Slide 1: Capital Markets Day 2024
Capital Markets Day 2024 1
Slide 2: Today’s agenda
Today’s agenda 13.00 Opening Essi Nikitin Group Strategy Heikki Vuorenmaa Group Financials Tuomas Mäkipeska Q&A Group CEO & CFO 14.10 Break 14.30 Residential Finland Antti Inkilä Residential CEE Antti Inkilä Building Construction Peter Forssell Infrastructure Aleksi Laine Closing remarks Heikki Vuor
Slide 3: With you today
Heikki Vuorenmaa Tuomas Mäkipeska President and CEO CFO With you Antti Inkilä EVP Peter Forssell EVP today Residential FI & CEE Building Construction Aleksi Laine Essi Nikitin EVP VP Infrastructure Investor Relations 3
Slide 4: YIT Group strategy 2025-2029
YIT Group strategy 2025-2029 Heikki Vuorenmaa, CEO 4
Slide 5: Key message
Key message We will continue to increase company’s resilience, improve financial performance and enhance our position as the trusted partner for our customers. 5
Slide 6: YIT is a European developer and contractor
YIT is a European developer and contractor Revenue by business 20232 Revenue 2023 2.2 BEUR Residential FI Building Construction Residential CEE Infrastructure Adjusted EBIT 41 Trusted European 2023 MEUR 20% 29% construction company Employees 4,300 for over 100 years 2023 in 8 countries €2.2B Most fa
Slide 7: Transformation program
EUR 40+ million in annual savings and more benefits from industrialized operations Key focus areas Achievements Centralized control and transparency in supply Transformation program Renewed procurement chain via category-based procurement and partnerships Real-time visibility into construction progr
Slide 8: Finnish residential market declined 90% from peak – recovery expected from 2025
Finnish residential market declined 90% from peak – market recovery expected from 2025 Self-developed multi-family residential starts in Finland2 26,000 -90% 20,600 16,000 Long-term average 7,500 3,400 2,000 2010-2020 average1 2021 2022 2023 2024E 2025F Volumes expected to recover to long-term avera
Slide 9: YIT to continue benefiting from megatrends
YIT to continue benefiting from megatrends Segment impact Megatrend Quantified opportunity YIT references Major downtown apartment and office Urbanization & Share of urban population in Europe is expected to complex in Bratislava High Mid Mid demographics increase from 76% in 2023 to 84% by 20501 To
Slide 10: YIT strategy for 2025-2029
YIT YIT STRATEGY YIT strategy STRATEGY FOR 2025-2029 for 2025-2029 FOR 2025- 2029 Getting it done together 10
Slide 11: Our new financial targets
Our new financial targets Financial targets by 2029 Growth Operative performance Capital efficiency ≥5% ≥7% ≥15% Net sales CAGR Adjusted EBIT ROCE Financial framework Net debt to equity in the range of 30-70% over the cycle Dividend policy Payout ratio ≥ 50% 11
Slide 12: Three strategic priorities to guide Group execution
KPMG to visualize Three strategic priorities to guide Group execution 1 Deliver industry-leading productivity and financial performance 2 Generate targeted growth and resilience 3 Elevate customer and employee experience 12
Slide 13: Company performance fueled by industry-leading productivity and capital-efficient business model
Company performance fueled by industry-leading productivity and capital-efficient business model Examples of initiatives Targeted impact Deliver industry-leading productivity and financial performance Strong fixed cost discipline across the Already executed over €40M fixed costs operations reduction
Slide 14: Targeted growth in residential, segments backed by megatrends, and selected value chain expansion
Targeted growth in residential, segments backed by megatrends, and selected value chain expansion Examples of initiatives Targeted impact Deliver industry-leading productivity and financial performance Residential market share growth in Finland Grow in selected areas in Finland and current CEE count
Slide 15: Winning with differentiating customer experience, best talent and work safety
Winning with our differentiating customer experience, leveraging the best talent and leading in work safety Examples of initiatives Targeted impact Deliver industry-leading productivity and financial performance Continue development of our customer Maintain high customer NPS level of over 50 experie
Slide 16: Sustainability is a key competitive advantage for YIT
