Slide 1: Interim report presentation 1–3/2022
ASSET WRITE-DOWNS IN RUSSIA AND INITIATING MEASURES TO STRENGTHEN THE BALANCE SHEET – OPERATIVE OPERATING PROFIT AT Q1 2021 LEVEL Interim report presentation 1–3/2022, SRV Group Plc Building April 28, 2022 for life. Saku Sipola, CEO Jarkko Rantala, CFO
Slide 2: Agenda
AGENDA Programme to reorganise balance sheet January-March 2022 Strategy review SRV focus after the finance restructuring 2 Outlook
Slide 3: Aiming to become a company with healthy operations in Finland, no risk in Russia
Aiming to become a company with healthy operations in Finland, no risk in Russia and virtually no net debt1 in the balance sheet Russia’s invasion of Ukraine and following economic sanctions led to a weaking of EUR 141 million SRV asset value in Russia. We have started a significant finance rest
Slide 4: Finance restructuring to strengthen the balance sheet
Finance restructuring to strengthen the balance sheet Building for life.
Slide 5: Most of SRV's equity stake in its Russian holdings and Fennovoima written off
Most of SRV’s equity stake in its Russian holdings and Fennovoima has been written off in Q1 2022 Overview of events since year-end 2021 Capital employed in Russia and Group equity (EURm) The war in Ukraine has resulted in a rapid deterioration of the 32.8 % Equity ratio 9.7 % Russian economy, acc
Slide 6: Reorganisation of the company's balance sheet
Reorganisation of the company’s balance sheet Segment of the solution Size Description Commitments Senior bonds of EUR 100m converted at 100% of par value into 2018/2025 Bonds: Voting commitments in favour of the proposal Senior bond conversion new 4-year hybrid bonds with a coupon of 4.875% p.a
Slide 7: Measures will help SRV return to a sustainable balance sheet
Measures will help SRV return to a sustainable balance sheet Equity ratio would increase considerably1) Interest-bearing debt would decrease significantly1) Equity ratio (excl. IFRS16) Net Interest bearing debt excl. IFRS16 liabilities, EURm >35% 110.1 10% Ca. 10 Q1 2022 Equity ratio Estimated post-
Slide 8: Key dates
Key dates Key events Timing1) I. Voting period for written procedures (Bonds and Hybrid Bonds) 28 Apr 2022 – 23 May 2022 II. Invitation to SRV’s Extraordinary General Meeting 6 May 2022 (expected) III. SRV’s Extraordinary General Meeting 30 May 2022 (expected) IV. Subscription period for Rights Issu
Slide 9: January–March 2022
JANUARY–MARCH 2022 Building for life.
Slide 10: Satisfactory operative operating profit despite the challenging market
Satisfactory operative operating profit despite the challenging market 1─3/ 1─3/ Change, Change, Milj. euroa FY 2021 Revenue increased by 1.9% 2022 2021 EUR million % Revenue included a positive EUR 14.5 million Revenue 190.7 187.1 3.6 1.9 932.6 positive dissolution of profit margin elimination re
Slide 11: Group revenue and operative operating profit
Group revenue and operative operating profit 450 REVENUE OPERATIVE OPERATING PROFIT 8 400 6 350 4 7.6 300 5.6 5.7 4.3 5.3 4.8 4.9 2 250 0 1.1 0.5 200 404 -0.6 -2.3 336 -2 -4.6 150 292 -4.7 265 100 223 207 227 208 210 218 -4 187 191 191 50 -6 0 -8 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21
Slide 12: Construction – strong growth in housing construction
Construction – strong growth in housing construction Revenue Decreased volume in business premises contracting had a negative impact on revenue. Revenue Revenue from housing construction increased by 62% to EUR 76.5 million (47.3) due to volume growth in developer-contracted projects. 175.2 (187
Slide 13: Developer-contracted housing units' start-ups and recognition as income
Developer-contracted housing units’ start-ups and recognition as income 600 Recognition of developer- 532 contracted housing has been low, revenue contribution EUR 500 1.4 million (11.6). 424 The amount of completed, 400 unsold apartments was low, 5 (46). 300 283 259 No new housing unit start-ups 23
Slide 14: Investments – Investments written down, accelerated exit from Russia
Investments – Investments written down, accelerated exit from Russia Revenue Revenue Mainly consists of revenue from shopping centre management. 1.1 (1.0) MEUR Capital employed decreased due to write-downs of Russia-related investments. The amount of capital employed remaining in Russia was EUR
Slide 15: SRV focus after the finance restructuring
SRV FOCUS AFTER THE FINANCE RESTRUCTURING Building for life. 15
Slide 16: SRV focuses on the Finnish growth centres
