Slide 1: Interim Report 1-3/2023
Interim Report 1-3/2023 Heikki Vuorenmaa − President and CEO Tuomas Mäkipeska − CFO
Slide 2: 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 3: Q1 – profitability decreased in an unprecedentedly weak housing market
Q1 – profitability decreased in an unprecedentedly weak housing market Strong headwinds Profitability YIT’s transformation from the market burdened primarily program launched persisted throughout by very low in February off the quarter consumer sales in to a good start Housing 3
Slide 4: Profitability burdened primarily by very low consumer sales in Housing
Profitability burdened primarily by very low consumer sales in Housing Revenue, Adjusted EBIT, Adjusted EBIT-margin € million € million % -12% 518 22 455 4.2 -4 -0.9 Q1/22 Q1/23 Q1/22 Q1/23 Q1/22 Q1/23 4
Slide 5: Slow start to the year across the segments
Slow start to the year across the segments Housing Business Infrastructure Property Unprecedentedly weak Premises Lower revenue Development market Increased material No significant prices and inadequate transactions Adj. EBIT, € million project management 21 2 1 2 1 1 -3 -3 Q1/22 Q1/23 Q1/22 Q1/23 Q
Slide 6: Order book remained balanced; revenue impacted by very low consumer sales in Housing
Order book remained balanced; revenue impacted by very low consumer sales in Housing Lower apartment start-ups Order book, € million in Housing and strict project Revenue, € million selection in Infrastructure 4,067 4,089 3,756 3,702 3,542 779 545 560 518 455 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q1/22 Q2/2
Slide 7: Housing: Unprecedentedly weak market in Finland
Housing: Unprecedentedly weak market in Finland Sold to consumers, housing units • Consumer sales -66% y-o-y, with 961 Finland -82% and CEE -41%. 1000 -66% • New start-ups and plot investments 381 690 750 slowed down. New consumer start-ups in 270 520 Q1 amounted to 29 (Q1/2022: 624). 500 353 285 33
Slide 8: Number of unsold completed apartments decreased in Q1
Number of unsold completed apartments decreased in Q1 Total number of apartments under • Total number of apartments under construction and unsold, housing units construction was 6,579. 10,000 100% 9,000 90% • The number of unsold completed apartments 8,000 80% 7,000 70% decreased to 747 (Q4/2022: 79
Slide 9: Transformation program to generate structural long-term efficiencies
TRANSFORMATION PROGRAM • Targeted run-rate cost savings are at least EUR 40 million by the end Transformation of 2024, with more than half achieved already during 2023. • Strong focus on improving capital efficiency. program to • Good start in Q1: o New structure with three agile and customer-focuse
Slide 10: Profitability decreased in Q1; cash flow burdened by very low consumer sales in Housing
Profitability decreased in Q1; cash flow burdened by very low consumer sales in Housing 10
Slide 11: Q1 in numbers
Q1 in numbers Order book Adjusted EBIT Operating cash Net debt amounted to decreased to flow after amounted to €3,542 €-4 investments amounted to €791 million million million (3,756) (22) €-211 (338) million (-41) 11
Slide 12: Profitability decreased year-over-year
Adjusted EBIT bridge per segment, € million Very low consumer sales Profitability 22 decreased Increased material prices and inadequate year-over-year project management No significant transactions Lower revenue -4 Q1/22 Housing Business Infra- Property Other Q1/23 Premises structure Development 12
Slide 13: Cash flow burdened by very low consumer sales in Housing
Cash flow burdened by very low consumer sales in Housing Operating cash flow after investments, Capital employed, continuing € million operations, € million Approx. half attributable to Housing, driven by very low sales, payments for 1,626 plot investments made before Q1, and the 1,444 1,443 apartme
Slide 14: Underlying asset base is strong; debt structure remains well-balanced
Underlying asset base is strong; debt structure remains well-balanced Distribution of key assets in balance sheet, Distribution of interest-bearing debt, € million € million Investments 1,956 294 Completed 229 Housing company loans have long maturities, and the buyer is responsible for the repayment
Slide 15: Gearing increased to 95% in Q1
