Jm Ab · OMXSTO:JM
Jm Ab — FY2008 Earnings Presentation
29 slides from Jm Ab's earnings presentation, Feb 17, 2009
Slide 1: Year-end Report 2008
Year-end Report 2008
Slide 2: JM Group
JM Group Income: SEK 12.2 billion Total assets: SEK 10.1 billion No. of building rights: 31,000 11 % No. of employees: 2,365 83 % Market cap: SEK 3.7 billion Finland Norway Sweden 5% 1% Denmark Belgium 2009-02-17 081024/ytf 2
Slide 3: Group Summary
Group Summary January – December 2008 • Income decreased by 4 percent to SEK 12,229m (12,731) • Earnings before tax decreased to SEK 1,052m (2,297) including write-downs of SEK 320m (0) for development properties • Property sales of SEK 748m (653) provided capital gains of SEK 73m (182) 2009-02-17 0
Slide 4: Group Summary
Group Summary January – December 2008 • Number of residential units sold 1,871 (3,880) • Number of housing starts 1,829 (4,065) • Earnings per share was SEK 9.50 (18.30) • Return on equity was 22.9 percent (44.5) • Cash flow from operations totaled SEK 101m (1,826) 2009-02-17 081024/ytf 4
Slide 5: No dividend proposed for 2008
No dividend proposed for 2008 • JM's capital allocation model indicates a significant surplus of risk capital that continues to confirm a good financial position • Despite strong balance sheet and good earning capacity over the long term, the Board of Directors propose 0 SEK (5.50) per share in divi
Slide 6: Cautious demand – declining production
Cautious demand – declining production • Demand for newly built homes has weakened in all of JM's main markets during the year • Low sales for residential units in the form of signed contracts in all of JM's main markets • The percentage of sold or reserved residential units in relation to on- going
Slide 7: Prices dropped on the existing home market
Prices dropped on the existing home market Tenant-owned apartment prices in cities, second-hand market 1997 – 2008 SEK/sq.m. 60000 50000 40000 30000 20000 10000 0 97 98 99 00 01 02 03 04 05 06 07 08 Q Q3 Q Q3 Q Q3 Q Q3 Q Q3 Q Q3 Q Q3 Q Q3 Q Q3 Q Q3 Q Q3 3 Q 19 19 19 20 20 20 20 20 20 20 20 20 1 1 1
Slide 8: Low home sales figures in all markets
Low home sales figures in all markets No. of units sold 2 000 1,907 1,631 1 600 640 1,502 1,412 360 330 1 200 1,061 393 97 747 800 564 131 471 137 400 73 246 36 0 2006 2007 2008 2006 2007 2008 2006 2007 2008 JM Residential Stockholm JM Residential Sweden JM International Q1-Q3 Q4 2009-02-17 081024/y
Slide 9: Low level of housing starts in all markets
Low level of housing starts in all markets No. of housing starts 2 000 1,770 1,820 461 1,566 1,515 1 500 524 417 448 973 1 000 50 796 730 597 306 138 500 237 259 59 0 2006 2007 2008 2006 2007 2008 2006 2007 2008 JM Residential Stockholm JM Residential Sweden JM International Q1-Q3 Q4 2009-02-17 0810
Slide 10: Declining production
Declining production 5,100 residential units in ongoing production Number 3 500 3 000 2 500 2 000 1 500 1 000 500 0 dec-02 dec-03 dec-04 dec-05 dec-06 dec-07 dec-08 JM Residential Stockholm JM Residential Sweden JM International 2009-02-17 081024/ytf 10
Slide 11: JM Residential Stockholm
JM Residential Stockholm January – December SEKm 2008 2007 Income 5,317 5,217 Operating profit 920 1,236 Operating margin (%) 17.3 23.7 Number of available 12,200 12,300 building rights • Weakening demand and sales • Lower prices - negative revaluation effects • Decreased margin • Write-down of Dalé
Slide 12: JM Residential Sweden
JM Residential Sweden January – December SEKm 2008 2007 Income 3,263 4,011 Operating profit 197 685 Operating margin (%) 6.0 17.1 Number of available 11,000 10,700 building rights • Weakening demand and sales • Lower prices - negative revaluation effects • Costs for reorganization and termination of
Slide 13: JM International
JM International January – December SEKm 2008 2007 Income 2,058 2,685 Operating profit -176 178 Operating margin (%) -8.6 6.6 Number of available building rights 7,800 8,000 • Weakening demand and sales • Lower prices - negative revaluation effects • Costs for reorganization and termination of proje
Slide 14: JM Property Development
JM Property Development January – December SEKm 2008 2007 Income 213 91 Operating profit 75 162 • Gains from property sales SEK 73m (182) • Sale of entire property portfolio in Älta, Nacka municipality, for SEK 477m with gains of SEK 33m • Production ongoing for JM’s new head office in Frösunda • Pr
Slide 15: JM Production
JM Production January – December SEKm 2008 2007 1) Income 2,008 1,296 Operating profit 124 89 Operating margin (%) 6.2 6.9 1) Of which internal 630 569 • Demand for contracting operations in the Stockholm market is still robust • Stable margin • Orders continue to be strong 2009-02-17 081024/ytf 15
