In
conjunction with the receipt of proceeds from property
sales, loans of approximately SEK 1,000m were redeemed in
the first quarter of 2003 which led to costs of SEK 30m for
early redemption.
49
Profit after financial items amounted to SEK 267m (368), a
decline of 27% compared with 2002.
with external consultants, of JM’s development properties
with a book value of SEK 3.6 billion (3.9) indicate a surplus
value of approximately SEK 1,400m (1,400).
PROFIT AFTER TAX
ORDER SITUATION
Profit after tax amounted to SEK 187m (253). The total tax
expense amounted to SEK 80m (115), of which current tax
SEK –84m (–228) and deferred tax SEK 4m (113).
Property tax, which is treated as an operating expense,
was charged against earnings in the amount of SEK 25m (44).
The order backlog at year-end amounted to SEK 5,685m
(5,925) and mainly pertained to residential production.
Order bookings in 2003 amounted to SEK 7,145m (6,690).
The JM Residential Stockholm and JM Residential Sweden
business units report lower order bookings, while JM International is showing a significant increase.
PROFIT AFTER FINANCIAL ITEMS
PROJECT DEVELOPMENT
Project development of housing and commercial premises is
JM’s core business. Undeveloped and developed land is
acquired and transformed through construction, conversion or
extension into attractive living and working environments.
Profit from project development amounted to SEK 182m
(459). The margin in these operations amounted to 2.4% (5.4)
for 2003. Project-related property sales and write-downs
made a net contribution of SEK 45m (232).
The number of sold residential units in the form of signed
contracts during the year rose sharply to 3,189 (2,511). The
improvement was attributable to a stabilised market, broader
product range and increased marketing efforts. The good sales
in the fourth quarter, combined with a stable reservations rate,
allowed a large number of housing starts in the fourth quarter.
The number of housing starts for the full year totalled 2,714
(2,711). The number of unsold residential units six months
after final inspection fell in the fourth quarter. The segment for
large homes in Stockholm, Gothenburg and Oslo remains the
part of the market with the weakest demand. Both production
starts and sales volumes can vary over time depending on the
dates of project starts and the size of individual projects.
Despite increased sales, JM is retaining its higher requirements on the proportion of reserved residential units prior to
production starts. In addition to delays due to re-planning, the
higher reservation requirements reduced the number of housing starts in the first nine months of the year. The high sales in
relation to the number of housing starts means that the level of
risk for JM decreased during 2003. Commercial project development continues to be conducted with considerable caution.
The building rights portfolio comprises approximately
23,400 residential units which can be compared with just
over 25,500 at year-end 2002. Valuations, in co-operation
INVESTMENTS IN DEVELOPMENT PROPERTIES
Total acquisitions of development properties in 2003
amounted to SEK 664m (629). Net investments in development properties amounted to SEK –163m (–49). The portfolio then amounted to SEK 3,631m (3,871). These holdings are
a prerequisite for JM’s residential project development.
INVESTMENTS IN INVESTMENT PROPERTIES
Investments in and acquisitions of investment properties
amounted to SEK 1,772m (645). Investments in existing
investment properties totalled SEK 350m (483). In addition,
residential properties were acquired for SEK 1,422m.
MACHINERY AND EQUIPMENT
Investments in machinery and equipment amounted to SEK
18m (35).
BUILDING RIGHTS PORTFOLIO
At year-end 2003, JM had access to a total of approximately
23,400 residential building rights (25,500), broken down as
follows:
NUMBER OF BUILDING RIGHTS
2003
2002
10,300
11,500
7,400
8,400
JM International
5,700
5,650
23,400
25,550
Of the 23,400 building rights, approximately 16,000 are
booked as an asset in the balance sheet. 7,400 building rights
are available under agreements and are not booked as assets.
In addition, the JM Commercial business unit has access to
50
building rights for commercial premises corresponding to
approximately 200,000 sq.m. with a book value of SEK 187m.
During the past year, the book value of the portfolio of
fully developed commercial properties decreased from SEK
2,109m to SEK 515m.
INVESTMENT PROPERTIES
JM’s portfolio of investment properties amounts to approximately SEK 2,800m, mostly comprising residential properties
for further development and office projects under construction.
Fully developed properties only account for a small portion.
The operating net from investment properties amounted to
SEK 109m (293) in 2003. The lower operating net is due to
major property sales in 2003 and 2002, which were carried out
in line with the Group’s strategy to sell fully developed properties. In 2003 properties were sold for SEK 2,219m (3,015) with
capital gains of SEK 411m (523), of which SEK 108m (473) is
included in profit from project development. Write-downs of
investment properties were made with SEK 63m (34).
Investments in existing investment properties amounted
to SEK 350m (483). In addition, residential properties were
acquired for SEK 1,422m.
The property market for commercial premises in Stockholm is characterised by a continued fall in rental levels and
vacancies of 15–16%. New and recently renovated premises
continued to perform relatively well in comparison. Vacancies in JM’s portfolio of fully developed commercial and residential properties amount to 4% (10) of annual rents and 4%
(10) of space. The occupancy rate for the Swedish office projects under construction amounts to approximately 65% of
annual rents and 64% of space.
The Läraren property in Stockholm was sold for SEK 70m
in the fourth quarter. Earlier in the year, JM sold the Svärdet
properties in Mörby for SEK 931m and at the same time
acquired 2,100 residential units in Nacka and Vaxholm for
SEK 1,422m. Other major property deals during the year
included the sale of the newly developed hotel property
Pennfäktaren 10 on Vasagatan in Stockholm to a Norwegian
insurance company for SEK 575m, and the sale of the Pilen
30 property for SEK 180m and of a newly developed office
property in central Brussels for SEK 133m.
Through a strategic deal comprising residential portfolios in
Vaxholm and Nacka, with very low vacancies and therefore secure
cash flows, JM acquired an opportunity to develop two attractive
property portfolios, among other things through densification
with new homes. Many tenants have shown an interest in conversion to tenant-owner co-operatives, which JM also favours.
MARKET VALUES OF JM’S INVESTMENT PROPERTIES
In an appraisal conducted in co-operation with external consultants, the market value of JM’s portfolio of investment properties at year-end 2003 was estimated at SEK 3,205m (3,478).
The corresponding book value amounted to SEK 2,833m
(2,774). The surplus value thus amounts to SEK 400m (700). A
breakdown of values by category is shown below:
SEKm
Book value
Market value
Fully developed properties
515
640
Properties under construction
776
856
Properties for further development 1)
1,542
1,709
Total
2,833
3,205
1)
Includes residential properties acquired during the year.
FINANCIAL ITEMS
INTEREST-BEARING LIABILITIES
At year-end 2003, interest-bearing net debt amounted to
SEK 2,611m (3,665), representing a decrease of just over
SEK 1,400m in the fourth quarter. The debt/equity ratio
amounted to 0.8 (1.0).
Total interest-bearing loans at the end of the period
amounted to SEK 2,986m (4,313), of which the PRI liability
accounted for SEK 451m (433). At the end of the period the
average interest rate for the total loan portfolio was 5.5%
(5.7). The average fixed-interest period for the Group’s total
loan stock, excluding the PRI liability, was 2.5 years (2.3).
CASH FLOW
Cash flow from operating activities, which includes acquisitions and sales of properties, amounted to SEK 1,504m
(2,161). This decline was mainly due to increased investments in investment properties. Cash flow for the year
amounted to SEK –264m (–56).
LIQUIDITY
The Group’s available liquidity amounted to SEK 3,065m
(2,724) at 31 December 2003. Aside from liquid assets of
SEK 332m (596), this includes unutilised overdraft facilities
and credit lines totalling SEK 2,733m (2,128).
OTHER
SHAREHOLDERS’ EQUITY
Consolidated shareholders’ equity at 31 December 2003
amounted to SEK 3,285m (3,570), divided between
restricted equity of SEK 1,796m (1,796) and unrestricted
equity of SEK 1,489m (1,774).
PERSONNEL
The number of employees in the Group at year-end 2003
amounted to 2,368 (2,664). The number of salaried employees was 1,090 (1,187) and the number of wage-earners was
1,278 (1,477). 2,207 (2,250) employees were men and 359
(352) women.
The average number of employees during the year was 2,566
(2,602), of whom 293 (301) were employed outside Sweden.
Wages, salaries and social security expenses amounted to
SEK 1,280m (1,309), of which social security expenses
accounted for SEK 390m (403).
THE WORK OF THE BOARD IN 2003
CHANGED ACCOUNTING PRINCIPLES 2005 (IFRS1))
During 2003, JM has carried out work to plan the changeover to
IFRS where two main areas are mainly relevant to JM:
IAS 2) 11 – Construction Contracts – within the framework
of the Swedish Construction Federation, preparations have
been made in 2003 to define a revenue recognition that meets
the criteria according to the industry’s interpretation of IAS
11. The industry has not yet stipulated the new industry recommendation in every detail. The current draft stipulates a
2)
International Financial Reporting Standards (IFRS)
International Accounting Standards (IAS)
conservative revenue recognition that is linked to sold residential units. This will lead to a more conservative revenue
reporting than that prescribed by the current industry recommendation. JM plans to change over to the new industry recommendation with effect from 1 January 2005.
IAS 19 – Employee Benefits – all the Group’s pension commitments have been examined. The revaluation effect on
opening equity for 2004 amounts to SEK –0.7m. The assumptions made regarding discounting, return and salary development are on a par with established practice.
SHARE BUY-BACK PROGRAMME
The Board of Directors had a mandate from the Annual General Meeting for the repurchase of up to 10% of the number of
shares outstanding. Buy-backs for SEK 154m (1.4 million
shares) were made at the beginning of 2003. The company has
not repurchased own shares under the present mandate since
the Annual General Meeting in April 2003.
KEY FIGURES
At the Annual General Meeting held on 23 April 2003 it was
decided that the Board should comprise seven regular Board
members as well as two employee representatives with two
deputies appointed by the trade unions.
The Board held one statutory meeting and ten subsequent
meetings. In accordance with its procedures, during 2003
the Board examined especially strategic issues as well as
internal control and efficiency.
In February 2003 a Compensation Committee and Audit
Committee were set up each comprising three members of the
Board. During the year the Compensation Committee held
four meetings and the Audit Committee held eight meetings.
1)
51
Interest-bearing net debt (SEKm)
2003
2002
2,611
3,665
Debt/equity ratio (times)
0.8
1.0
Interest coverage ratio (times)
2.1
2.1
Equity ratio (visible) (%)
36
34
Pre-tax return on total capital (%)
5.2
5.9
Pre-tax return on capital employed (%)
7.3
7.8
After-tax return on equity (%)
5.5
6.8
Asset turnover rate (times)
0.79
0.75
Earnings per share, after tax (SEK)
6.60
8.50
PARENT COMPANY
The Parent Company’s core business is project development
of residential and commercial properties.
Net sales for the Parent Company in 2003 amounted to
SEK 5,836m (7,118).
The Parent Company’s profit before appropriations and
tax amounted to SEK 735m (–17) for the period. Investments
in investment properties amounted to SEK 232m (408).
The average number of employees was 2,061 (2,133), of whom
1,760 men (1,833) and 301 women (300). Wages, salaries and
social security expenses totalled SEK 1,047m (1,061). An
account of the number of employees and salaries and remuneration is provided in the notes to the financial statements.
52
Marielundsviken, Mariefred
P4
53
I N C O M E S TAT E M E N T
GROUP
SEKm
Net sales
Gross profit
Operating profit
2003
7,787
–7,152
635
2002
8,872
–7,960
912
1
1, 3
1, 4
1
–505
411
– 63
478
–527
523
–256
652
–379
199
– 84
114
–436
317
–92
410
–
–
3
36
–250
267
–
–
4
34
–322
368
885
0
48
31
–343
735
–130
–11
30
79
–395
–17
86
–61
0
821
21
–57
Result from financial items
Result from group companies
Result from associated companies
Result from other financial fixed assets
Result from financial current assets
Interest expenses and similar profit/loss items
Profit/loss after financial items
1
5
6
7
8
1
Appropriations in the Parent Company
9
NET PROFIT/LOSS FOR THE YEAR
PARENT COMPANY
2003
2002
5,836
7,118
–5,458
–6,497
378
621
Note
1
1
1, 10
1
– 80
187
–115
253
11
11
6.60
6.60
8.50
8.50
Earnings per share before dilution (SEK)
Earnings per share after dilution (SEK)
CONSOLIDATED NET SALES BY BUSINESS UNIT
JM Residential Stockholm, 41% (40)
JM Residential Sweden, 26% (25)
JM Production, 9% (13)
JM Commercial, 3% (5)
JM International, 21% (17)
54
SEKm
ASSETS
Fixed assets
Intangible fixed assets
Goodwill
Other intangible fixed assets
BALANCE SHEET
Note
GROUP
31 Dec 2003
31 Dec 2002
PARENT COMPANY
31 Dec 2003
31 Dec 2002
12
Tangible fixed assets
Machinery and equipment
Other tangible fixed assets
12
Financial fixed assets
Participations in group companies
Receivables from group companies
Participations in associated companies
Receivables from associated companies
Other securities held as fixed assets
Other long-term receivables
Deferred tax assets
13
13, 21
TOTAL FIXED ASSETS
55
–
55
70
1
71
–
–
–
–
–
–
46
12
58
59
–
59
26
–
26
36
–
36
–
–
6
–
2
47
–
55
–
–
6
–
2
58
–
66
1,933
1,186
10
43
2
28
1
3,203
1,605
527
10
145
2
37
57
2,383
168
196
3,229
2,419
Current assets
Buildings and land
14
2,833
2,774
1,106
1,627
Development properties
15
3,631
3,871
2,629
2,512
Participations in tenant-owner
co-operatives and similar
16
527
358
485
290
17
18
338
–
1,029
263
24
1,654
357
–
1,197
1,244
35
2,833
224
291
944
179
18
1,656
245
808
1,018
249
22
2,342
332
596
245
493
8,977
10,432
6,121
7,264
9,145
10,628
9,350
9,683
Current receivables
Accounts receivable, trade
Receivables from group companies
Recognised revenue less progress billings
Other current receivables
Prepaid expenses and accrued income
Liquid assets
TOTAL CURRENT ASSETS
TOTAL ASSETS
2, 19
55
BALANCE SHEET
31 Dec 2003
GROUP
31 Dec 2002
Shareholders’ equity 1)
Share capital
Restricted reserves/statutory reserve
Restricted shareholders’ equity
112
1,684
1,796
121
1,675
1,796
112
754
866
121
754
875
Unrestricted reserves/profit carried forward
Net profit/loss for the year
Unrestricted equity
1,302
187
1,489
1,521
253
1,774
487
821
1,308
816
–57
759
TOTAL SHAREHOLDERS’ EQUITY
3,285
3,570
2,174
1,634
778
864
SEKm
SHAREHOLDERS’ EQUITY AND LIABILITIES
Note
Untaxed reserves in the Parent Company
20
Provisions
Provisions for pensions and similar commitments
Provisions for taxes
Other provisions
23
PARENT COMPANY
31 Dec 2003
31 Dec 2002
457
449
139
1,045
435
348
135
918
452
7
84
543
433
12
83
528
2,451
518
–
131
915
288
512
4,815
3,753
520
–
120
801
403
543
6,140
2,167
399
1,820
35
862
201
371
5,855
3,339
420
1,523
–
767
214
394
6,657
2
9,145
10,628
9,350
9,683
PLEDGED ASSETS
Pledges and equivalent collateral to
secure own liabilities and provisions
29
183
432
100
100
CONTINGENT LIABILITIES
29
3,686
3,641
4,475
4,671
Liabilities
Liabilities to credit institutions
Accounts payable, trade
Liabilities to group companies
Income tax liability
Progress billings in excess of recognised revenue
Other liabilities
Accrued expenses and deferred income
TOTAL SHAREHOLDERS’ EQUITY
AND LIABILITIES
1)
21
22
23, 25, 29
24
26
27
28
See section Statement of shareholders’ equity.
