Yit Oyj · OMXHEX:YIT
Yit Oyj — Non-Deal Roadshow (November 2018)
104 slides from Yit Oyj's roadshow presentation, November 2018
Slide 1: Roadshow presentation
Roadshow presentation November 2018
Slide 2: Contents
Contents 1 Merger and integration 2 YIT in a nutshell 3 YIT’s strategy 2019-2021 4 Performance in Q3 5 Segment reviews 6 Financial position and key ratios 7 Outlook and guidance 8 Appendices 2 Roadshow presentation, November 2018 SÄHKÖTTÄJÄNPUISTO PARL HELSINKI, FINLAND
Slide 3: Merger and integration
1 Merger and intergration 3 Roadshow presentation, November 2018
Slide 4: The merger of YIT and Lemminkäinen, February 1st 2018
The merger of YIT and Lemminkäinen, February 1st 2018 Revenue: EUR 1,909 million Adjusted EBIT: EUR 122.3 million 2018 - MERGER Personnel: 5,427 YIT is the largest Finnish and significant SINCE YIT creates more attractive North European construction company. We Target to 1912 and sustainable urban e
Slide 5: Track record of YIT's and Lemminkäinen's revenue and EBIT-%
Track record of YIT's and Lemminkäinen’s revenue and EBIT-% EX-LEMMINKÄINEN’S REVENUE (EUR MILLION) AND OPERATING PROFIT MARGIN (EBIT) DEVELOPMENT BY GROUP, IFRS 2,477 2,174 2,184 2,268 1,966 2,020 2,045 1,796 1,830 1,879 1,847 1,602 1,683 1,359 1,431 1,256 1,117 965 6.2% 6.1% 5.8% 5.2% 1.2% 1.6% 2.
Slide 6: Merger rationale
Merger rationale • Target to become a leader in urban development Strong platform for • More balanced business portfolio 1 growth (housing, business premises, infrastructure projects, paving and partnership properties) • Wider geographical presence in several economic regions Synergies and • Good re
Slide 7: YIT and Lemminkäinen's combined operations 2017
YIT and Lemminkäinen’s combined operations 2017 Geographic revenue split, 2017* (EURm) ILLUSTRATIVE COMBINED REVENUE SPLITS 2017* Total revenue: EUR 3.8 billion FINLAND Paving 68% of total revenue Geographic split* Operational split* No of personnel: 5,847 Baltics, CEE Paving and Infrastructure proj
Slide 8: Progress in synergy benefits and integration costs
Progress in synergy benefits and integration costs MAIN SOURCES OF SYNERGY BENEFITS TIMING OF SYNERGY BENEFIT MEASURES 3/2018A 6/2018A 9/2018A 2018E 2019E 2020E ANNUAL SYNERGY BENEFIT TARGET1 AT 6 34 38 38–40 40–50 40–50 LEAST 40–50 cumulative from 2018, EUR million ESTIMATION OF ACHIEVED SYNERGY BE
Slide 9: YIT in a nutshell
2 YIT in a nutshell 9 Roadshow presentation, November 2018 UPM HEAD OFFICE HELSINKI, FINLAND
Slide 10: YIT in brief
YIT in brief Geographic revenue split, 2017* (EURm) February 1, 2018 10,000 FINLAND Paving 68% of total revenue YIT and Lemminkäinen employees No of personnel: 5,847 merged Infrastructure projects Business premises SCANDINAVIA 10% of total revenue 3.8 bn 11 Partnership No of personnel: 980 RUSSIA 12
Slide 11: We offer the whole package
We offer the whole package INFRA- PARTNERSHIP HOUSING FINLAND HOUSING BUSINESS STRUCTURE PAVING PROPERTIES AND CEE RUSSIA PREMISES PROJECTS Revenue: 1.2 bn€ Revenue: 400 M€ Revenue: 900 M€ Revenue: 700 M€ Revenue: 800 M€ Equity investments/ Adjusted operating Adjusted operating Adjusted operating Ad
Slide 12: Reasons to invest - Good outlook for 2019
Reasons to invest - Good outlook for 2019 1 Strong order backlog ~EUR giving 5abillion good outlook for 2019 • Diverse portfolio of businesses, over 60% of pro forma revenue in 2017 from non-housing segments 2 Potential for result improvement • Synergy impact expected to be 40M€ at the beginning of
Slide 13: YIT's strategy 2019-2021
3 YIT’s strategy 2019‒2021 13 Roadshow presentation, November 2018 HELSINGIN KLYYGA APARTMENT TRIPLA BUILDING PROJECT PROJECT TRIPLA-PROJECT, HELSINKI, FINLAND HELSINKI, FINLAND
Slide 14: Megatrends Driving Growth and Productivity
Megatrends Driving Growth and Productivity URBANISATION DIGITALISATION SUSTAINABILITY • Urban development • Customer experience • Circular and sharing economy • Public transportation connections • Higher productivity • Resource efficiency • Complex projects • Utilisation of data • Re-vitalisation of