Slide 16: Available building rights portfolio
Available building rights portfolio Region No. of building rights Stockholm 12,200 Malmö/Lund 3,700 Gothenburg 2,700 Uppsala 2,850 Rest of Sweden 1,750 Norway 5,750 Copenhagen 900 Helsinki 300 Belgium 850 Total approximately 31,000 2009-02-17 081024/ytf 16
Slide 17: Change in development properties
Change in development properties Building rights in Balance Sheet SEKm 2005 2006 2007 2008 Opening balance 2,971 2,925 4,348 5,282 Plus 1,337 2,718 2,130 1,571 1) Minus -1,383 -1,295 -1,196 -1,233 Closing balance 2,925 4,348 5,282 5,620 1) Including write-down of SEK 320m 2009-02-17 081024/ytf 17
Slide 18: 11 years production in Balance Sheet
11 years production in Balance Sheet Low production rate - over invested building rights portfolio 1) No. building rights In Balance Production Average 2) 3) 2008-12-31 Sheet starts period, years JM Residential Stockholm 8,200 973 8.4 JM Residential Sweden 6,800 597 11.3 JM International 5,100 259 1
Slide 19: Valuation of development properties
Valuation of development properties 2008-12-31 Book Market Surplus SEKm value value value JM Residential Stockholm 2,432 3,451 1,019 JM Residential Sweden 1,546 1,848 302 JM International 1,562 1,961 399 JM Property Development 80 91 11 Total 5,620 7,351 1,731 2009-02-17 081024/ytf 19
Slide 20: Market value project properties
Market value project properties 2008-12-31 Book Market Surplus SEKm value value value Residential units (tenancy rights) 137 139 2 Properties under development 410 438 28 Fully developed 67 92 25 commercial properties Total 614 669 55 2009-02-17 081024/ytf 20
Slide 21: Strong cash flow Q4 2008
Strong cash flow Q4 2008 Q4 Q1 Q2 Q3 Q4 Cash Flow Statement, SEKm 2007 2008 2008 2008 2008 1) 2) Cash flow from operating activities 745 -235 290 -196 242 Cash flow from investment activities 1 -7 -13 37 -21 Cash flow from financing activities 49 -19 -1,414 72 306 Total cash flow for the quarter 795
Slide 22: Unsold residential units in the Balance Sheet
Unsold residential units in the Balance Sheet SEKm 180 160 140 120 100 80 60 40 20 0 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 2009-02-17 081024/ytf 22
Slide 23: Good financial position and liquidity
Good financial position and liquidity Net interest-bearing liability/receivable SEKm times 3 000 3 • Equity/Assets ratio is 32 percent, netting of deferred payments 2 000 2 implies 36 percent • Available liquidity was SEK 1 000 1 3,911m (4,861) of which cash and cash equivalents SEK 0 0 1,111m (2,06
Slide 24: Net financial items
Net financial items January – December 2008, SEKm Financial income 88 Interest income 50 Currency revaluation 38 Financial expenses -119 Interest expenses -54 Interest expense pensions -28 Currency revaluation -37 Net financial items -31 2009-02-17 081024/ytf 24
Slide 25: Components of profit/loss
Components of profit/loss Percentage of completion method Cost-based Revaluation Sales effect effect SEK 190m + effect SEK -90m + SEK 48m Always positive Usually positive Positive/negative Recognized expenses x Changed assessment about forecast Change in the relationship contribution margin (for tot
Slide 26: Revaluation effects – housing business
Revaluation effects – housing business SEKm Q1 2008 Q2 2008 Q3 2008 Q4 2008 Group 305 303 89 -90 Interna Business segments Stockholm Sweden -tional Total Q4 2008 142 -95 -137 -90 The rapid drop in demand had a substantial negative revaluation effect mainly attributable to expected lower price levels
Slide 27: Consolidated Balance Sheet
Consolidated Balance Sheet SEKm 2008-12-31 2007-12-31 Assets Project properties 614 790 Development properties 5,620 5,282 Other assets 3,821 3,844 Total 10,055 9,916 Shareholders' equity and liabilities Shareholders' equity 3,241 3,893 Non-current liabilities 2,164 2,552 Current liabilities 4,650 3
Slide 28: Measures to deal with the worsened economy
Measures to deal with the worsened economy • Lay off of a large number of employees • Giving priority to caring for the balance sheet and freeing cash flow - restrictive regarding acquisitions • Building rights are also being used to build rental housing for external parties • A security package was
Slide 29: Declining economy
Declining economy • Customer-focused – strong brand • 31,000 residential building rights in attractive locations – high quality and good distribution • Declining economy and weakening demand – fundamentally favorable prospects in the long term • Industrialized process and attractive homes • Strong b