Slide 1: SRV – Building for life
SRV – Building for life Financial report January – December 2012 Jukka Hienonen CEO 12.2.2013
Slide 2: Profitability weak, order backlog remained at a strong level
Profitabilty weak, order backlog remained at a strong level • Group’s revenue at previous years level, profitability weakend - Revenue EUR 641.6 million, -4.6 % - Operating profit EUR 6.9 million, -51.2 % • Profitability weakend due to profit margin lowerings on several contracting contracts • Order
Slide 3: Q4 in brief
Q4 in brief • Revenue declined to EUR 175.4 million (EUR 266.7 million in 10-12/2011) • Operating profit showed a clear decline to EUR 2.4 million (EUR 13.2 in 10- 12/2011) - Numbers of the reference period included the sale of to underground parking facilites and recognition of a higher number of d
Slide 4: SRV Group graphs
SRV Group graphs Meur Revenue Meur EBIT 300 14 12 250 10 200 8 13,2 150 6 267 100 4 175 170 156 141 137 136 133 2 1,0 50 3,1 -0,4 2,4 -0,3 1,8 0,2 0 0 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 -2 Meur Order backlog Meur Profit before taxes 900 86
Slide 5: Order backlog
Order backlog 828 811 800 53 100 700 International 595 operations 600 336 20 489 349 500 32 303 Domestic 400 operations; 202 Housing 300 construction 439 Domestic 200 362 operations; 255 272 Business 100 premises construction 0 12/2009 12/2010 12/2011 12/2012
Slide 6: Housing production and sales at a good level
Housing production and sales at a good level • SRV sold a record number of housing units last year, 745 units in total - 477 units were sold to consumers, 268 to institutional investors - 207 units were sold during Q4, 104 to consumers - housing sales have continued on a good level in January 2013 •
Slide 7: Housing sales by year
Housing sales by year SRV's housing sales in Finland including institutional sales (units) 800 745 2008 2009 2010 2011 2012 Gi Developer contracting projects O Institutional sales; negotiation contract projects mn SRW ZZ
Slide 8: Housing production has increased in recent years
Housing production has increased in recent years 8
Slide 9: Development of SRV's housing projects in Helsinki area relies on exploitation of railways
Development of SRV’s housing projects in Helsinki area relies on exploitation of railways • Kalasatama towers - six 20-33 storey residential towers connected to a metro station. Permitted building volume 90.000 m². - one appeal on city plan, project start at 2014 • Keilaniemi towers - four 32-40 sto
Slide 10: Domestic operations
Domestic operations Meur Revenue Meur Operating profit 250 18 16 200 14 12 150 10 249 17,9 8 100 157 6 151 140 124 131 128 121 50 4 5,4 5,8 2 4,4 3,3 2,4 1,9 1,6 0 0 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Meur Order backlog Meur New agreements
Slide 11: International operations
International operations Meur Revenue Meur Operating profit 25 4 2,4 20 2 15 0 10 20 19 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 18 18 16 -1,1 5 -2 -1,4 8 8 -1,9 -1,9 5 -2,4 -2,6 -2,6 0 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 -4 Meur Order backlog 140 120 100 80 60 112 117 109 102 100
Slide 12: Russian shopping centre market is active
Russian shopping centre market is active • Pearl Plaza - part of the Baltic Pearl residential project in St. Petersburg - 1.phase of the project approximately EUR 140 million - SRV’s share 50% (investment EUR 20 million), financing from China - SRV acts as a project management constructor and is in
Slide 13: SRV's focus in Russia is in St. Petersburg and Moscow
SRV’s focus in Russia is in St. Petersburg and Moscow • Trend in Russian real estate market has been positive - Moscow accounts for most part of the Russian real estate investment market, total volume was estimated at EUR 5 billion in 1-9/2012 - according to unconfirmed information Morgan Stanley Re
Slide 14: Co-investor arrangements support project development in Russia
Co-investor arrangements support project development in Russia • Investment company Russia Invest B.V. - Co-investor concept developed by SRV. The company will invest in SRV’s development projects in Moscow and St. Petersburg. SRV will be in charge of project development and acts as a project manage
Slide 15: Business premises ready for sale
Business premises ready for sale • Derby Business Park, Espoo - Three building office project developed by SRV, borders the new intersection of Turku motorway - 88% of premises leased, almost 600 parking spaces - 1. phase completed in 8/2012 including among others SRV head office. Phase 2 (including
Slide 16: Issue of SRV's hybrid bond
Issue of SRV’s hybrid bond • In December, SRV issued a EUR 45 million domestic hybrid bond (equity bond) • Terms of the hybrid bond follow the market standards in Finland - coupon rate of the bond is 9.5 per cent per annum - The bond has no set maturity date but the company may exercise an early red
Slide 17: SRV's outlook for 2013
SRV’s outlook for 2013 • The Group’s full-year revenue is estimated to be at least on a par with the previous year’s level • The Group’s result before taxes is expected to exceed the previous year’s level. Estimation does not include the possible sales of Derby and Etmia.
