Slide 1: Interim report 1-3/2016
Interim report 1-3/2016 Juha Pekka Ojala, CEO Ilkka Pitkänen, CFO 1
Slide 2: January-March 2016
January-March 2016 Result bland as expected Order backlog and revenue declined remains at record slightly – fewer housing high level, and the units recognised as same trend seems income than in Q1/2015 to be continuing Foundations of Many development financing housing projects under successfully con
Slide 3: Agenda
Agenda • SRV Group 1-3/2016 • Operations in Finland - Market - Result 1-3/2016 • International Operations - Market - Result 1-3/2016 • Projects • Outlook Central Finland new central hospital 3
Slide 4: SRV Group 1-3/2016
SRV Group 1-3/2016 SRW
Slide 5: First-quarter result bland as expected
First-quarter result bland as expected MEUR Q1 Q1 change Change, 2015 2016 2015 MEUR % Revenue 143.8 172.9 -29.1 -16.8 719.1 Operating profit 0.0 2.5 -2.5 -99 24.4 Operating profit % 0.0 1.5 3.4 Return on equity, % -6.8 4.9% 5.6 Return on investment, % 0.5 4.5 5.9 Equity ratio, % 36.7 39.8 42.5 Orde
Slide 6: Revenue decreased slightly from last year
Revenue decreased slightly from last year SRV Group Meur Meur Revenue Operating profit 250 20 200 15 150 10 209 227 17,0 100 194 173 165 155 138 143 144 5 50 9,6 4,4 4,9 6,0 2,5 4,1 0 0 0,8 0,0 Q1/14Q2/14Q3/14Q4/14Q1/15Q2/15Q3/15Q4/15Q1/16 Q1/14Q2/14Q3/14Q4/14Q1/15Q2/15Q3/15Q4/15Q1/16 Meur Meur Prof
Slide 7: Order backlog remains at record high level
1-3 / Order backlog remains at record high level 2016 • Order backlog remained at a record high due to new Order backlog contracts totalling over of EUR 100 million 1572.1 MEUR • New contracts included those for the implementation of a (1179.8) new campus building and Metro Centre business premises
Slide 8: Order backlog almost 1.6 billion euros
Order backlog almost 1.6 billion euros Meur SRV Group: order backlog 1 800 1 583 1 572 1 600 77 60 International 1 400 operations The largest projects 1 200 554 539 are REDI, TAYS, Niittykumpu Metro 1 000 Operations in 860 Center and Tapiola 811 828 826 Finland; 800 53 137 city center 100 Housing 18
Slide 9: First-quarter result bland as expected – number of housing units lower
1-3 / First-quartet result bland as expected – number 2016 of housing units lower than last year Revenue Revenue - Recognition in revenue of the REDI site’s excavation and other infrastructure work in the previous year 143.8 MEUR contributed to the decline (172.9) - Number of housing units recognise
Slide 10: Foundations of financing secured
Foundations of financing secured 1-3 / 2016 • The foundations of financing were secured in spring 2016 - A EUR 100 million bond as well as a new EUR 45 million Equity ratio hybrid bond were issued in March 2016 36.7 % (39.8) - The voluntary repurchase of a hybrid bond issued in 2012 was also impleme
Slide 11: Operations in Finland 1-3/2016
Operations in Finland 1-3/2016 New Children’s Hospital. Helsinki 11
Slide 12: Helsinki housing construction boom (press clippings)
Hui +o: Tuoreimmat Nain Helsinki muuttuu - menossa :ohinnat nousivat pHelsingin seudulle jopa 60 000 uutta asuntoa — ammin kuin muuallaakennusvauhti vain kiihtyy valtava rakennusbuumi te \ wim See = ! i f ” Kuvassa valmistuvia asuntoia J nid a a Ai Keskustat imevat asukkaita merlattavasti. Vime vuon
Slide 13: Order backlog remains to be all-time high
Order backlog remains to be all-time high Operations in Finland Operations in Finland Kansa Meur Meur Revenue Operating profit 250 20 200 15 150 10 213 18,3 100 197 176 157 131 147 137 131 5 10,2 124 50 6,6 7,0 6,2 4,9 3,3 2,4 2 0 0 Q1/14Q2/14Q3/14Q4/14Q1/15Q2/15Q3/15Q4/15Q1/16 Q1/14Q2/14Q3/14Q4/14Q
Slide 14: REDI site was recognised in revenue
REDI site was recognised in revenue 1-13 / 2016 Revenue - Slight decrease in revenue, as quarrying and other Revenue infrastructure work completed at the REDI site was recognised in revenue in 2015. 131,2 MEUR (157,1) Operating profit - First-quarter result bland as expected due to the quarterly flu