CONSOLIDATED ASSETS
CONSOLIDATED CAPITAL STRUCTURE
Fixed assets, 2% (2)
Investment properties, 31% (26)
Development properties, 40% (36)
Liquid assets, 4% (6)
Other current assets, 23% (30)
Shareholders’ equity, 36% (33)
Provisions, 11% (9)
Interest-bearing liabilities, 28% (37)
Non-interest bearing liabilities, 25% (21)
56
C A S H F L O W S TAT E M E N T
GROUP
SEKm
OPERATING ACTIVITIES
Operating profit before financial items
Depreciation and write-downs
Other items with no effect on cash flow
Note
32
Interest received
Dividends received
Interest paid and other financial expenses
Paid tax
Investments in development properties, etc.
Transfer (sale) of development properties, etc.
33
34
Increase/decrease in accounts receivable, trade
Increase/decrease in other current receivables, etc.
Increase/decrease in accounts payable, trade
Increase/decrease in other current operating liabilities
Cash flow before investments and
sale of investment properties
Investments in investment properties, etc.
Sale of investment properties, etc.
Cash flow from operating activities
35
36
INVESTING ACTIVITIES, OTHER
Investments in intangible fixed assets
Investments in tangible fixed assets
Sale of tangible fixed assets
Investments in group companies
Sale of group companies
Change in associated companies, other shares and participations
Cash flow from investing activities, other
FINANCING ACTIVITIES
Repurchase of shares
Loans raised
Amortisation of loans
Change in financial fixed assets
Group contributions paid
Dividends paid
Cash flow from financing activities
Total cash flow for the year
Liquid assets, 1 January
Liquid assets, 31 December
1)
PARENT COMPANY
2003
2002
2003
2002
478
109
– 407
180
38
1
–245
–571)
– 83
–1,578
1,560
652
300
–318
634
37
0
–304
– 400
–33
–1,152
1,013
114
101
–206
9
79
783
–352
0
519
–1,414
1,025
410
110
–176
344
113
63
–360
–348
–188
–936
839
–22
351
–3
72
512
–781
–55
119
21
860
–21
417
477
–485
11
–20
297
–377
1,407
–302
–1,878
3,085
1,504
–526
3,064
2,161
–232
934
2,109
–408
2,685
1,975
–8
–28
2
–
–
–
–34
0
–35
1
–
–
0
–34
–
–10
1
–340
–
–
–349
–
–22
1
–78
1
–
–98
–154
1,520
–2,828
9
–
–281
–1,734
–116
1,385
–3,038
6
–
– 420
–2,183
–154
1,520
–2,807
– 433
147
–281
–2,008
–116
1,214
–2,723
133
–
–420
–1,912
–264
596
332
–56
652
596
–248
493
245
–35
528
493
Of which, SEK 1m (225) pertains to tax on profit for the previous year.
57
C A S H F L O W S TAT E M E N T
GROUP
SEKm
INTEREST-BEARING NET DEBT
Interest-bearing liabilities and provisions
Liquid assets
Interest-bearing receivables
Interest-bearing net debt, 31 December
Comments on
the cash flow statement
Cash flow from operating activities declined to SEK 1,504m
(2,161). Operating activities, before interest and tax, contributed SEK 180m (634). This represents a decline of SEK
454m after adjustment of items with no effect on liquid
assets, of which gains on the sale of properties of SEK 411m
account for a significant portion.
Sales of investment properties decreased compared with the
previous year. At the same time, the substantial decrease in
receivables from property sales (approximately SEK 1,000m)
made a positive contribution so the net contribution to cash
flow is unchanged compared with 2002. JM has a receivable
from property sales of SEK 54m (1,063) which will be paid in
2004. The reduced holding of investment properties also led to
a lower contribution to cash flow from rental income.
2003
2002
2,986
–332
– 43
2,611
4,313
–596
–52
3,665
PARENT COMPANY
2003
2002
4,522
–245
–1,210
3,067
5,438
–493
–559
4,386
JM invested in development and investment properties for
approximately SEK 3,456m (1,678). The higher level of investment had a negative impact on cash flow of approximately
SEK 1,778m compared with 2002. In 2003, the JM Group’s
acquisitions included properties in Vaxholm and Älta in conjunction with an exchange deal.
Change in current receivables and liabilities had a total
positive effect on cash flow of SEK 398m.
Cash flow from operating activities was partly used for
dividends to shareholders, SEK 281m, and partly for buybacks of own shares with SEK 154m. The short-term loans
raised during the year were all amortised on a current basis.
During the year cash flows for each quarter fluctuated
substantially (see section Quarterly Overview – Group, page
81). During the quarters, JM sold large property portfolios
with postponed payment. The net effect, the sales proceeds
minus the receivable, for each quarter affected cash flow by
approximately SEK 2,191m, SEK 480m, SEK 331m and SEK
83m. Cash flow was affected by buy-backs in the first quarter by SEK 154m and by a dividend of SEK 281m in the second quarter.
58
S TAT E M E N T O F S H A R E H O L D E R S ’ E Q U I T Y
GROUP
Shareholders’ equity, 31 December 2001
Transfer of profit for 2001
Buy-backs of own shares
Redemption of convertible loan
Translation difference
Transfer between unrestricted and restricted equity
Dividend
Net profit for 2002
Cancellation of repurchased shares
Transfer between unrestricted and restricted equity
Dividend
Net profit for 2003
Share
capital
121
–
–
0
–
–
–
–
121
–
–
–9
0
–
–
–
–
112
Restricted
reserves
1,701
–
–
11
19
–56
–
–
1,675
–
–
–
0
–37
46
–
–
1,684
Accumulated translation difference at year-end
Unrestricted
reserves
857
1,144
–116
–
–
56
– 420
–
1,521
253
–154
9
–
–
– 46
–281
–
1,302
Net profit
for the year
1,144
–1,144
–
–
–
–
–
253
253
–253
–
–
–
–
–
–
187
187
Total shareholders’ equity
3,823
–
–116
11
19
–
–420
253
3,570
–
–154
–
0
–37
–
–281
187
3,285
–17
JM AB has a loan in NOK of NOK 85m.The loan is an indexation for part of the net investment in Byggholt AS, Norway.The currency gain at 31 December
2003 amounted to SEK 15m (–7) and is reported as a translation difference in equity in the Group.
Proposed dividend for 2003 is SEK 5 per share (10).
Share
PARENT COMPANY
capital
Shareholders equity, 31 December 2001
121
Adjustment of changed accounting principle 1)
–
Shareholders’ equity, 31 December 2001 (adjusted) 121
–
–
0
–
Merger of group companies
Dividend
–
Net profit for 2002
–
121
–
–
Cancellation of repurchased shares
–9
0
Group contribution received
–
–
Tax effect of group contribution
–
Dividend
–
Profit for 2003
–
112
Statutory
reserve
687
–
687
–
–
–
–
–
–
687
–
–
–
–
–
–
–
–
–
687
Premium Profit brought
reserve
forward
56
527
–
98
56
625
–
715
–
–116
11
–
12
–
–
– 420
–
–
67
816
–
–57
–
–154
–
9
0
–
–
204
–
–57
–
7
–
–281
–
–
67
487
Net profit
for the year
715
–
715
–715
–
–
–
–
–57
–57
57
–
–
–
–
–
–
–
821
821
Total shareholders’ equity
2,106
98
2,204
–
–116
11
12
–420
–57
1,634
–
–154
–
0
204
–57
7
–281
821
2,174
Number of shares (1 vote/share) at 31 December 2003 amounts to 28,065,407. Par value per share is SEK 4.
1)
Changed accounting principle relates to accelerated depreciation of properties which was previously stated as an untaxed reserve.With effect from 2002,
accelerated depreciation of properties (SEK 136m) is reported as shareholders’ equity to 72% (SEK 98m) and as a deferred tax liability to 28% (SEK 38m).
A C C O U N T I N G A N D V A L U AT I O N P R I N C I P L E S
Accounting principles
The accounting principles applied conform with the recommendations of the Swedish Financial Accounting Standards Council.
Adaptations have mainly been made in accordance with the
Swedish Construction Federation’s industry comments. The
accounting and valuation principles for the Group are unchanged compared with the previous year.
Changes
With effect from 1 January 2003, JM has applied the following
new recommendations from the Swedish Financial Accounting
Standards Council: RR 2:02 Inventories, RR 22 Presentation of
Financial Statements, RR 25 Segment Reporting, RR 27 Financial
Instruments.
Application of the new recommendations did not affect the
company’s income statements and balance sheets.
With regard to RR 25 Segment Reporting, JM’s accounts in
essential details already conformed with the new recommendation. Reporting according to the new recommendation is shown
in Notes 1 and 2 in the Notes to the financial statements.
New recommendations 2004
With effect from 1 January 2004, JM will apply RR 29, Employee
Benefits. Application of RR 29 means that defined benefit pension plans within all the Group’s companies will be reported
according to common principles. In JM’s accounts until year-end
2003, such plans are reported according to local rules and regulations in each country. In accordance with the interim rules for
the recommendation, an opening liability will be determined as
per 1 January 2004 in accordance with RR 29.This opening liability is expected to exceed the liability reported at 31 December
2003, in accordance with the earlier principles, by SEK 1.0m.The
excess liability figure will then be reported as per 1 January 2004
as an increase in provisions for pensions as well as a corresponding decrease in shareholders’ equity. In accordance with the
interim rules for the recommendation,JM will not restate earlier
financial years in accordance with the new recommendation.
Consolidated financial statements
The consolidated financial statements are prepared in accordance with the Swedish Financial Accounting Standards Council
recommendation RR 1:00.
The consolidated financial statements include those companies
in which the Parent Company owns more than 50% of the voting
rights directly or indirectly,or otherwise has a controlling interest.
The consolidated financial statements are prepared according to the purchase accounting method, whereby consolidated
shareholders’ equity only includes the portion of subsidiaries’
equity that arose after the acquisition.
If the consolidated cost of the shares exceeds the market
value of subsidiaries’ net assets stated in the acquisition analysis,
the difference is reported as consolidated goodwill.
59
Companies acquired during the year are included in the consolidated financial statements in an amount proportionate to the
period after the acquisition. Profit from companies sold during
the year is included in the consolidated income statement until
the date of sale.
Foreign subsidiaries are regarded as operating as independent
units and their accounts have therefore been translated according to the current method, whereby all assets, provisions and
other liabilities are translated at the closing day rate and all items
in the income statement are translated at the average rate during the year.Translation differences thus arising are transferred
directly to shareholders’ equity. In the event that hedging has
been effected to balance and hedge against exchange rate differences on a net investment in an independent subsidiary, the
exchange rate difference arising from translation of the hedging
instrument is transferred directly to shareholders’ equity.
In the event of different valuations of assets and liabilities at
Group and company level a tax effect arises which is reported
as a deferred tax asset or a deferred tax liability. See also the
section on reporting income taxes.
Intra-group profits are eliminated in full.
Intra-group invoicing that is included in the cost of investment properties is included in net sales and amounts to SEK
51m for 2003.
Joint ventures
Companies and other types of joint ventures that are formed in
order to carry out specific contracting assignments in collaboration with other companies are included in the accounts
according to the proportional method. JM’s holding of associated companies is negligible.
Receivables and liabilities in foreign currency
Receivables and liabilities in foreign currency are valued at the
closing day rate.
Financial instruments
Interest rate swaps are used to change the underlying financial
liabilities’ interest rate structure in order to minimise risk and
are reported as a hedge of the same. Amounts to be paid or
received as a result of derivative contracts entered into are
reported on a current basis as interest income or interest
expense. Until the payment date, changes in market values are
not reported in the balance sheet.
JM’s financial instruments that are reported in the balance
sheet are held until maturity and include securities, receivables
and operating liabilities. They are measured and booked at
amortised cost.
Percentage of completion method
The percentage of completion method is based on the view that
an assignment is carried out in pace with completion of the
60
respective project. Revenue and profit in the project are
reported period by period, in pace with recognition, providing a
direct link between financial reporting and the operations conducted during the period.
Revaluations (changes in forecasts) of anticipated project
revenues lead to adjustment of previously recognised revenue
in the project concerned.This adjustment is included in the net
profit for the period.
Anticipated losses are charged to the profit for the period in full.
The “first krona principle” is applied,whereby revenue recognition is carried out according to the percentage of completion
method already at the preliminary stage of the project and continues according to the same principle until the project is completed.
The percentage of completion method is also applied in the
Parent Company.
Most of JM’s operations pertain to projects conducted by JM
for subsequent sale. These operations consist of projects on
JM’s own land for production of housing to be sold as apartments to tenant-owner co-operatives or tracts of single-family
homes for sale directly to consumers.
However, revenue recognition from JM’s own projects for
future sale must meet the following two basic criteria with
regard to reliability:
• Declarations or preliminary agreements must exist to such
an extent that the building contractor, based on reliable
experience, can assume that the full provision of the end
product (the future residential units) is secured.
• The building contractor’s decisions regarding the technical
and financial framework, timetable and operating organisation for implementation of the project shall meet the specifications made when the client-principal relationship was formalised through the transfer of land and signing of a
contracting agreement.
In residential project development the development property is
normally owned by JM at the start of the project.
When production starts the property is transferred by book
value to the project and included with the project’s other production costs.The cost charged for the property therefore affects the
recognised project revenue at that time. Interest expenses are
included among production costs from the start of production.
Revenue recognition, sale of properties
Income from the sale of properties is normally recognised as
revenue when the purchase contract is signed. This assumes
that the seller does not have to carry out any essential action
according to the purchase contract and that the risk of cancellation is not considered to exist. Reporting of every property sale
is examined individually.
Investment properties (Properties held for resale)
JM’s investment properties are classified as current assets and
valued in accordance with the Swedish Financial Accounting
Standards Council’s recommendation RR 2:02 Inventories.Starting in the first quarter of 2004, these properties will be designated as properties held for resale and called project properties.
In line with JM’s focus on project development, the Group’s
investment properties are classified based on project status as
follows:
• Fully developed properties
• Properties under construction
• Properties for further development
Fully developed properties refer to properties fully developed by JM
and properties to be sold without further development. During
the period until sale, the properties are managed by JM and operating profit is reported as profit from property management.
Properties under construction are properties undergoing new
construction, extension or renovation into fully developed
properties. Operating profit from rental activities during the
renovation or extension period is reported as profit from property management.
Properties for further development are properties that are currently rented and where plans for further development are in
progress. Operating profit here is also reported as profit from
property management.
Production costs for JM’s fully developed properties include
both direct costs and a reasonable share of indirect costs.
Interest expenses pertaining to production to be held for
property management purposes are expensed in the Parent
Company. In the consolidated financial statements, a corresponding amount is added to the cost of investment properties.
Properties, undeveloped or developed, that are intended for
production of tenant-owned apartments/owned apartments or
single-family homes and land for investment properties are
reported as development properties. The properties are normally sold immediately after production. Operating profit from
development properties is reported as profit from project
development operations. Interest is not included in the cost of
development properties.