Sustainability is a key competitive advantage for YIT Forerunner in construction sector with ambitious Aleksanterinkatu 13 emission reduction targets Science Based Targets initiative (SBTi) validated YIT’s emission reduction targets in June 2023. by 2030 Own operations Value chain emissions (scope 1
Slide 17: Key investment highlights
Key investment highlights Trusted industry Resilient business Execution focused leader model corporate culture Preferred brand Presence in multiple markets Transformation and construction sectors delivering results Leading urban developer Balanced project portfolio Ongoing productivity Diverse, enga
Slide 18: CFO presentation
CFO presentation Tuomas Mäkipeska CFO
Slide 19: Financial stability reached through rigorous execution
Financial stability reached through rigorous execution Divested non-core assets Successful refinancing Transformation savings Focused, resilient business portfolio Comprehensive financing and stable Savings achieved ahead of schedule position Cumulative annualized cost savings, €M Date Divestment /
Slide 20: Balance sheet ready to support targeted growth and ensure resilience
Balance sheet ready to support targeted growth and ensure resilience Assets and net debt breakdown Debt maturity structure EUR million, Q3/2024 EUR million Loans from financial institutions Commercial papers Assets 645 183 280 398 271 1,777 Bonds Owned plots Leased plots Production Completed Investm
Slide 21: Our new financial targets
Our new financial targets Financial targets by 2029 Growth Operative performance Capital efficiency ≥5% ≥7% ≥15% Net sales CAGR Adjusted EBIT ROCE Financial framework Net debt to equity in the range of 30-70% over the cycle Dividend policy Payout ratio ≥ 50% 21
Slide 22: Four distinctive segments to deliver on Group targets
Four distinctive segments to deliver on Group targets Residential Residential Building Infrastructure Finland CEE Construction Segment targets Growth Increase market share ≥15% CAGR ≥2% CAGR ≥5% CAGR Adjusted EBIT ≥10%1 ≥15% ≥6% ≥6% ROCE >20%1 >25% Capital efficiency Negative capital employed Negati
Slide 23: Residential and Building Construction to drive profitability improvement
Residential and Building Construction to drive profitability improvement EBIT contribution by business segment Adjusted EBIT EBIT growth in strategy ≥7% Already secured from transformation 1.7% YIT Q3/24 Residential FI Building Construction Residential CEE Infrastructure YIT target Improve profitabi
Slide 24: Increased capital efficiency and returns to ensure resilience
Increased capital efficiency and returns to ensure resilience Development of capital employed Development of net debt to equity EUR million % 1,542 98% 30-70% YIT Capital Capital Retained Growth Target YIT Q3/24 Released Free cash flow YIT target Q3/24 release efficiency earnings capital after growt
Slide 25: YIT to deliver on targets in two phases
YIT to deliver on targets in two phases 2025-2026 – Reinforcing the core 2027-2029 – Acceleration Accelerate growth in core segments and explore Growth Return to growth after market downturn potential in adjacencies Capitalize on profitable and growing Profitability Reinforce financial stability Res
Slide 26: Key investment highlights
Key investment highlights Financially Synergistic Value creation resilient business portfolio via Residential Transformation track Presence in multiple Profitable growth record markets and construction leveraging plot portfolio as sectors providing stability market recovers in Finland Balance sheet
Slide 27: Residential Finland
Residential Finland YIT Capital Markets Day 2024
Slide 28: Finnish residential market declined 90% from peak – recovery expected from 2025
Finnish residential market declined 90% from peak – market recovery expected from 2025 Self-developed multi-family residential starts in Finland2 Residential starts Euribor 12 months 3 3.9% 3.5% 1.1% 0.4% -0.5% 2.6% As of Oct 28th 26,000 -90% 20,600 16,000 Long-term average 7,500 3,400 2,000 2010-20
Slide 29: Migration to Finnish growth centers set to support robust demand
Migration to Finnish growth centers set to support robust demand going forward Estimated population change Thousand, population change in 2023-2040* Population change in YIT focus areas (thousand) Population change in other areas (thousand) -% change in population 16% 11% 4% -3% -14% -12% 202 119 42
Slide 30: Achievable profitability target
