YIT Oyj · OMXHEX:YIT
YIT Oyj — analyst event
28 slides from YIT Oyj's investor presentation, Jun 13, 2019
Slide 1: YIT Analyst breakfast
YIT Analyst breakfast June 13, 2019
Slide 2: Agenda
Agenda 1. How to turn around underperforming segments 2. Finnish residential market outlook 3. Financing update 4. Last words TRIPLA PROJECT HELSINKI, FINLAND
Slide 3: How to turn around underperforming segments
1 How to turn around underperforming segments Kari Kauniskangas President and CEO 3 Analyst breakfast, June 2019 REMIXER METHOD, E18 MOTORWAY, FINLAND
Slide 4: Adjusted operating profit per segment in 2018
Adjusted operating profit per segment in 2018 • Strong performers: 20% • Housing Finland & CEE • Business premises 15% Partnership properties • Partnership properties = Total EUR 199 million 10% Business • Underperforming segments: Housing premises Housing FIN & CEE • Paving Finland • Infrastructure
Slide 5: Housing Russia
Housing Russia • Target to further reduce capital employed in Russia by EUR ~100 million by end of 2021 • Planned steps • Capital allocation into well-performing units (St Petersburg, Kazan, Tyumen, Yekaterinburg) • Complete open projects in contracting • Continue to mitigate issues and sell plots i
Slide 6: Capital employed in Russia 2018-2019
Capital employed in Russia 2018-2019 EUR million 450 400 393 353 350 341 314 300 294 250 200 (Illustrative) 150 100 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Target end 2021 6 Analyst breakfast, June 2019
Slide 7: Paving
Paving • Actions taken in Scandinavia 2018 • Sweden and Norway: closed down unprofitable asphalt plants • Norway: restructuring completed, order backlog quality improving • Denmark: efficiency improvement program completed • Improved processes • Reduced winter planning costs • Higher overall product
Slide 8: Paving 1Q17-1Q19, adjusted operating profit (pro forma)
Paving 1Q17-1Q19, adjusted operating profit (pro forma) EUR million 40 Q1/19 EUR 10 29,3 30 27,4 million above Q1/18 thanks to 20 changes in winter Highly seasonal business planning 9,1 10 practices 4,8 0 -0,7 -10 -6,9 -20 -20,2 -25 -30 -30,8 -40 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 8 Analys
Slide 9: Infrastructure projects
Infrastructure projects • Special attention to management and risk management processes • Selective tendering • Price setting practices renewed • Margin quality of order backlog improving • New projects with clearly higher margins • Improved project control and preventive actions • Cleaning of old p
Slide 10: Infrastructure projects order backlog - share of post merger orders
Infrastructure projects Order backlog - illustrative share of post merger orders 1200 1000 Raidejokeri to 800 be added in Q2 order book 600 400 200 Blominmäki EUR million 0 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Share of pre merger orders Share of post merger orders Raidejokeri 10 Analyst breakfast, June 201
Slide 11: Key elements of YIT culture
Key elements of YIT culture VALUES RESPECT COOPERATION CREATIVITY PASSION • We care about our customers • We are open and share • We trust and build • We aim high with quality, and personnel knowledge a positive spirit expertise and results • We look for environmentally • We involve and partner • We
Slide 12: Government policy
Government policy • Housing: • Build a carbon neutral society and improve the quality of construction • Support sustainable urban development and increase housing construction in growing urban areas • Eradicate homelessness within 2 government terms • Infrastructure investments: • June 2019: a suppl
Slide 13: Finnish residential market outlook
2 Finnish residential market outlook Antti Inkilä EVP, Housing Finland and CEE 13 Analyst breakfast, June 2019 PURJEENTEKIJÄNKUJA APARTMENT BUILDING PROJECT LAUTTASAARI, HELSINKI, FINLAND
Slide 14: (Short-term) outlook in Finland
(Short-term) outlook in Finland • Consumer and investor demand expected to remain stable at autumn 2018 level • Private residential investment on lower level than in previous year • Consumer confidence remaining above long-term average – families investing • Population concentrating in urban centers