Slide 15: YIT Strategy 2019–2021 – Performance through cycles
YIT Strategy 2019–2021 – Performance through cycles Profitable and financially stable YIT STRATEGIC PRIORITIESSTRATEGIC PRIORITIES CORNERSTONESOF CORNERSTONES OF SUCCESS SUCCESS TOP PERFORMANCE • Synergies EUR 40–50 million URBAN DEVELOPMENT • Focus on productivity improvement Sustainable Focus in s
Slide 16: Strategic priorities
Strategic priorities URBAN DEVELOPMENT NON-CYCLICAL BUSINESSES More out of the urban development capability Portfolio of businesses with stable nature and performance Average ROCE >15% through the pipeline > EUR 100 million of annual operating profit 2019 on STABLE OR GROWING Sustainable DEMAND urba
Slide 17: Some examples of urban development projects
Some examples of urban development projects YIT’S ONGOING PROJECTS FUTURE PROJECTS TIETOTIE 6 TRIPLA HELSINKI HIGH RISE CAMPUS MARIA ESPOO, FINLAND HELSINKI, FINLAND FINLAND HELSINKI, FINLAND 120M€ 1.4BN€ 500 + 500M€ 300M€ 2017-2020 2014-2020 2021-2030 2021-2025 COMPLETED PROJECT TAMPERE LIGHT RAIL
Slide 18: Strategic financial targets
Strategic financial targets Financial target Long-term target level ROCE-% >12% Gearing 30–50% Dividend per share Growing annually Roadshow presentation, November 2018 18
Slide 19: Implementation by strategic development programmes
Implementation by strategic development programmes GREEN GROWTH Value from sustainability • Sustainability-driven growth CUSTOMER FOCUS and profit Sales and customer excellence • During 2019: Clarify current impact and ambition level • Revenue growth among PERFORMANCE private customers • Improved NP
Slide 20: Performance in Q3/2018
4 Performance in Q3/2018 E18 MOTORWAY, HELSINGIN KLYYGA SOUTHERN APARTMENT BUILDINGFINLAND PROJECT 20 Roadshow presentation, November 2018 TRIPLA-PROJECT, HELSINKI, FINLAND
Slide 21: Presentation of financial information in Q3
Presentation of financial information in Q3 • In this presentation, all figures are pro forma figures, unless otherwise stated, to facilitate the comparability of the Merger related fair value cost effects and goodwill have not been combined company’s financial information allocated to the segments’
Slide 22: Q3 in brief
Q3 in brief Segments’ Segments’in Success operational Success in operational Strong order Guidance property leasing property performance as performance backlog unchanged leasing expected as expected 53.8 50,000 4,991 130–160 EUR million adjusted sq. metres let during Q3 EUR million order EUR million
Slide 23: Segments update Q3
Segments update Q3 HOUSING FINLAND AND CEE HOUSING RUSSIA BUSINESS PREMISES • Revenue EUR 244.2 million (329.1), with • Capital employed1 EUR 341.0 million a 9.8% margin (10.1) (6/18: 352.5) • Order backlog EUR 1,631 million (6/18: 1,589) • Low revenue due to low y-o-y number of • Adjusted EBIT weak
Slide 24: Success in property leasing during Q3
Success in property leasing during Q3 DEVELOPMENT OF OCCUPANCY RATE Project Size, Anchor Duration Occu- Occu- Ownership POC at sq.m tenant of rental pancy pancy 9/2018 agreement rate Q2 rate Q3 Tripla 28,000 Telia 15 years 0% 80% 100% 64% Workery Finland East Tripla 22,000 Otava- 10 years ~45% 50% 1
Slide 25: Revenue and adjusted operating profit decreased
Group Revenue and adjusted operating profit decreased • Revenue decreased mainly in Housing Finland and CEE due to low y-o-y number of completed projects in the Helsinki Metropolitan area and small average size of completed apartments • Postponements of residential projects handovers in Housing Finl
Slide 26: Adjusted EBIT bridge Q3/2017–Q3/2018
Group Adjusted EBIT bridge Q3/2017–Q3/2018 • Adjusted operating profit was mainly weakened in Housing Finland and CEE due to low y-o-y number of completed projects in the Helsinki Metropolitan area and small average size of completed apartments • In Infrastructure projects, the adjusted operating pr
