Slide 1: Interim report 1-9/2016
Interim report 1-9/2016 SRV Group Plc Juha Pekka Ojala, CEO 1 Ilkka Pitkänen, CFO
Slide 2: January-September 2016 highlights
January-September 2016: Profit before taxes was modest – a fair value Revenue grew and operating revaluation of a interest profit improved, particularly rate hedge contributed to due to business construction the weakaning of the result in Finland The order backlog 2016 result outlook remains at a re
Slide 3: SRV Group 1-9/2016
SRV Group 1-9/2016 3
Slide 4: Revenue grew and operating profit increased
Revenue grew and operating profit increased MEUR 1-9/ 1-9/ Change Change, 1-12/ 2016 2015 MEUR % 2015 Revenue 555.5 492.5 63.0 12.8 719.1 Operating profit 11.4 7.5 4.0 53.4 24.4 Operating profit % 2.1 1.5 3.4 Return on equity % -1.2 0.9 5.6 Return on investment % 3.3 3.2 5.9 Equity ratio % 37.8 41.6
Slide 5: Operating profit grew due to improved margins
Operating profit grew due to improved margins 1-9 / in business construction in Finland 2016 Revenue - grew primary driven by large business construction Revenue project 555.5 MEUR - was impacted by the projects announced at the early part (492.5) of 2016, such as the new Central Finland Central Hos
Slide 6: Growth in revenue was driven by large business construction projects
Growth in revenue was driven by large business construction projects SRV Group Meur Meur Revenue Operating profit 250 20 200 15 150 227 219 10 100 209 194 193 17,0 173 165 155 138 143 144 50 5 9,6 6,0 7,3 4,4 4,9 0,8 4,1 4,1 0 2,5 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 0 0
Slide 7: Financing solidly secured
Financing solidly secured 1-9 / 2016 • Changes in the equity ratio and gearing resulted from an Equity ratio increase in interest-bearing debt. • Two significant financing arrangements were finalised in the 37.8 % first quarter of 2016. Through these SRV Group aims to (41.6) strengthen its self-suff
Slide 8: The order backlog remains at a record high
The order backlog remains at a record high The order backlog is clearly higher than in January- September 2015 8
Slide 9: Operations in Finland 1-9/2016
Operations in Finland 1-9/2016 9
Slide 10: Urbanization is accelerating in Finland
Urbanization is accelerating in Finland Urbanization scenario, Finland Urbanization scenario, 14 largest urban centres Conservative scenario, Finland Conservative scenario, 14 largest urban centres Source: VTT Technical Research Centre of Finland
Slide 11: Revenue impacted by business construction
Revenue impacted by business construction 1-9 / 2016 Revenue Revenue - growth particularly impacted by an increase in business 512.9 MEUR construction revenue - number of developer-contracted housing units (441.3) recognised as income was at same level as 1-9/2015 - own-development shopping centre p
Slide 12: Hospital projects and infrastructure construction had a positive impact on revenue
Hospital projects and infrastructure construction had a positive impact on revenue Operations in Finland Meur Meur Revenue Operating profit 350 20 300 250 15 213 200 197 200 176 181 52 157 147 57 10 150 124 131 137 93 131 40 18,3 77 43 52 32 25 100 55 48 5 10,2 145 144 141 7,6 6,6 50 69 82 99 114 95
Slide 13: 500 developer-contracted housing units will be recognised as income in 2016
High amount of housing startups 500 developer-contracted housing units in 2015 will be will be recognised as income in 2016 visible in result and revenue in 2016-2017 In 2016, 500 developer-contracted housing units will be recognised as income When construction of REDI’s Majakka begins, number of ho
Slide 14: The number of developer contracted housing units have increased
Many housing The number of developer contracted housing units units under have increased construction, particularly in growth centres The number of housing units under construction Construction contracts, Total of 1,057 (994) 418 housing units developer-contracted housing units currently Developer u
Slide 15: International operations 1-9/2016
International operations 1-9/2016 15
Slide 16: Russian economic forecasts improved
Russian economy Russian economic forecasts improved projected to grow by just over 1% in 2017 Russian Gross Domestic Product Foreign tourism declined and domestic tourism increased – consumption focus on domestic market due to inflation Economic forecasts improved thanks to e.g. oil price developmen
Slide 17: Temporary rent discounts contributed to loss-making result
Temporary rent discounts contributed to 1-9 / loss-making result 2016 Revenue • proportion of Group revenue accounted for by Revenue International Operations fell to 8 (10)%. • most of the revenue consisted of the construction of 42.9 MEUR Okhta Mall and 4Daily shopping centres. (51.3) Operating pro
Slide 18: Operating result was also improved by rouble exchange rate
Operating result was also improved by rouble exchange rate International operations Meur Meur Revenue Operating profit 20 3,0 2,0 15 1,0 -1,5 -0,6 -0,4 0,2 1,8 0,7 0,1 -0,3 -0,6 -1,1 1,2 10 0,0 18 18 18 18 14 16 12 13 14 12 12 -1,0 5 -2,0 0 -3,0 Q1/14Q2/14Q3/14Q4/14Q1/15Q2/15Q3/15Q4/15Q1/16Q2/16Q3/1
Slide 19: Okhta Mall, St. Petersburg
Okhta Mall, St.Petersburg Largest retail sector Officially opened its doors project implemented in in August – footfall around St. Petersburg in recent 10,000 customers per day years Over 1.5 million St. Occupancy rate is 68%. In Petersburg inhabitants addition, 25% of business live in close vicinit