Slide 15: Finnish housing stock statistics
Finnish housing stock statistics • ~20% live in dwellings from the 70’s • 50% live in dwellings completed after 1980 • Only 10% live in dwellings built in 2010’s • In 2018 statistics, 614,000 dwellings completed in the 2000’s • 1/3 of those located in Uusimaa • In 2018, nearly 1.2 million persons li
Slide 16: Residential construction started to decline
Residential construction started to decline -10,000 apartments from 2018 high level 2019-2020 Highest level since the 70’s Analyst breakfast, June 2019 Source: Rakennusteollisuus RT, April 2019
Slide 17: YIT's housing starts 2017-2019
YIT’s housing starts 2017-2019 100 % 1 600 • Adapted offering already Q2/18 90 % 1 400 • Activity in housing started to 80 % 1 200 increase at end of Q1/19 70 % • Started more residential projects 1 000 60 % in 2019 than on average in the 50 % 800 second half of 2018 40 % 600 • Increased sales to in
Slide 18: Consumer sales: innovative concepts
Consumer sales: innovative concepts • Large variety of interior design solutions and materials in ready-made packages • YIT yard concept for well-being and sense of community while increasing density • Benefits for first-time buyers: • First year without maintenance charge • No transfer tax for firs
Slide 19: Our residential construction projects
Our residential construction projects Number of projects per region Helsinki, Espoo, Vantaa Greater Helsinki area Turku, Tampere, Hämeenlinna Rest of Finland 19 Analyst breakfast, June 2019
Slide 20: Financing update
3 Financing update Ilkka Salonen CFO 20 Analyst breakfast, June 2019 FINAVIA PLAZA VANTAA, FINLAND
Slide 21: Impact of the IFRS 16 adoption in 2019 for YIT
Impact of the IFRS 16 adoption in 2019 for YIT ESTIMATED ANNUAL IMPACT ON INCOME STATEMENT IMPACT ON BALANCE SHEET ON 1 JAN 2019 IFRS 16 impact IFRS 16 impact Revenue No material impact Assets +306 M€ EBITDA +45 M€ Property plant and equipment -19 M€ Operating profit +10 M€ Leased property, plant an
Slide 22: Adjusted net debt stable compared to 12/2018
Adjusted net debt stable compared to 12/2018 • In order to improve comparability between quarters, the company has excluded the IFRS 16 impact from the graphs below • Adjusted net debt amounted to EUR 556 million ADJUSTED NET INTEREST-BEARING DEBT1, EUR million MATURITY STRUCTURE, NOMINAL AMOUNTS1,
Slide 23: Capital employed by segment
Capital employed by segment 1 902 1 880 Impact of IFRS 16 standard implementation on capital employed on 1 Jan 2019 404 422 Capital Housing FIN Housing Business Infra Partnership Other and Group, employed, Paving & CEE Russia premises projects properties eliminations IFRS M€ 145 150 155 31/12/2018 5
Slide 24: Last words
4 Last words 24 Analyst breakfast, June 2019 OODI LIBRARY HELSINKI, FINLAND
Slide 25: Market outlook for the next 12 months
Market outlook for the next 12 months Housing Finland and Housing Business Infrastructure Partnership CEE Russia premises projects Paving properties Finland Russia The CEE countries The Baltic countries The Czech Republic, Slovakia, Poland Scandinavia Sweden Norway Denmark Weakened outlook compared
Slide 26: Estimated completions of consumer apartment projects under construction
Estimated completions of consumer apartment projects under construction Apartments under construction in total on March 31, 2019: 13,350. The table below shows the company’s current estimate of completed consumer apartment projects under construction. In addition, the company has 2,364 apartments (1
Slide 27: Guidance for 2019
Guidance for 2019 The Group revenue 2019 is estimated to be in the range of +5% – -5% compared to revenue 2018 (pro forma 2018: EUR 3,759.3 million). In 2019, the adjusted operating profit1 is estimated to be EUR 170–230 million (pro forma 2018: EUR 134.5 million). GUIDANCE RATIONALE • The guidance
Slide 28: Together we can do it.
Together we can do it.