Slide 1: SRV – Building for life: Interim report January–June 2013
SRV – Building for life Interim report January – June 2013 Jukka Hienonen CEO 1 August 2013
Slide 2: 1-6/2013 – Profit improvement from Russian shopping centre projects
1-6/2013 – Profit improvement from Russian shopping centre projects • Group’s revenue and operating profit increased - Revenue EUR 337.8 million, +8.8% - Operating profit EUR 14.9 million (EUR 4.9 million 1-6/2012) • Concentrating on constructing shopping centres in Russia bore fruit - Shopping cent
Slide 3: January – June 2013 in brief
January – June 2013 in brief 1-6/ 1-6/ change, change, 1-12/ 2013 2012 meur % 2012 Revenues, meur 337.8 310.4 +27.4 +9% 641.6 Opera ng pro t, meur 14.9 4.9 +10.0 +207% 6.9 Opera ng pro t, % 4.4 % 1.6 % 1.1 % Pro t before taxes, meur 14.0 2.8 +11.2 +408% 2.8 Order backlog 1), meur 959.2 746.3 +212.9
Slide 4: SRV Group Plc
SRV Group Plc Meur Revenue Meur Operating profit 200 16 180 13.7 14 160 12 140 10 120 100 8 170 175 179 80 156 158 6 141 60 4 3.1 2.4 40 1.8 2 1.2 20 -0.4 0 0 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 -2 Meur Order backlog Meur Profit before taxes 959 16 900 828 14 13.3
Slide 5: Order backlog at the highest level of the history
Order backlog at the highest level of the history • Order backlog was EUR 959.2 million (+28.5 %, 30 June 2012) - Domestic order backlog rose to EUR 771.6 million (EUR 661.7 million) - Competitive contracting has been regarded more critically both in commercial and housing construction. The volume o
Slide 6: Order backlog
Order backlog 959 900 811 828 188 800 53 100 International 700 operations 595 313 600 336 20 489 349 500 Domestic 32 303 operations; 400 Housing 202 construction 300 439 459 Domestic 200 operations; 362 255 272 Business 100 premises construction 0 12/2009 12/2010 12/2011 12/2012 6/2013
Slide 7: International operations
International operations Meur Revenue Meur Operating profit 60 14 12.3 12 50 10 40 8 30 6 50 4 2.4 20 2 10 20 23 19 16 18 0 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 -2 -1.1 -0.8 0 -1.9 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 -4 -2.6 Meur Order backlog 200 180 160 140 120 100 188 80 60 102 40 85 71 53 20 40 0
Slide 8: Russian shopping centre market is active
Russian shopping centre market is active • Pearl Plaza shopping centre - 1. phase of the project approx. EUR 140 million, area approx. 92,000 m2. SRV’s share 50% and investment EUR 22 million - SRV acts as a project management constructor in charge of commercialisation. The total value of SRV’s proj
Slide 9: Future Quality Shopping Centres in St. Petersburg, 2013-15
Future Quality Shopping Centres in St. Petersburg, 2013-15
Slide 10: Illustration of the estimated cumulative profit of the development project
Illustration of the estimated cumulative profit of the development project Construction time Sales profit - Revenue is recognized according to the stage of completion - The share corresponding to SRV’s ownership is eliminated from the construction margin Revenue Operating time recognization of - The
Slide 11: SRV’s focus in Russia is in St. Petersburg and Moscow
SRV’s focus in Russia is in St. Petersburg and Moscow H2/2013 completed main projects in St. Petersburg
Slide 12: 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 13: Domestic operations
Domestic operations Meur Revenue Meur Operating profit 200 10 180 160 8 140 120 6 100 5.8 80 151 157 4 140 135 129 60 121 5.4 40 2 3.4 2.7 20 1.9 1.6 0 0 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Meur Order backlog 774 772 800 662 676 687 700 658 600 336 313 297 500 329
