Slide 1: SRV – Building for Life
SRV – Building for Life Interim Report 1-9/2014 Jukka Hienonen President and CEO 5 Nov. 2014 1
Slide 2: The three cornerstones of our business
The three cornerstones of our business 1-9/2014 Domestic Operations 92% of the Group's revenue International Operations Business construction Housing construction 8% of the Group's revenue 66%* 34%* • Offices and retail premises • Owner-occupied housing • Shopping centres • Hotels and special-purpos
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) Rec
Slide 4: 1-9/2014 – Focusing of operations has yielded results
1-9/2014 – Focusing of operations has yielded results Pearl Plaza, Footfall developing positively; footfall nearly 600,000 St. Petersburg + in August. 97% of space leased. opened 8/2013 Okhta Mall, Developer- Construction proceeding. Estimated cost savings €25m. St. Petersburg + Financing secured. c
Slide 5: 1-9/2014 in brief
1-9/2014 in brief • Group’s order backlog €944m (€911.5m) • New agreements €592m • Order backlog mostly comprises contracting; sold share of order backlog €817m (87%) • Domestic Operations’ profitability continued to grow • Operating profit in Finland was €19.8m (€13.4m); operating profit margin was
Slide 6: 1-9/2014 in brief
1-9/2014 in brief 1-9/ 1-9/ change, change, 1-12/ 2014 2013 MEUR % 2013 Revenue, MEUR 490.6 507.8 -17.2 -3.4% 679.4 Opera ng pro t, MEUR 15.3 21.8 -6.5 -29.7% 26.4 Opera ng pro t, % 3.1% 4.3% 3.9% Pro t before taxes, MEUR 11.3 19.2 -7.9 -41.1% 22.8 Order backlog 1), MEUR 944.1 911.5 +32.6 +3.6% 825.
Slide 7: Order backlog remained at high level
Order backlog remained at high level Meur SRV Group: new agreements 700 • Number of new agreements grew 600 • Efforts to obtain new contracts were successful 500 • Consumer-directed housing start-ups will 400 be stepped up 661 300 595 601 592 532 • Start-up decisions made for 304 units 200 • These u
Slide 8: Domestic Operations’ profitability improved
Domestic Operations’ profitability improved Meur Domestic operations: net sales (LTM) and order backlog 1 000 920 • Domestic revenue has remained at a 900 772 778 good level as order backlog continues to 800 728 721 687 Net sales 700 646 (LTM) grow 600 • Domestic order backlog €778m 500 400 + €50m v
Slide 9: SRV Group
SRV Group Revenue 16 Operating profit 14 12 10 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 93/14 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Order backlog 1047 Profit before taxes 8380 12 Q1/13_ Q2/13 Q3/13 Q4/13 Qi/14 Q2/14 Q3/14 Q1/13_ Q2/13_ Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Sold order backlog j= Unsold order
Slide 10: Domestic Operations
Domestic Operations 92% of the Group's revenue Business construction Housing construction 66 %* 34 %* • Offices and retail premises • Owner-occupied housing • Hotels and special-purpose • Rental housing premises Logistics facilities • Regional development • Rock construction and projects • infrastru
Slide 11: Total sales of housing units contracted moderately
Total sales of housing units contracted moderately SRV's housing sales in Finland (units) 900 • Total sales of housing production 800 745 701 developed by SRV fell by 6% 700 680 667 268 584 600 550 • 384 rental housing units developed by SRV 500 198 404 were sold to investors (316 1-9/13) 400 472 31
Slide 12: Decision made to increase own housing production start-ups
Decision made to increase own housing production start-ups Developer contracting, housing starts in Finland (units) 500 • SRV reacted to decline in consumer sales 426 397 by reducing start-ups in Q3/13-Q2/14 400 Start-ups, LTM • SRV started construction of 111 new units 300 297 in Q3/14 202 • On the
Slide 13: International Operations
International Operations 8% of the Group’s revenue • Shopping centres • Shopping centre management • Other business premises projects 13
Slide 14: SRV’s shopping centre projects in Russia 1.
SRV’s shopping centre projects in Russia 1. Pearl Plaza shopping centre: opened 24 August 2013 • Phase I: €140m, scope 92,000 m2. SRV’s holding 50% and investment €23m • SRV is responsible for shopping centre management and leasing; around 97% of the space has been leased • Annual rental income targ
Slide 15: SRV’s shopping centre projects in Russia 2.
