Cover: Essinge Udde, Stockholm JM AB (publ) Postal address SE-169 82 Stockholm ANNUAL REPORT Visitors’ address Telegrafgatan 4,Solna Telephone +46 8 782 87 00 Fax +46 8 782 86 00 2004 Internet www.jm.se -04 JM ANNUAL REPORT 2004 JM develops new residential areas in attractive locations for people who demand high standards in their living environment. Our work is characterised by a holistic approach and attention to detail – we want to take lasting pride in the homes and residential areas we develop. “Record sales in 2004 and improved earnings meant that we took key steps towards achieving our profitability TURN THE PAGE FOR A PRESENTATION AND SUMMARY OF 2004 target.The past year showed that we are developing homes and residential areas where people want to live.” Johan Skoglund,President and CEO ADDRESSES HEAD OFFICE AND Helsingborg Denmark STOCKHOLM OFFICE Prästgatan 24, SE-252 24 Helsingborg JM Danmark A/S JM AB Tel.+46 42 28 98 90, fax +46 42 13 82 24 Vester Farimagsgade 37 Telegrafgatan 4,Solna DK-1606 Copenhagen V SE-169 82 Stockholm Lund (regional office) Tel.+45 33 45 70 00, fax +45 33 45 70 70 Tel.+46 8 782 87 00, fax +46 8 782 86 00 Åldermansgatan 13 www.jmdanmark.dk www.jm.se Box 21, SE-221 00 Lund KEY FIGURES 2004 HIGHLIGHTS JM is the Nordic region’s leading housing developer.Operations focus on new production of homes Tel.+46 46 30 00 00, fax +46 46 30 01 38 Norway Byggholt AS (head office) SEKm 2004 2003 2002 • Net sales increased by 8% to SEK 8,414m (7,787) due to REGIONAL AND LOCAL OFFICES Malmö Bærumsveien 473 in attractive areas of growth markets,with the main focus on metropolitan areas and university Net sales 8,414 7,787 8,872 production starts for a large number of residential projects EAST REGION Övägen 6, Limhamn Postboks 33 Operating profit 661 478 652 during the year. Profit after financial items 516 267 368 Uppsala (regional office) Box 60228, SE-216 09 Malmö N-1306 Bærum towns in Sweden,Norway,Denmark and Belgium. Sylveniusgatan 2 Tel.+46 40 16 56 00, fax +46 40 16 56 01 Tel.+47 67 17 60 00, fax +47 67 17 60 01 Operating margin1) (%) 7.9 2.4 5.4 • Profit after financial items doubled to SEK 516m (267) due to Earnings per share (SEK) 13.40 6.60 8.50 a generally favourable market for housing and completion of Box 1334, SE-751 43 Uppsala www.byggholt.no Tel.+46 18 66 03 00, fax +46 18 66 03 10 JM is also involved in project development of residential portfolios and conducts limited project Dividend per share (SEK) 72) 510efficiency enhancements. Profit after tax for the year increased Return on equity (%) 11.1 5.5 6.8 to SEK 376m (187). SUBSIDIARIES IN SWEDEN Bergen CENTRAL REGION AB Borätt Damsgårdsveien 125 development of commercial premises,primarily in the Greater Stockholm area. 1)2002–2003: project development margin. 2)Board proposal. • Property sales of SEK 1,018m (2,219) provided capital gains of Jönköping Sjöängsvägen 17 Postboks 178 SEK 164m (411). Herkulesvägen 6, SE-553 03 Jönköping Box 956, SE-191 29 Sollentuna N-5847 Bergen JM AB is a public limited company and is listed on the Stockholm Stock Exchange A list. Tel.+46 36 12 03 40, fax +46 36 12 03 66 Tel.+46 8 626 66 30, fax +46 8 626 98 20 Tel.+47 55 15 53 00, fax +47 55 15 53 01 • Return on equity increased to 11% (6). Earnings per share www.boratt.se amounted to SEK 13 (7). Linköping (regional office) Skien NET SALES AND PROFIT AFTER TAX Brigadgatan 24, SE-581 31 Linköping Seniorgården AB Lundegate 4C SEKm SEKm • The interest-bearing net debt decreased by SEK 2 billion to 12,000 1,200 SEK 0.6 billion.The Group’s cash flows improved substantially Tel.+46 13 37 14 00, fax +46 13 37 14 09 Sjöängsvägen 17 Postboks 45 and amounted to SEK 2.2 billion. Box 956, SE-191 29 Sollentuna N-3701 Skien 10,000 1,000 Strängnäs Tel.+46 8 626 66 30, fax +46 8 626 98 20 Tel.+47 35 54 33 50, fax +47 35 54 33 60 8,000 800 • The Board of Directors proposes a dividend of SEK 7 per Trädgårdsgatan 15, SE-645 31 Strängnäs www.seniorgarden.se share (5) as well as distribution of approximately SEK 1.0 Tel.+46 152 104 69, fax +46 152 222 59 Stavanger 6,000 600 billion through redemption of shares corresponding to a total JM Entreprenad AB Gamle Forusveien 14 GEOGRAPHIC BREAKDOWN OF NET SALES 4,000 400 of approximately SEK 43 per existing share. Västerås Telegrafgatan 4,Solna N-4033 Stavanger Kopparbergsvägen 8, SE-722 13 Västerås SE-169 82 Stockholm Tel.+47 40 00 15 15, fax +47 51 57 57 13 2,000 200 Tel.+46 21 81 20 00, fax +46 21 81 20 10 Tel.