Slide 1: 2015 – A year of large-scale start-ups
2015 – A year of large-scale start-ups Interim report 1-3/2015 Juha Pekka Ojala, CEO Ilkka Pitkänen, CFO 1
Slide 2: Three pillars of business operations
Three pillars of business operations Operations in Finland 91% of Group revenue International operations Business premises Housing 9% of Group revenue 73% * 27% * • Offices and retail • Owner-occupied ● Shopping centres facilities housing ● Shopping centre • Hotels and specialised • Rental housing m
Slide 3: Focus on measures to increase profitability
Focus on measures to increase profitability Direct effect on profitability Long-term effect Project margin % Start-up of shopping centre projects Ownership of developer- Start-up of contracted shopping centre developer- projects (e.g. Pearl Plaza, Okhta contracted projects Mall, Promenade, REDI) ÞRe
Slide 4: 1-3/2015 – Focusing of operations has yielded results
1-3/2015 – Focusing of operations has yielded results Pearl Plaza, Footfall grew 19% and sales 40% compared with Q1/14. St. Petersburg + Visitors are buying more at one go. 99% of premises opened 8/2013 leased. Okhta Mall, Construction proceeding according to plan. Most of St. Petersburg + owners’ i
Slide 5: SRV Group
SRV Group 1-3/2015 5
Slide 6: Key figures
KEY FIGURES 1-3 / Start-ups of large-scale projects increased 2015 order backlog REDI and Niittykumpu Metro Centre Start-up of REDI shopping Revenue Result before taxes Order backlog centre and parking facility €172.9 €3.3 million €1179.8 million (+ 54.0%) million (+ 24.9%) (+ 34.0%) Operating profi
Slide 7: Group order backlog at new record level, revenue rose
1-3 / Group order backlog at new record level, 2015 revenue rose Order backlog • The record level of the Group’s order backlog record is €1179.8 due to new contractor agreements, of which the largest are the REDI shopping centre and parking facility and million Niittykumpu Metro Centre (+ 34.0%) Rev
Slide 8: SRV Group
Meur . ., Revenue - Operating profit 10 8 6 4 2 ty) Qi/i4 2/14. 3/14. 4/14 Qs Qi/i4 2/14. 3/14 4/14 Q/5 Order backlog 1180 meu Profit before taxes 1047 944 7 6 5 4 3 2 1 0 Qi/14 Q2/14 Q3/14 04/14 Qi/i5s Qi/14 Q2/14 03/14 04/14 Qi/i5 Sold order backlog l= Unsold order backlog
Slide 9: Number of new contracts grew
Number of new contracts grew 9
Slide 10: Order backlog broke records
Order backlog broke records 10
Slide 11: Operations in Finland
Operations in Finland 1-3/2015 11
Slide 12: Operations in Finland: REDI increased revenue
1-3 / 2015 Operations in Finland: REDI increased revenue • Revenue was increased by the start-up of the REDI Revenue shopping centre and parking facility, as excavation and other work done before the official start-up €157.1 decision was recognised in revenue according to million percentage of compl
Slide 13: Operations in Finland
Operations in Finland Finnish operations Meur Meur Revenue Operating profit 250 12 200 10 8 150 6 100 197 10,2 176 157 4 131 6,6 7,0 6,2 50 124 2 3,3 0 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Meur Order backlog 1 200 1063 1 000 920 262 778 800 721 287 723 600 244 272 273 400 80
Slide 14: Operations in Finland: revenue (12-month moving) and order backlog
Operations in Finland: revenue (12-month moving) and order backlog Meur 1 200 1 100 1063 1 000 920 900 Net sales 778 (LTM) 800 721 723 700 600 500 Order 400 backlog 300 608 628 661 564 566 200 100 0 Q2/13 - Q1/14 Q3/13 - Q2/14 Q4/13 - Q3/14 Q1-Q4/14 Q2/14 - Q1/15 14
Slide 15: Operations in Finland: operating profit (12-month moving)
Operations in Finland: operating profit (12-month moving) Meur 30 6% 5,1 % 25 4,8 % 5% 4,6 % 4,4 % Operating 4,0 % profit (LTM) 20 4% 15 29,0 30,0 3% 27,8 26,7 24,6 10 2% Operating profit, % 5 1% 0 0% Q2/13 - Q3/13 - Q4/13 - Q1-Q4/14 Q2/14 - Q1/14 Q2/14 Q3/14 Q1/15 15
Slide 16: Housing production under construction grew slightly
Housing production under construction grew slightly 16
Slide 17: Total sales of housing units contracted
Total sales of housing units contracted 17
Slide 18: International operations
International operations 1-3/2015 18
Slide 19: International operations: Russian projects proceeding according to plan
1-3 / 2015 International operations: Russian projects proceeding according to plan • Most of revenue generated by construction of Revenue Okhta Mall and Daily shopping centres €15.9 million (+ 12.0%) • Improvement of operating profit was mainly due to improved results of associated companies and joi
Slide 20: International Operations
International Operations Meur Meur Revenue Operating profit 20 2,0 1,5 15 1,0 1,8 10 0,5 18 0,7 14 16 0,2 12 13 0,0 5 -0,6 -0,4 -0,5 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 0 -1,0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Meur Order backlog 200 150 100 159 166 127 137 50 117 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 20
Slide 21: Financing structure of SRV's main projects in Russia