Write-downs
If on the balance sheet date there is any indication that a tangible or intangible fixed asset has impaired in value a calculation is
performed of the recoverable value of the asset.If the estimated
recoverable value is lower than the carrying amount, a writedown is made of the asset’s recoverable value.
A write-down is reversed when the basis for the write-down,
wholly or partly, no longer exists.
The term write-down is also used in conjunction with revaluation of properties reported as current assets. Valuation of
these properties is performed, however, according to the lower
of cost and market principle and follows RR 2:02, Inventories.
Provisions
Provisions are reported when JM has or is considered to have a
commitment as a result of events that have occurred and where
it is probable that payments will be required in order to meet
the commitment.A further prerequisite is that it is possible to
make a reliable estimation of the amount to be paid.
Provisions are made for future costs on the basis of guarantee commitments. This calculation is based on the estimated
costs for the project concerned.
Pensions
The greater part of the JM Group’s pension commitments
(Sweden and Norway) comprise defined benefit pension plans.
For these plans a provision and annual cost are calculated on the
basis of the present value of earned future benefits. Provisions
and annual costs attributable to defined benefit pension benefits
are reported in JM’s income statements and balance sheets
applying local rules and regulations in the country concerned. In
some of JM’s subsidiaries pension commitments comprise
defined contribution pension plans where payments are made
on a regular basis to independent authorities or bodies that
administer the plan. For these defined contribution plans, a running pension cost is reported which matches the amounts paid.
Goodwill
Goodwill on the acquisition of Byggholt AS (1998) and AS Prosjektfinans (1999) in Norway is being amortised over 10 years.
The amortisation period is motivated by the strategic and longterm nature of the acquisition and the reputation of these companies in the Norwegian market.
Machinery and equipment
The following depreciation rates are applied:
Construction machinery
Computers and other equipment
Vehicles
10%
20–33%
20%
Leasing
The Group has leasing agreements pertaining to office equipment and company cars.These are reported as operating leases.
The leasing agreements are of a limited scope.
Mergers
Mergers of wholly owned group companies are reported according to the consolidated value method, whereby all assets and liabilities are taken over at values based on the acquisition analysis
carried out in connection with the original acquisition of the
company in question.The merger difference is taken directly to
shareholders’ equity. Mergers are reported in accordance with
general advice from the Swedish Accounting Standards Board.
61
Group contributions
Group contributions paid and received in the Parent Company
are reported according to the pronouncement made by the
Swedish Financial Accounting Standards Council’s Emerging
Issues task force, whereby Group contributions paid and
received to minimise the Group’s tax are reported as a
decrease/increase in unrestricted equity.
Tax
The Tax item in the income statement includes current and
deferred income tax for Swedish and foreign group units. The
companies in the Group are liable for tax according to existing
legislation in each country.The state income tax rate in Sweden
was 28% during the year and is calculated on nominal book profit
with an addition for non-deductible items and a deduction for
non-taxable income and other deductions, primarily tax-free
dividends from subsidiaries.The balance sheet method is applied
to accounting for income taxes. According to this method
deferred tax liabilities and assets are reported for all temporary
differences between book and fiscal values respectively for
assets and liabilities and for other fiscal deductions or deficits.
Deferred tax liabilities and tax assets are calculated on the basis
of the anticipated tax rate when the temporary difference is cancelled.The effects of changes in applicable tax rates are taken to
income in the period the change becomes law. Deferred tax
assets are reduced by a valuation reserve to the extent the company cannot stipulate that it is probable that the underlying tax
asset can be realised within the foreseeable future.
Cash flow statement
The cash flow statement has been prepared according to the
indirect method in accordance with the Swedish Financial
Accounting Standards Council’s recommendation RR 7,
Accounting for cash flows.The analysis has been adapted to JM’s
operations.
Since buying and selling of investment and development
properties are part of JM’s ongoing activities,these are reported
under the corresponding sections of the cash flow statement.
The item “reversal of investment properties” mainly refers to
utilisation of properties for production and is matched by a cash
flow in the form of invoicing. Investments in and sales of properties are reported gross without adjustment for any assumption
or redemption of loans.
Buying and selling of fixed assets not pertaining to properties
are reported under “Investing activities, other”.
Liquid assets are classified as cash and bank balances and
short-term financial investments that are traded on the open
market at known amounts and are associated with only a marginal risk for value fluctuations. Liquid assets also include shortterm investments with a maturity of less than three months
from the acquisition date.
The year’s paid tax is reported in full under operating activities.
62
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
Amounts in SEKm unless otherwise stated.
NOTE 1
CONSOLIDATED INCOME STATEMENT BY SEGMENT
JM
JM
ResiResidential dential
JM
Stockholm Sweden Production
Group 2003
3,218
2,092
701
Net sales
–3,121 –1,875
–634
Costs for production and management*
– 97
217
67
Gross loss/profit
Unallocated
items
JM
within
Commercial Sweden
227
–134 1)
–129
134 1)
98
–
Unallocated
items
within
the Group
–
–
–
Subtotal
Sweden
6,104
–5,625
479
JM
International
1,683
–1,527
156
Subtotal
Group
7,787
–7,152
635
–337
389
–63
468
–106
22
–
72
–443
411
–63
540
–62 2)
–
–
– 62
–505
411
– 63
478
Net financial items
540
–211 3)
–273
–211
267
NET PROFIT FOR THE YEAR
540
–80 3)
–353
– 80
187
Selling and administrative expenses**
Operating loss/profit (operating result)
Net sales – external
Net sales – internal
Total
* Of which: depreciation of intangible
fixed assets
** Of which: depreciation of tangible
fixed assets
–141
22
–
–22
–112
–7
–
98
–33
–
–
34
–51
374
–63
358
–
–
–
–
6,104
–
6,104
1,683
–
1,683
7,787
–
7,787
–
–
–
7,787
–
7,787
–
1
13
14
–
14
6
19
7
26
–
26
7,342
–6,594
748
1,530
–1,366
164
8,872
–7,960
192
–
–
–
8,872
–7,960
912
–391
526
–256
627
–71
–3
–
90
–462
523
–256
717
–65 2)
–
–
– 65
–527
523
–256
652
Net financial items
717
–284 3)
–349
–284
368
717
–115 3)
– 464
–115
253
Group 2002
Net sales
Costs for production and management*
Gross loss/profit
Selling and administrative expenses **
Operating loss/profit (operating result)
Net sales – external
Net sales – internal
Total
* Of which: depreciation of intangible
fixed assets
** Of which: depreciation of tangible
fixed assets
Net sales by country
2003
2002
3,218
–
3,218
2,092
–
2,092
567
134
701
227
–
227
–
–
1
–
3
3
6
1
3,623
–3,492
131
2,205
–1,899
306
1,166
–1,133
33
424
–146
278
–76 1)
76 1)
–
–145
9
–155
–160
–128
4
–2
180
–60
–
–
–27
–58
513
–99
634
–
–
–
–
3,623
–
3,623
2,205
–
2,205
1,090
76
1,166
424
–
424
–
–
2
–
3
3
5
1
Sweden
6,104
7,342
–
–134 1)
–134
Group
total
7,787
–7,152
635
–
–76 1)
–76
7,342
–
7,342
1,530
–
1,530
–
2
13
15
–
15
6
18
6
24
–
24
Norway
985
1,114
Denmark
525
287
8,872
–
8,872
Belgium
173
129
–
–
–
8,872
–
8,872
Total
7,787
8,872
Comments: The JM Group’s primary basis of division for segment reporting is the geographical areas Sweden and International.The Swedish operations are also divided into four
business units: JM Residential Stockholm, JM Residential Sweden, JM Production and JM Commercial, which are reported separately within the Sweden segment. JM’s secondary
segment comprises project development. Since there is only one secondary segment, information is provided in the income statements, balance sheets and cash flow statements.
1)
Unallocated items within Sweden comprise elimination of intra-group billing between business units.The JM Production business unit is primarily a supplier to JM Residential
Stockholm but some production is also carried out for external customers.
2)
Pertains to group-wide expenses.
3)
Net financial items and tax are not divided by segment but reported as unallocated items.
63
NOTE 2
CONSOLIDATED BALANCE SHEET BY SEGMENT
Group, 31 December 2003
Assets
Fixed assets
JM
JM
ResiResidential dential
JM
Stockholm Sweden Production
–
–
–
Unallocated
items
JM
within
Commercial Sweden
–
–
Subtotal
Sweden
–
JM
International
55
Subtotal
Group
55
Unallocated
items
within
the Group
113 1)
Group
total
168
Buildings and land
Participations in tenant-owner co-operatives
Current receivables
Liquid assets
Total current assets
74
2,219
398
638
–
3,329
86
700
82
484
–
1,352
–
5
–
113
–
118
2,405
187
1
4
–
2,597
–
–
3 1)
–
–
3
2,565
3,111
484
1,239
–
7,399
268
520
43
236
–
1,067
2,833
3,631
527
1,475
–
8,466
–
–
–
179 2)
332 1)
511
2,833
3,631
527
1,654
332
8,977
TOTAL ASSETS
3,329
1,352
118
2,597
3
7,399
1,122
8,521
624
9,145
–
–
647
–
–
470
–
–
110
–
–
23
–
–
–
–
–
1,250
–
–
144
–
–
1,394
3,285 1)
1,045 1)
3,421 2)
3,285
1,045
4,815
647
470
110
23
–
1,250
144
1,394
7,751
9,145
2,682
882
8
2,574
–
–
978
–
–
–
Investments in fixed assets
–
–
–
–
–
–
8
8
30 3)
38
Group, 31 December 2002
Assets
Fixed assets
–
–
1
–
–
1
70
71
125 1)
196
Buildings and land
Participations in tenant-owner co-operatives
Current receivables
Liquid assets
Total current assets
213
2,330
247
837
–
3,627
85
808
43
341
–
1,277
–
5
–
164
–
169
2,158
87
985
–
3,230
–
–
–
–
–
2,456
3,230
290
2,327
–
8,303
318
641
68
297
–
1,324
2,774
3,871
358
2,624
–
9,627
209 2)
596 1)
805
2,774
3,871
358
2,833
596
10,432
TOTAL ASSETS
3,627
1,277
170
3,230
–
8,304
1,394
9,698
930
10,628
–
–
749
–
–
311
–
–
132
–
–
29
–
–
–
–
–
1,221
–
–
265
–
–
1,486
3,570 1)
918 1)
4,654 2)
749
311
132
29
–
1,221
265
1,486
9,142
2,878
966
38
3,201
–
–
1,129
–
–
–
–
–
–
–
–
1
1
35
Shareholders’ equity and liabilities
Shareholders’ equity
Provisions
Liabilities
TOTAL SHAREHOLDERS’
EQUITY AND LIABILITIES
Total operating capital by business unit
Provisions
Liabilities
TOTAL SHAREHOLDERS’
EQUITY AND LIABILITIES
Total operating capital by business unit
Investments in fixed assets
3,570
918
6,140
10,628
–
3)
36
Comments: The JM Group’s primary basis of division for segment reporting is the geographical areas Sweden and International.The Swedish operations are also divided into four
business units: JM Residential Stockholm, JM Residential Sweden, JM Production and JM Commercial, which are reported separately within the Sweden segment. JM’s secondary
segment comprises project development. Since there is only one secondary segment information is provided in the income statements, balance sheets and cash flow statements.
1)
The assets and liabilities and shareholders’ equity that are not included in JM’s definition of operating capital are not allocated by segment.They are reported as unallocated
items since they mainly cannot be allocated in a reasonable and fair manner.
2)
The items within current receivables and liabilities that are included in JM’s definition of operating capital are allocated by segment. Other items are reported as unallocated items.
3)
Investments in intangible fixed assets are allocated by segment.Tangible fixed assets are not included in JM’s definition of operating capital and these investments are therefore
stated as an unallocated item.
A definition of operating capital is provided in the section Definitions, page 83.
64
NOTE 3
NOTE 6
GAINS ON THE SALE OF PROPERTIES
Parent Company
2003
2002
Group
Sales revenue
2003
2002
2,075
2,908
945
1,696
144
107
34
44
2,219
3,015
979
1,740
Total
Book values
Total
1,680
2,397
128
738
95
42
1,380
43
1,808
2,492
780
1,423
395
511
207
316
16
12
–8
1
411
523
199
317
Gains
Total
RESULT FROM OTHER
FINANCIAL FIXED ASSETS
Group
2002
Dividend
0
0
–
1
Capital gain on the sale
of securities
–
0
0
0
Write-down of shares
and participations
–
–
–
–4
Interest income, group companies
–
–
43
25
Interest income, other
3
4
5
8
Total
3
4
48
30
NOTE 7
RESULT FROM FINANCIAL CURRENT ASSETS
Group
2002
36
34
10
22
–
–
21
57
36
34
31
79
Interest income, group companies
Total
WRITE-DOWNS OF PROPERTIES
Group
Total
2003
2002
63
34
Parent Company
2003
2002
54
20
–
222
30
72
63
256
84
92
NOTE 8
INTEREST EXPENSES AND
SIMILAR PROFIT/LOSS ITEMS
Group
2003
2002
–
–
Interest expenses,
group companies
NOTE 5
Interest portion of pension
costs for the year
RESULT FROM GROUP COMPANIES
Parent Company
2002
2003
Dividends
Capital gain on sale
896
62
–
3
Write-down
–11
–195
Total
885
–130
Interest expenses, other
Exchange rate differences
on liabilities
Total
NOTE 9
Parent Company
2003
2002
2003
Interest income, other
NOTE 4
Parent Company
2003
2002
2003
Parent Company
2003
2002
129
94
23
27
23
27
227
295
206
267
0
0
–15
7
250
322
343
395
APPROPRIATIONS IN THE PARENT COMPANY
Parent Company
2003
2002
Depreciation in excess/below plan equipment:
Provision to tax allocation reserve
9
8
–17
–75
Reversal of tax allocation reserve
94
6
Total
86
– 61
NOTE 10
NOTE 11
TAX ON PROFIT FOR THE YEAR
Group
2003
2002
Sweden
International
Total
231
301
821
–78
36
67
–
–
267
368
EARNINGS PER SHARE
Group
Parent Company
2003
2002
Profit/loss before tax
821
–78
2003
2002
Net profit
187.0
253.3
Profit for calculation of earnings
per share before dilution
187.0
253.3
Interest expenses on convertible debenture
Tax attributable to above items
Current tax
Sweden
60
211
55
62
International
24
17
–
–
Total
84
228
55
62
Deferred tax
Sweden
International
Total
4
–126
–55
–83
–8
13
–
–
–4
–113
–55
– 83
Sweden
64
85
0
–21
International
16
30
–
–
Total
80
115
0
–21
Total tax
Difference between reported tax and nominal tax rate 28%
Profit/loss before tax x 28%
75
103
230
–22
Adjustment of tax from
previous years
–1
–2
6
–12
Difference foreign tax
1
1
–
–
Non-taxable income
–2
–1
–222
–1
6
6
2
3
Non-deductible expenses
Recalculation of deferred tax
from previous years
Total
2
–
2
–
80
115
0
–21
65
Profit for calculation of earnings
per share after dilution
Average number of shares before dilution
0.2
0.5
–
– 0.2
187.2
253.6
28,311,705
29,857,486
Assumed conversion of convertible debenture
–
96,874
Average number of shares after dilution
28,311,705
29,954,360
6.60
8.50
Earnings per share after dilution (SEK)
JM AB issued convertible debentures in 1999–2001 which carry entitlement to
conversion to a total of 543,588 ordinary shares, during the period 16 June 2001 –
1 June 2003. A total of 448,507 shares were converted, of which 1,793 in 2003.
The remaining convertibles were redeemed on 1 June 2003.