Achievable profitability target Key figures 1,2 Performance due to market downturn Increase in CE from unsold ready apts. Net sales and adjusted EBIT Return on Capital Employed Net sales, EUR million Capital employed Adj. EBIT-% ROCE -% 3 21.7% 1,050 20.5% 1,010 14.4% 803 689 698 9.2% 8.1% 8.2% 628
Slide 31: Residential Finland financial targets
Residential Finland financial targets Financial targets 2025-2029 Growth Operative performance Capital efficiency Increase market ≥10% ≥20% share Adjusted EBIT ROCE 31 Merenkulkijanranta, Helsinki, Finland
Slide 32: Market share growth with plot portfolio and customer concepts
Market share growth with plot portfolio and customer concepts Road to increasing market share Priorities Increase market share Strong plot portfolio Ready to build ~15k apartments in growing cities Winning with best customer experience 429 Enhance experience through data-driven optimization of the c
Slide 33: Profitability via improved productivity and product optimization
Profitability via improved productivity and product optimization Road to ≥10% EBIT-% Priorities Right-sized operations Scale fixed cost base and reduce running costs connected 10% to oversized balance sheet. Maintain capability to accelerate EBIT ~9% achieved historically operations according to mar
Slide 34: Capital release and efficiency to reach ROCE targets
Capital release and efficiency to reach ROCE targets Road to ROCE >20% with levers of capital Priorities employed 20% Release capital ROCE 20% achieved historically Release capital from unsold completed apartments and plots with long development period Reduce lead time Reduce end-to-end lead time fr
Slide 35: Residential CEE
Residential CEE YIT Capital Markets Day 2024
Slide 36: Homes in fast-growing European cities
Homes in fast-growing European cities Zwirn, Bratislava Piliamiestis, Kaunas Żurawie, Gdansk We build highly functional Major downtown apartment and office Residential complex transforming Kaunas Award-winning property designed by Rainer and sustainable homes and complex market Mahlamäki living envi
Slide 37: Strong profitability and investments in growth through cycle
Strong profitability and investments in growth through cycle Key figures 1,2 Restated figures Strong profitability despite uncertainty Plot reserve to enable future growth Net sales and adjusted EBIT Return on Capital Employed Net sales, EUR million Capital employed Adj. EBIT-% ROCE -% 2 364 366 349
Slide 38: YIT brand enables expansion in large, growing cities
YIT brand enables expansion in large, growing cities Addressable market YIT position In value, # of YIT market YIT brand Operating cities M€ apartments 1 share 2 preference 3 Estonia Tallinn ~500 ~2,700 ~7% 26% Latvia Riga ~300 ~2,200 ~8% 21% Lithuania Kaunas, Vilnius ~850 3,500 ~4% 26% Poland Gdans
Slide 39: Urbanization and purchasing power continue to support demand
Urbanization and purchasing power continue to support demand Estonia Latvia Lithuania Czech republic Slovakia Poland URBAN URBAN URBAN URBAN URBAN URBAN POPULATION POPULATION POPULATION POPULATION POPULATION POPULATION 70%* 69%* 69%* 75%* 54%* 60%* In 2023 In 2023 In 2023 In 2023 In 2023 In 2023 GDP
Slide 40: Residential CEE financial targets
Residential CEE financial targets Financial targets 2025-2029 Growth Operative performance Capital efficiency ≥15% ≥15% ≥25% Net sales CAGR Adjusted EBIT ROCE 40
Slide 41: Grow in current and new cities
Grow in current and new cities Road to ≥15% sales CAGR Priorities ≥15% Organic growth in current cities Increase market share in current cities by capitalizing on plots in best locations and strong YIT brand Geographical expansion within countries 312 Scale operations to other major cities led by cu
Slide 42: Maintain profitability via systematic processes and pricing
Maintain profitability via systematic processes and pricing Road to ≥15% EBIT-% Priorities 15% Cost efficiency Continue to decrease lead time via segment-level 13% support and prefabrication Pricing Capitalize on brand leader position by using data- driven dynamic pricing Systematic development proc
Slide 43: Capital release and efficiency to reach ROCE targets
Capital release and efficiency to reach ROCE targets Road to ROCE >25% with levers of capital Priorities employed >25% Release capital Release capital from unsold completed apartments and plots with long development period Increased use of capital-efficient models Partnership agreements already in p