SRV focuses on the Finnish growth centres SRV revenue by area 2021 SRV revenue by building type 24 % 11% 100% 17% 34% EUR 932.6m 38% 76 % Capital region Homes Business premises Hospitals, schools & Infrastructure and 2021 revenue Other cities education renovation SRV is active in mainly four diffe
Slide 17: Strong underlying construction business – Future cornerstone of SRV
Strong underlying construction business – Future cornerstone of SRV Construction segment operative operating profit (2021 excluding Tampere Arena project) EURm Construction operative operating profit Construction operative operating profit -% 4,0% 2,6% 34,7 1,6% 25,1 16,4 2019 2020 2021 Reported ope
Slide 18: Strong project portfolio now and in the future
Strong project portfolio now and in the future Wood City II, WithSecure Oulu Main Police Station and Prison Jorvi hospital, new ward building Laakso Joint Hospital 09.02.2022, Helsinki 04.03.2022, Oulu 03.03.2022, Espoo 23.04.2021, Helsinki WithSecure, Private Senate Properties, Public Helsinki and
Slide 19: Solid order backlog outlook for 2022 and 2023
Solid order backlog outlook for 2022 and 2023 Solid current order backlog… … with rapid order backlog development ahead from new projects and won tenders Project Contract value (EURm) Current situation EUR 858m Oulu Security Campus 105 Won tender and LOI Total order backlog Q1 2022 2 Residential bui
Slide 20: Towards a lifecycle-wise reality
TOWARDS A LIFECYCLE-WISE REALITY SRV’s strategy 2021-2024 Streamlining operations throughout the construction chain OUR OBJECTIVE is, together with our partners, to create a new lifecycle-wise reality, where solutions related to construction ensure well-being, financial value and the benefit of user
Slide 21: No changes in our long-term financial objectives
No changes in our long-term financial objectives Considering changes towards the end of 2022 after the write downs and the completion of financing arrangements. 6% 30–50% Operating profit: 6 per cent The longer-term objective is to by the end of the strategy distribute dividend of 30–50 per period 2
Slide 22: Outlook
OUTLOOK Building for life. 22
Slide 23: Outlook 2022
Outlook 2022 During 2022, SRV's revenue and result will be affected by several factors in addition to general economic trends, such as: the timing and amount of income recognition for SRV's own projects, which are recognised as income upon delivery; the margin of the order backlog and its developmen
Slide 24: Focus in FY 2022
Focus in FY 2022 1. Successful completion of the well-supported financing arrangement. 2. Starting the recently won projects in co-operation with the customers. 3. Working actively with our customers and proceeding with the project development. 4. Mitigating cost inflation and securing the availabil
Slide 25: Appendices
Appendices
Slide 26: Key financials
Key financials EBITDA (EUR milj. ) & EBITDA (%) NET GEARING (%) 35,000 15.0 % 800 748.4 12.5 % 700 25,000 10.0 % 7.5 % 600 15,000 3.9 % 3.6 % 3.6 % 1.9 % 2.1 % 2.4 % 5.0 % 500 5,000 -0.3 % 0.5 % 2.5 % 400 0.0 % -5,000 2016 2017 2018 2019 2020 3/21 6/21 9/21 12/21 3/22 -2.5 % 300 240.3 343.2 -1.5 % -
Slide 27: Consolidated income statement
Consolidated income statement Previous 12 EUR million 1-3/2022 1-3/2021 Change, % 1-12/2021 months Revenue 190.7 187.1 1.9 % 932.6 936.2 Other operating income 0.2 1.0 -77.1 % 3.5 2.7 Change in inventories of finished good and work in progress -62.8 4.3 -1572.8 % -116.9 -184.0 Use of materials and s
Slide 28: Balance sheet
Balance sheet EUR million 31.3.2022 % 31.3.2021 % Muutos % 12/2021 % Non-current assets 75.0 15.4 % 185.9 21.6 % -59.7 184.8 26.9 % Inventories 240.1 49.2 % 469.3 54.6 % -48.8 300.1 43.7 % Other current assets 136.0 27.9 % 141.2 16.4 % 106.4 133.5 19.4 % Cash 37.2 7.6 % 63.1 7.3 % -41.0 68.0 9.9 % A
Slide 29: Indebtedness in detail
Indebtedness in detail EUR million 1-3/2022 1-3/2021 12/2021 Non-current interest bearing liabilities Loans from financial institutions 16.5 18.6 16.5 Bonds 0.0 74.7 94.2 Housing corporation loans 21.4 35.1 18.1 Lease liabilities. IFRS 16 85.3 126.5 86.7 Subtotal 123.2 254.8 215.5 Current interest b
Slide 30: Consolidated cash flow statement
Consolidated cash flow statement Previous 12 EUR million 3/2022 03/2021 12/2021 months Cash receipts from customers 172.9 192.3 927.2 907.9 Cash receipts from other operating income 0.3 0.9 3.1 2.5 Cash generated from operations -193.6 -207.9 -842.6 -828.4 Net cash before interests and taxes -20.5 -