Slide 18: Appendices
Appendices
Slide 19: January – December 2012 in brief
January – December 2012 in brief 1-12/ 1-12/ change, change, (meur) 2012 2011 MEUR % ● Revenue 641.6 672.2 -30.6 -5% ● Operating profit 6.9 14.1 -7.2 -51% ● Profit before taxes 2.8 10.8 -8.0 -74% ● EPS, eur 0.02 0.17 -0.15 -88% ● Dividend 1) 0.06 0.12 -50% ● Order backlog 827.8 810.8 +16.9 +2% ● New
Slide 20: SRV's order backlog remains strong
SRV’s order backlog remains strong 1-12/2012 in brief • Positive trend in domestic housing construction continued - Housing units under construction 1,849 (2,197) - Total of 745 units were sold in 2012 (680) • Success in growing domestic order backlog (+ 9%) - order backlog of business premise const
Slide 21: Q4/2012 in brief
Q4/2012 in brief change Q4/ Q4/ Q4/12 vs (meur) 2012 2011 Q4/11 ● Revenue 175.4 266.7 -34% ● Operating profit 2.4 13.2 -82% ● Profit before taxes 2.2 12.4 -82% ● EPS, eur 0.03 0.24 -88% ● New agreements 248.0 196.1 +26% ● Housing sales, units 207 129 +60% ● Developer contracting, units 140 100 +40%
Slide 22: Structure of Housing production's order backlog
Structure of Housing production’s order backlog • Risk profile of housing production remained modest • Order backlog EUR 336 million - negotiated and construction contracts (EUR 129 million) amount for 38% of order backlog - order backlog of own production under construction EUR 178 million - Share
Slide 23: Domestic operations
Domestic operations change 1-12/ 1-12/ 10-12 10-12 1-12/12 vs 1-12/11 2012 2011 meur % 2012 2011 Revenue 568.3 632.3 -64.0 -10.1% 157.2 248.9 - Business premises 305.3 379.6 -74.3 -19.6% 83.5 135.9 - Housing construction 263.0 252.8 +10.2 +4.0% 73.7 113.0 Operating profit 14.8 27.9 -13.2 -47.2% 1.6
Slide 24: International operations
International operations change 1-12/ 1-12/ 10-12 10-12 1-12/12 vs 1-12/11 2012 2011 meur % 2012 2011 Revenue 73.1 39.0 +34.2 +87.6% 18.1 17.5 Operating profit -3.2 -8.3 +5.1 -61.3% 2.4 -2.6 Operating profit, % -4.4% -21.3% 13.3% -14.9% Order backlog 53.4 99.6 -46.3 -46.4% • Revenue increased due to
Slide 25: SRV Group
SRV Group change 1-12/12 1-12/ 1-12/ 10-12 10-12 vs 1-12/11 2012 2011 Meur % 2012 2011 Revenues, MEUR 641.6 672.2 -30.6 -4.6% 175.4 266.7 Operating profit, MEUR 6.9 14.1 -7.2 -51.2% 2.4 13.2 Operating profit, % 1.1% 2.1% 1.4% 4.9% Financial income and exp., MEUR -4.1 -3.3 -0.8 +25.1% -0.2 -0.8 Profi
Slide 26: Development of housing production and sales
Development of housing production and sales • Production under construction 1,849 units - 70% of production rental or right-of- occupancy units - over 80% of production under construction sold - 586 developer contracting units under construction, 2/3 of production located in Helsinki metropolitan ar
Slide 27: SRV's development projects
SRV’s development projects
Slide 28: Finland's first tower districts
Finland’s first tower districts • SRV will plan, construct and commercialise • Projects in co-operation with the city • Metro stations below the towers • Four residential towers to Keilaniemi • Six residential towers to Kalastama, a shopping centre, office and hotel towers and a healthcare centre •
Slide 29: Kalasatama centre
Kalasatama centre • SRV won the City of Helsinki’s competition for implementation of the metro block - plan includes construction, financing as well as selling and leasing of the premises. Total revenue 2011-2021 is estimated at EUR one billion. • Implementation contract was signed in August 2011 •