Slide 27: Operating environment for housing in Q3
Group Operating environment for housing in Q3 • In Finland, consumer demand was on a • Consumer demand was brisk in all CEE • In Russia, consumers continued to be good level, supply on a high level countries cautious • Residential demand of private investors • Due to increased construction volume, •
Slide 28: Operating environment for business premises, infrastructure projects and paving in Q3
Group Operating environment for business premises, infrastructure projects and paving in Q3 • The volume of construction in Finland on a • The market for infrastructure was strong in • Higher bitumen price has reduced market high level, the positive overall market especially in Sweden and Norway, ma
Slide 29: 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 30: Segment reviews
5 Segment reviews 30 Roadshow presentation, November 2018 KASARMIKATU 21, OFFICE BUILDING PROJECT HELSINKI, FINLAND
Slide 31: Housing Finland and CEE
HOUSING FINLAND AND CEE FABRIIKIN FESTIVO RESIDENTIAL PROJECT 31 Roadshow presentation, November 2018 TURKU, FINLAND
Slide 32: Housing Finland and CEE: Lower year-on-year revenue
Housing Finland and CEE Lower year-on-year revenue IFRS POC • Declined revenue and adjusted operating profit due to a low y-o-y • The decline of private residential investors’ demand compared to number of completed projects in the Helsinki Metropolitan area and previous year had an impact on revenue
Slide 33: Housing Finland and CEE: Stable order backlog
Housing Finland and CEE Stable order backlog • Number of completed unsold apartments was on the level of the end of June • The share of CEE of the sales portfolio (units) was 32% ORDER BACKLOG (EUR million) APARTMENT INVENTORY (units) 1,774 1,767 9,275 9,499 8,750 8,851 9,029 0% 8,685 364 434 404 38
Slide 34: Housing Finland and CEE: Sales and start-ups in Q3
Housing Finland and CEE Sales and start-ups in Q3 SOLD APARTMENTS (units) • Sold apartments and start-ups on the FINLAND IN 1–9/2017: 3,315 FINLAND IN 1–9/2018: 2,687 CEE IN 1–9/2017: 1,070 CEE IN 1–9/2018: 771 same level 1,182 1,127 1,249 • Share of apartments sold to 1,006 1,018 438 449 429 235 87
Slide 35: Impact of the mix in Finnish housing
Impact of the mix in Finnish housing Different types of customer profiles have different EBIT-% and ROCE-% impacts Consumer projects • High capital employed Investor • Highest EBIT margin projects Bundles of EBIT-% apartments from • Low capital employed consumer • Lower EBIT margin than projects to
Slide 36: Housing Russia
HOUSING RUSSIA FJORD PROJECT 36 Roadshow presentation, November 2018 ST PETERSBURG AREA, RUSSIA
Slide 37: Housing Russia: Revenue and adjusted operating profit decreased
Housing Russia Revenue and adjusted operating profit decreased IFRS • Changes in the operating model made during 2018 will decrease • A total of 699 apartments were completed during Q3 (931) fixed costs of the segment by EUR 10.5 million p.a. as of 6/2019. • Adjusted operating profit decreased due t
Slide 38: Housing Russia: Number of completed unsold apartments increased
Housing Russia Number of completed unsold apartments increased • Order backlog decreased slightly • At the end of September, YIT Service was responsible for the maintenance and the living services of almost 37,000 apartments (6/2018: almost 37,000) and in total over 46,500 clients (incl. parking spa
Slide 39: Housing Russia: Sales and start-ups in Q3
Housing Russia Sales and start-ups in Q3 SOLD APARTMENTS (units) AND SHARE OF SALES FINANCED WITH MORTGAGE (%) • Apartment sales increased by 8% 1–9/2017: 1,947 1–9/2018: 2,498 56% • Start-ups increased by nearly 52% 51% 952 49% 892 814 779 827 30% 548 590 48% 47% 45% • Share of sales financed with
Slide 40: Business premises
BUSINESS PREMISES TRIPLA WORKERY EAST OFFICES 40 Roadshow presentation, November 2018 HELSINKI, FINLAND