Slide 14: Development of housing sales
Development of housing sales SRV's housing sales in Finland (units) 900 778 800 745 680 700 640 600 268 354 530 116 198 500 400 323 300 524 482 477 200 424 100 207 0 1-12/09 1-12/10 1-12/11 1-12/12 LTM Developer contracting Institutional sales, negotiation contracts
Slide 15: Development of housing production
Development of housing production Housing production under construction in Finland (units) 2 197 2 000 1 849 1 629 1 525 1 377 Construction 1 500 contracts 969 560 908 966 1 000 Negotiation contracts, 497 198 294 415 investor sold 536 116 500 195 Developer 206 622 76 605 586 550 contracting 265 263
Slide 16: Profitability level of order backlog for housing construction has been improved
Profitability level of order backlog for housing construction has been improved and preparations made in case of decrease in consumer sales • 63% of housing production (40%, 30 June 2012) is SRV’s developer-contracted production or production sold to investors as negotiation contracts - Total of 965
Slide 17: 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 - city plan entered into legal effect in June 2013 • Keilaniemi towers - four 32-40 st
Slide 18: 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 - Over 90% of premises leased, almost 600 parking spaces. 1. phase completed in 8/2012 including among others SRV head office. Phase II (incl
Slide 19: SRV revises its outlook for 2013
SRV revises its outlook for 2013 • The volume and the completion schedules of developer-contracted housing production, trends in the order backlog margin, the number of new construction contracts, the realisation of planned project sales, the recognition of SRV’s own projects as income upon delivery
Slide 20: Appendices
Appendices SRW
Slide 21: Q2/2013 in brief
Q2/2013 in brief Q2/ Q2/ Change, 2013 2012 meur Revenues, MEUR 179.4 169.7 +9.7 Operating profit, MEUR 13.7 3.1 +10.6 Operating profit, % 7.6 % 1.8 % Profit before taxes, MEUR 13.3 2.5 +10.8 New agreements, MEUR 424.5 208.1 +216.5 EPS, EUR 0.35 0.04 +0.31
Slide 22: Domestic operations
Domestic operations change 1-6/ 1-6/ 4-6 4-6 1-12/ 1-6/13 vs 1-6/12 2013 2012 meur % 2013 2012 2012 Revenue 264.0 271.4 -7.5 -2.8% 128.9 150.8 568.3 - Business premises 142.1 142.9 -0.7 -0.5% 74.6 80.9 305.3 - Housing construction 121.8 128.6 -6.8 -5.3% 54.3 69.9 263.0 Operating profit 6.1 11.3 -5.2
Slide 23: Structure of housing production’s order backlog
Structure of housing production’s order backlog Order backlog - housing production in Finland • Order backlog EUR 313 million 100% 26 M€ 28 M€ 24 M€ - Negotiated and construction 90% 63 M€ 53 M€ Unsold developer contracting, contracts amount 80% 115 M€ 119 M€ 117 M€ completed 62 M€ for 39% of order
Slide 24: International operations
International operations change 1-6/ 1-6/ 4-6/ 4-6/ 1-12 1-6 13 vs 1-6 12 2013 2012 MEUR % 2013 2012 2012 Revenue, MEUR 73.9 39.0 +34.9 +89.6% 50.4 18.9 73.1 Operating profit, 11.5 -4.5 +16.0 12.3 -1.9 -3.2 Operating profit, % 15.6% - 24.5% -9.9% -4.4% Order backlog 187.6 84.5 +103.1 +121.9 53.4 % •
Slide 25: SRV Group
SRV Group change 1-6/13 1-6/ 1-6/ 4-6/ 4-6/ 1-12 vs 1-6/12 2013 2012 MEUR % 2013 2012 2012 Revenues, MEUR 337.8 310.4 +27.4 +8.8% 179.4 169.7 641.6 Operating profit, MEUR 14.9 4.9 +10.0 +206.7% 13.7 3.1 6.9 Operating profit, % 4.4% 1.6% 7.6% 1.8% 1.1% Financial income and expenses, MEUR -0.9 -2.1 +1