Srv Yhtiot Oyj · OMXHEX:SRV1V

Srv Yhtiot Oyj — SRV Group — Q3 2013 Earnings Presentation

28 slides from Srv Yhtiot Oyj's earnings presentation, Oct 31, 2013

  1. Slide 1: SRV – Building for life

    SRV – Building for life Interim report January – September 2013 Jukka Hienonen CEO 31 October 2013 1

  2. Slide 2: 1-9/2013 – Positive profitability trend continued

    1-9/2013 – Positive profitability trend continued • Group’s revenue and operating profit increased - Revenue EUR 507.8 million, +8.9% - Operating profit EUR 21.8 million, +368% • Domestic Operations’ revenue and operating profit increased - Profitability improved in 7-9/2013 due to increase in reven

  3. Slide 3: January – September 2013 in brief

    January – September 2013 in brief 1-9/ 1-9/ change, change, 1-12/ 2013 2012 meur % 2012 Revenues, meur 507.8 466.2 +41.6 +9% 641.6 Opera ng pro t, meur 21.8 4.5 +17.3 +386% 6.9 Opera ng pro t, % 4.3% 1.0% 1.1 % Pro t before taxes, meur 19.2 0.6 +18.6 +2961% 2.8 Order backlog 1), meur 911.5 747.1 +16

  4. 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 6.9 170 175 179 170 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 Q3/13 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 -2 Meur Order backlog Meur Profit before taxes 95

  5. Slide 5: Strong order backlog

    Strong order backlog • Order backlog EUR 911.5 million (+22.0%, 30 September 2012) - Domestic order backlog rose to EUR 727.8 million (EUR 676.2 million) - Competitive contracting has been regarded more critically both in commercial and housing construction. The volume of housing contracting has bee

  6. Slide 6: Order backlog

    Order backlog 911 900 811 828 53 184 800 100 International 700 operations 595 600 336 277 20 482 349 500 Domestic 25 303 operations; 400 Housing 202 construction 300 439 451 Domestic 200 operations; 362 255 272 Business 100 premises construction 0 12/2009 12/2010 12/2011 12/2012 9/2013 6

  7. Slide 7: Domestic operations

    Domestic operations Meur Revenue Meur Operating profit 200 10 180 160 8 140 120 6 100 5.8 80 151 157 155 4 140 135 7.3 60 121 129 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 Q3/13 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Meur Order backlog 774 772 800 728 662 676 687 700 658

  8. Slide 8: Development of housing sales

    Development of housing sales SRV's housing sales in Finland (units) 900 791 800 745 680 700 640 383 * ) 600 268 530 116 198 500 400 323 300 524 482 477 200 408 100 207 0 1-12/09 1-12/10 1-12/11 1-12/12 LTM Developer contracting Institutional sales, negotiation contracts *) In addition, preliminary a

  9. Slide 9: Structure of SRV’s housing production

    Structure of SRV’s housing production Housing production under construction in Finland (units) 100 % Construction 195 550 contracts 80 % 497 908 969 1 377 60 % 76 Negotiation contracts, 448 investor sold 40 % 116 294 206 198 265 Developer 20 % 605 contracting 263 622 586 400 0% 12/2008 12/2009 12/20

  10. Slide 10: Profitability level of order backlog for housing construction improved

    Profitability level of order backlog for housing construction improved and preparations made in case of decrease in consumer sales • 61% of housing production is production developed by SRV (43%, 30 September 2012) - Total of 848 units under construction from developer-contracted projects or develop

  11. Slide 11: 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

  12. Slide 12: 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 0.2 10 20 23 19 16 18 0 15 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 -2 0 -2.6 -1.9 -1.1 -0.8 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 -4 Meur Order backlog 200 180 160 140 120 100 188 184 80 60

  13. Slide 13: SRV’s main shopping centre projects in Russia

    SRV’s main shopping centre projects in Russia • Pearl Plaza shopping centre opened on 24 August 2013 - 1. phase of the project approx. EUR 140 million, area approx. 92,000 m2. SRV’s share 50% and investment EUR 22 million - SRV acted as a project management constructor in charge of commercialisation

