Slide 1: SRV – Building for Life
SRV – Building for Life Interim Report 1-6/2014 Jukka Hienonen President and CEO 6 Aug. 2014 1
Slide 2: The three cornerstones of our business
The three cornerstones of our business 1-6/2014 Domestic Operations 91% of the Group's revenue International Operations Business construction Housing construction 9% of the Group's revenue 63%* 37%* • Offices and retail premises • Owner-occupied housing • Shopping centres • Hotels and special-purpos
Slide 3: Focus on measures to increase profitability
Focus on measures to increase profitability Direct effect on profitability Long-term effect Project margin % Start-up of shopping centre projects Ownership of developer- Start-up of contracted shopping centre developer- projects (e.g. Pearl Plaza, Okhta contracted projects Mall, Promenade, REDI) Rec
Slide 4: H1/2014 – Focusing operations has yielded results
H1/2014 – Focusing operations has yielded results Pearl Plaza, St Petersburg + Number of visitors growing. 96% of the space leased out. opened 8/2013 Developer- Okhta Mall, St Construction is progressing on schedule. Estimated cost- contracted Petersburg + savings amount to MEUR 25. Bank financing i
Slide 5: H1/2014 in brief
H1/2014 in brief • The Group’s order backlog exceeded one billion euros (MEUR 1,045) • New agreements amounted to MEUR 502; growth was generated by contracting in Finland • Order backlog largely comprises contracting; sold share of the order backlog amounts to MEUR 873 (83%) • Profitability of Domes
Slide 6: 1-6/2014 in brief
1-6/2014 in brief 1-6/ 1-6/ change, change, 1-12/ 2014 2013 MEUR % 2013 Revenue, MEUR 281.6 337.8 -56.2 -16.6% 679.4 Operating profit, MEUR 9.3 14.9 -5.6 -37.4% 26.4 Operating profit, % 3.3% 4.4% 3.9% Profit before taxes, MEUR 5.6 14.0 -8.4 -60.3% 22.8 Order backlog 1), MEUR 1047.0 959.2 +87.8 +9.2%
Slide 7: SRV’s order backlog hits an all-time high, exceeding a billion
SRV’s order backlog hits an all-time high, exceeding a billion Meur Konserni; uudet sopimukset 800 • Growth in number of new 700 agreements 600 • Efforts to obtain new contracts in Finland 500 were successful 400 • Housing start-ups for consumers will be 300 595 601 678 stepped up 200 425 502 • Star
Slide 8: Profitability of Domestic Operations has improved
Profitability of Domestic Operations has improved • Domestic revenue has remained at a good level as the order backlog continues to grow • Domestic order backlog is MEUR 920 +MEUR 148 vs. Q2/13 +MEUR 274 vs. Q4/13 • Favourable trend in domestic operating profit Meur Domestic operations: operating pr
Slide 9: SRV Group
150 SRV Group Revenue 16 Operating profit 14 12 10 8 6 4 2 0 Q1/13_Q2/13.Q3/13. 4/13. Q1/14. 2/14 Q1/13_ Q2/13. 03/13. 4/13. Q1/14_ 2/14 Order backlo _ Profit before taxes 959 it 8 na? “4 826 880 12 10 8 6 4 2 0 1/13 PAB, 03/13, ng. on G 4 Q2/14 Q1/13_Q2/13_Q3/13_ 4/13. 1/14 Q2/14 SRW
Slide 10: Domestic Operations
Domestic Operations 91% of the Group's revenue Business construction Housing construction 63 %* 37 %* • Offices and retail premises • Owner-occupied housing • Hotels and special-purpose • Rental housing premises • Logistics facilities • Regional development • Rock construction and projects infrastru
Slide 11: Total housing sales up 12%
Total housing sales up 12% • Total sales of housing developed by SRV grew by 12 % • 347 rental housing units developed by SRV were sold to investors (202 H1/13) • Demand for housing produced for consumers decreased significantly, and 101 units were sold (199 units H1/13) Housing production under con
Slide 12: SRV has decided to increase own housing start-ups
SRV has decided to increase own housing start-ups • SRV reacted to the decline in sales to Start ups, LTM consumers by strongly decreasing start-ups • Housing demand is partly recovering, but the regional and project-specific differences are great • On the basis of advance marketing, SRV has decided
Slide 13: International Operations
International Operations 9% of the Group’s revenue • Shopping centres • Shopping centre management • Other business premises projects 13
Slide 14: SRV’s shopping centre projects in Russia 1.