Slide 41: Business premises: Solid performance during third quarter
Business premises Solid performance during third quarter • Improved adjusted operating profit was driven by solid performance of construction sites • Success in leasing market supporting the sale negotiations of several office premises • YIT and Telia Finland signed a long-term lease agreement on th
Slide 42: Business premises: Order backlog strengthened
Business premises Order backlog strengthened • Order backlog strengthened, new orders include LARGEST ONGOING BUSINESS PREMISES PROJECTS schools, hotel, airport extension and renovation projects Project value, Project Completion Estimated Sold / unsold Project, location EUR million type rate, % comp
Slide 43: Infrastructure projects
INFRASTRUCTURE PROJECTS KAITAA METRO STATION 43 Roadshow presentation, November 2018 ESPOO, FINLAND
Slide 44: Infrastructure projects: Adjusted operating profit decreased
Infrastructure projects Adjusted operating profit decreased • Revenue was on par with the comparison period • Adjusted operating profit decreased. The figure includes additional costs related to the Court of Appeal’s decision in a dispute related to the construction of the Niittykumpu metro tunnels
Slide 45: Infrastructure projects: Order backlog declined
Infrastructure projects Order backlog declined • Order backlog declined slightly • New orders include for example West Metro’s Kaitaa metro station (worth EUR 33 million) and a hydro power plant in Western Norway (worth EUR 33 million) ORDER BACKLOG (EUR million) LARGEST ONGOING INFRASTRUCTURE PROJE
Slide 46: Paving
PAVING PAVING WORK IN KIVISTÖ 46 Roadshow presentation, November 2018 HELSINKI, FINLAND
Slide 47: Paving: Result improved year-on-year
Paving Result improved year-on-year • Revenue decreased due to lower year-on-year volumes caused by the close-downs of unprofitable asphalt stations in Sweden and Norway in H1/2018 • Adjusted operating profit and profitability improved year-on-year due to a successful quarter in all market areas, su
Slide 48: Paving: Strong order backlog
Paving Strong order backlog • Order backlog is continuously strong and increased year-on-year to EUR 522 million (512). The order backlog decreased from the end of June (6/2018: 575) due to ordinary seasonal variation. • Demand is mainly driven by the industrial and private customers as well as larg
Slide 49: Partnership properties
PARTNERSHIP PROPERTIES ARCHITECT’S VIEW ON KEILANIEMI PANORAMA RESTAURANT 49 Roadshow presentation, November 2018 ESPOO, FINLAND
Slide 50: Partnership properties: Strong project portfolio
Partnership properties Strong project portfolio • Project pipeline strengthened further e.g. Telia Campus and Trigoni Helsinki High-rise (published in October) • Preparations for first major divestment with Regenero Oy ongoing Partnership Type of JV YIT’s equity Total investment Additional informati
Slide 51: Targets of the Partnership properties segment
Targets of the Partnership properties segment TARGETS SET 2017 ADDITIONAL TARGET IN 2018 IMPROVE IMPROVE CREATE PROVIDE VISIBILITY ON GROUP’S PORTFOLIO OF STABLE 1 GROWTH 2 TRUE VALUE 3 STABLE CASH 4 OPERATING OF EXISTING CAPABILITY FLOWS PROFIT ASSETS STRONG AND RENTAL PART OF DIVERSE PROJECT FAIR
Slide 52: Improving Group's growth capability
Improving Group’s growth capability INVESTMENT CAPACITY YIT’S NEW ROLE HAS GAINED MULTIPLE OPPORTUNITIES INCREASED POSITIVE FEEDBACK AND UNDER DEVELOPMENT TO EUR 2 BILLION REACTION FROM INVESTOR which gross value sums up to EUR 2 billion FROM EUR 1 BILLION PARTNERS compared to year ago • New role al
Slide 53: Establishing a portfolio enabling stable profits annually
Establishing a portfolio enabling stable profits annually CREATING A PORTFOLIO OF STABLE CASH FLOWS Solid project pipeline will be generating significant cash flows and profits annually …AND STABLE PROFITS 2018 Profits are mainly from capital gains and RENTAL FAIR VALUE smaller recurring revenue sou