Equity ratio Gearing 40% 36% 95% 33% 34% 68% 64% 30% Gearing increased to 2020 2021 2022 Q1/23 2020 2021 2022 Q1/23 95% in Q1 Interest cover ratio Maturity structure of interest-bearing debt** 7.1 166 150 139 4.9 € million 3.5 3.0 2022 2023 2024 2025 2026 2027- 2020* 2021 2022 Q1/23 31 March 22 31 M
Slide 16: We are in a good position to face the challenging market
We are in a good position to face the challenging market Our underlying Debt structure Transformation asset base is remains well- program will result strong balanced in increased efficiencies 16
Slide 17: Strong headwinds from the market are expected to persist
Strong headwinds from the market are expected to persist 17
Slide 18: Outlook in Housing remains weak for H1
Outlook in Housing Real estate Infra- structure Housing market market market remains Finland weak for H1 Baltic countries but is Central Eastern Europe expected to Sweden gradually recover in H2 Q1 market environment Short-term market outlook Good Normal Weak Improving Stable Weakening 18
Slide 19: 2023 Group adjusted operating profit expected to be lower than in 2022
YIT expects its Group adjusted operating profit for continuing operations to be lower than in 2022, but at least EUR 50 2023 Group million (2022: EUR 110 million). adjusted In Housing, the demand outlook remains weak for the first half of the year but is expected to gradually recover in the second o
Slide 20: Completions of consumer apartments to remain stable in 2023
Completions of consumer apartments to remain stable in 2023 Estimated completions of consumer apartment projects under construction, housing units In 2023, consumer 3,242 3,000 1,519 completions peak in Q3 2,965 407 1,181 863 1,000 1,500 900 524 585 568 550 550 400 2,102 150 1,112 100 2,061 337 148
Slide 21: Focus on improving productivity and decreasing construction lead times
Focus on improving productivity and decreasing construction lead times Example of lead time improvement with industrial construction in Nuppu • We have continued our residential projects in Slovakia* determined work to implement industrial construction methods. 21 • Lean based tools enable us to 18
Slide 22: Several actions ongoing to improve our performance and competitiveness
Several actions ongoing to improve our performance and competitiveness We have taken We focus firmly on We are determined decisive actions to executing our to seize the release cash from transformation and opportunities the our operations delivering value to market situation our customers might offe
Slide 23: Additional information
Follow YIT IR Additional information YIT’s financial reporting and AGM on Twitter: twitter.com/ in 2023 YITInvestors YIT Investor Relations Annual Review Week 7-8/2023 investorrelations@yit.fi Annual General Meeting 16 March Interim Report Q1/2023 3 May Samu Heikkilä Half-year Report 2023 1 August I
Slide 24: Appendices
Appendices I. Key figures II. Housing sales and start-ups III. Property Development highlights 24
Slide 25: I. Key figures
I. Key figures € million 1-3/23 1-3/22 1-12/22 Revenue 455 518 2,403 Operating profit -8 22 102 Operating profit, % -1.7 4.2 4.2 Adjusted operating profit -4 22 110 Adjusted operating profit margin, % -0.9 4.2 4.6 Result before taxes -19 14 74 Result for the period, continuing operations -14 12 63 R
Slide 26: II. Sales and start-ups Q1/2020-Q1/2023 – Housing Finland
The Housing segment in Finland II. Sales and start-ups Q1/2020-Q1/2023 SOLD APARTMENTS, units APARTMENT START-UPS, units 1,305 1,239 539 1,131 583 1,058 1,023 583 1,007 968 932 955 929 427 897 539 427 835 422 267 390 799 390 428 717 725 267 702 683 657 654 664 363 645 766 636 363 198 438 665 263 422
Slide 27: II. Sales and start-ups Q1/2020-Q1/2023 – Housing CEE
The Housing segment in Central Eastern Europe II. Sales and start-ups Q1/2020-Q1/2023 SOLD APARTMENTS, units APARTMENT START-UPS, units 1,096 998 951 946 577 740 588 565 711 634 623 639 195 368 523 242 100 479 480 374 523 523 519 516 339 209 195 348 332 274 293 381 255 397 242 98 363 97 334 135 158
Slide 28: III. Investment portfolio and development highlights, 31 March 2023
Property Development III. Investment portfolio and development highlights, 31 March 2023 INVESTMENT PORTFOLIO EUR million Value1 Change 1/23 - 3/232 Change 4/22 - 3/232 Housing 71 -1 13 Commercial 206 1 -2 Infra 6 – -1 Total 283 0 10 1 Book value of Property Development´s equity investment including
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