Why invest in YIT?
HELSINKI-VANTAA AIRPORT, FINLAND
Investor presentation – Why invest in YIT? August 2021 Disclaimer
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This presentation includes “forward-looking statements”. These statements contain the words "anticipate", “will”, "believe", "intend", "estimate", "expect" and words of similar meaning. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company’s financial position, business strategy, plans and objectives of management for future operations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this presentation. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The Company cautions you that forward-looking statements are not guarantees of future performance and that its actual financial position, business strategy, plans and objectives of management for future operations may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the Company's financial position, business strategy, plans and objectives of management for future operations are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in future periods. Neither the Company nor any other person undertakes any obligation to review or confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation.
2 YIT Investor presentation YIT in brief We are the largest Finnish and a significant North European urban development company
REVENUE IN 2020 REVENUE AND PERSONNEL 3.1 B€ BY SEGMENT AND REGION IN 2020
ADJUSTED OPERATING PROFIT IN 2020 REGION Finland Finland Sweden REVENUE 85 M€ Scandinavia 3.1 B€ Norway* Russia Russia Baltic countries Estonia OUR CUSTOMER OFFERING Central European Latvia countires Lithuania
SEGMENT Poland Housing Finland & CEE
Housing Russia Housing Business premises Czech Slovakia Republic PERSONNEL Business premises and Partnership properties ~7,400 Infrastructure Group *YIT announced in Oct 2020 Infrastructure Partnership properties to start to close down its operations in Norway.
On 1 April 2020, YIT sold its Nordic paving and mineral aggregates businesses. Figures refer to continuing operations. HELSINKI-VANTAA AIRPORT, FINLAND Investor presentation – Why invest in YIT?
1. YIT in brief
2. Strategy
3. ESG: Environmental, Social, Governance
4. Business segments
5. Market environment
6. Key financial development
7. Appendices TRIPLA, HELSINKI, FINLAND 1
YIT in brief
5 YIT Investor presentation / YIT in brief Our customer offering
Partnership Business Housing properties premises Infrastructure
Functional homes, Sustainable urban Diverse offices, business, Smooth traffic flows living services and environments and supporting production and logistics and sustainable living convenience in daily life. services for investors, premises, hybrid projects, environments. owners and tenants. public spaces and housing contracting.
6 YIT Investor presentation / YIT in brief YIT value creation: More life in sustainable cities
FOR ENVIRONMENT
• Emissions (71.8 kt CO2e) • Momentary impacts (noise, dust, vibration) • Waste (107 kt) • Carbon neutral use of buildings FOR PERSONNEL • Ecological products and • Satisfied personnel services (commitment index 80%) • Direct and indirect employment PERSONNEL effect • Competent and professional (wages and salaries 372 M€) personnel in 10 countries • Safe work environment FOR SOCIETY (~ 7,400 employees) (combined LTIF 9.8) • Development of sustainable • Employee competence urban areas development NATURAL RESOURCES • Responsible corporate citisen • Building materials SUSTAINABLE (income taxes 4 M€) (materials and supplies 325 M€) URBAN • 100 Good Deeds -responsibility • Energy (308 GWh) program DEVELOPMENT FINANCIAL RESOURCES FOR CUSTOMERS • Equity (920 M€) • Satisfied customers (NPS 51) • Plot reserve (812 M€) • Sustainable and life facilitating • Associated companies and RELATIONAL CAPITAL services joint ventures (80 M€) • Long customer relationships • Better living environment • Investment property (consumers and investors) FOR OWNERS • Reliable partner • Stable and profitable investment (~16,000 suppliers and (revenue 3,069 M€ and subcontractors) adjusted operating profit 85 M€) INTANGIBLE ASSETS BUSINESS AREAS • External services FOR PARTNERS • Dividends and appreciation • YIT brand (1,612 M€) • Strategic partnerships (dividend 0.14 € per share) • Product and service consepts • Reliable customer for financiers • Company culture and values (finance expenses 45 M€) Housing Business Infrastructure Partnership Premises Properties
RESOURCES BUSINESS OUTPUTS AND IMPACTS A YIT’s operations have positive net impacts to society B Sustainable urbanX development