Slide 15: High amount of housing startups will improve future result
High amount of housing startups High amount of housing startups will improve in 2015 will be visible future result in result and revenue in 2016-17 1000 Developer contracting, housing starts in Finland (units) 900 883 In 2016 over two 802 791 times more 800 750 apartments will be 700 completed than
Slide 16: Share of housing development projects has increased
Housing sales successful Share of housing development projects during Q1 2016 has increased – 93 housing units have been sold Housing production under construction in Finland (units) 100% Developer- 90% 249 330 Developer contracting contracted housing 80% launches tripled 885 910 70% from Q1 2015 60
Slide 17: International operations 1-3/2016
International operations 1-3/2016 Okhta Mall 17
Slide 18: Some positive signs in Russia's economy
Some positive signs in Russia’s economy Development of Russia’s GDP In Russia the amount of shopping centres still half of that in the Western Europe (in relation to population) Middle class consumption focuses to homeland → travelling abroad -40% domestic travelling +30% top destinations St. Peters
Slide 19: Projects progressing according to plan
1-3 / Projects progressing according to plan 2016 • Revenue continued to account for 9 per cent of Group revenue Revenue • Most of the revenue consisted of the construction of 12.4 MEUR the Okhta Mall and 4Daily shopping centres (15.9) • Operating result slightly negative due to weaker results of as
Slide 20: The weak exchange rate of the ruble affected the result
The weak exchange rate of the ruble affected the result International operations Meur Meur Revenue 3,0 Operating profit 20 2,0 15 1,0 1,8 10 -0,6 -0,4 0,2 0,1 -0,3 18 18 18 0,7 16 0,0 14 13 14 -0,6 -1,1 12 12 5 -1,0 Q1/14Q2/14Q3/14Q4/14Q1/15Q2/15Q3/15Q4/15Q1/16 0 -2,0 Q1/14Q2/14Q3/14Q4/14Q1/15Q2/15Q
Slide 21: Projects
Projects 21
Slide 22: SRV has a key role as a developer of a rail hub
KEIMOLANMÄKI KIVISTÖ SRV has a keyrole as a AVIAPOLIS TIKKURILA 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: Largest commercial premises projects under construction
Largest commercial premises projects under construction (estimated figures) Project. location Worth of SRV Project type Level of Completion. % Completion Sold / For sale contract. MEUR DEVELOPMENT PROJECTS REDI. Kalasatama. Helsinki 390 Commercial and 26 Q3/2018 Sold parking Health and Wellbeing Cen
Slide 24: Largest developer-contracted housing projects under construction in Finland
Largest developer-contracted housing projects under construction in Finland (estimated figures) Project, location Worth of SRV Apartments, Completion Sold/for sale contract, piecec MEUR DEVELOPERCONTRACTING PROJECTS IN THE RS SYSTEM Espoon Niittyhuippu 57 200 Q4/2017 121/79 Helsingin Kvartto 31 66 Q
Slide 25: REDI proceeding well
REDI proceeding well • Work is progressing on schedule – installation work on the frame of the shopping centre is under way 240 • 50 SRV and 350 subcontractor Apartments reserved employees working daily on the construction site • Approximately 240 of The Majakka’s 283 apartments have occupancy been
Slide 26: REDI's first residential tower
In REDI’s first residential tower, the stunning height of the building will not be only the impressive feature.. • Everyone who has reserved an apartment in the Majakka tower will participate in developing REDI’s service package • Workshops have focused, for example, on the facilities and user requi
Slide 27: Bunkkeri building in Jätkäsaari
Bunkkeri building in 300 Jätkäsaari apartments • SRV will construct a swimming hall and sports facilities as well as 300 apartments for the Bunkkeri • The sports facilities and swimming hall will be leased on a 25-year agreement to the City of Helsinki 25- • A hybrid project, combining year unique h
Slide 28: Aalto University campus building