Slide 44: YIT’s leading capabilities are acknowledged across markets
YIT’s leading capabilities are acknowledged across markets Estonia Latvia Lithuania Czech Republic Slovakia Poland #1 Winner #1 Top 3 #1 Winner Construction Most sustainable Construction and Developer on the Developer in 5 European company in residential project in development Prague residential Bra
Slide 45: Residential summary
Residential summary YIT Capital Markets Day 2024
Slide 46: YIT strengths in Residential
YIT strengths in Residential Development Customer first Productivity process and plots Local presence with Plots in attractive Improved lead times and compelling offerings for locations ready to be cost efficiency customers developed effectively 46 46
Slide 47: Customer first
Focus areas YIT NPS 2024 2022 Continuously improving Customer first 1 customer experience with data insights and high-quality delivery 54 65 79 60 61 44 Attractive living concepts based 59 2 on functionality, sustainability, and service 53 58 59 Local presence with 42 compelling offerings for 39 cus
Slide 48: Productivity
Systematic decrease in lead time in Finland Enablers Housing lead time in months per gross area (m2), 2022-2024 2022 lead time (month) 2024 lead time (month) Average lead time improvement by 15% in 2022-2024 Segment-level support to Productivity ✓ achieve lead time targets -13.6% -15.4% 16.2 -18.4%
Slide 49: Development process and plots
Building rights (average apartment size) Building rights by segment, Q3/2024 We have secured plots for majority of our strategy period. Selected investments in additional strategic areas Development Finland CEE process and plots 11% 27% 40% 19,460 28% 15,270 apartments apartments 61% 12% Plots in at
Slide 50: Building Construction
Building Construction YIT Capital Markets Day 2024
Slide 51: Versatile premises for great customers
Versatile premises for great customers Kamppi Health and Freda furniture production Nokia campus Oulu Well-being Centre facility: Phases 1-4 We build and renovate Highest quality points Extensive offering, Delivery throughout in demanding location including building tech long relationship schools, h
Slide 52: Stable topline in challenging market with potential to improve
Stable topline in challenging market with potential to improve Key figures 1,2 Stable topline Potential to release capital Net sales and adjusted EBIT Baltic & Capital employed to net sales CEE Sales by Net sales, EUR million 21% geography Capital employed, EUR million 3 Adj. EBIT-% 2023 CE -% of Ne
Slide 53: Well positioned to benefit from megatrends
Well positioned to benefit from megatrends Segment outlook Growth driven by Industrial Datacenters Defense industrial, AI, security needs, and demand for smart [Picture] buildings Education Healthcare Commercial 53
Slide 54: Resilience from multiple regions and subsegments
Resilience from multiple regions and subsegments Regional and segment outlook Finland Baltics CEE ~€7B ~€4B ~€10B Addressable Addressable Addressable market market market Market outlook Market outlook Market outlook Industrial, Defense, Growth Growth Defense Growth Logistics Datacenters Healthcare,
Slide 55: Building Construction financial targets
Building Construction financial targets Financial targets 2025-2029 Growth Operative performance Capital efficiency ≥2% ≥6% Negative Net sales CAGR Adjusted EBIT Capital employed 55 Pradiaren 1900, Bratislava, Slovakia
Slide 56: Grow in priority segments and cities
Grow in priority segments and cities Road to growth ≥2% CAGR Priorities ≥2% Expand in developing segments Capture growth in industrial, datacenter, and 789 defense segments backed by megatrends Double size of renovation business Leverage building tech capabilities to capture opportunities from tight
Slide 57: Improve profitability through on-site project control and value creation with private customers
Improve profitability through on-site project control and value creation with private customers Road to ≥6% EBIT-% Priorities 6% On-site project control Systematic project management to increase final project margins and productivity Value creation with private customers Capitalize on higher margin
Slide 58: Capital release and capital light project models to reach negative capital employed