In 2001 all employees in Sweden were invited to acquire subscription warrants in the
company.The warrant programme comprises a total of 600,000 warrants. A total of
376,000 warrants were subscribed for in 2001 and 2002.The price per warrant was
determined based on the Black & Scholes method.The price on the first subscription
date was SEK 20. Each warrant carries entitlement to subscribe for one share in the
period 3 May 2004 to 30 June 2004 for SEK 271.50.The price for JM’s shares at 31
December 2003 amounted to SEK 106. Outstanding warrants do not give rise to any
dilution effect since the present value of the subscription price exceeds the fair value
of the shares.
The total number of shares after full conversion, but excluding warrants, amounts to
28,065,407 (29,560,488).
The average number of shares before dilution for 2003 amounts to 28,311,705
(29,857,486).The average number of shares after dilution for 2003 amounts to
28,311,705 (29,954,360). Calculation of earnings per share before dilution is based
on net profit for the year. In the calculation of earnings per share after dilution, net
profit for the year was adjusted by interest expenses for convertible debentures of
SEK 169,000 (342,000).
66
NOTE 12
INTANGIBLE AND TANGIBLE FIXED ASSETS
Group 2003
Goodwill
Other intangible
fixed assets
Machinery and
equipment
Other tangible
fixed assets
Total
Accumulated cost
Opening balance, 1 January
129
1
167
–
297
New acquisitions
8
–
18
12
38
Reclassifications
–
–1
12
1
12
–9
–
–6
–
–15
Sales
Closing balance, 31 December
–
–
–44
–
– 44
128
–
147
13
288
Accumulated planned depreciation
59
–
108
–
167
Depreciation for the year
14
–
25
1
40
Reclassifications
–
–
12
–
–
–4
–
–4
Sales
12
–
–
–40
–
– 40
73
–
101
1
175
Planned residual value, 31 December
55
–
46
12
113
The reported goodwill mainly pertains to goodwill at acquisition of Byggholt AS and AS Prosjektfinans in Norway.
With effect from 2003, acquired fixed assets are reported gross, i.e. divided among original accumulated cost and depreciation in acquired companies. Reclassifications under
Machinery and equipment, cost and depreciation in 2003 include adjustment for previously reported net values with SEK 12m.
Parent Company 2003
Machinery and
equipment
Accumulated cost
122
New acquisitions
10
Sales
–42
90
86
Depreciation for the year
18
–40
Sales
64
26
67
NOTE 13
FINANCIAL FIXED ASSETS
Group 2003
Participations
in associated
companies
Other
securities
held as fixed
assets
Other
long-term
receivables
Total
Opening cost
6
2
58
66
Additional receivables
–
–
1
1
Settled receivables
–
–
–9
–9
–
–
–3
–3
Book value, 31 December
6
2
47
55
Other
securities
held as fixed
assets
Other
long-term
receivables
Deferred
tax assets
Total
Parent Company 2003
Opening cost
Participations
in group
companies
Receivables Participations
Receivables
from group in associated from associated
companies
companies
companies
1,605
527
10
145
2
37
57
2,383
340
–
–
–
–
–
–
340
Additional receivables
–
659
–
–
–
–
–
659
Settled receivables
–
–
–
–102
–
–9
–56
–167
New acquisitions
Write-downs
11
–
–
–
–
–
–
11
Change due to merger
–1
–
–
–
–
–
–
–1
1,933
1,186
10
43
2
28
1
3,203
Note 13 continued next page
68
Note 13, continued
Specification of Parent Company’s shares and participations in wholly owned group companies, SEK 000s
Company
Company
reg. no.
Domicile
No. of shares
and participations
Book
value
AB Garantihus
556073-0524
Stockholm
5,000
1,000
JM Cityfastigheter AB
556355-8179
Stockholm
17,000,000
369,501
Mörbysvärdet AB
556471-2601
Danderyd
1,000
18,083
Förvaltningsbolaget Sicklaön HB
916619-0992
Stockholm
10,000
78,275
292,442
HB Mörby Fastighetsförvaltning 1)
916505-6798
Stockholm
JM Värmdöstrand Holding AB
556275-4696
Stockholm
3,300,120
23,480
AB Stockholms Badmintonhall
556037-3655
Stockholm
2,520
312
AB Borätt
556257-9275
Stockholm
500
1,978
JM Stombyggnad AB
556173-0564
Stockholm
1,000
113
GL Bodservice AB
556161-8025
Stockholm
250,000
56,524
Seniorgården AB
556359-9082
Stockholm
1,000
100
Fastighetsbolaget Bohusmark KB
916443-1125
Gothenburg
1
120
JM Inredning i Stockholm AB
556202-8653
Stockholm
1,000
50
Sekå AB
556298-5605
Gothenburg
1,000
6,782
Bruket i Kallhäll Exploaterings KB
969653-9122
Järfälla
Bruket i Kallhäll Exploaterings AB
556561-0184
Järfälla
1,000
100
Fastighetsbolaget Göta Ark HB
916600-1082
Stockholm
1,200
104,395
Olle Timblads Målerifirma AB
556072-9492
Stockholm
5,000
HB Kojan Fastighetsförvaltning
916634-1334
Stockholm
JM Fastigheter i Lomma HB
916470-0057
Lomma
Tre Masar Produktion AB
556472-0323
Stockholm
5,000
11,602
AB Naryda
556046-9081
Stockholm
1,000
13,000
Stora Mossen Fastigheter i Bromma HB
969673-7999
Stockholm
E. Lindqvist Rör AB
556060-8837
Stockholm
600
50
AB Vaxholmsbostäder 2)
556041-8120
Vaxholm
15,000
311,316
JM Älta Holding AB 2)
556638-5372
JM Construction SA, Belgium
Byggholt AS, Norway
JM Danmark AS
20,505
4,939
144,944
41,978
58
Nacka
1,000
100
Brussels
10,000
111,906
Oslo
20,000
127,687
Copenhagen
100,000
191,267
1,932,607
Specification of the Group’s other holdings of shares and participations in wholly owned group companies, SEK 000s.
Company
Company
reg. no.
Domicile
No. of shares
and participations
Book
value
19,735
Norrlands Handelshus AB
556264-2198
Stockholm
9,000
JM Cityfastigheter i Helsingborg AB
556044-6766
Helsingborg
1,000
0
JM Cityfastigheter i Stockholm AB
556063-5988
Stockholm
3,800
250,358
HB Mörby Fastighetsförvaltning
916505-6798
Stockholm
880
483
Fastighets AB Strandpromenaden
556164-5523
Stockholm
25,000
9,236
KB Pelarbacken Mindre 23
916635-8920
Stockholm
1
260,101
Mariastaden AB 2)
556228-8596
Stockholm
100
102
JM Värmdöstrand AB
556001-6213
Stockholm
4,400
250,000
JM Älta Centrum AB 2)
556638-5380
Nacka
1,000
100
JM Älta 98:2 AB 2)
556638-5265
Nacka
1,000
100
JM Älta 14:27 AB 2)
556638-5281
Nacka
1,000
100
Årstapaviljongen HB
969601-0389
Stockholm
Bærum
1,000
12,987
Stavanger
11,000
19,552
Seniorbo AS, Norway
Vikevåg Bolig AS, Norway 2)
1)
The holding amounts to 56% of the share capital.The remaining 44% is owned by the wholly owned subsidiary Mörbysvärdet AB.
2)
Group companies acquired during the year.
565
69
Note 13, continued
Specification of the Parent Company’s shares and participations in associated companies, SEK 000s
Company
Company
reg. no.
Domicile
No. of shares
and participations
% of
capital
Book
value
50
AB Hälsingborgsbostäder
556105-9196
Helsingborg
500
50
AB Ramlösa Brunnsanläggning
556031-6274
Helsingborg
625
50
75
Glasberga Fastighets AB
556361-0707
Södertälje
1,000
25
100
Högmora Exploaterings AB
556395-0707
Stockholm
1,000
25
100
SMÅA AB
556497-1322
Stockholm
3,525
33
3,564
916643-1842
Stockholm
1
25
101
* 916629-6948
Järfälla
1
50
800
Exploateringsbolaget Högmora KB
916643-6258
Stockholm
1
25
1
Adolfsbergs Brunns AB
556303-8685
Örebro
340
33
34
* 969611-4868
Danderyd
100
50
100
556597-0596
Västerås
500
50
500
* 969680-8659
Sollentuna
1
50
1
556594-2645
Malmö
333
33
5,003
Fastighetsbolaget Glasberga KB
Olunda Terminal HB
Stockholms Mineralhantering HB
AB Västerås Studentbostäder
HB Markbyggarna Silverdal
Dockan Exploatering AB
10,429
* Unlimited liability.
Specification of the Parent Company’s other securities held as fixed assets, SEK 000s
Company
Number of shares
and participations
Svenskt Fastighetsindex SFI ek.för
CGC Centralgalaxen Bygg AB
Haninge Turism AB
Parkerings AB Dukaten
Garbo AB
Sverigehuset i Göteborg AB
Momentum Software AB
% of
capital
Book
value
1
8
50
150
20
20
100
1
10
1,245
4
1,245
2
70
250
100
31,686
6
0
49
Other shares
Sub-total
1,544
Added for the Group, SEK 000s
Trygg Eiendomsmegling
586
Rörekonomi i Örebro AB
272
143
1
Others
Sub-total
730
2,274
70
NOTE 14
BUILDINGS AND LAND (INVESTMENT PROPERTIES)
Group 20031)
Fully developed
properties
Properties under
construction
Properties for
further development
Total
Accumulated cost
2,245
612
73
2,930
89
243
618
950
Company acquisitions
–
–
905
905
Reclassifications
1
–4
40
37
–10
–2
–1
–13
New acquisitions
Sales
–1,742
–
–
–1,742
583
849
1,635
3,067
115
5
2
122
–
–
83
83
–2
–
–
–2
–49
–
–
– 49
64
5
85
154
21
13
–
34
Reclassifications
–4
–
–
–4
Company acquisitions
Reclassifications
Sales
Accumulated write-downs
Write-downs for the year
–
55
8
63
–13
–
–
–13
4
68
8
80
515
776
1,542
2,833
Tax assessment values
477
300
1,090
1,867
Sales
1)
Interest expenses added to the cost of investment properties amounted to SEK 17m (78).
Parent Company 2003
Accumulated cost
1,274
435
48
1,757
New acquisitions
98
130
4
232
Reclassifications
–68
52
55
39
3
–
–
3
–785
–
–
–785
522
617
107
1,246
102
5
3
110
3
–
–
3
–44
–
–
– 44
61
5
3
69
Sales
Sales
7
13
–
20
–
46
8
54
Sales
–3
–
–
–3
4
59
8
71
457
553
96
1,106
Tax assessment values
470
293
41
804
71
NOTE 15
NOTE 18
DEVELOPMENT PROPERTIES
Group 2003
OTHER CURRENT RECEIVABLES
Parent Company 2003
Group
Accumulated cost
4,093
2,585
Receivables, property sales
New acquisitions
664
569
Other
Reclassifications
–43
–39
Total
–35
–
Transferred to production
–698
–341
Sales
–129
–43
3,852
2,731
NOTE 19
2002
54
1,063
–
8
209
181
179
241
263
1,244
179
249
Group 2003
Interest- Non-interest
bearing
bearing
Sales
73
Intangible fixed assets
–
55
–
–
–1
–1
Tangible fixed assets
–
58
–
26
–
30
Financial fixed assets
221
102
3,631
2,629
Tax assessment value
2,638
1,546
PA RT I C I PAT I O N S I N T E N A N T- OWNER
CO-OPERATIVES AND SIMILAR
43
12
1,210
1,993
Buildings and land
–
2,833
–
1,106
Development properties, etc.
–
4,158
–
3,114
Current receivables
–
1,654
–
1,656
Liquid assets
332
–
245
–
Total
375
8,770
1,455
7,895
NOTE 20
Group 2003
Parent Company 2003
360
290
Purchases
894
845
–720
–650
Tax allocation funds:
534
485
UNTAXED RESERVES IN
THE PARENT COMPANY
Parent Company
2003
2002
Accumulated cost
2
Reclassifications
Sales
Accumulated accelerated depreciation:
4
13
Provision for 1998
–
94
Provision for 1999
19
19
Provision for 2000
64
64
–
Provision for 2001
332
332
Equipment
7
–
Provision for 2002
267
267
–2
–
Provision for 2003
75
75
7
–
Provision for 2004
17
–
778
864
Total
NOTE 17
527
485
Net reversal of appropriations for the year amounts to SEK 86m (see Note 9).
RECOGNISED REVENUE
LESS PROGRESS BILLINGS
Group
Parent Company
2003
2002
2003
2002
Accumulated on account billing
for work in progress
–2,256
–4,431
–1,727
–3,515
5,628
1,197
2,671
944
4,533
1,018
Recognised revenue in
work in progress
Total
3,285
1,029
Parent Company 2003
bearing
bearing
222
Sales
Parent Company
2003
2002
INTEREST-BEARING AND
NON-INTEREST BEARING ASSETS
NOTE 16
2003
72
NOTE 21
PROVISIONS FOR TAXES/
DEFERRED TAX ASSETS
Group
2002
2003
NOTE 23
INTEREST-BEARING AND NON-INTEREST
BEARING LIABILITIES AND PROVISIONS
Parent Company
2003
2002
Group 2003
bearing
bearing
Parent Company 2003
bearing
bearing
Deferred tax liability on
untaxed reserves
285
311
–
–
Other deferred tax liability
194
158
–
–
451
6
451
15
15
7
12
Provisions for taxes
–
449
–
7
494
484
7
12
Other provisions
–
139
–
84
45
136
1
57
449
348
6
– 45
Other provisions for tax
Sub-total
Provisions for pensions and
similar commitments
Liabilities to credit institutions 2,451
Deferred tax assets
Net provisions for tax
Tax allocation funds
283
298
Total
2
13
285
311
2,167
–
–
399
–
–
1,820
–
–
131
–
35
–
Liabilities to group companies
Tax liabilities
Other liabilities
Accelerated depreciation,
equipment
–
518
Accounts payable, trade
Progress billings in excess
of recognised revenue
Deferred tax liability on untaxed reserves 1)
Accrued expenses and
deferred income
Total
1
–
915
–
862
84
204
84
117
–
512
–
371
2,986
2,874
4,522
1,876
Other deferred tax liability is allocated on
Buildings and land 2)
105
66
Development properties 2)
10
12
Other, net
79
80
194
158
Total
1)
2)
NOTE 24
Group
Tax rules in Sweden allow companies to postpone taxation through provisions to
untaxed reserves in the balance sheet via appropriations in the income statement.
In the consolidated financial statements, however, untaxed reserves or appropriations are not stated.The untaxed reserves are divided between deferred tax liability
and restricted reserves respectively in shareholders’ equity.
Fiscal difference and book value.