+46 8 782 87 00, fax +46 8 782 86 01 0 0 www.jm-entreprenad.se Tønsberg 2000 2001 2002 2003 2004 JM 2000–2003 Örebro Ålveien 19 Stockholm,52% Net sales Profit after tax Vasastrand 11, SE-703 54 Örebro O.Timblad Målerifirma AB Postboks 2053 2000 Focus on project development. Tel.+46 19 10 29 40, fax +46 19 10 29 15 Strandbergsgatan 53, SE-112 51 Stockholm N-3103 Tønsberg Major property sales in Stockholm. Tel.+ 46 8 619 51 00, fax +46 8 618 16 01 Tel.+47 33 30 03 00, fax +47 33 30 03 33 WEST REGION www.timblad.se 2001 Continued major property sales. EARNINGS AND DIVIDEND PER SHARE Gothenburg Seniorbo AS Share buy-backs. Sweden SEK Gårdatorget 2, SE-412 50 Gothenburg Kjørbokollen 30 Rest of Sweden,27% Norway 40 Tel.+46 31 703 57 00, fax +46 31 335 88 70 SUBSIDIARIES ABROAD N-1337 Sandvika 35 2002 Continued strategic reduction of property portfolio. Belgium Tel.+47 67 55 19 40, fax +47 67 55 19 41 30 Continued share buy-backs. SOUTH REGION JM Construction S.A. www.seniorbo.no 25 Problems in Stockholm projects. Halmstad Avenue Louise 287, Bte 1 20 Brogatan 1, SE-302 43 Halmstad B-1050 Brussels 2003 Focus on routines for improved control and oversight. 15 Tel.+46 35 10 63 60, fax +46 35 10 67 45 Tel.+32 2 646 11 12, fax +32 2 646 96 26 Programme for group-wide pre-construction routines. International,21% Denmark 10 www.jmconstruction.be Belgium 5 0 2000 2001 2002 2003 2004 Earnings per share Dividend per share Production: JM and Inte Rio Text: JM, BBD Corporate Communications and Newsec Translation: Morton Communications Photography: Helena Bergengren,Torbjörn Bergkvist,Yvan Glavie, Richard Hammarskiöld, Staffan Johansson, Johan Olsson, Per Ranung, Lars Strandberg and Svenska Aerobilder Illustrations: Leif Åbjörnsson and ÅWL Arkitekter Repro and printing: silkorekord, Stockholm 2005 JM AB (publ) has its registered office in Stockholm Paper: Incada Silk 220g (cover), Scandia 2000 130g (inside pages) and Silverblade Art 170g (JM in pictures and Company reg.no.556045-2103 Essinge Udde:A new district is born) Cover: Essinge Udde, Stockholm CONTENTS 1 COMPANY PRESENTATION 2004 HIGHLIGHTS 2 CEO’S COMMENTS 4 SHARE DATA 6 BUSINESS CONCEPT,GOALS AND STRATEGIES P1– P8 JM IN PICTURES 10 JM’S CORE BUSINESS 12 MARKET OVERVIEW 16 JM’S RESIDENTIAL BUILDING RIGHTS 18 JM’S PROJECT PROPERTIES 21 COMPETENCE AND RESOURCES 24 RISKS AND RISK MANAGEMENT 28 SOCIAL RESPONSIBILITY 33 ESSINGE UDDE: A NEW DISTRICT IS BORN 39 BUSINESS SEGMENTS JM develops new residential areas in attractive locations 44 BOARD OF DIRECTORS’ REPORT 50 INCOME STATEMENT WITH COMMENTS 52 BALANCE SHEET WITH COMMENTS for people who demand high standards in their living 56 CASH FLOW STATEMENT WITH COMMENTS 58 CHANGES IN SHAREHOLDERS’ EQUITY 59 ACCOUNTING AND VALUATION PRINCIPLES environment. Our work is characterised by a holistic 62 NOTES TO THE FINANCIAL STATEMENTS 80 PROPOSED DISPOSITION OF EARNINGS approach and attention to detail – we want to take 81 AUDIT REPORT 82 CORPORATE GOVERNANCE 85 BOARD OF DIRECTORS, AUDITORS AND SENIOR EXECUTIVES lasting pride in the homes and residential areas we 88 FIVE-YEAR SUMMARY – GROUP 90 QUARTERLY OVERVIEW – GROUP 91 QUARTERLY OVERVIEW – BUSINESS SEGMENTS develop. 92 2004 INCOME STATEMENT AND BALANCE SHEET ACCORDING TO IFRS 93 JM’S PROPERTIES 99 DEFINITIONS TURN THE PAGE FOR A PRESENTATION AND SUMMARY OF 2004 100 NOTICE OF ANNUAL GENERAL MEETING 100 FINANCIAL CALENDAR jm annual report 2004 2 CEO’S COMMENTS CEO’S COMMENTS 3 recipe for success is to give each new residential area its own SUSTAINABLE DEVELOPMENT Housing sales at record levels identity and a strong brand at an early stage. Some examples of Sustainability issues are firmly established at JM. We were, this are Liljeholmskajen and Lilla Essingen in Stockholm, the for example, the first construction company in Europe to Dockan area in Malmö, Industristaden in Uppsala, Lomma introduce an environmental policy. In 2004 we introduced Hamn just north of Malmö, the station area in Grefsen in Oslo new and very extensive requirements on good heat insula- For the first time in JM’s history more than 4,000 residen- and the Islands Brygge project in Copenhagen. All of these tion for the windows that we install in order to reduce tial units were sold in one year. Continued low interest have been very well received by our customers. We often energy consumption in the residential units. We have sharp- rates and housing shortages in many places contributed to involve our customers at the planning stage so that the dis- ened our controls of environmentally hazardous substances the high demand,but above all we have had our customers tricts can be adapted to meet their needs as much as possible.