Slide 1: Half-year report 1-6/2022
Half-year report 1-6/2022 Markku Moilanen − President and CEO Tuomas Mäkipeska − CFO
Slide 2: 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
Slide 3: Q2 – strategy execution continued
Q2 – strategy execution continued The sale of the Profitability Order book businesses in Russia improved despite strengthened completed prevailing market successfully instability 3
Slide 4: Successful quarter despite the prevailing market instability
Successful quarter despite the prevailing market instability Revenue, Adjusted EBIT, Adjusted EBIT-margin € million € million % 685 545 24 25 4.5 3.4 2Q21 2Q22 2Q21 2Q22 2Q21 2Q22 4
Slide 5: Our businesses are in good shape
Our businesses are in good shape Housing Business Infrastructure Property Good performance in Premises Transformation Development market instability Solid underlying continued Stable result performance Adj. EBIT, € million 39 14 11 2 1 1 -1 -13 2Q21 2Q22 2Q21 2Q22 2Q21 2Q22 2Q21 2Q22 5
Slide 6: Our strategy is the right one
FOCUS • The sale of the Russian businesses completed • IISY Oy divested in line with our strategy to focus on core businesses • Investments in attractive urban plots continued Our strategy PRODUCTIVITY • Cumulative YTD cost savings from the new agile operating model is the right one amounted to €14
Slide 7: We continued to invest in our land bank
We continued to invest in our land bank Most significant land bank acquisitions in Q2 Land bank exposure Housing units 11,300 Warsaw Kraków Poland Poland 11,200 300 housing units 160 housing units 4,600 4,600 7
Slide 8: We are well positioned to achieve our financial targets for 2025
>6% 3.8% EBIT 2.8% 3.2% > % 6 2020** 2021* LTM* 2025 We are well positioned to GEARING 68% 51% <50% achieve our 30% financial < 50% 2020 2021 Q2/22 2025 targets for 2025 DIVIDEND 0.14 0.16 Stable growth 2020 2021 2025 *Adj.EBIT 8 **Adj. EBIT. Not restated and therefore not fully comparable.
Slide 9: Profitability strengthened; balance sheet remains strong
Profitability strengthened; balance sheet remains strong 9 Konepaja, Helsinki, Finland
Slide 10: Q2 in numbers
Q2 in numbers Order book Adjusted EBIT Adjusted Net debt strengthened to amounted to EBIT-margin increased to €4.1 €25 increased to €435 billion million 4.5% million (3.7) (24) (3.4) (353) 10
Slide 11: The financial impacts of the sale of the Russian businesses
Q2 • Total transaction price €71 million The financial • Debt-free purchase price €30 million • Net cash impact -€14 million impacts of the • Result for discontinued operations -€293 million sale of the • Accumulated RUB/EUR translation difference -€253 million booked – no impact on Group´s equity o
Slide 12: Strong order book; revenue decreased due to a lower number of apartment completions
Strong order book; revenue decreased due to a lower number of apartment completions Order book, € million Revenue, € million 3,885 4,067 870 3,653 3,847 3,756 685 535 518 545 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 12 Hiekkaharju water tower, Vantaa, Finland
Slide 13: Our diversified business model provides us protection against market turbulence
Adjusted EBIT bridge per segment, € million Our diversified Lower number of completions business 25 model Margin reductions in comparative provides us period 4.5% protection 3.4% against market Supported by the sale of two self-developed projects turbulence Q2/21 Housing Business Infra- Property Oth
Slide 14: Capital employed increased y-o-y
Capital employed increased y-o-y Operating cash flow after investments, Capital employed, continuing € million operations, € million 1,240 1,286 1,207 1,176 1,142 109 133 -23 -41 -133 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 14
Slide 15: Our debt structure leads to a low financial risk profile
Our debt structure leads to a low financial risk profile Distribution of interest-bearing debt, Maturity structure of interest-bearing debt1, € million € million 30 June 21 30 June 22 Other interest-bearing debt 44 63 150 Interest-bearing receivables 138 Bonds 199 248 Cash and cash equivalents 100 L
Slide 16: Our strong balance sheet withstands cyclical changes
Net interest-bearing debt Gearing 862 81% 628 68% Our strong 435 51% € million 303 30% balance sheet withstands 2019 2020 2021 Q2/22 2019 2020 2021 Q2/22 cyclical Interest cover ratio Equity ratio changes 40% 37% 5.8 34% 33% 4.3 3.5 3.0 1 1 2019 2020 2021 Q2/22 2019 2020 2021 Q2/22 16 1 The comparab
Slide 17: Successful transformation and improving performance drove our earnings growth