Slide 54: Mall of Tripla in a nutshell
Mall of Tripla in a nutshell Office, Workery East Completed Q1/2020 Office, Workery West Completed Q1/2020 Office, Workery East Completed Q1/2020 Housing Completed Q1-Q3/2020 Hotel, Exilion SOLD 100% 6/2017 1 Completed Q1/2020 Pasila Station (Mall of Tripla) SOLD 61.25% 6/2016 2 Opening Q4/2019 as k
Slide 55: Revenue recognition structure and timeline in Mall of Tripla
Revenue recognition structure and timeline in Mall of Tripla YIT ROLE FROM DEVELOPER-CONTRACTOR TO INVESTOR DEVELOPER Mall of Tripla opens in H2/2019 CONTRACTOR INVESTOR 2020 Q4/2022 CURRENT RECOGNITION RECOGNITION IN Q4/2019 RECOGNITION AFTER FULL PROFIT CAN BE 61.25% Remaining Q4/2019 REALISED FRO
Slide 56: Urban development as source of growth and profitability
Urban development as source of growth and profitability LARGE PROJECTS ( EUR >100 MILLION) ARE REALISED THROUGH JOINT VENTURE STRUCTURES AND REPORTED UNDER PARTNERSHIP PROPERTIES SEGMENT Hankekuva ☺ 0 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 E18 Hamina-Vaalimaa motorway Tietotie 6 Mall of
Slide 57: Financial position and key ratios
6 Financial position and key ratios 57 Roadshow presentation, November 2018 PURJEENTEKIJÄ APARTMENT BUILDING PROJECT LAUTTASAARI, HELSINKI, FINLAND
Slide 58: Operating cash flow negative
Operating cash flow negative • Operating cash flow after investments was EUR 33 million negative due to changes in working capital • Strong cash flow in Paving, negative cash flow in Housing Finland & CEE and Business premises CASH FLOW FROM PLOT INVESTMENTS AND INVESTMENTS TO ASSOCIATED OPERATIVE C
Slide 59: Stable maturity of debt portfolio
Stable maturity of debt portfolio • No major changes in loan portfolio • During Q3, the company agreed on using 1 year extension option of its RCF, new maturity is in August 2021. INTEREST-BEARING NET DEBT (EUR million) MATURITY STRUCTURE, NOMINAL AMOUNTS1 (EUR million) 48 54 49 65 286 205 46 111 16
Slide 60: Financial key ratios in Q3
Financial key ratios in Q3 • Gearing was 75.5% (6/2018: 73.4) • The company’s new strategic target for gearing is 30–50% NET DEBT / ADJUSTED PRO FORMA EBITDA GEARING1 (%) EQUITY RATIO (%) (multiple, x) 79.8 73.4 75.5 40.2 39.1 59.9 34.8 33.9 5.6 4.8 4.8 3.6 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2017 2
Slide 61: Financing activities during 2018
Financing activities during 2018 June 11, 2018 February 1, 2018 April 3, 2018 May 31, 2018 June 11,redemption Voluntary 2018 240 M€ bridge Payment April 3,of the May 31, issued 2018 February 1, 2018 2018 Regenero forVoluntary redemption outstanding 100 M€ financing agreed outstading Payment share of
Slide 62: IFRS 16 Leases - update
IFRS 16 Leases - update • New IFRS 16 will be effective on the 1st of January 2019. • Lease agreements will be recognised in balance sheet. • According to the current estimate • the adoption of the standard will increase the amount of property, plant and equipment, inventories and financial liabilit
Slide 63: Plot reserves by segments and geography
Plot reserves by segments and geography PLOT RESERVES 6/2018 (EUR MILLION) PLOT RESERVES 6/2018 (FLOOR-M2) INCL. FINNISH HOUSING PRE-AGREEMENTS AND RENTAL PLOTS In total 988 M€, on balance sheet 659 In total 5,3 million floor-m2 0.7 1.0 1811 261 329 709 98 119 1.7 1.4 0.5 1 Business Premises, on bal
Slide 64: Outlook and guidance
7 Outlook and guidance 64 Roadshow presentation, November 2018 KONEPAJA AREA DEVELOPMENT PROJECT HELSINKI, FINLAND
Slide 65: Estimated completions of consumer apartment projects under construction
Estimated completions of consumer apartment projects under construction Apartments under construction in total on September 30, 2018: 14,666 (6/2018:14,938). The table below shows the company’s current estimate of completed consumer apartment projects under construction, 13,250 apartments in total.