NOTE 22
OTHER PROVISIONS
Group
2003
Other
provisions
Total
96
39
135
–47
–
–47
51
–
51
100
39
139
Reversals
Provisions
Parent Company
2003
Provisions for
guarantees
Reversals
83
–45
Provisions
46
84
Maturity less than 1 year
from closing day
Maturity 1–5 years
from closing day
Parent Company
2003
2002
2003
2002
226
682
–
350
42
61
–
–
Maturity later than 5 years
from closing day
2,183
3,010
2,167
2,989
Total
2,451
3,753
2,167
3,339
Exposure interest rate risk,
Group
< 1 year
1-5 years
>5 years
175
–
2003
Provisions for
guarantees
LIABILITIES TO CREDIT INSTITUTIONS
Loans
Effect of interest
rate derivatives
Total
2,276
–1,400
1,000
400
876
1,175
400
3,059
694
–
2002
Loans
Effect of interest
rate derivatives
–1,100
500
600
Total
1,959
1,194
600
The JM Group mainly works with short-term borrowing in credit institutions combined with derivatives in order to manage interest rate risk.The average interest rate
on interest-bearing liabilities at 31 December 2003, excl. the PRI liability, was 5.5%.
Liabilities to credit institutions, confirmed credits
Group
Overdraft facilities
Granted credit ceiling
Unutilised portion
Utilised credit amount
2003
Parent Company
2003
2002
400
415
400
415
–400
–415
–400
– 415
–
–
–
–
Credit agreements carry fixed interest.
2002
73
Note 24, continued
Group
Credit agreements
Granted credit agreement
maturity within 1 year
Granted credit agreement
maturity more than 1 year
2003
2002
800
1,800
Parent Company
2003
2002
800
1,800
3,700
3,000
3,700
3,000
Unutilised portion
–2,333
–1,713
–2,333
–1,713
Utilised credit agreements
2,167
3,087
2,167
3,087
NOTE 25
FINANCIAL INSTRUMENTS AND
FINANCIAL RISK MANAGEMENT
JM’s Finance unit is responsible for the Group’s short- and long-term financing, liquidity planning, cash management and financial risk management.The division of responsibility and control of the Group’s overall financing activities are regulated by a
finance policy established by the Board of Directors.
Finance policy
The finance policy specifies the objectives for finance operations, overall responsibility and specific rules and limits.The objectives for the finance operations are to:
• Support operating activities in residential and commercial project development.
• Optimise use of capital and cash flow management.
• Control and manage the financial risks to which JM is exposed.
Financial instruments and financial risk management
The nominal amount for outstanding interest rate swaps amounts to SEK 1,400m
(1,100). At 31 December 2003 fixed interest rates varied between 3.18% and 5.84%
(5.1% and 6%).The short rate is 2.9%.
JM AB has a loan in NOK of SEK 85m.The loan is an indexation for part of the net
investment in Byggholt AS, Norway The exchange gain at 31 December 2003 amounted
to SEK 15m (–7) and is reported as a translation difference in equity in the Group.The
Group has not effected any other currency hedging for balance sheet exposure.
Furthermore, JM has no transaction exposure since operations are only conducted
within the respective country.
Valuation of financial assets and liabilities
JM used generally accepted methods for calculating the fair value of the Group’s
financial instruments as of 31 December 2003 and 2002.The fair value of interestbearing liabilities to credit institutions is assumed to correspond to the book value
since they mainly have a short fixed-term of less than three months. For all other
financial assets and liabilities, e.g. liquid assets, accounts receivable and accounts
payable, the book value is assumed to provide a good approximation of the fair value.
NOTE 26
PROGRESS BILLINGS IN
EXCESS OF RECOGNISED REVENUE
2003
Group
2002
Parent Company
2003
2002
Accumulated billing on account
for work in progress
10,265
6,918
9,722
6,812
–9,350
–6,117
–8,860
– 6,045
915
801
862
767
The Group’s financial risks primarily consist of interest rate risk, financing risk, liquidity
risk and, to a limited extent, currency risk.The choice of maturities and fixed interest
spread is governed by several factors, such as capital tied up in ongoing projects, business
risk, anticipated dates for sale of properties, the terms of leases in investment properties
and the Group’s financial position in general.These factors are summarised in the
Board’s established guidelines for fixed interest spread and maturity structure with
scope for deviations within certain limits based on the current market situation.There
are also rules for handling interest rate risk in building loans during the construction
period and final financing of tenant-owner co-operatives.
Recognised revenue in
work in progress
Cash is kept at a low level and any surplus liquidity may only be invested in banks defined
by JM and in Swedish fixed-income securities without currency risk. Payment preparedness is maintained through overdraft facilities and committed credit lines.
Maturity less than 1 year
from closing day
Total
NOTE 27
OTHER LIABILITIES
Group
Currency risk is eliminated as far as possible for transaction and balance sheet exposure.
Maturity 1–5 years
from closing day
Derivative instruments may only be used in order to minimise risks.
Convertible debenture loan
Finance strategy
JM’s basic finance strategy is to clearly link cash flows from projects in progress and
investment properties to the company’s management of borrowing and interest rate
risks.This strategy provides the best control of financial risks.
Maturity later than 5 years
from closing day
Total
Parent Company
2003
2002
2003
2002
211
322
124
60
48
60
48
–
15
–
31
117
17
18
17
18
288
403
201
214
Convertible debenture loan
The employees were offered a convertible debentures in 1999 and have subscribed
for SEK 84m.The term of the convertible debenture is 15 June 1999 –15 June 2003,
i.e. four years.
In order to maintain flexible administration and cost-effective debt management,
existing loan agreements are guaranteed by JM’s excellent creditworthiness, which
means that no mortgage deeds are provided.
Derivative instruments
Market value at 31 December 2003 for the Group’s interest rate derivatives
Asset
Liability
–
39
–
51
2003
Interest rate swaps – cash flow hedging
ACCRUED EXPENSES
AND DEFERRED INCOME
Group
2002
Interest rate swaps – cash flow hedging
NOTE 28
Interest rate derivatives are not reported in the balance sheet (off balance). Figures
do not include the underlying capital amount and are indicative.
Parent Company
2003
2002
2003
2002
Vacation reserve, etc.
140
132
127
127
Social security contributions, etc.
139
152
105
119
Accrued interest
34
52
30
47
Deferred rents
33
73
21
31
Accrued expenses and
deferred income
166
134
88
70
Total
512
543
371
394
74
NOTE 29
ASSETS PLEDGED AND
CONTINGENT LIABILITIES
Group
2003
2002
NOTE 30
FEES AND REMUNERATION
Parent Company
2003
2002
Group
2003
2002
Parent Company
2003
2002
Assets pledged to secure own
provisions and liabilities
Öhrlings Pricewaterhouse
Coopers
Pertaining to provisions for pensions
and similar commitments:
Auditing assignments
4.7
3.5
3.8
2.6
Other assignments
1.1
5.91)
1.0
5.7 1)
Total
5.8
9.4
4.8
8.3
100
100
100
100
83
332
–
–
183
432
100
100
–
–
983
1,495
Guarantee commitments, other 3) 3,184
3,153
3,184
2,892
441
420
285
251
51
–
13
–
Corporate mortgages
Property mortgages
Total assets pledged 1)
Guarantees in connection
with assignments
Payment and rental guarantees 4)
Other contingent liabilities
Total contingent liabilities
Of which, SEK 4.8m relates to services carried out by IBM (formerly PWC
Consulting).
NOTE 31
Contingent liabilities
Guarantees on behalf of
group companies 2)
1)
EMPLOYEES AND PAYROLL EXPENSES
Average number
of employees
2003
Of whom,
men
2002
Of whom,
men
2,061
85%
2,133
86%
99%
Parent Company
10
68
10
33
3,686
3,641
4,475
4,671
Sweden
Subsidiaries
Sweden
212
96%
168
The corporate mortgage relates to the pension liability that JM Sverige has with
PRI. Property mortgages are only granted to a limited extent for financing with
credit institutions.
Belgium
15
73%
14
71%
Denmark
27
56%
25
52%
Norway
251
87%
262
87%
2)
Guarantees on behalf of group companies mainly relate to commitments for foreign
companies and the subsidiaries Seniorgården and Borätt.
Total in subsidiaries
505
89%
469
89%
2,566
86%
2,602
86%
3)
During the production period of a tenant-owner co-operative, the JM Group provides guarantees for part of the short-term financing that exceeds a co-operative’s
future long-term loans. Guarantee commitments, other relate entirely to this shortterm financing.The long-term loans are secured by the mortgage deeds taken out
by the co-operative itself.
1)
4)
The Parent Company and the Group also have guarantee commitments for longterm management contracts in the form of payment and rental guarantees.
The Group also has obligations to acquire unsold participations in tenant-owner cooperatives formed by JM. See Note 16 Participations in tenant-owner co-operatives
and similar.
A tenant-owner co-operative’s only revenue is its monthly charges. In order to
ensure that the estimated monthly charges are received by the co-operative, JM
provides a 7-year guarantee.
The guarantee comprises an undertaking to buy such apartment which is returned to
the co-operative from the first owner. JM then buys the apartment for SEK 1 and
then pays the monthly charge to the co-operative until JM in its turn has sold the
apartment.This guarantee has existed since 1993 and has never been utilised. JM
considers it unlikely that the guarantee will need to be met in other than exceptional
cases.
The Parent Company has a recourse agreement against AB Bostadsgaranti regarding
their investment guarantee for paid contributions and charges for grant of enjoyment.The guarantee primarily ensures that the co-operative can repay a reasonable
amount (maximum contribution and charges) to the tenant-owner who has a right of
termination due to significant increases in charges during the first year after final
accounts, subsequently Bostadsgaranti has no liability to pay anything. Bostadsgaranti
has not paid out anything since 1962.
Total Group
Salaries/wages, other remuneration and social security expenses
2003
Salaries/
wages and
remuneration
Parent Company
(of which, pension costs)
Subsidiaries
Total Group
710
–
2002
Social
Salaries/
security
wages and
expenses remuneration
337
67 1)
Social
security
expenses
719
342
–
65
61
180
53
187
–
8
–
5
890
390
906
403
–
70
–
75 2)
1)
Of the Parent Company’s pension costs, SEK 2.4m (2.2) pertains to the President
and Vice President.The company’s outstanding pension commitments to these
individuals amounts to SEK 13.9m (24.7).The company has no pension costs or
pension commitments to the rest of the Board.
2)
Of the Group’s pension costs, SEK 3.3m (4.1) pertains to the Group President and
Vice President.The Group’s outstanding pension commitments to these individuals
amounts to SEK 32.2m (35.2).
75
Note 31, continued
Salaries and other remuneration by country and distribution
between the Board and President and other employees
2003
2002
Board and
President
Other
employees
Board and
President
Other
employees
7
703
10
709
3
33
3
51
1
52
1
52
0
–
–
–
1
8
1
6
Parent Company
Sweden
(of which, variable compensation)
Subsidiaries
Sweden
Belgium
Denmark
Norway
Total subsidiaries
Total Group
0
–
–
–
1
16
1
14
–
–
–
–
1
100
2
110
1
5
1
7
4
176
5
182
1
5
1
7
11
879
15
891
1
38
4
58
Salaries and benefits of senior executives are reported according to the
recommendation of the Industry and Commerce Stock Exchange
Committee, NBK.
Other senior executives:
A few of the senior executives are entitled to retire at the age of 60 with pension in
an amount corresponding to 70% of salary until the age of 65.The period of notice is
24 months in the event of termination by the company and 12 months in the event of
termination by the employee.With regard to shares and options in JM AB held by
members of the Board, the President and Executive Management, see pages 14–15.
Absence due to illness within JM in Sweden
Total absence due to illness amounts to 5.4% (5.6) of normal working hours.
Of the total absence due to illness, 55.4% (55.6) comprises continuous absence due
to illness of more than 60 days.
Breakdown of absence due to illness by age
4.4%
30–49
4.4%
4.8%
50 and older
7.4%
7.6%
Breakdown of absence due to illness by gender 2003
2002
Men
5.6%
5.8%
Women
4.1%
4.3%
NOTE 32
OTHER ITEMS WITH NO EFFECT
ON CASH FLOW
Group
Board of Directors:
JM’s Board of Directors comprises a total of nine people, eight men and one woman.
The Chairman of the Board received board fees amounting to a total of SEK 458,000
(538,000). Other external Board members received total fees of SEK 1,167,000
(1,200,000).
Change in pension liability
President & CEO:
In the 2003 financial year, the President received salary and other benefits totalling
SEK 3,489,000 (463,000).This amount includes variable compensation, earned in
another position in JM during the 2002 financial year, of SEK 600,000.
NOTE 33
The result of variable compensation for the 2003 financial year amounts to SEK
180,000, which will be paid in spring 2004.
The variable compensation for the 2004 financial year may be paid in an amount
within the band SEK 0 to a maximum of SEK 1,200,000. Calculation of this compensation is based to 50% on the financial result for the Group, 30% on return on operating
capital, and 20% on a measurement of how satisfied JM’s customers are (Customer
Satisfaction Index, CSI). Payment of the resulting amount will be made in spring 2005.
Other provisions, etc.
Total
2003
2002
Parent Company
2003
2002
–411
–523
–199
0
–1
0
–
18
24
18
24
For Executive Management, variable compensation can amount to a maximum of 3
and 7 monthly salaries respectively depending on position.
–317
–14
182
–25
117
– 407
–318
–206
–176
INVESTMENTS IN
DEVELOPMENT PROPERTIES, ETC.
2003
Group
2002
Parent Company
2003
2002
Investments in
development properties
–664
–629
–569
– 406
Acquisition of participations in
tenant-owner co-operatives
–894
–589
–845
–530
Financing via short-term
promissory notes
–20
66
–
–
Effect on liquid assets
–1,578
–1,152
–1,414
–936
NOTE 34
REVERSAL AND SALES
OF DEVELOPMENT PROPERTIES, ETC.
Group
Executive Management:
JM’s Executive Management in 2003 comprised a total of nine people, eight men and
one woman. Executive Management, excluding the President, received salaries and
other benefits totalling SEK 18.1m in 2003, of which variable compensation amounted to SEK 6.8m. Of this amount, SEK 4.0m was earned in 2001 and earlier. This
amount was expensed in previous years but not available for payment.
2002
4.8%
Gains on other sales
The period of notice is 12 months in the event of termination by the company and 6
months in the event of termination by the President. If no other employment has been
secured by the end of the notice period, severance pay shall be awarded in an amount
corresponding to 12 months’ salary. Furthermore, the President is entitled to a pension through an annual premium provision of 35% of fixed monthly salary.
2003
–29
2003
2002
Parent Company
2003
2002
Reversal of development
properties to production
698
583
341
472
Sold development properties
144
107
34
44
Sold participations in
tenant-owner co-operatives
718
323
650
323
1,560
1,013
1,025
839
76
NOTE 35
INVESTMENTS IN
INVESTMENT PROPERTIES, ETC.
NOTE 37
2003
2002
Parent Company
2003
2002
Investments in
investment properties
–1,772
–645
–232
–408
Financing via short-term
promissory note
–107
107
–
–
Group
Adjustment for capitalised
interest
1
12
–
–
–1,878
–526
–232
– 408
MERGER OF GROUP COMPANIES
During the year, one group company was merged with JM AB.This transaction did not
lead to any cash flow.
NOTE 38
ACQUISITION OF COMPANIES
The total value of acquired assets and liabilities, purchase prices and effect on consolidated liquid assets for 2003 was as follows:
Properties
Other current assets
NOTE 36
SALE OF INVESTMENT PROPERTIES, ETC.