SRV’s shopping centre projects in Russia 1. Pearl Plaza shopping centre: opened on 24 Aug. 2013 • Phase I: MEUR 140, scope 92,000 m2. SRV’s holding 50% and investment MEUR 23 • SRV is responsible for shopping centre management and leasing; about 96% of the space has been leased out • Annual rental i
Slide 15: SRV’s shopping centre projects in Russia 2.
SRV’s shopping centre projects in Russia 2. Okhta Mall shopping centre: opening in spring 2016 • Part of SRV’s large-scale construction project in the Okhta area • Ownership: Russia Invest1 55%, SRV 45% (+ indirect holding 15%) • SRV is responsible for commercialisation and construction; the agreeme
Slide 16: Upcoming modern shopping centres in St Petersburg, 2013-2015
Upcoming modern shopping centres in St Petersburg, 2013-2015 No. Name 1 Admiralteiskaya 2 Galaktika 3 London Park 4 PEARL PLAZA, COMPLETED 5 Monpansye 6 Pyat ozer 15 7 Zanevskiy Kaskad, Phase III 8 Evropolis 9 10 Skandinavia Piter-Raduga Phase II 11 Port Nakhodka, Phase II 12 Hollywood 4 13 Hines Ou
Slide 17: SRV’s shopping centre projects in Russia 3.
SRV’s shopping centre projects in Russia 3. Promenade shopping centre: opening in early 2016 • SRV’s development project that will be built in the city of Mytishi in the Greater Moscow Area • Investors: SRV (19%), Blagosostoyanie1 (55%) and Vicus2 (26%). SRV’s total holding in the project is 20%, ac
Slide 18: REDI shopping centre and car park
REDI shopping centre and car park • Leasing of REDI is progressing - REDI will be a unique shopping centre in Finland - customer flows will be directed to the centre from many levels. Leasing negotiations are under way with anchor tenants and a wide range of potential tenants. If the ongoing lease n
Slide 19: Ready-for-sale business properties
Ready-for-sale business properties • Derby Business Park, Espoo • SRV-developed business property project concerning three office buildings in Perkkaa, Espoo, which borders the new intersection on the Turku motorway • Occupancy rate 95%, almost 600 parking spaces. • Phase I (incl. SRV’s head office)
Slide 20: SRV’s financial position remains strong
SRV’s financial position remains strong • Good financing reserves to start up own projects • Equity ratio 38.4% • Group’s financing reserves: MEUR 153 • Ready-for-sale commercial projects are an additional financing reserve • Financing for the completion of own construction in Finland has been secur
Slide 21: Outlook for 2014 remains unchanged
Outlook for 2014 remains unchanged • The quarterly variation and development of revenue and result in 2014 will be affected by several factors, such as: SRV's own projects are recognised as income upon delivery, the part of the order backlog that is continuously recognised as income mainly consists
Slide 22: Appendices
Appendices SRW
Slide 23: Domestic Operations
Domestic Operations 1-6/ 1-6/ change change 4-6/ 4-6/ 1-12/ 2014 2013 MEUR % 2014 2013 2013 Revenue, MEUR 255.3 264.0 -8.6 -3.3% 131.0 128.9 574.8 business construction 151.5 142.1 +9.3 +6.6% 82.5 74.6 319.2 housing construction 103.9 121.8 -17.9 -14.7% 48.5 54.3 255.5 Operating profit, MEUR 13.7 6.
Slide 24: International Operations
International Operations 1-6/ 1-6/ change change 4-6/ 4-6/ 1-12/ 2014 2013 MEUR % 2014 2013 2013 Revenue, MEUR 26.6 73.9 -47.3 -64.1% 12.4 50.4 104.7 Operating profit, MEUR -0.9 11.5 -12.4 -108.1% -0.4 12.3 10.0 Operating profit, % -3.5% 15.6% -2.9% 24.5% 9.5% Order backlog, MEUR 126.9 187.6 -60.7 -
Slide 25: SRV Group
SRV Group 1-6/ 1-6/ change change 4-6/ 4-6/ 1-12/ 2014 2013 MEUR % 2014 2013 2013 Revenue, MEUR 281.6 337.8 -56.2 -16.6% 143.1 179.4 679.4 Operating profit, MEUR 9.3 14.9 -5.6 -37.4% 4.9 13.7 26.4 Operating profit, % 3.3% 4.4% 3.4% 7.6% 3.9% Financial income and expenses, MEUR -3.8 -0.9 -2.9 +315.3%