Slide 20: European Property Awards winner 2016-2017
EUROPEAN PROPERTY AWARDS in association with The Telegraph AWARD WINNER 2016-2017
Slide 21: Strategical outlook
Strategical outlook 21
Slide 22: SRV has a keyrole as a developer of a rail hub
KEIMOLANMÄKI KIVISTÖ AVIAPOLIS TIKKURILA SRV has a keyrole as a developer of a rail hub VANTAANKOSKI MARTINLAAKSO MYYRMÄKI METRO LINE RING RAIL LINE RAIDE-JOKERI, TRAM LINE OULUNKYLÄ SRV PROJECTS SÄTERINPORTTI PERKKAA–VERMONTIE PASILA AALTO-YLIOPISTON KALASATAMA KAMPUSRAKENNUS KEILANIEMI NIITTYKUMPU
Slide 23: Almost 3,500 homes to be built next to west metroline
Almost 3,500 homes to be built next to west metroline KIVENLAHTI ESPOONLAHTI NIITTYKUMPU AINOA AALTO UNIVERSITY KEILANIEMI KALASATAMA METROCENTRE CAMPUS At the moment over 900 AALTO UNIVERSITY KALASATAMA housing units constructed CAMPUS or under construction KEILANIEMI NIITTYKUMPU AINOA KOIVUSAARI I
Slide 24: Largest commercial premises projects under construction
Largest commercial premises projects under construction (estimated figures) Project, location Value of SRV Project type Level of Completion, % Completion contract, date (estimated) MEUR DEVELOPMENT PROJECTS REDI, shopping centre and parking facility, 390 Retail, parking 41 Q3/2018 Helsinki TeHyKe, K
Slide 25: Largest commercial premises projects under construction
Largest commercial premises projects under construction (estimated figures) Project. location Value of SRV Project type Level of Completion, % Completion contract. date (estimated) MEUR Keilaniemi tunnel and excavation 49 Public 27 Q4/2018 HK Scan poultry processing plant 38 Industry 37 Q2/2017 Raum
Slide 26: Largest developer-contracted housing projects under construction in Finland
The largest developer-contracted housing projects under construction in Finland (estimated figures) Project, location Value of Level of Completion Sold / For SRV completion, % sale contract, MEUR 3,500 homes in the development Niittyhuippu, Espoo pipeline–target to 57 42 Q4 /2017 135/65 build 15,000
Slide 27: Largest ongoing housing projects in Finland, housing contracting
The largest ongoing housing projects in Finland, housing contracting (estimated figures) Housing project, location SRV, contract Completion Completion date value, MEUR level, %* (estimated)* Wood City, Helsinki, ATT 3,500 homes in * 10 Q1 /2018 the development Vantaan Celica, LocalTapiola * 53 Q2/20
Slide 28: Completed projects to be adventurous
Fazer's visitors' center was created Completed projects to be adventurous
Slide 29: Strategic financial targets
Strategic financial targets Targets set Status in Status 2020 for 2020 9/2016* Faster than 782,0 Revenue (MEUR) industry growth 3,6 Operating profit (%) More than 8 % Return on equity (%) At least 15 % 3,5 Return on investment in At least 15 % 1,0 international operations (%) Equity ratio (%) Above
Slide 30: Share price performance strong, especially during recent months
Share price performance strong, especially during recent months SRV OMX Nordic Construction & Real Estate OMX Helsinki Mid Cap PI 30
Slide 31: REDI news
REDI news New ideas for REDI apartment and shopping centre services at #REDIHack event
Slide 32: REDI news experiential
47 % of the premises are REDI news leased - Cafeteria and restaurant area fully leased REDI will be an experiential shopping centre: for example offering a 7D cinema
Slide 33: Outlook remains unchanged
Outlook remains unchanged • A total of 503 developer-contracted housing units are expected to be completed during 2016 • Due to the completion schedules of SRV’s developer-contracted housing production, a significant part of operating profit will be made in the Q4 • Due to growth of interest-bearing
Slide 34: Thank You!
Thank You! 34
Slide 35: Appendices
Appendices
Slide 36: Apartments needed in growth centers
Apartments needed in growth centers Source: VTT Technical Research Centre of Finland
Slide 37: Consolidated income statement
Consolidated income statement EUR million 1-9/2016 1-9/2015 1-12/2015 Revenue 555.5 492.5 719.1 Other operating income 1.8 1.3 1.8 Change in inventories of finished good and work in progress 88.2 34.4 24.7 Use of materials and services -564.6 -460.9 -639.1 Employee benefit expenses -53.0 -48.8 -64.6
Slide 38: Balance sheet
Balance sheet EUR million 09/30/2016 % 12/31/2015 % Non-current assets 283.8 32.1 % 271.9 35.6 Inventories 423.1 47.9 % 336.6 44.1 Other current assets 138.7 15.7 % 119.2 15.6 Cash and cash equivalents 37.9 4.3 % 35.0 4.6 Total assets 883.5 100.0 % 762.6 100.0 Equity 285.8 32.3 % 277.2 36.3 Non-curr
Slide 39: Indebtedness in detail
Indebtedness in detail EUR million 09/30/2016 12/31/2015 12/31/2014 Non-current interest bearing liabilities Loans from financial institutions 11.0 29.5 26.6 Bonds 174.2 74.9 74.8 Housing corporation loans 53.9 58.9 45.6 Subtotal 239.2 163.2 147.0 Current interest bearing liabilities Loans from fina
Slide 40: Consolidated cash flow statement
Consolidated cash flow statement EUR million 1-9/2016 1-12/2015 1-12/2014 Net profit -2.6 14.0 15.4 Non-cash transaction / Financial income and expenses / 17.8 12.3 10.7 Income taxes Depreciation and impairments 2.8 3.5 2.0 Change in working capital -64.4 41.2 34.7 Interest paid and received -5.4 -1