Slide 30: Keilaniemi Towers, Espoo Niittykumpu area
Keilaniemi Towers, Niittykumpu area Espoo development, Espoo • Residential tower project developed by • Area development project developed by SRV adjacent to Keilaniemi metro station SRV adjacent to future Niittykumpu • four 32-40-storey towers metro station • a tunnel will be built for Ring Road I
Slide 31: Perkkaa area development and Jätkäsaari projects
Perkkaan area Projects in Jätkäsaari development, Espoo district, Helsinki • Pilot project of SRV and VVO for sustainable building “Airut” • Sitra as an expert partner • Ilmarinen and Sato as partners, á • total floor area 12 000+ m2, valid zoning 1/3 of the project • land and buildings bought from
Slide 32: SRV Financial Report January – December 2012 Tables
SRV Financial Report January – December 2012 Tables
Slide 33: Group key figures
Group key figures Group key figures 1-12/ 1-12/ change, 10-12/ 10-12/ (IFRS, EUR million) 2012 2011 MEUR change,% 2012 2011 Revenue 641,6 672,2 -30,6 -4,6 175,4 266,7 Operating profit 6,9 14,1 -7,2 -51,2 2,4 13,2 Financial income and expenses, total -4,1 -3,3 -0,8 -0,2 -0,8 Profit before taxes 2,8 1
Slide 34: Key figures (1)
Key figures (1) Group key figures 1-12/ 1-12/ 10-12 10-12/ 2012 2011 2012 2011 Revenue EUR million 641.6 672.2 175.4 266.7 Operating profit EUR million 6.9 14.1 2.4 13.2 Operating profit, % of revenue % 1.1 2.1 1.4 4.9 Profit before taxes EUR million 2.8 10.8 2.2 12.4 Profit before taxes, % of reven
Slide 35: Key figures (2)
Key figures (2) Group key figures 1-12/ 1-12/ 10-12 10-12/ 2012 2011 2012 2011 Earnings per share, share issue adjusted EUR 0.02 0.17 0.03 0.24 Earnings per share, share issue adjusted, diluted EUR 0.02 0.17 0.03 0.24 Equity per share, share issue adjusted EUR 4.62 4.68 - - *) Dividend per share, sh
Slide 36: Consolidated income statement
Consolidated income statement Consolidated income statement 1-12/ 1-12/ change, change, 10-12/ 10-12/ (EUR million) 2012 2011 MEUR % 2012 2011 Revenue 641.6 672.2 -30.6 -4.6 175.4 266.7 Other operating income 4.6 4.5 0.1 3.2 1.9 1.0 Change in inventories of finished goods and work in progress 61.6 6
Slide 37: Consolidated statement of comprehensive income
Consolidated statement of comprehensive income Statement of comprehensive income 1-12/ 1-12/ 10-12/ 10-12/ (EUR million) 2012 2011 2012 2011 Net profit for the period 0,9 5,3 1,4 8,2 Other comprehensive income: Foreign currency translation differences for foreign operations 0,0 0,1 0,0 0,1 Gains and
Slide 38: Consolidated balance sheet: Assets
Consolidated balance sheet: Assets Consolidated balance sheet change, (EUR million) 31.12.12 31.12.11 % ASSETS Non-current assets Property, plant and equipment 13.7 15.2 -10.1 Goodwill 1.7 1.7 0.0 Other intangible assets 0.6 0.5 27.8 Other financial assets 10.9 10.8 0.8 Receivables 1.4 2.2 -35.4 Loa
Slide 39: Consolidated balance sheet: Equity and liabilities
Consolidated balance sheet: Equity and liabilities Consolidated balance sheet change, (EUR million) 31.12.12 31.12.11 % EQUITY AND LIABILITIES Equity attributable to equity holders of the parent company Share capital 3.1 3.1 0.0 Invested free equity fund 92.2 92.1 0.1 Translation differences 0.0 -0.
