The Supreme Administrative Court rejects JM's application for leave to appeal

In November 2022, the Administrative Court of Appeal announced its ruling that JM must consolidate tenant-owner associations in current production in its consolidated financial statements according to IFRS. JM chose to apply for leave to appeal with the Supreme Administrative Court. The decision by the Supreme Administrative Court to not grant leave to appeal thus closes the matter, and the ruling by the Administrative Court of Appeal becomes legally binding. Under this ruling, the tenant-owner associations formed through JM's residential development must be consolidated in JM's consolidated financial statements according to IFRS.

Changed accounting principle
As of fiscal year 2023, JM, according to IFRS, consolidates ongoing projects with Swedish tenant-owner associations during the production phase up until the point in time that the home buyers of the residential units take over occupancy. Accordingly, JM recognizes the projects in the balance sheet as work in progress and interest-bearing liabilities. Revenue and expenses for the projects are recognized as the home buyers take over occupancy of the residential units. The changed accounting principle entails that JM will recognize all residential projects that are developed in-house in Sweden, Norway and Finland according to the completed contract method. Revenue from residential development through tenant-owner associations in Sweden was previously recognized over time.

To provide a correct overview of JM's earnings trend over time with regard to residential development through tenant-owner associations, JM will continue to present segment reporting where revenue in these projects is recognized in accordance with the percentage of completion method. The reporting of financial key ratios will also take these conditions into consideration, which is in line with JM's internal governance model. Neither JM's risk profile nor existing financing agreements are impacted by this accounting change.

Restated tables
The changed accounting principle for legal consolidation according to IFRS has been applied retroactively from January 1, 2022. The tables attached present the restatement of the new accounting principles for segment reporting and legal consolidation per quarter in 2022 and per opening balance on January 1, 2023.

CONDENSED CONSOLIDATED Reported IFRS Effect of restatement Restated IFRS
INCOME STATEMENT 2022,
SEK M
Revenue 15,747 276 16,023
Production and operating −12,607 −317 −12,925
costs
Gross profit 3,140 −41 3,098
Selling and −1,108 −1,108
administrative expenses
Gains/losses on the sale −11 −11
of property, etc
Operating profit 2,021 −41 1,980
Financial income and −89 −89
expenses
Profit before tax 1,933 −41 1,891
Taxes −404 9 −395
Profit for the period 1,529 −32 1,496

CONDENSED CONSOLIDATED Reported Effect of restatement Restated IFRS
BALANCE SHEET 12/31/2022, IFRS
SEK M
ASSETS
Non-current assets 565 565
Project properties 932 932
Development properties 8,465 8,465
Utilization of site 513 513
leasehold rights
Participations in tenant 308 308
-owners associations, etc.
Work in progress 5,095 10,507 15,602
Current receivables 6,664 −2,897 3,767
Cash and cash equivalents 1,840 311 2,151
Total current assets 23,818 7,921 31,739
Total assets 24,383 7,921 32,304
Equity and liabilities
Equity 8,725 −684 8,041
Non-current interest 892 892
-bearing liabilities
Other non-current 414 414
liabilities
Non-current provisions 2,646 −177 2,468
Total non-current 3,952 −177 3,774
liabilities
Current interest-bearing 7,593 7,887 15,480
liabilities
Other current liabilities 3,992 895 4,887
Current provisions 122 122
Total current liabilities 11,707 8,782 20,489
Total equity and 24,383 7,921 32,304
liabilities

Key figures 2022 Reported IFRS Effect of restatement Restated IFRS
Operating margin, % 12.8 −0.4 12.4
Debt/equity ratio, multiple 0.9 1.0 1.9
Equity/assets ratio, % 36 −11 25
Earnings per share, SEK 22.70 −0.50 22.20