33 000 square meters in 4 floors Aalto University campus building • SRV builds a new campus building for Aalto University’s School of Arts Design and Architecture and commercial premises in the OtaniemiMetro Centre • 33.000 square metres in four levels: multi-functional education and work facilities
Slide 29: Tampere's Central Deck and Arena project
Tampere’s Central Deck and Arena project • The unique realization in city center directly on top of the railway track • Biggest multi-purpose arena In Finland - over 1000 apartments as well as restaurants Finland´s • Group of companies created by SRV further develops the biggest project - negotiatio
Slide 30: New central hospital project in Central Finland
New central hospital Over project in Central 300 Finland MEUR • SRV has been chosen to be a project futher developer for Central Finlands Central Hospital. • Largest contract in SRV’s history to which we are not committing our own equity • If the final target price set by Central Finland Health Care
Slide 31: Business campus New Vantaankoski
New Vantaankoski Business campus • The New Vantaankoski Idea of the future Competition sought a vision of the business campus of the future. • The winning entry is based on the premise that the sharp opposition between work, home, work and leisure will end. • A multidisciplinary team, led by L Arkki
Slide 32: Outlook
Outlook 32
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 second half of the year • Due to growt
Slide 34: SRV vision 2020 and strategy
& “ny. Increase in prosperity Asp, and service culture a and polarisation of Changes in consumer ALINIGISNOdS3aY Urbanisation 4%, society behaviour and ways Sy of working VISION 2020 SRV CREATES THE BEST am COURAGE IN DEVELOPryey Sustainability CUSTOMER EXPERIENCE in everything we do AS A CONSTRUCTO
Slide 35: Appendix
Appendix 35
Slide 36: Housing demand in the Helsinki metropolitan area continues to grow
Housing demand in the Helsinki metropolitan area continues to grow Demand for housing production. number Location of housing production. urbanization scenario Population in the Helsinki Cumulated metropolitan housing deficit. area is predicted immigration and to grow about urbanization → 10-15 % by
Slide 37: Estimated implementation of on-going shopping centre projects
Estimated implementation of on-going shopping centre projects 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Pearl Plaza 1 (50 % ownership) Okhta Mall (45 % ownership) Daily (20 % ownership) REDI shopping mall and parking premises During the (40 % ownership) current year already three Constructio
Slide 38: Consolidated income statement
Consolidated income statement EUR million 2016 Q1 2015 Q1 2015 Revenue 143.8 172.9 719.1 Other operating income 0.2 0.1 1.8 Change in inventories of finished good and work in progress 25.6 -10.6 24.7 Use of materials and services -145.8 -141.2 -639.1 Employee benefit expenses -17.7 -15.5 -64.6 Share
Slide 39: Balance sheet
Balance sheet EUR million 03/31/2016 % 12/31/2015 % Non-current assets 275.1 30.9 271.9 35.6 Inventories 364.8 41.0 336.6 44.1 Other current assets 126.9 14.3 119.2 15.6 Cash and cash equivalents 122.8 13.8 35.0 4.6 Total assets 889.6 100.0 762.6 100.0 Equity 282.7 31.8 277.2 36.3 Non-current intere
Slide 40: Indebtedness in detail
Indebtedness in detail EUR million 03/31/2016 12/31/2015 12/31/2014 Non-current interest bearing liabilities Loans from financial institutions 15.8 29.5 26.6 Bonds 174.2 74.9 74.8 Housing corporation loans 57.4 58.9 45.6 Subtotal 247.4 163.2 147.0 Current interest bearing liabilities Loans from fina
Slide 41: Consolidated cash flow statement
Consolidated cash flow statement EUR million 2016 Q1 2015 2014 Net profit -4.7 14.0 15.4 Non-cash transaction / Financial income and expenses / 3.8 12.0 10.7 Income taxes Depreciation and impairments 0.8 3.5 2.0 Change in working capital -31.2 40.2 34.7 Interest paid and received -2.3 -14.7 -14.7 In