Slide 40: Changes in Group equity
Changes in Group equity Statement of changes in Group equity 1.1. - 31.12.2012 Equity attributable to the equity holders of the parent company Invested Trans- Non- Hybrid Fair Share free lation Retained controll- bond Total (EUR million) value Total capital equity differ- earnings ing equity reserve
Slide 41: Group and Segment information by quarter
Group and Segment information by quarter SRV Group (EUR million) 10-12/12 7-9/12 4-6/12 1-3/12 10-12/11 7-9/11 4-6/11 1-3/11 Revenue 175.4 155.8 169.7 140.7 266.7 136.3 136.6 132.6 Operating profit 2.4 -0.4 3.1 1.8 13.2 0.2 -0.3 1.0 Financial income and expenses, total -0.2 -1.8 -0.6 -1.5 -0.8 -1.7
Slide 42: Revenue and operating profit by quarter
Revenue and operating profit by quarter Revenue (EUR million) 10-12/12 7-9/12 4-6/12 1-3/12 10-12/11 7-9/11 4-6/11 1-3/11 Domestic operations 157.2 139.7 150.8 120.7 248.9 128.3 131.2 123.9 - business construction 83.5 78.9 80.9 61.9 135.9 82.0 86.4 75.3 - housing construction 73.7 60.7 69.9 58.7 11
Slide 43: Order backlog
Order backlog Order backlog (EUR million) 31.12.12 30.9.12 30.6.12 31.3.12 31.12.11 30.9.11 30.6.11 31.3.11 Domestic operations 774.4 676.2 661.7 658.3 711.2 745.8 564.8 589.8 - business construction 438.7 312.1 325.4 329.4 362.2 371.5 233.3 277.7 - housing construction 335.7 364.2 336.4 328.8 349.0
Slide 44: Invested capital and residential production in Finland by quarter
Invested capital and residential production in Finland by quarter Invested capital (EUR million) 31.12.12 30.9.12 30.6.12 31.3.12 31.12.11 30.9.11 30.6.11 31.3.11 Domestic operations 297.4 286.2 270.2 228.8 249.2 233.3 248.7 215.6 International operations 200.2 200.7 198.5 198.6 210.8 194.0 193.3 18
Slide 45: Segments: Assets, liabilities and invested capital
Segments: Assets, liabilities and invested capital Assets change, change, (EUR million) 31.12.12 31.12.11 MEUR % Domestic operations 422.9 376.0 46.9 12.5 International operations 233.7 228.2 5.4 2.4 Other Operations 311.8 324.2 -12.4 -3.8 Eliminations -293.0 -340.1 47.1 Group, total 675.4 588.3 87.
Slide 46: Segments: Inventories
Segments: Inventories Inventories change, (EUR million) 31.12.12 31.12.11 MEUR Land areas and plot-owning companies 175.0 193.8 -18.7 Domestic operations 74.6 95.5 -21.0 International operations 100.5 98.2 2.3 Work in progress 159.3 97.0 62.4 Domestic operations 150.9 93.2 57.7 International operati
Slide 47: Unbuilt land areas and land acquisition commitments
Unbuilt land areas and land acquisition commitments Land reserve Business Housing International 31.12.2012 construction construction Operations Total Unbuilt land areas and land acquisition commitments 2 Building rights*, m 265 000 301 000 886 000 1 452 000 Land development agreements 2 Building rig
Slide 48: Personnel
Personnel Share of Group Personnel by business area 31.12.2012 31.12.2011 personnel, 31.12.2012, % Domestic operations 685 651 72,0 International operations 179 191 18.8 Other Operations 87 91 9.1 Group. total 951 933 100.0 Average personnel 1-12/2012 Non-salaried 262 26 % Salaried 727 74 %
Slide 49: Shareholders 31.12.2012
Shareholders 31.12.2012 Number of % of shares and Shareholder shares votes Kokkila Ilpo 9 034 712 24,6 Kolpi Investments Oy 5 358 563 14,6 Kokkila Timo 4 522 288 12,3 Nordea Suomi sijoitusrahasto 1 040 000 2,8 Fondita Nordic Micro Cap 900 000 2,4 OP-Suomi Pienyhtiöt 769 718 2,1 Srv Yhtiöt Oyj 717 44
Slide 50: Calculation of key figures
Calculation of key figures Net interest-bearing debt Gearing ratio, % = 100 x Total equity Net result for the financial year Return on equity, % = 100 x Total equity, average Result before taxes + interest and other financial expenses Return on investment, % = 100 x Invested capital, average Total e