Group
Sold investment properties
Reversal of properties
to production
2003
2002
2,075
2,908
Parent Company
2003
2002
945
1,696
–
87
–
–
Receivables
1,010
69
–11
989
3,085
3,064
934
2,685
822
94
Long-term liabilities
–537
Current liabilities and provisions
–116
Acquired net assets
263
Purchase price paid
263
Effect on consolidated liquid assets
263
77
P RO P O S E D D I S P O S I T I O N O F E A R N I N G S
A U D I T O R S ’ R E P O RT
PROPOSED DISPOSITION OF EARNINGS
The Group’s unrestricted equity amounts to SEK 1,489m. No transfer to restricted equity is required.
The Board of Directors and the President propose that the Parent Company’s net profit for the year of SEK 820,541,120 and
profit carried forward of SEK 486,616,965, a total of SEK 1,307,158,085, be distributed to the shareholders as a dividend of
SEK 5 per share
SEK 1,140,327,035
carried forward to new account
SEK 1,166,831,050
SEK 1,307,158,085
stockholm, 16 february 2004
Per Westlund
Chairman
Björn Björnsson
Berthold Lindqvist
Lennart Sundén
Elisabet Annell
Leif Lundell
Per Olofsson
Johan Wegin
Johan Skoglund
President & CEO
AUDITORS’ REPORT
TO THE ANNUAL GENERAL MEETING OF JM AB (PUBL)
COMPANY REG. NO. 556045-2103
We have examined the annual accounts, the consolidated
financial statements, the accounting records and the administration by the Board of Directors and the President of JM AB
(publ) for the year 2003. These accounts and the administration of the Company are the responsibility of the Board of
Directors and the President. Our responsibility is to express
an opinion on the annual accounts, the consolidated financial
statements and the administration based on our audit.
We conducted our audit in accordance with generally
accepted auditing standards in Sweden. These standards
require that we plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated
financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit
also includes assessing the accounting principles used and
their application by the Board of Directors and the President, as well as evaluating the overall presentation of information in the annual report and consolidated financial statements. As a basis for our opinion concerning discharge from
liability, we examined significant decisions, actions taken
and circumstances of the Company in order to determine the
liability, if any, to the Company of any Board member or the
President. We also examined whether any Board member of
the President has, in any other way, acted in contravention of
the Swedish Companies Act, the Swedish Annual Accounts
Act or the Articles of Association. We believe that our audit
provides a reasonable basis for our opinion set out below.
The annual accounts and the consolidated financial statements have been prepared in accordance with the Swedish
Annual Accounts Act and, thereby, give a true and fair view
of the Company’s and the Group’s financial position and
results of operations in accordance with generally accepted
accounting principles in Sweden.
We recommend to the Annual General Meeting that the
income statement and the balance sheet of the Parent Company and the Group be adopted, that the profit for the Parent Company be dealt with in accordance with the proposal
in the Board of Directors’ Report and that the members of
the Board of Directors and the President be discharged from
liability for the financial year.
stockholm, 16 february 2004
öhrlings pricewaterhousecoopers ab
Bertil Johanson
Authorised Public
Accountant
Ulf Westerberg
Authorised Public
Accountant
78
P RO J E C T D E V E L O P M E N T –
N E T S A L E S A N D P RO F I T
Net sales from project development by business unit
Group 2003
Net sales
Less rental revenue investment properties
Net sales from project development
JM
JM
Residential Residential
Stockholm
Sweden
3,218
2,092
–
–
3,218
2,092
JM
Production
701
–
701
JM
JM
InterCommercial national
227
1,683
–227
–
–
1,683
Eliminations/
Other
–134
–
–134
Group
total
7,787
–227
7,560
Profit from project development by business unit
Group 2003
Gross loss/profit
Minus operating net investment properties
Plus property sales
Minus sales of investment properties
Plus write-down of properties
Loss/profit from project development
– 44
–
22
–
–
–22
105
–
–7
–
–
98
34
–
–
–
–
34
47
–55
374
–303
– 63
0
50
–
22
–
–
72
–
–
–
–
–
–
192
–55
411
–303
–63
182
3,623
–
3,623
2,205
–
2,205
1,166
–
1,166
424
– 424
–
1,530
–
1,530
–76
–
–76
8,872
–424
8,448
–14
–
9
–
–155
–
–160
178
–
4
–
–2
–
180
–27
–
–
–
–
–
–27
220
–223
513
–50
–99
15
376
93
–
–3
–
–
–
90
–
–
–
–
–
–
–
450
–223
523
–50
–256
15
459
Net sales from project development by business unit
Group 2002
Net sales
Less rental revenue investment properties
Profit from project development by business unit
Group 2002
Gross loss/profit
Less operating net investment properties
Plus property sales
Less sales of investment properties
Plus write-down of properties
Less write-down of investment properties
Loss/profit from project development
79
F I V E - Y E A R S U M M A RY
INCOME STATEMENT, SEKm
Net sales
Gross profit
Gains on the sale of operations
Non-recurring items (Alecta – surplus)
Operating profit
Net financial items
Profit after net financial items
2003
7,787
–7,152
635
–505
–
411
– 63
–
478
–211
267
– 80
187
2002
8,872
–7,960
912
–527
–
523
–256
–
652
–284
368
–115
253
2001
8,642
–7,022
1,620
–545
–
928
–39
–
1,964
–335
1,629
– 485
1,144
2000
6,849
–5,519
1,330
– 455
30
535
–
78
1,518
–309
1,209
–364
845
1999
5,825
–4,770
1,055
–395
–
330
–
–
990
–356
634
–193
441
INCOME STATEMENT BY FUNCTION, SEKm
Production
Recognised revenue
Production costs
Profit from production operations
7,429
– 6,916
513
8,311
–7,739
572
7,867
– 6,763
1,104
5,990
–5,146
844
4,946
–4,402
544
144
–120
–11
13
163
–105
–11
47
133
–69
–6
58
189
–112
–15
62
137
–72
–8
57
214
–
–91
–14
–
109
398
–
–72
–33
–
293
640
2
–145
–39
–
458
660
10
–144
– 43
–59
424
711
31
–163
–37
–88
454
– 443
– 462
– 481
–399
–318
Property sales
Sales values
Book values
2,219
–1,808
411
3,015
–2,492
523
4,074
–3,146
928
2,213
–1,678
535
1,710
–1,380
330
– 63
– 62
–
–
478
–256
– 65
–
–
652
–39
– 64
–
–
1,964
–
–56
30
78
1,518
–
–77
–
–
990
Rental revenue
Operating expenses
Property tax
Profit from development properties
Rental revenue
Interest subsidies
Operating expenses
Property tax
Depreciation
Profit from investment properties
Group-wide costs
Gains on the sale of operations
Non-recurring items (Alecta – surplus)
OPERATING PROFIT
80
F I V E - Y E A R S U M M A RY
BALANCE SHEET, SEKm
Assets
Investment properties (fixed assets)
Other fixed assets
Investment properties (current assets)
Liquid assets
TOTAL ASSETS
31 Dec 2003
31 Dec 2002
31 Dec 2001
31 Dec 2000
31 Dec 1999
–
168
2,833
3,631
1,152
1,029
332
9,145
–
196
2,774
3,871
1,994
1,197
596
10,628
–
210
4,717
4,048
2,295
966
652
12,888
–
254
6,445
3,105
930
917
446
12,097
6,855
300
–
2,611
894
–
390
11,050
Provisions
Interest-bearing liabilities
Other liabilities
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
3,285
1,045
2,535
915
1,365
9,145
3,570
918
3,880
801
1,459
10,628
3,823
1,015
5,521
1,073
1,456
12,888
3,770
936
5,236
673
1,482
12,097
3,144
987
5,662
28
1,229
11,050
CASH FLOW STATEMENT, SEKm
Cash flow
2003
–264
2002
–56
2001
206
2000
56
1999
–6
OTHER, SEKm
Average number of employees
Investment properties:
Market values
Book values
Surplus values before deferred tax
Vacancy rate at 31 Dec
Share of total space (%)
Share of possible rental revenue (%)
Order bookings
Order backlog at 31 Dec
2003
2,566
2002
2,602
2001
2,502
2000
2,163
1999
2,140
3,205
2,833
372
3,478
2,774
704
6,371
4,717
1,654
9,619
6,445
3,174
9,202
6,855
2,347
4
4
7,145
5,685
10
10
6,690
5,925
6
7
8,811
7,546
2
2
8,774
6,603
3
2
5,780
3,819
KEY RATIOS
Interest-bearing net debt (SEKm)
Debt/equity ratio (times)
Interest coverage ratio (times)
Equity ratio (visible) (%)
Pre-tax return on total capital (%)
Pre-tax return on capital employed (%)
After-tax return on shareholders’ equity (%)
Asset turnover rate (times)
2003
2,611
0.8
2.1
36
5.2
7.3
5.5
0.79
2002
3,665
1.0
2.1
34
5.9
7.8
6.8
0.75
2001
5,220
1.4
5.5
30
15.9
20.8
30.1
0.69
2000
5,117
1.4
4.6
31
13.8
16.7
24.4
0.61
1999
5,588
1.8
2.7
28
9.3
11.4
14.8
0.54
81
Q U A RT E R LY O V E R V I E W – G R O U P
2003
INCOME STATEMENT, SEKm
Net sales
Gross profit/loss
2002
Q4
2,224
–2,026
198
Q3
1,707
–1,586
121
Q2
2,091
–1,928
163
Q1
1,765
–1,612
153
Q4
2,301
–2,355
–54
Q3
1,900
–1,597
303
Q2
2,340
–2,039
301
Q1
2,331
–1,969
362
–134
11
– 63
12
– 45
–33
11
–22
–109
1
–
13
– 45
–32
7
–25
–141
32
–
54
–51
3
–3
0
–121
367
–
399
–70
329
–95
234
–153
253
–243
–197
– 81
–278
71
–207
–99
94
–
298
– 68
230
– 67
163
–133
2
–13
157
– 65
92
–27
65
–142
174
–
394
–70
324
–92
232
31 Dec
2003
30 Sep
2003
30 Jun
2003
31 Mar
2003
31 Dec
2002
30 Sep
2002
30 Jun
2002
31 Mar
2002
168
2,833
3,631
2,181
332
9,145
167
2,926
3,773
3,121
142
10,129
182
1,989
3,635
3,263
548
9,617
187
2,039
3,767
3,242
210
9,445
196
2,774
3,871
3,191
596
10,628
200
3,583
4,038
3,613
106
11,540
204
4,150
3,934
2,697
156
11,141
201
3,996
3,964
3,486
411
12,058
Provisions
Interest-bearing liabilities
Other liabilities
Total
3,285
1,045
2,535
2,280
9,145
3,308
1,051
3,871
1,899
10,129
3,343
967
3,210
2,097
9,617
3,642
945
2,832
2,026
9,445
3,570
918
3,880
2,260
10,628
3,790
1,082
4,564
2,104
11,540
3,712
1,056
4,239
2,134
11,141
4,048
1,049
4,702
2,259
12,058
CASH FLOW STATEMENT, SEKm
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Total cash flow for the period
Liquid assets at the end of the period
Q4
1,530
–24
–1,316
190
332
Q3
–1,068
8
654
– 406
142
Q2
223
–13
128
338
548
Q1
819
–5
–1,200
–386
210
Q4
1,223
–12
–721
490
596
Q3
–270
–6
226
–50
106
Q2
634
–10
– 879
–255
156
Q1
574
–6
–809
–241
411
Change in interest-bearing net debt
–1,444
1,036
136
–782
–1,173
378
–177
–583
Operating profit/loss
Net financial items
Result from financial items
Tax on profit for the period
NET LOSS/PROFIT FOR THE PERIOD
BALANCE SHEET, SEKm
Assets
Fixed assets
Liquid funds
Total
2003
2002
82
Q U A RT E R LY O V E R V I E W – B U S I N E S S U N I T S
2003
JM RESIDENTIAL STOCKHOLM, SEKm
Net sales
Operating profit/loss 1)
Margin (%) 2)
Return on operating capital (%) 3)
Book value of development properties
2002
Q4
919
13
0.8
– 0.7
10,300
2,219
Q3
641
–23
– 4.2
–14.9
10,100
2,249
Q2
884
–15
–3.1
–11.4
10,800
2,251
Q1
774
3
0.4
– 8.1
11,200
2,305
Q4
893
– 452
–33.5
– 4.6
11,500
2,330
Q3
833
92
10.9
13.5
12,500
2,547
Q2
918
81
8.4
14.7
12,400
2,600
Q1
979
119
12.0
16.3
12,500
2,545
6
–
4
–
12
–
–
–
2
–155
1
–
4
–
2
–
585
33
6.0
10.2
7,400
700
423
18
5.0
13.2
7,450
768
623
29
5.0
17.0
7,900
737
461
18
3.9
16.5
8,500
787
697
64
9.5
16.7
8,400
808
500
45
8.2
20.0
8,800
877
535
36
7.1
21.3
8,900
767
473
35
7.0
19.9
9,000
767
Of which – property sales
– property write-downs
–2
–
–3
–
–2
–
–
–
–
–2
4
–
–2
–
2
–
JM PRODUCTION, SEKm
Net sales
Operating profit/loss 1)
Margin (%) 2)
196
13
6.6
172
8
4.7
168
7
4.2
165
6
3.6
213
–29
–13.6
174
5
2.9
357
–17
– 4.8
422
14
3.3
–
–
–
–
–
–
–
–
–
–35
–
–
–
–30
–
–
JM COMMERCIAL, SEKm
Net sales
Operating loss/profit 1)
Margin (%) 2)
64
– 45
17.2
14.3
60
17
28.3
22.7
49
11
22.4
25.3
54
375
14.8
23.5
102
220
51.0
16.8
97
143
55.7
11.2
111
46
53.2
10.1
114
225
48.2
18.0
7
–63
–
–
–
–
367
–
254
–86
89
–
–
–13
170
–
547
15
2.7
6.8
5,700
520
425
6
1.4
7.1
5,400
573
385
38
4.2
8.9
5,500
556
326
13
4.0
7.9
5,600
581
396
19
5.6
9.2
5,650
641
350
24
6.9
10.9
5,100
464
432
26
6.0
12.6
5,000
420
352
21
6.0
13.8
5,200
442
–
–
22
–
–3
–
–
–
1)
JM RESIDENTIAL SWEDEN, SEKm
Net sales
Operating profit 1)
Margin (%) 2)
1)
Of which property sales
Provision for risk of loss in ongoing project
1)
1)
JM INTERNATIONAL, SEKm
Net sales
Operating profit 1)
Margin (%) 2)
1)
Of which property sales
2)
Excluding property sales and property write-downs.
12-month rolling.
3)
DEFINITIONS
83
Amounts in SEKm unless otherwise stated.
GROUP
CAPITAL MEASUREMENT
Total restricted and unrestricted equity according to the balance sheet.
Result 2003: 1,796+1,489 = SEK 3,285m
Result 2002: 1,796+1,774 = SEK 3,570m
Interest-bearing net debt
Interest-bearing liabilities and provisions less liquid assets and
interest-bearing receivables.
Result 2003: 2,986–332–43 = SEK 2,611m
Result 2002: 4,313–596–52 = SEK 3,665m
Recognised revenue according to the percentage of completion method
Production costs incurred plus recognised contribution.
Result 2003: 6,916+513 = SEK 7,429m
Result 2002: 7,739+572 = SEK 8,311m
MEASURES FOR CAPITAL INTENSITY
Asset turnover rate
Net sales for the year in relation to average total assets.