  14. Slide 14: Future Quality Shopping Centres in St. Petersburg, 2013-15

    Future Quality Shopping Centres in St. Petersburg, 2013-15 14

  15. Slide 15: 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

  16. Slide 16: An example of the calculation formula of Okhta Mall's cumulative profit development estimate

    An example of the calculation formula of Okhta Mall's cumulative profit development estimate OKHTA MALL -PROJECT; SRV'S FINANCIAL RESULTS SRV ownership 60 % Investment cost 250 MEUR Construction volume 160 MEUR Project loan 160 MEUR Construction profit, %* 10 % Target rent level 33 MEUR Rental level

  17. Slide 17: An example of the calculation formula of Okhta Mall's cumulative profit development estimate

    An example of the calculation formula of Okhta Mall's cumulative profit development estimate OKHTA MALL -PROJECT; SRV'S FINANCIAL RESULTS SRV ownership 60 % Investment cost 250 MEUR Construction volume 160 MEUR Project loan 160 MEUR Construction profit, %* 10 % Target rent level 33 MEUR Rental level

  18. Slide 18: An example of the calculation formula of Okhta Mall's cumulative profit development estimate

    An example of the calculation formula of Okhta Mall's cumulative profit development estimate OKHTA MALL -PROJECT; SRV'S FINANCIAL RESULTS SRV ownership 60 % Investment cost 250 MEUR Construction volume 160 MEUR Project loan 160 MEUR Construction profit, %* 10 % Target rent level 33 MEUR Rental level

  19. Slide 19: 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 19

  20. Slide 20: 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

  21. Slide 21: 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. Phase I completed in 8/2012 including among others SRV’ headquarters. Phase II (inc

  22. Slide 22: SRV revises its outlook for 2013

    SRV revises its outlook for 2013 • The quarterly change and development of revenue and result in 2013 are affected by the recognition upon delivery of SRV's own projects, the continuously recognised order backlog comprising mostly low-margin contracting, the development of the order backlog's profit

  23. Slide 23: Appendices

    Appendices SRW

  24. Slide 24: Q3/2013 in brief

    Q3/2013 in brief Q3/ Q3/ Change, 2013 2012 meur Revenues, MEUR 170.0 155.8 +14.2 Operating profit, MEUR 6.9 -0.4 +7.2 Operating profit, % 4.0% -0.2% Profit before taxes, MEUR 5.2 -2.1 +7.3 New agreements, MEUR 532.4 346.5 +185.9 EPS, EUR 0.06 -0.04 +0.10 24

  25. Slide 25: Domestic operations

    Domestic operations change 1-9/ 1-9/ 7-9 7-9 1-12/ 1-9/13 vs 1-9/12 2013 2012 meur % 2013 2012 2012 Revenue 418.9 411.1 +7.8 +1.9% 155.0 139.7 568.3 - Business premises 230.2 221.8 +8.4 +3.8% 88.1 78.9 305.3 - Housing construction 188.7 189.3 -0.6 -0.3% 66.9 60.7 263.0 Operating profit 13.4 13.1 +0.

  26. Slide 26: Structure of housing production’s order backlog

    Structure of housing production’s order backlog • Order backlog EUR 277 million Order backlog - housing production in Finland 100% 26 M€ 28 M€ - Negotiated and construction 90% 53 M€ 40 M€ Unsold developer contracting, contracts amount 80% 63 M€ completed 115 M€ for 43% of order backlog 70% 62 M€ 11

  27. Slide 27: International operations

    International operations change 1-9/ 1-9/ 7-9/ 7-9/ 1-12 1-9 13 vs 1-9 12 2013 2012 MEUR % 2013 2012 2012 Revenue, MEUR 89.0 55.1 +33.9 +61.6% 15.1 16.1 73.1 Operating profit, 11.7 -5.6 +17.3 -308.0% 0.2 -1.1 -3.2 Operating profit, % 13.1% -10.2% 1.1% -7.0% -4.4% Order backlog 183.7 70.9 +112.8 +159

  28. Slide 28: SRV Group

    SRV Group change 1-9/13 1-9/ 1-9/ 7-9/ 7-9/ 1-12 vs 1-9/12 2013 2012 MEUR % 2013 2012 2012 Revenues, MEUR 507.8 466.2 +41.6 +8.9% 170.0 155.8 641.6 Operating profit, MEUR 21.8 4.5 +17.3 +385.8% 6.9 -0.4 6.9 Operating profit, % 4.3% 1.0% 4.0% -0.2% 1.1% Financial income and expenses, MEUR -2.6 -3.9 +

SRV Group — Q3 2013 Earnings Presentation on 6ix