Slide 66: Guidance for 2018 unchanged
Guidance for 2018 unchanged (as given on June 27, 2018) The Group pro forma revenue 2018 is estimated to decrease by -2% – -6% from pro forma revenue 2017 (pro forma 2017: EUR 3,862.5 million). In 2018, the adjusted pro forma operating profit1 is estimated to be in the range of EUR 130–160 million (
Slide 67: Appendices
8 Appendices 67 Roadshow presentation, November 2018 HELSINGIN PIKKUTYLLI RESIDENTIAL PARLIAMENT PROJECT HOUSE RENOVATION HELSINKI, HELSINKI,FINLAND FINLAND
Slide 68: Appendices
Appendices I. Key figures and additional information about financial position II. Share ownership and organisation III. General economic and construction indicators IV. Housing indicators V. Business premises, infrastructure and paving indicators FINAVIA SOUTH PIER VI. Additional strategy material V
Slide 69: I Key figures and additional information about financial position
I Key figures and additional information about financial position 69 Roadshow presentation, November 2018 TURUN RAUNINPUISTO 2 RESIDENTIAL PROJECT TURKU, FINLAND
Slide 70: Key figures
Key figures Reported Pro forma Pro forma Reported Pro forma Pro forma Pro forma EUR million Change Change1 7–9/18 7–9/18 7–9/17 1-9/18 1–9/18 1–9/17 1–12/2017 Revenue 979.2 979.2 1,059.5 -8% 2,420.4 2,490.3 2,738.9 -9% 3,862.5 Operating profit 44.1 48.6 60.1 -19% 16.1 8.7 40.3 -78% 77.4 Operating pr
Slide 71: Examples of new projects in Q3
Examples of new projects in Q3 • Long-term lease agreement on the Tripla Workery East offices with Telia • Kaitaa metro station, Phase 2 of West Metro, Espoo, Finland (~EUR 33 million) • New hydropower plant in the Hordaland County, Western Norway (~EUR 33 million) • Merenoja comprehensive school in
Slide 72: Foreign exchange rates in Q3
Foreign exchange rates in Q3 PRINCIPLES OF MANAGING CURRENCY RISKS EUR/RUB exchange rates 1–9/2018 1–9/2017 1–12/2017 • Sales and project costs typically in same currency, all Average rate 73.4342 64.9392 65.9183 foreign currency items hedged no transaction impact Quarter-end rate 76.1422 68.2519
Slide 73: Balanced debt portfolio
Balanced debt portfolio DEBT PORTFOLIO1 AT THE END OF THE PERIOD 9/2018, EUR 1,021 MILLION INTEREST RATE DISTRIBUTION OF THE DEBT PORTFOLIO AT THE END OF 9/2018 Bonds, 35% Housing corporation loans, 23% Floating rate, 29% Commercial papers, 19% Loans from financial institutions, 13% Pension loans, 5
Slide 74: Capital employed
Group Capital employed CAPITAL EMPLOYED BY SEGMENTS1 (at the end of period) 1,854.2 1,773.3 3% 1,754.7 1,699.3 389.5 Other 382.8 -6% 356.0 379.7 137.0 Partnership properties 116.6 4% 148.7 143.3 142.7 148.2 -4% 117.0 97.5 122.1 Paving 99.2 19% 95.2 122.3 79.9 82.6 125.2 104.3 20% Infrastructure proj
Slide 75: II Share ownership and organisation
II Share ownership and organisation 75 Roadshow presentation, November 2018
Slide 76: YIT's shareholders
YIT’s shareholders NUMBER OF SHAREHOLDERS AND SHARE OF NOMINEE-REGISTERED MAJOR SHAREHOLDERS ON OCTOBER 31, 2018 AND NON-FINNISH OWNERSHIP, OCTOBER 31, 2018 % of share Shareholder Shares capital 1. Tercero Invest AB 22,100,000 10.47 48,159 2. Varma Mutual Pension Insurance Company 15,945,975 7.55 43
Slide 77: Transaction overview
Transaction overview 3.6146 new YIT shares 60% 40% The transaction would be executed as an 3.6146 new YIT shares would be issued for After the transaction the current absorption merger whereby Lemminkäinen each share in Lemminkäinen as merger shareholders of YIT would own 60% of the is merged into Y
Slide 78: Board of Directors as of March 16, 2018
Board of Directors as of March 16, 2018 Harri-Pekka Eero Heliövaara Erkki Järvinen Olli-Petteri Kaukonen Vice Chairman of Member of the Lehtinen Chairman of the the Board Board Member of the Board Board Inka Mero Kristina Tiina Tuomela Member of Pentti-von Member of the the Board Walzel Board Member