Result 2003: 7,787/((9,145+10,628)/2) = 0.8 times
Result 2002: 8,872/((10,628+12,888)/2) = 0.8 times
Capital employed
Visible shareholders’ equity plus interest bearing liabilities and provisions.
Result 2003: 3,285+2,535 = SEK 6,271m
Result 2002: 3,570+3,880+433 = SEK 7,883m
MARGIN MEASUREMENT
Project development margin
Profit from project development in relation to net sales from
project development.
Result 2003: 182/7,560 = 2.4%
Result 2002: 459/8,448 = 5.4%
FINANCIAL MEASUREMENT, ETC.
Invoicing less recognised income.
Result 2003: 10,265–9,350 = SEK 915m
Result 2002: 6,918–6,117 = SEK 801m
PROFITABILITY MEASUREMENT
After-tax return on equity
Profit after tax in relation to average shareholders’ equity.
Result 2003: 187/((3,285+3,570)/2) = 5.5%
Result 2002: 253/((3,570+3,823)/2) = 6.8%
Net sales
Total recognised revenue according to the percentage
of completion method, plus rental revenue and interest subsidies.
Result 2003: 7,429+358 = SEK 7,787m
Result 2002: 8,311+561 = SEK 8,872m
Pre-tax return on capital employed
Profit before tax with reversal of financial expenses in relation to
average capital employed.
Result 2003: (267+250)/((6,271+7,883)/2) = 7.3%
Result 2002: (368–322)/((7,883+9,753)/2) = 7.8%
Total net sales minus net sales within JM Commercial.
Result 2003: 7,787–227 = SEK 7,560m
Result 2002: 8,872–424 = SEK 8,448m
Pre-tax return on total capital
Profit before tax with reversal of financial expenses in relation to
average total assets.
Result 2003: (267+250)/((9,145+10,628)/2) = 5.2%
Result 2002: (368+322)/((10,628+12,888)/2) = 5.9%
Profit from project development
Operating profit minus operating net, sales and write-downs of
investment properties and eliminations at Group level.
Result 2003: 478–55–303+62 = SEK 182m
Result 2002: 652–223–50+15+65 = SEK 459m
Earnings per share after tax
Profit after tax in relation to average number of shares.
Result 2003: SEK 186,987,000/28,311,705 = SEK 6.60
Result 2002: SEK 253,271,000/29,857,486 = SEK 8.50
Interest coverage ratio
Profit after depreciation and financial income in relation to financial expenses.
Result 2003: (478+39)/250 = 2.1 times
Result 2002: (652+38)/322 = 2.1 times
SHARE-RELATED MEASUREMENT
Dividend yield
Proposed dividend in relation to market price at 31 December 2003.
Result 2003: SEK 5/106 = 4.7%
Result 2002: SEK 10/162 = 6.2%
Debt/equity ratio
Interest-bearing net debt in relation to shareholders’ equity.
Result 2003: 2,611/3,285 = 0.8 times
Result 2002: 3,665/3,570 = 1.0 times
Equity ratio (visible)
Visible shareholders’ equity in relation to total assets.
Result 2003: 3,285/9,145 = 36%
Result 2002: 3,570/10,628 = 34%
Recognised revenue less invoicing.
Result 2003: 3,285–2,256 = SEK 1,029m
Result 2002: 5,628–4,431 = SEK 1,197m
OTHER
See section on development properties under accounting and valuation principles.
Result 2003: SEK 3,361m
Result 2002: SEK 3,871m
See section on investment properties under accounting and valuation principles.
Result 2003: 515+776+1,542 = SEK 2,833m
Result 2002: 2,109+594+71 = SEK 2,774m
Surplus values before deferred tax in investment properties
Difference between the market values and book values of investment properties.
Result 2003: 3,205–2,833 = SEK 372m
Result 2002: 3,478–2,774 = SEK 704m
84
DEFINITIONS
BUSINESS UNITS
Operating capital
Total book values of goodwill, investment properties, development properties, participations in tenant-owner co-operatives, receivables from property sales and accounts
receivable minus accounts payable and plus/minus project balances.
Average operating capital is calculated as closing operating capital on five measurement dates (five most recent quarter-ends).
JM Residential Stockholm:
Result 2003: 3,091
Result 2002: 3,496
JM International
Result 2003: 72
Result 2002: 90
JM International
Result 2003: 1,059
Result 2002: 979
Return on operating capital
Operating profit per business unit in relation to average operating capital.
JM Commercial
Result 2003: 358/2,498 = 14.3%
Result 2002: 634/3,776 = 16.8%
JM International
Result 2003: 72/1,059 = 6.8%
Result 2002: 90/979 = 9.2%
Result 2003: 98
Result 2002: 180
JM Commercial
Result 2003: 358
Result 2002: 634
JM Commercial
Result 2003: 2,498
Result 2002: 3,776
Result 2003: 98/961 = 10.2%
Result 2002: 180/1,076 = 16.7%
Result 2003: –22
Result 2002: –160
JM Production
Result 2003: 34
Result 2002: –27
Result 2003: 961
Result 2002: 1,076
Result 2003: –22/3,091 = –0.7%
Result 2002: –160/3,496 = –4.6%
Operating profit
Operating profit in the business units reported before financial items.
Margin per business unit
Operating profit before property sales and write-downs of properties
in relation to net sales.
Result 2003: (–22–22)/3,218 = –1.4%
Result 2002: (–160–9+155)/3,623 = –0.4%
Result 2003: (98+7)/2,092 = 5.0%
Result 2002: (180–4+2)/2,205 = 8.1%
JM Production
Result 2003: 34/701 = 4.9%
Result 2002: –27/1,166 = –2.3%
JM Commercial
Result 2003: (358–374+63)/227 = 20.7%
Result 2002: (634–513+99)/424 = 51.9%
JM International
Result 2003: (72–22)/1,683 = 3.0%
Result 2002: (90+3)/1,530 = 6.1%
85
J M ’ S P R O P E RT I E S
Investment properties and
a selection of development properties at 31 December 2003
The following conditions apply to the schedule of properties:
All commercial rental agreements are index-linked and the
correlation with CPI is between 75 and 100%. In the column
for “breakdown of rental revenue”, the approximate values
are stated since certain leases include several different types
of space. In the “term of lease” column, residential leases are
included in the percentage for 2004.
The selection of development properties has been made
based on the size of the projects and the time aspect - they
have been started or will be started in the next few years.
RENTABLE SPACE 2003, BY CATEGORY
Residential, 49%
Commercial, 27%
Other, 12%
Garage, 6%
Retail, 4%
Hotel, 2%
LEASE STRUCTURE, SHARE OF TOTAL RENTAL REVENUE,
FULLY DEVELOPED PROPERTIES
FINANCIAL OCCUPANCY RATIO
%
100
%
50
80
40
60
30
40
20
20
10
0
0
Properties for further
Properties
Fully developed
development excl.
under construction1)
properties excl.
residential properties
residential properties
1) Applies
Residential
properties
2004
to lettable properties.
2005
2006
2007–
Length of lease
86
INVESTMENT PROPERTIES, FULLY DEVELOPED
No. Property
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Age
Municipality
Address
Descriptions
Year
built/
renovated
Paradiset 23
Stockholm
Nordenflychtsv. 66
Office, warehouse
Spelbomskan 14
Stockholm
Sandåsgatan 2
1970
School
Gjuterihuset 1
Stockholm
Patentgatan 2–12
Office
Lux 7
Stockholm
Primusg. 112–116
Office
Holar 1
Stockholm
Skalholtsgatan 2
Office
Skogskarlen 1
Solna
Pipers väg 2
Office, warehouse
Hornlyktan 3
Stockholm
Karlsborgsvägen 15–19
Residential
Sicklaön 37:9
Nacka
Finnbodavägen 9A–D
Residential, etc.
Kvarngärdet 62:2
Uppsala
Portalgatan 4B
Office
Kvarngärdet 33:1
Uppsala
S:t Persgatan 23, etc.
Office
Töebacken 8
Lund
Åldermansg. 13, etc.
Office
Beitostølen
Beitostølen
Øystre Slidre
Cabins
Rud
Bærum
Bærumsveien 471
Office/warehouse
Rud
Bærum
Bærumsveien 473
Office
Tax/
rent 2003
Tax ass. value
Ground rent
Total rentable Rentable space,
space
breakdown
Hotel
Residential
Office
Other
Retail
Garage
SEKm/SEK000s Sq.m.
133.1
15,162
Sq.m.
0
8,212
620
Sq.m.
0
3,480
2,850
Revenue 2003
Rental revenue
SEKm
12.3
1950
0.0
2,400
0
2,400
0
0
0
0
2.6
1927
2002
17.5
1,489
0
1,489
0
0
0
0
1.6
1908–16
27.5
2,163
0
1,526
0
0
637
0
3.5
1982
71.2
190.0
5,626
0
5,626
0
0
0
0
8.7
1971
118.6
12,140
0
12,140
0
0
0
0
15.3
1943
6.1
41.9
1,008
0
223
0
785
0
0
0.9
1670
1970
25.1
2,019
0
0
0
1,811
208
0
1.3
1988
0.0
1,482
0
1,482
0
0
0
0
1.5
2001
8.5
2,500
0
2,500
0
0
0
0
4.2
1999
27.3
2,845
0
2,845
0
0
0
0
3.9
1990
0.2
90
0
0
0
90
0
0
0.0
1976
1985
5.2
1,444
0
250
0
0
1,194
0
1.5
1978
1986
4.8
1,855
1,855
0
0
0
0
0
2.3
2002
Rental revenue,
breakdown
Hotel/Office
Retail
Residential
Other/Garage
%
86%
5%
0%
9%
100%
0%
0%
Term of
lease
2004
2005
2006
>=2007
%
8%
17%
5%
70%
100%
0%
0%
0%
100%
0%
0%
0%
0%
35%
0%
65%
0%
47%
0%
0%
53%
99%
0%
0%
1%
100%
0%
0%
0%
27%
0%
73%
0%
0%
0%
95%
5%
98%
0%
0%
2%
100%
0%
0%
0%
0%
73%
27%
0%
1%
0%
99%
0%
100%
0%
0%
71%
29%
0%
0%
95%
2%
0%
3%
0%
0%
16%
84%
0%
0%
0%
0%
100%
0%
0%
0%
0%
0%
100%
0%
100%
34%
58%
8%
0%
0%
0%
0%
100%
17%
0%
0%
83%
100%
0%
0%
0%
60%
0%
0%
40%
0%
0%
0%
100%
Possible rental
revenue
Fully rented 2004
Of which, leased
SEKm
18.5
12.5
Major
tenants
Adena Pickos
Solidlås
Fortun Service
2.6
1.7
Stift. Docendo
Discimus
Europaskolan
3.3
2.0
Design AB Propeller
Stiftelsen Inuti
5.5
2.9
Stockholm County
Council
Carrier Refrigeration
8.7
8.7
ÅF-Industriteknik
15.3
15.3
Sveaskog
0.9
0.9
17 residential units
1 commercial unit
1.4
1.4
27 residential units
2 studios
1.6
1.4
Uppsala County Council
Uppsala Municipality
4.6
4.6
Systeam AB
Udac AB
3.9
3.9
JM AB
Trivector AB,
Svenska ESF-rådet,
Lernia Bemanning AB
Used internally by JM
0.0
0.0
1.5
1.5
2.6
2.6
87
INVESTMENT PROPERTIES, FULLY DEVELOPED
No. Property
15
16
17
Age
Municipality
Address
Descriptions
Year
built/
renovated
Sandvika
Kjørbokollen
Kjørbokollen 30
Office
Signalisten 7
Västerås
Signalistgatan 17
1972
2000
Office
Yxlö 3:51
Nynäshamn
Ådudden
Conference facilities
Total
Tax/
rent 2003
Tax ass. value
Ground rent
SEKm/SEK000s
13.5
Total rentable Rentable space,
space
breakdown
Hotel
Residential
Office
Other
Retail
Garage
Sq.m.
3,076
Sq.m.
3,076
0
0
Sq.m.
0
0
0
1992
3.1
686
0
686
0
0
0
0
1984
1993
0.8
427
0
0
0
0
427
0
462.4
231.9
56,412
4,931
39,379
620
2,686
5,946
2,850
Revenue 2003
Rental revenue
SEKm
2.4
Rental revenue,
breakdown
Hotel/Office
Retail
Residential
Other/Garage
%
100%
0%
0%
0%
100%
0%
0%
Term of
lease
2004
2005
2006
>=2007
%
25%
0%
0%
75%
Possible rental
revenue
Fully rented 2004
Of which, leased
SEKm
2.7
2.3
0%
0%
0%
0%
100%
62.0
Major
tenants
89%
1%
3%
7%
14%
32%
8%
46%
73.1
61.7
INVESTMENT PROPERTIES, UNDER CONSTRUCTION
No. Property
Municipality
Address
Description
18
19
20
21
22
Total
Barnängen 4
Stockholm
Barnängsg. 21
Office
Skogskarlen 1, part of
Solna
Björnstigen 85
Office
Västerbotten 19
Lidingö
Stockholmsvägen 18
Office, retail
Belgium
Brussels
Rue de la Science
Office
Belgium
Brussels
Rue d´Idalie
Office
Scheduled occupancy
Total rentable space
Q4 2004
Sq.m.
11,200
Q1 2004
18,600
Q4 2004
4,912
Rentable space, breakdown
Hotel Residential
Office
Other
Retail
Garage
Sq.m.
Sq.m.
0
0
9,300
0
0
1,900
11,376
3,379
0
29.9
450
6,300
18.7
0
0
114
750
5.8
4.5
Under renovation
Sällma, IDTM
Intersport,Vivo
0
372
0
23.2
0.0
Under renovation
0
0
6.7
0.0
New construction
0
0
3,379
0
49 467
Under renovation
FFNS, Nyréns,
Stockholm County
Council
DHL
0
11,004
0
Q3 2005
SEKm
25.0
16.0
Major tenants
11,850
0
2,560
1,488
Q3 2004
Possible rental rev.
Fully rented 2004
Of which, leased
0
38,093
1,488
0
0
936
8,950
90.6
39.2
88
INVESTMENT PROPERTIES, FOR FURTHER DEVELOPMENT
No. Property
23
24
25
26
27
28
29
30
Total
Age
Municipality
Address
Description
Year built/
renovated
Annedal 4
Lund
Annedalsvägen 8
Retail
Töebacken 7
Lund
Åldermansg. 13, etc.
1970
Office, retail
Librobäck 12:2
Uppsala
Klockargatan 4
Office, warehouse
Tågarp 16:15
Burlöv
Testvägen 15A
Warehouse
Kallhäll 1:22
Järfälla
Fabriksvägen
Light industry
Västerbotten 18
Lidingö
Stjärnvägen
Residential, retail
Älta
Nacka
Älta
Residential, centre
Vaxholm
Vaxholm
Residential, office
Retail
Total rentable
space
Rentable space,
breakdown
Hotel
Residential
Office
Other
Retail
Garage
Rental
revenue 2003
Sq.m.
840
Sq.m.
0
0
740
Sq.m.