Capital release and capital light project models to reach negative capital employed Road to negative capital employed to net sales Priorities 32% Capital release Sale of non-operating assets in balance sheet, especially Tripla and other properties Capital-efficient projects New partnerships, financi
Slide 59: Key investment highlights
Key investment highlights Efficiency from Robust plan for Compelling value transformation profitable growth proposition Continued benefits from Growth driven by industrial Ahead of schedule, under procurement, project investments, AI, security budget, agreed quality management, and internal needs, a
Slide 60: Infrastructure
Infrastructure YIT Capital Markets Day 2024
Slide 61: Complex infrastructure projects and maintenance
Complex infrastructure projects and maintenance Crown Bridges Prysmian projects Road maintenance We build rails, roads, Alliance project excellence Specialized engineering Experienced in efficient combined with demanding expertise in challenging maintenance processes bridges, tunnels, and technical
Slide 62: YIT’s leading capabilities in complex projects
YIT’s leading capabilities in complex projects Industrial Light Tram Urban construction BIM capabilities Bridge construction construction #1 #1 #1 #1 #1 Project of the year Project of the year Street site of the year Tekla Global BIM Bridge of the year 20231 20221 20242 award 2024 20223 Blominmäki w
Slide 63: Significant profitability uplift with negative capital employed
Significant profitability uplift with negative capital employed Key figures 1,2 Significant profitability uplift Negative capital employed Net sales and adjusted EBIT Capital employed to net sales Net sales, EUR million Capital employed, EUR million 3 Adj. EBIT-% CE -% of Net sales 595 539 5.0% 437
Slide 64: Strong capabilities in key segments
Strong capabilities in key segments Segments Industry-leading Railway & light rail Energy & industrial Maintenance capabilities to win in Capabilities the growing market Project management and alliance excellence Rails & light rails, roads Bridges, water construction, and structural engineering Fou
Slide 65: Private market expected to drive growth
Private market expected to drive growth Public Private ~€2B ~€1B Addressable Addressable market market Market outlook Market outlook Rail construction, Growth Growth Energy infrastructure Defense Road construction & Logistics, Moderate Moderate Parking facilities, maintenance Foundation work in resi
Slide 66: Infrastructure financial targets
Infrastructure financial targets Financial targets 2025-2029 Growth Operative performance Capital efficiency ≥5% ≥6% Negative Net sales CAGR Adjusted EBIT Capital employed 66
Slide 67: Targeted growth in segments backed by megatrends
Targeted growth in segments backed by megatrends Road to ≥5% sales CAGR Priorities ≥5% Capture opportunities in public Build on solid order book in light rail and strengthen 399 capabilities to win in rail Utilize market opportunities in defense Grow in private customers Double our revenue in privat
Slide 68: Continued profitability through portfolio mix and productivity enhancements
Continued profitability through portfolio mix and productivity enhancements Road to ≥6% EBIT-% Priorities Balanced portfolio 6% Optimization of project portfolio risk-reward ratio across clients and segments 5% Invest in capabilities Invest in rail and industrial construction expertise to continue d
Slide 69: Capital employed to remain negative with cash flow generation for YIT Group
Capital employed to remain negative with cash flow generation for YIT Group Maintain negative capital employed to net sales Negative Continue to excel in (1) Portfolio management (2) Project management Already operating below the capital employed target (3) Efficient supply chain to operate with neg
Slide 70: Key investment highlights
Key investment highlights Transformation Solid market Industry-leading track record demand expertise EBIT from 0% to industry- Pipeline in energy and Broadest Infra expertise in leading 5% LTM industrial driven by private market supported by YIT and public investments Group capabilities Released cap
Slide 71: Disclaimer
Disclaimer This presentation has been prepared by, and the information contained herein (unless otherwise indicated) has been provided by YIT Corporation (the “Company”). By attending the meeting or event where this presentation is made, or by reading the presentation slides, you agree to be bound b