Slide 79: Group Management Team as of November 1, 2018
Group Management Team as of November 1, 2018 Kari Kauniskangas Ilkka Salonen Teemu Helppolainen Antti Inkilä President and CEO CFO EVP, Housing Russia EVP, Housing Deputy to CEO Finland and CEE Harri Kailasalo Juha Kostiainen Esa Neuvonen Juhani Nummi EVP, Infrastructure EVP, Urban EVP, Business EVP
Slide 80: Dividend payout
Dividend payout Dividend / share (EUR) The dividend for 2017 is EUR 31,453,802.25, 373% corresponding 55.6% of the net result 2017 (IFRS) and 50.0% of net profit 2017 (POC) which is in accordance with the long-term financial targets ** Considering the number of shares after the merger, a dividend of
Slide 81: III General economic and construction indicators
III General economic and construction indicators 81 Roadshow presentation, November 2018
Slide 82: General economic and construction indicators
General economic and construction indicators GDP GROWTH IN YIT’S OPERATING COUNTRIES, % UNEMPLOYMENT RATE IN YIT’S OPERATING COUNTRIES, % 5% 20% 18% 4% 16% 14% 3% 12% 10% 2% 8% 6% 1% 4% 2% 0% 0% Finland Sweden Denmark Norway Estonia Latvia Lithuania The Slovakia Poland Russia 2010 2011 2012 2013 201
Slide 83: IV Housing indicators
IV Housing indicators 83 Roadshow presentation, November 2018
Slide 84: Start-ups expected to decrease in 2018 and 2019
Finland Start-ups expected to decrease in 2018 and 2019 RESIDENTIAL START-UPS (units) CONSUMERS’ VIEWS ON ECONOMIC SITUATION IN ONE YEAR’S TIME (balance) 45,400 30.0 7,200 39,500 37,500 35,500 Own economy 33,525 32,807 32,500 7,800 20.0 32,033 6,800 29,842 27,778 8,100 25,200 6,400 10.0 23,361 23,38
Slide 85: Construction indicators
Finland Construction indicators UNSOLD COMPLETED UNITS, RESIDENTIAL DEVELOPMENT PROJECTS (units) RESIDENTIAL BUILDING PERMITS, START-UPS AND COMPLETIONS (million ,m3) PRICES OF OLD APARTMENTS IN FINLAND (index 2015=100) 110 105 100 95 2015 2016 2017 2018 Finland Capital region Rest of Finland Source
Slide 86: Operating environment in CEE
CEE Operating environment in CEE AVERAGE INTEREST RATE OF MORTGAGES IN CEE COUNTRIES (%) 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2013 2014 2015 2016 2017 2018 HOUSE PRICE INDEX, NEW DWELLINGS IN CEE COUNTRIES (2015=100) 140 120 100 80 60 2013 2014 2015 2016 2017 2018 Estonia Latvia Lithuania The Czech Repub
Slide 87: Residential construction is expected to level off
The Baltic Countries Residential construction is expected to level off RESIDENTIAL COMPLETIONS IN ESTONIA (UNITS) RESIDENTIAL COMPLETIONS IN LATVIA (UNITS) 5,890 5,800 6,100 4,732 1,583 1,700 1,600 4,200 3,969 1,511 3,000 1,270 1,800 2,800 2,756 2,662 2,631 2,300 2,500 1,000 2,079 2,087 2,237 2,242
Slide 88: Start-ups forecasted to grow in the Czech Republic
The Czech Republic, Slovakia and Poland Start-ups forecasted to grow in the Czech Republic RESIDENTIAL START-UPS IN THE CZECH REPUBLIC (UNITS) RESIDENTIAL START-UPS IN SLOVAKIA (UNITS) 37,300 36,800 34,600 31,500 21,400 28,200 27,500 20,300 19,600 19,900 19,300 19,300 26,400 27,200 20,700 23,800 24,
Slide 89: EUR/RUB exchange rate and housing indicators
Russia EUR/RUB exchange rate and housing indicators EUR/RUB EXCHANGE RATE NEW RESIDENTIAL CONSTRUCTION VOLUMES (EUR billion*) 55 50 95 45 40 85 35 30 75 25 20 2013 2014 2015 2016 2017 2018F 2019F 65 *At 2016 prices, excluding taxes. 1 EUR = 74.144 rubles CONSUMER CONFIDENCE 55 0 -5 45 -10 -15 -20 35
Slide 90: V Business premises, infrastructure and paving indicators
V Business premises, infrastructure and paving indicators 90 Roadshow presentation, November 2018
Slide 91: Operating environment
Infrastructure, paving and business premises Operating environment TRANSPORT INFRASTRUCTURE, ROADS (EUR million) CIVIL ENGINEERING INVESTMENT VOLUME IN FINLAND 8,000 6,000 4,000 2,000 0 2014 2015 2016 2017 2018F 2019F Finland Denmark Norway Sweden RETAIL TRADE CONFIDENCE IN THE BALTIC COUNTRIES AND