Q. 4 Q. 3 Q. 2 Q. 1
2022 2022 2022 2022
Income Repor Effect Restated Repor Effect Re Repor Effect Re Repor Effect Re
statement, SEK -ted of IFRS -ted of -stated -ted of -stated -ted of -stated
M IFRS restat IFRS restat IFRS restat IFRS restat
-ement -ement -ement -ement
IFRS IFRS IFRS
Revenue 5,240 1,784 7,024 3,004 -416 2,589 3,668 -527 3,140 3,835 −565 3,270
Production and -4,134 -1,628 -5,762 -2,413 453 -1,961 -2,932 464 -2,467 −3,128 394 −2,734
operating
costs
Gross profit 1,106 156 1,261 591 37 628 736 -63 673 707 −171 536
Selling and -288 -288 -243 -243 -320 -320 −258 −258
administrative
expenses
Gains/losses -3 -3 -9 -9 -6 -6 7 7
on the
sale of
property,
etc.
Operating 816 156 970 339 37 376 410 -63 347 457 −171 286
profit
Financial -26 -26 -21 -21 -20 -20 −21 −21
income and
expenses
Profit before 789 156 944 318 37 355 390 -63 327 436 −171 265
tax
Taxes -160 -32 -192 -72 -7 -79 -81 12 -68 −91 36 −56
Profit for the 630 124 753 246 30 276 309 -51 259 344 −135 209
period
Earnings per 9.60 1.90 11.50 3.70 0.40 4.10 4.50 −0.70 3.80 5.00 −2.00 3.00
share,
SEK

12/31/2 09/30/2 06/30/2 03/31/2

0 0 0 0
22 22 22 22
BALANCE SHEET, Repor Effect Restat Repor Effect Restat Repor Effect Re Repor Effect Re
SEK M -ted of -ed -ted of -ed -ted of -stated -ted of -stated
IFRS restat IFRS IFRS restat IFRS IFRS restat IFRS restat
-ement -ement -ement -ement
IFRS IFRS
ASSETS
Non-current 565 565 545 545 545 545 599 599
assets
Project 932 932 1,369 1,369 1,225 1,225 896 896
properties
Development 8,465 8,465 8,607 8,607 8,336 8,336 7,995 7,995
properties
Utilization of 513 513 626 626 356 356 287 287
site
leasehold
rights
Participations 308 308 339 339 389 389 330 330
in tenant
-owners
associations,
etc.
Work in 5,095 10,507 15,602 4,946 10,187 15,133 4,277 9,557 13,834 4,175 8,996 13,171
progress
Current 6,664 −2,897 3,767 6,216 −3,213 3,003 6,517 −3,064 3,453 6,004 −2,851 3,153
receivables
Cash and cash 1,840 311 2,151 1,902 284 2,186 2,481 276 2,757 4,115 608 4,723
equivalents
Total current 23,818 7,921 31,739 24,004 7,258 31,263 23,582 6,769 30,350 23,801 6,753 30,555
assets
Total assets 24,383 7,921 32,304 24,549 7,258 31,807 24,127 6,769 30,896 24,400 6,753 31,153
Equity and
liabilities
Equity 8,725 −684 8,041 8,080 -806 7,274 7,947 −836 7,111 8,662 -786 7,876
Non-current 892 892 1,016 1,016 744 744 636 636
interest
-bearing
liabilities
Other non 414 414 374 374 373 373 374 374
-current
liabilities
Non-current 2,646 −177 2,468 2,783 −209 2,574 2,972 −217 2,755 3,007 −204 2,803
provisions
Total non 3,952 −177 3,774 4,173 −209 3,964 4,089 −217 3,872 4,017 −204 3,813
-current
liabilities
Current 7,593 7,887 15,480 7,765 6,876 14,641 7,767 6,625 14,392 7,573 7,150 14,723
interest
-bearing
liabilities
Other current 3,992 895 4,887 4,394 1,397 5,791 4,182 1,197 5,379 4,003 594 4,597
liabilities
Current 122 122 137 137 142 142 144 144
provisions
Total current 11,707 8,782 20,489 12,295 8,273 20,569 12,091 7,822 19,913 11,721 7,744 19,464
liabilities
Total equity 24,383 7,921 32,304 24,549 7,258 31,807 24,127 6,769 30,896 24,400 6,753 31,153
and
liabilities