Financing structure of SRV’s main projects in Russia SRV’s SRV’s Project’s Status NOI target additional Other ownership bank loan investment SRV’s investment €24 million. Phase 2 commercial concept Pearl Plaza, ready, 99% €18m 50% €0m €95m planning completed and St. Petersburg leased construction pl
Slide 22: Projects
: i Nn 2 >. Projects Eléméasi rakentaja
Slide 23: Illustration: estimated realization of on-going projects
Illustration: estimated realization of on-going projects Strategy period 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Etmia 1&2 Pearl Plaza 1 Pearl Plaza 2 (no decision) Okhta Mall Daily REDI shopping centre and parking facility Construction and letting Stabilization of letting business (c. 2-4
Slide 24: Construction of REDI shopping centre and parking facility has begun
Construction of REDI shopping centre and parking facility has begun SRV 40%, SRV signed Ilmarinen contract 30%, agreements OP-Pohjola totalling 15%, €390 LähiTapiola million 15% Agreement signed on Opening in €225 2018 million project credit
Slide 25: REDI – well over a billion euro revenue
REDI – well over a billion euro revenue during less than 10 years • In the centre of the city, yet by the sea, close to nature • In addition to own metro station, REDI can be reached by tram, bus, car, walking, cycling and even by boat • Inner city’s largest shopping centre, with nearly 200 shops an
Slide 26: Niittykumpu Metro Centre Complex
Niittykumpu Metro Centre Complex 24- and 12- Commercial storey centre was residential sold to OP- towers ready Vuokratuotto in 2017 and special 2018 investment fund Commercial centre ready in 2016
Slide 27: Other significant projects
Other significant projects HEALTH CARE - New Children’s Hospital, Helsinki - TAYS Central Hospital yard, Tampere - Kalasatama’s TeHyKe Health Centre, Helsinki - Jorvi Hospital additional emergency unit, Espoo - HUSLAB, Helsinki EDUCATION - University of Technology campus arena, Tampere - Opinmäki Ca
Slide 28: Shopping Centres in St Petersburg and Moscow
Shopping Centres in St Petersburg and Moscow Award: Russia’s Best Shopping Centre in its Pearl Plaza, St Petersburg size category - SRV’s ownership 50% - Opened in August 2013 - Footfall and sales have grown continually - 99% leased - Total investment €150 million Okhta Mall, St Petersburg - SRV’s o
Slide 29: Pearl Plaza's progress exceeds market trends in Russia
Pearl Plaza’s progress exceeds market trends in Russia REX Marketing Award 2015 RCSC Award 2015 “Best Shopping center holiday “Best average size acting event” shopping mall” 29
Slide 30: Outlook for construction
Outlook for construction • Total volume of construction projected to fall by 0.5% in 2015 • Housing construction still slightly subdued • Amount of empty office space high, wholesale and retail trade’s need for additional premises low • Start-ups of business premises other than offices projected to
Slide 31: Result outlook for 2015
Result outlook for 2015 Thanks to the REDI shopping centre start-up, the Group's full-year revenue for 2015 is expected to increase on 2014 (EUR 684.4 million 1–12/2014). m² The result before taxes is forecast to be in the range of EUR 10–20 million (EUR 18.5 million 1–12/2014).
Slide 32: Appendices
Appendices 32
Slide 33: SRV Group
1-3 / 2015 SRV Group Change Meur Change % 1-3/ 2015 1-3/ 2014 1-3/15 vs 1-3/14 1-3/15 vs 1-3/14 1-12/ 2014 Revenue, MEUR 172,9 138,5 +34,4 +24,9% 684,4 Operating Profit, MEUR 2,5 4,4 -1,9 -42,8% 24,9 Operating Profit, % 1,5% 3,2% 3,6% Net financial items, MEUR 0,8 -2,3 +3,1 -6,4 Profit before taxes,
Slide 34: Operations in Finland
1-3 / 2015 Operations in Finland Change Meur Change % 1-3/ 2015 1-3/ 2014 1-3/15 vs 1-3/14 1-3/15 vs 1-3/14 1-12/ 2014 Revenue, MEUR 157,1 124,4 +32,7 +26,3% 627,9 business premises construction 114,0 69,0 +45,0 +65,2% 395,5 housing construction 43,1 55,4 -12,4 -22,3% 232,5 Operating Profit, MEUR 3,
Slide 35: Fruits of increase in developer-contracted housing production will be evident in future quarters
Fruits of increase in developer-contracted housing production will be evident in future quarters Unsold housing production in Finland (units) 700 Developer contracting, housing starts in Finland (units) 500 600 402 394 400 500 310 374 300 219 400 242 330 112 300 200 197 189 200 100 183 198 100 66 15
Slide 36: International operations
1-3 / 2015 International operations Change Meur Change % 1-3/ 2015 1-3/ 2014 1-3/15 vs 1-3/14 1-3/15 vs 1-3/14 1-12/ 2014 Revenue, MEUR 15,9 14,2 +1,7 +12,0% 56,9 Operating Profit, MEUR 0,7 -0,6 +1,2 1,1 Operating Profit, % 4,1% -4,0% 1,9% Order backlog, MEUR 116,9 158,8 -41,9 -26,4% 137,2 New agree
Slide 37: Ready-for-sale Etmia II & III office building, Moscow
Ready-for-sale Etmia II & III office building, Moscow • Etmia II completed Q4/2009, Etmia III expansion completed in 2012 • Most of the property consists of Etmia II, a Class A office building. Etmia III is a Class B office building. • SRV owns 50% of the joint venture, SRV’s investment amounts to €