Successful transformation and improving performance drove our earnings growth Our Our balance Our order profitability sheet remains book is improved strong healthy 17
Slide 18: We expect our profitability to improve in 2022
We expect our profitability to improve in 2022 18 Konepaja, Helsinki, Finland
Slide 19: Market outlook is subdued in the short term
Market outlook Infra- is subdued in Housing market Real estate market structure market the short term Finland Baltic countries Central Eastern Europe Sweden Q2 market environment Short-term market outlook Good Normal Weak Improving Stable Weakening 19 Mall of Tripla, Helsinki, Finland
Slide 20: In Finland, building costs rose by 9.4% y-o-y
Building cost index (1.1.2021 – 30.6.2022) Source: Statistics Finland 120 In Finland, 115 110 building costs 105 rose by 100 9.4% y-o-y 95 90 85 80 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 2021 2022 Total index Labour Materials Services 20
Slide 21: COVID-19 pandemic reflected in 2022 completions
COVID-19 pandemic reflected in 2022 completions Estimated completions of consumer apartment projects under construction, housing units In addition, revenue from apartments under construction recognised over time (POC): • 2,020 units for investors 1,654 450 1,181 1,050 621 137 2,579 300 1,100 2,061 2
Slide 22: Apartment completions to remain low in 2022 but increase in 2023
Consumer apartment start-ups and completions, Finland and Central Europe, rolling 12 months, units Apartment Started for consumers completions to 5,000 Completed for consumers remain low in 4,000 2022 but 3,000 increase 2,000 in 2023 1,000 Cautious start-up levels at the beginning of the COVID-19 pa
Slide 23: Our 2022 Group adjusted operating profit expected to be higher than in 2021
Housing Our 2022 • Completions of consumer apartments to decrease Group Business Premises adjusted • Performance continues to improve Infrastructure operating • Will gradually improve profit expected • Still impacted by certain legacy low-margin projects to be higher Property Development than in 202
Slide 24: We expect to navigate through current market challenges by rigorous strategy execution
We expect to navigate through current market challenges by rigorous strategy execution Our balance sheet is Our diversified Our investments are strong and business model geared towards withstands cyclical and strategy which future growth and changes focuses on core opportunities competencies are sup
Slide 25: Additional information
Additional information Follow YIT IR on Twitter YIT Investor Relations YIT’S FINANCIAL REPORTING twitter.com/ investorrelations@yit.fi IN 2022 YITInvestors Tommi Järvenpää Vice President, Investor Relations Interim report Q3/2022 27 October +358 40 576 0288 tommi.jarvenpaa@yit.fi Samu Heikkilä Inves
Slide 26: Appendices
TRIPLA, HELSINKI, FINLAND Appendices 26
Slide 27: Appendices
Appendices I. Key figures II. Housing sales and start-ups III. Property Development highlights KEILALAMPI, ESPOO, FINLAND 27 Half-year report Q2/2022
Slide 28: I. Key figures
I. Key figures € million 4-6/22 4-6/21 1-6/22 1-6/21 1-12/21 Revenue 545 685 1,063 1,247 2,652 Operating profit 22 21 44 31 56 Operating profit margin, % 4.1 3.1 4.2 2.5 2.1 Adjusted operating profit 25 24 47 39 85 Adjusted operating profit margin, % 4.5 3.4 4.4 3.1 3.2 Result before taxes 14 12 28
Slide 29: II. Sales and start-ups Q2/2019-Q2/2022 – Housing Finland
The Housing segment in Finland II. Sales and start-ups Q2/2019-Q2/2022 SOLD APARTMENTS, units APARTMENT START-UPS, units 1800 1600 1,481 1,637 1600 1400 1,080 993 1,274 1,305 1400 546 539 1200 1,131 1,239 583 1,007 1200 1,091 583 1000 932 955 1,023 1,058 897 427 968 845 390 907 546 929 427 1000 267
Slide 30: II. Sales and start-ups Q2/2019-Q2/2022 – Housing CEE
The Housing segment in Central Eastern Europe II. Sales and start-ups Q2/2019-Q2/2022 SOLD APARTMENTS, units APARTMENT START-UPS, units 1200 1000 951 946 1,096 900 588 565 998 1000 800 700 634 623 800 600 368 665 523 100 639 479 480 600 590 500 442 523 523 516 209 195 400 98 374 339 98 5 363 381 345
Slide 31: III. Investment portfolio and development highlights, 31 March 2022
Property Development III. Investment portfolio and development highlights, 31 March 2022 INVESTMENT PORTFOLIO Change from Change from EUR million Value1 31 Mar 20222 30 June 20212 Housing 63 2 6 Commercial 206 -4 7 Infra 6 0 -1 Total 275 -2 12 1 Book value of Property Development´s equity investment
Slide 32: Together we can do it.
Together we can do it.