SRV’s shopping centre projects in Russia 2. Okhta Mall shopping centre: opening in spring 2016 • Part of large-scale project to be built in Okhta area • Ownership: Russia Invest1 55%, SRV 45 % (+ indirect holding 15%) • SRV is responsible for commercialisation and construction; the agreements are va
Slide 16: Upcoming modern shopping centres in St Petersburg, 2013-2015
Upcoming modern shopping centres in St Petersburg, 2013-2015 No. Name 1 Admiralteiskaya 2 Galaktika 3 London Park 4 PEARL PLAZA, COMPLETED 5 Monpansye 6 Pyat ozer 15 7 Zanevskiy Kaskad, Phase III 8 Evropolis 9 10 Skandinavia Piter-Raduga Phase II 11 Port Nakhodka, Phase II 12 Hollywood 4 13 Hines Ou
Slide 17: SRV’s shopping centre projects in Russia 3.
SRV’s shopping centre projects in Russia 3. Promenade shopping centre: opening in early 2016 • SRV development project under construction in city of Mytishi, Greater Moscow Area • Investors: SRV (19%), Blagosostoyanie1 (55%) and Vicus2 (26%). SRV’s total ownership is around 20%, taking into account
Slide 18: Financing structure of SRV’s key projects in Russia
Financing structure of SRV’s key projects in Russia SRV’s NOI SRV’s Project’s Status additional Other information target ownership bank loan investment Pearl Plaza, Completed, St. €18m 50% €0m €95m SRV’s investment €23m 97% leased Petersburg Etmia, Completed, €4m 50% €0m €33m SRV’s investment €2m Mo
Slide 19: REDI shopping centre and car park
REDI shopping centre and car park • REDI leasing is proceeding • In addition to anchor tenants, leasing negotiations are under way with a wide range of other tenants. If ongoing negotiations lead to agreements, 70% of the retail space would be leased • Final and preliminary lease agreements have alr
Slide 20: Ready-for-sale business premises
Ready-for-sale business premises • Etmia II & III office building, Moscow • SRV-developed project office in Moscow • Location next to Prospekt Mira metro station; Etmia II was completed in Q4/2009; Etmia III expansion was completed in 2012 • Etmia II forms the majority of the property; it is a Class
Slide 21: SRV adjusts outlook for 2014
SRV adjusts outlook for 2014 • SRV revises its outlook for full-year profitability and reiterates its outlook for full-year revenue. The development of revenue and result in 2014 are affected by several factors, such as: SRV's own projects are recognised as income upon delivery, the part of the orde
Slide 22: Appendices
Appendices SRW
Slide 23: Domestic Operations
Domestic Operations 1-9/ 1-9/ change change 7-9/ 7-9/ 1-12/ 2014 2013 MEUR % 2014 2013 2013 Revenue, MEUR 451.9 418.9 +32.9 +7.9% 574.8 451.9 418.9 business construction 296.4 230.2 +66.2 +28.7% 319.2 296.4 230.2 housing construction 155.6 188.7 -33.2 -17.6% 255.5 155.6 188.7 Operating profit, MEUR
Slide 24: International Operations
International Operations 1-9/ 1-9/ change change 7-9/ 7-9/ 1-12/ 2014 2013 MEURr % 2014 2013 2013 Revenue, MEUR 39.2 89.0 -49.8 -56.0% 12.6 15.1 104.7 Operating profit, MEUR -0.7 11.7 -12.4 -106.2% 0.2 0.2 10.0 Operating profit, % -1.8% 13.1% 1.6% 1.1% 9.5% Order backlog, MEUR 166.2 183.7 -17.5 -9.5
Slide 25: SRV Group
SRV Group 1-9/ 1-9/ change change 7-9/ 7-9/ 1-12/ 2014 2013 MEUR % 2014 2013 2013 Revenue, MEUR 490.6 507.8 -17.2 -3.4% 209.0 170.0 679.4 Operating profit, MEUR 15.3 21.8 -6.5 -29.7% 6.0 6.9 26.4 Operating profit, % 3.1% 4.3% 2.9% 4.0% 3.9% Financial income and expenses, MEUR -3.5 -2.6 -0.9 +36.1% 0