0
100
0
SEKm
0.6
1979
1989
1999
1,749
0
75
891
0
783
0
1.0
1987
956
0
450
0
0
506
0
0.4
1974
918
0
240
0
0
678
0
0.0
1907
19,500
0
0
0
0
19,500
0
7.1
1972
12,511
0
0
4,735
1,715
1,186
4,875
6.3
1965–93
81,451
0
2,288
1,710
72,974
4,479
0
73.2
1943–94
81,500
0
3,500
2,700
71,000
3,000
1,300
77.0
0
145,689
30,232
6,175
165.5
199,425
6,553
10,776
Rental revenue,
breakdown
Hotel/Office
Retail
Residential
Other/Garage
%
0%
100%
0%
0%
3%
95%
0%
2%
45%
0%
0%
55%
100%
0%
0%
0%
19%
0%
0%
81%
7%
66%
14%
13%
3%
4%
89%
5%
5%
5%
85%
5%
5%
7%
79%
9%
Planned
use
Description
Office
Office
Planned
use
Planning
process
Planning phase
Development period
No.of apts/GFA
approx. 3,000
sq.m.
General plan
2005–2006
approx. 8,000
sq.m.
Detailed plan
2003–2004
Used internally
by JM
Used internally
by JM
Light industry
Development
2003–2008
Densification
2003–2006
Densification
2003–2006
89
No. Country
Property/project
Municipality
Location
31
Sweden
32
Sweden
33
Sweden
Långbro
Stockholm
Älvsjö
Essinge Udde
Stockholm
Lilla Essingen
Bolinder Strand
Järfälla
Fabriksvägen
34
Sweden
Liljeholmskajen
Stockholm
Årstadal/Liljeholmen
35
Sweden
36
Sweden
Hägernäs
Täby
Close to water
Silverdal Bostäder
No. of residential
units in projects
where production
not started
Approx.
550
450
400
Development
period
2001–2008
Sales price 1)
present phase
Average (stake
SEK/sq.m.) Spread
SEKm
Tenure
21.5
20,000
14,000 –24,000
Tenant-owner co-operative
33,700
2001–2009
24,500 – 44,000
4.8
17,000
2000–2010
2,400
2001–2012
500
2001–2009
150
2001–2008
Present
rentable space
Sq.m.
25,000
0 3)
45,000
Rental revenue
2003
11,500 –23,000
23.5
23,700
13,300 –32,700
28,000
19,000 –36,000
27,500
Sollentuna
37
Sweden
Sollentunavägen
Västra Daggkåpan
Sweden
Norra Frösunda 2)
190
2000–2007
Freehold
23,000
2001–2011
19,000
39
Sweden
660
2001–2011
12,000
40
Sweden
360
2002–2010
15,500
41
Sweden
42
Sweden
43
Sweden
44
Sweden
45
Sweden
46
Sweden
47
Sweden
48
Sweden
Gustavsberg
Kojan
Stockholm
Production start 2001
Detailed plan – 500 residential units
Detailed plan
Detailed plan
Detailed plan
Detaljplan
Detailed plan
10,000 –14,000
270
Uppsala
Kungsängen
Rickomberga
Uppsala
Central
Kviberg
Göteborg
By Säveån
Norra Älvstranden
Göteborg
Norra Älvstranden
Dockan
Malmö
Västra Hamnen
Lomma
Lomma
Lomma Hamn
Vallkärratorn
Lund
Stångby
Charlottendal
Värmdö
Detailed plan
13,000 –27,500
Vallentuna
Bällstabergsvägen
Industristaden
Detailed plan
15,000 –30,000
Solna
Frösundavik
Bällstaberg
Production
Detailed plan – 460 residential units
28,000 –31,000
Nacka
38
Planning process
Planning phase
Detailed plan 2002
13,000 –22,000
14,500
11,000 –19,000
Sales not yet started
80
2001–2006
380
2003–2010
400
2002–2007
550
2003–2010
740
2003–2010
300
2002–2010
300
2002–2008
24,000
22,000 –28,000
400
2000–2008
33,000
19,000
14,500 –22,000
19,500
10,000 –30,000
9.0
Freehold
Detailed plan
Detailed plan 2005
Detailed plan
Detailed plan 2003
Detailed plan 2004
Detailed plan –
190 residential units 2004
Detailed plan
Detailed plan 2005
Västra Kungsholmen
Sales prices specified for residential units with tenure as tenant-owner co-operative do not include loans raised in the co-operative. JM’s total revenue comprises both stakes and loans raised in the co-operative.
Full purchase price not yet paid.
3)
At year-end 2003.
1)
2)
90
No. Country
Property/project
Municipality
Location
49
Sweden
50
Norway
51
Norway
52
Norway
Hagaberg
Linköping
Garnisonen
Grefsen Stasjon2)
Oslo
Central/north Oslo
No. of residential
units in projects
where production
not started
Approx.
120
Development
period
2002–2007
Rental revenue
2003
Sales price 1)
present phase
Average (stake
SEK/sq.m.) Spread
SEKm
Tenure
12,300
10,000–15,000
Norway
54
Norway
55
Norway
56
Norway
57
Norway
58
Norway
59
Norway
Planning phase
Production
Detailed plan
Control planning work
2001–2005
350
2001–2012
150
2001–2008
175
2001–2006
28,000
23,000–30,000
Freehold apartments
32,000
130
2002–2010
Freehold apartments
150
2001–2010
20,000
190
2000–2007
Detached houses
Control plan
330
2002–2009
Control plan
750
2003–2015
Control plan 2004
160
2000–2010
Control plan
160
2001–2007
Detached houses
30,000
Control plan
R.Theodore De Cuyper
Woluwé-St Lambert
Central
Nordlyset, Amerika Plads
Copenhagen
113
2001–2006
110
2002–2006
22,000
20,000 –24,000
Freehold apartments
32,000
Havnestad
Copenhagen
By harbour
Sluseholmen 2)
Copenhagen
292
2002–2006
29,500
Detailed plan
315
2003–2008
Detailed plan
Rolvsrud Skog 2)
Lørenskog
Central
Kjørbokollen
Bærum
53
Planning process
Central Sandvika
Hovenga 2)
Porsgrunn
Central
Trulsrudmarka
Bærum
Close to nature
Natlandsterasse
Bergen
Central
Bragenesstrand 2)
Drammen
Central
Strongafjellet 2)
Askøy Bergen
Close to water
Ilebrekke 2)
Tønsberg
Billingstadlia
Control plan
Control plan
27,000–41,000
Control plan
Asker
60
Belgium
61
Denmark
62
Denmark
63
Denmark
Detailed plan
Detailed plan
1)
2)
Sales prices specified for residential units with tenure as tenant-owner co-operative do not include loans raised in the co-operative. JM’s total revenue comprises both stakes and loans raised in the co-operative.
Full purchase price not yet paid.
TA B L E S , I L L U S T R AT I O N S A N D D I A G R A M S
Presenting JM
Key figures
Geographic breakdown of net sales
Net sales and profit after tax
JM 1999–2003
Page
inside cover
inside cover
inside cover
inside cover
CEO’s comments
Cost-cutting programme
Demographic growth and new housing, County of Stockholm
More efficient pre-construction
Example of working drawing
2
3
4
4
Share data
Ownership structure at 31 December 2003
Share price trend 1 January 2003–29 February 2004
Share data
Shareholders at 29 February 2004
Changes in share capital 1998–2003
Stockbrokers who continuously monitor JM
6
6
7
7
7
7
Business concept, goals and strategies
Financial targets
9
Corporate governance
Audit Committee – duties and responsibilities
Compensation Committee – duties and responsibilities
11
11
JM’s core business
Project development phases
Housing projects JM
Sensitivity calculation, land value
Land value during planning process
Property terms
Percentage of completion
Value chain
Cash flow in housing development
16
16
16
17
17
17
18
18
Market overview housing
Trend indicators
Price trend tenant-owned apartments
Breakdown at sales start of JM’s residential units by size band, Sweden
Average price at sales start for JM’s residential units, Sweden
Breakdown at sales start of JM’s residential units by price band, Sweden
JM’s total available building rights portfolio
Number of building rights reported in the balance sheet
Number of residential units at different planning phases, Greater Stockholm
Number of residential units at different planning phases, rest of Sweden
JM’s planned housing in Greater Stockholm – travelling times to
city centre and locations close to water
Major ongoing housing projects in Greater Stockholm
Market value, residential building rights, Greater Stockholm
Market value, residential building rights, rest of Sweden
Market value, residential building rights, international
19
19
20
20
20
21
21
22
22
22
23
24
24
24
Market overview residential and commercial properties
Älta – map
Vaxholm – map
Market rental spread, Stockholm
Rental revenues
JM’s property sales
Property sales in 2003
Market values 2003
25
25
26
27
27
27
27
29
Opportunities and risks
Housing expenditure in relation to disposable income
Sensitivity analysis by cost category, housing development projects
Sensitivity analysis, present value in SEKm for JM’s residential building rights
Sensitivity analysis, present value in SEK/share for JM’s residential building rights
30
31
32
32
91
Financial items
Loan structure
Asset turnover and interest coverage ratio
Interest-bearing net debt and debt/equity ratio
Net financial items, JM Group
Interest-bearing liabilities and average interest rates at 31 December 2003
33
34
34
34
34
Environment
The Group’s quality and environmental policy
Quality and environmental objectives
Environmental impact of project development
Facts environment
Environmental KPIs – follow-up of targets
35
35
36
37
37
Human resources
Number of employees
Absence due to illness
39
39
Business units
Net sales
Operating profit
Summary of results
Key figures
Net sales
Operating profit
Summary of results
Key figures
JM Production
Net sales
Operating profit
Summary of results
Key figures
JM Commercial
Net sales
Operating profit
Summary of results
Key figures
JM International
Net sales
Operating profit
Summary of results
Key figures
41
41
41
41
42
42
42
42
43
43
43
43
44
44
44
44
45
45
45
45
Board of Directors’ report
Consolidated income statement
Net sales by business unit
Operating profit by business unit
Margin by business unit
Number of building rights
Market values of JM’s investment properties
Key figures
46
48
48
48
49
50
51
Income statement
Consolidated net sales by business unit
53
Balance sheet
Consolidated assets
Consolidated capital structure
55
55
JM’s properties
Rentable space 2003, by category
Financial occupancy ratio
Lease structure, share of total rental revenue, fully developed properties
85
85
85
92
N OT I C E O F A N N U A L G E N E R A L M E E T I N G
Welcome to JM’s Annual General Meeting
Shareholders in JM AB are hereby invited to attend the Annual General Meeting
to be held at 4 p.m. on Wednesday, 28 April 2004 at JM’s head office, Telegrafgatan 4, Solna.
NOTIFICATION
Shareholders who wish to participate in the meeting must be entered in the
register of shareholders maintained by VPC AB by Friday, 16 April 2004, and
must have informed the Company of their intention to participate by 4 p.m. on
Friday, 23 April 2004, using one of the following channels:
Mail:
JM AB, SE-169 82 Stockholm
Telephone: +46 8 782 87 00
Fax:
+46 8 782 86 12
E-mail:
[email protected]
Shareholders whose shares are registered in the name of a nominee must, in
order to be entitled to participate in the Meeting, request that their shares be
temporarily registered in their own name by Friday, 16 April 2004.
Admission cards to the Annual General Meeting will not be sent out.
DIVIDEND
The Board of Directors proposes that a dividend be paid to shareholders of
SEK 5 per share. The proposed record date is Monday, 3 May 2004. If the proposal is approved by the Meeting, dividends are expected to be distributed by
VPC on Thursday, 6 May 2004.
FINANCIAL CALENDAR
28 April 2004:
Annual General Meeting
Interim Report for the period January–March 2004
28 April 2004:
18 August 2004: Interim Report for the period January–June 2004
1 November 2004: Interim Report for the period January–September 2004
REPORTS AND FINANCIAL INFORMATION
JM’s financial information – including share data, presentation material
and financial reports, etc., can be accessed at www.jm.se
Reports are available in both Swedish and English and can be ordered
from JM AB, Corporate Communications, telephone +46 8 782 87 00, fax
+46 8 782 86 10 or via www.jm.se
ADDRESSES
HEAD OFFICE AND
SOUTH REGION
Denmark
STOCKHOLM OFFICE
Halmstad
JM Danmark A/S
JM AB
Tel. +46 35 10 63 60, fax +46 35 10 67 45
Tel. +45 33 45 70 00, fax +45 33 45 70 70
SE-169 82 Stockholm
Tel. +46 8 782 87 00, fax +46 8 782 86 00
Helsingborg
www.jm.se
www.jmdanmark.dk
Tel. +46 42 28 98 90, fax +46 42 13 82 24
Norway
Bærumsveien 473,
EAST REGION
Åldermansgatan 13
Postboks 33
Uppsala
N-1306 Bærum
Sylveniusgatan 2
Tel. +46 46 30 00 00, fax +46 46 30 01 38
Tel. +47 67 17 60 00, fax +47 67 17 60 01
KEY FIGURES
SEKm
Net sales
Operating profit
1)
JM 1999–2003
2003
7,787
478
267
2.4
6.60
51)
5.5
2002
8,872
652
368
5.4
8.50
10
6.8
2001
8,642
1,964
1,629
11.8
36.30
14
30.1
Share buy-backs.
Stockholm
53%
Rest of Sweden
26%
Share buy-backs.
Sweden
Belgium
Norway
Sweden
Denmark
Norway
Denmark
SEKm
12,000
SEKm
1,200
10,000
1,000
8,000
800
6,000
600
Bergen
Box 60228, SE-216 09 Malmö
Damsgårdsveien 125
Jönköping
Tel. +46 40 16 98 80, fax +46 40 16 98 98
Postboks 178
N-5847 Bergen
Tel. +47 55 15 53 00, fax +47 55 15 53 01
Tel. +46 36 12 03 40, fax +46 36 12 03 66
AB Borätt
Skien
Sjöängsvägen 17
Lundegate 4C
Tel. +46 13 37 14 00, fax +46 13 37 14 09
Postboks 45
Tel. +46 8 626 66 30, fax +46 8 626 98 20
N-3701 Skien
www.boratt.se
Tel. +47 35 54 33 50, fax +47 35 54 33 60
Seniorgården AB
Tønsberg
Tel. +46 21 81 20 00, fax +46 152 222 59
Sjöängsvägen 17
Ålyveien 19
Västerås
Postboks 2053
Tel. +46 8 626 66 30, fax +46 8 626 98 20
N-3103 Tønsberg
Tel. +46 21 81 20 00, fax +46 21 81 20 10
www.seniorgarden.se
Tel. +47 33 30 03 00, fax +47 33 30 03 33
Örebro
Seniorbo AS
4,000
400
2,000
200
Kjørbokollen 30
Tel. +46 19 10 29 40, fax +46 19 10 29 15
Tel. + 46 8 619 51 00, fax +46 8 618 16 01
N-1337 Sandvika
www.timblad.se
Tel. +47 67 55 19 40, fax +47 67 55 19 41
WEST REGION
www.seniorbo.no
Gothenburg
SUBSIDIARIES ABROAD
Vikevåg Bolig AS
Tel. +46 31 703 57 00, fax +46 31 335 88 70
Belgium
Gamle Forusveien 12
N-4033 Stavanger
Tel: +47 51 81 58 50, fax +47 51 81 58 01
B-1050 Brussels
www.vikevaag.no
Tel. +32 2 646 11 12, fax +32 2 646 96 26
0
0
1999
2000
Net sales, SEKm
Övägen 6, Limhamn
International
21%
Malmö
CENTRAL REGION
Strängnäs
Tel. +46 18 66 03 00, fax +46 18 66 03 10
Belgium
www.byggholt.no
2001
2002
2003
JM AB (publ)
Postal address
Visitors’ address
Telephone
Fax
Internet
SE-169 82 Stockholm
+46 8 782 87 00
+46 8 782 86 00
www.jm.se
2003
-03
PRESENTING JM

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