Slide 92: Non-residential construction volumes
Finland, the Baltic countries and Slovakia Non-residential construction volumes NEW NON-RESIDENTIAL CONSTRUCTION VOLUMES (index 2013=100) NEW NON-RESIDENTIAL CONSTRUCTION IN FINLAND (EUR million) 240 1,600 220 1,400 200 1,200 180 160 1,000 140 800 120 600 100 400 80 200 60 40 0 2013 2014 2015 2016 2
Slide 93: Yields and transaction volumes in Finland
Finland Yields and transaction volumes in Finland PRIME YIELDS IN HELSINKI METROPOLITAN AREA, (%) TRANSACTION VOLUME BY PURPOSE OF USE, (EUR billion) TRANSACTION VOLUME IN FINLAND, (EUR billion) OFFICE YIELDS IN THE HELSINKI METROPOLITAN AREA, (%) 93 Roadshow presentation, November 2018 Source: Cate
Slide 94: Yields are expected to decrease slightly
The Baltic countries Yields are expected to decrease slightly PRIME OFFICE YIELDS IN THE BALTIC COUNTRIES (%) PRIME OFFICE RENTS IN THE BALTIC COUNTRIES (%, EUR / sq. m. / year) % % EUR/m2 Tallinn Riga Vilnius Average Annual Rental Growth 2013-2018E (left axis) Rent Level 2018E (right axis) Tallinn
Slide 95: VI Additional strategy material
VI Additional strategy material 95 Roadshow presentation, November 2018
Slide 96: Cornerstones for success
Cornerstones for success TOP PERFORMANCE SYNERGIES CAPITAL EFFICIENCY EUR 40–50 MILLION GEARING • Capture synergies of the • Lower working capital and 30–50% integration CLEARLY continued divestment of SHORTER LEAD slow-moving asets • Common management system (GRIP) as a TIMES • Co-investments and f
Slide 97: Cornerstones for success: customers and partners, happy people
Cornerstones for success BEST EMPLOYER SUCCESS WITH CUSTOMERS AMONG AND PARTNERS IMPROVING HAPPY PEOPLE CONSTRUCTION NPS PROFESSIONALS AND STUDENTS IMPROVED • Increased customer activity SALES MIX and deeper customer insight • Create common values and culture • Better product and service concepts •
Slide 98: Housing Finland and CEE and Housing Russia
Key implications and targets Housing Finland and CEE and Housing Russia HOUSING FINLAND AND CEE HOUSING RUSSIA • Customer experience improvement • Less capital intensive business model • Capital employed further down in Russia1 by EUR ~100 million • Industrialisation: Design management, BIM, modular
Slide 99: Infrastructure projects and Paving
Key implications and targets Infrastructure projects and Paving INFRASTRUCTURE PROJECTS PAVING • Focus in profitability improvement • Business minded culture, good employer image and systematic training • Project and customer mix, operating model, risk management practices • Customer-focused and pro
Slide 100: Business premises and Partnership properties
Key implications and targets Business premises and Partnership properties BUSINESS PREMISES PARTNERSHIP PROPERTIES • Increasing revenue from self-developed and negotiation based • Ensuring continuously stronger project pipeline for upcoming years projects • Stable operating profit recognition every
Slide 101: Roadshow presentation, November 2018
101 Roadshow presentation, November 2018
Slide 102: Additional information
Additional information Ilkka Salonen Chief Financial Officer (CFO) +358 45 359 4434 ilkka.salonen@yit.fi Hanna Jaakkola Vice President, Investor Relations +358 40 566 6070 hanna.jaakkola@yit.fi Follow YIT on Twitter @YITInvestors 102 Roadshow presentation, November 2018
Slide 103: Disclaimer
Disclaimer This presentation has been prepared by, and the information contained herein (unless otherwise indicated) has been provided by YIT Corporation (the “Company”). By attending the meeting or event where this presentation is made, or by reading the presentation slides, you agree to be bound b
Slide 104: Together we can do it
Together we can doit.