IMPACT NEGATIVE (SCORE) POSITIVE ENVIRONMENT -2.9 +0.3 (-2.6) HEALTH -0.4 +1.3 Based on scientific (+0.9) research all SOCIETY construction projects -0.0 +2.4 cause emissions and (+2.4) waste, and have a risk for accidents. KNOWLEDGE Also, YIT uses skilled -0.8 +0.6 and highly educated (-0.2) Sustainable urban development workforce as a projects are essential parts of resource. = building of societal infrastructure and they also contibute to health TOTAL NET IMPACT SCORE* and wellbeing. (+0.5)
*Upright model version 0.3.367 8 YIT Investor presentation / YIT in brief on 4th Feb, 2021 TRIPLA, HELSINKI, FINLAND Reasons to invest
Annually growing Large development 1 dividend 2 portfolio
Solid balance sheet with improving Strong brand and 3 business mix 4 market position
9 YIT Investor presentation / YIT in brief KONEPAJA AREA, HELSINKI, FINLAND 2
Strategy
10 YIT Investor presentation / YIT in brief 15 MINUTES’ More life in sustainable cities CITY
11 YIT Investor presentation / Strategy Megatrends driving growth and productivity
Urbanisation Digitalisation Sustainable development Changing demographics
• Urban development • Customer experience • Circular economy • Employee shortages • Public transport • Higher productivity • Carbon neutrality • Competition for talent • Complex projects • Use of data • Subsidies and green finance • Ageing population • Telecommuting • The platform economy and • Revitalising urban areas • Health and safety cooperation between companies and start-ups
12 YIT Investor presentation / Strategy Our mission to create better living environments
MISSION Creating VISION better living More life in STRATEGY environments sustainable cities Improve business mix BUSINESS MODEL Cornerstones drive profitability and performance
VALUES Respect Cooperation FUNDAMENTS Creativity 13 Safety Quality Sustainability Passion Strategic actions to adjust business mix
A Improve offering and Strengthen pipeline for lifetime value of assets B growth • Differentiating services in SERVICES • Plot reserve in urban areas co-operation with partners • Partnerships and financing SustainableX • Competitive core products urban • Project development development capability
Grow assets under Focus on projects and ownership businesses based on our • Partnerships and strengths co-investments • Self-developed and • Large urban development projects competence-based projects • Housing portfolio • Performance and quality
14 YIT Investor presentation / Strategy Group-wide cornerstones drive profitability and performance
Success with Top performance customers and partners
Stepping up Happy people sustainability
15 YIT Investor presentation / Strategy TRIPLA, HELSINKI, FINLAND Cornerstone Top performance
Improve productivity by • Common ways of working – the YIT way
• Improve lead times
• Expand usage of BIM and digital tools across lifecycle
• More centralised supply chain
16 YIT Investor presentation / Strategy Cornerstone Success with customers and partners
Best customer experience by • Data-driven business and customer understanding
• Digital solutions
• Differentiation with new services and concepts
• Attractive YIT B2B offering combining services and products
17 YIT Investor presentation / Strategy Cornerstone Stepping up sustainability
Sustainability in the core of everything we do by
• CO2 reduction across lifecycle
• Differentiate with sustainable products and services
• Develop sustainability (ESG) reporting and data platform
• Improve supply chain responsibility and grey economy prevention
18 YIT Investor presentation / Strategy Cornerstone Happy people
Building on best expertise by • Culture and leadership as core strengths
• Core superior skills development & support for early interventions
• Systematic trainee and competence development programmes
• Common way of project staffing
19 YIT Investor presentation / Strategy Strategic targets
ROCE Gearing >12% <50%
CO emissions Dividend per share 2 Growing -50% by 2030 vs. 2019
20 YIT Investor presentation / Strategy TRIPLA, HELSINKI, FINLAND Strategic targets Gearing improved, ROCE weakened
ROCE, % GEARING, %
81 >12 68 10 54 <50 6 5
// // 1 2 2018 2019 2020 Target 2018 2019 2020 Target 1Pro forma, excluding IFRS 16. 2Excluding IFRS16.
21 YIT Investor presentation / Strategy Strategic targets Dividend 0.14 € per share
EMISSION INTENSITY OF
DIVIDEND PER SHARE, € OWN OPERATIONS, tCO2e/M€
BASE YEAR 1 0.12 -21%
GROWING -50%
0.27 0.28
0.14 n/a // // 2018 2019 2020 Target 2018 2019 2020 Target 1 Additional dividend.
22 YIT Investor presentation / Strategy Dividend history
DIVIDEND PAYOUT RATIO AND DIVIDEND PER SHARE, € EFFECTIVE DIVIDEND YIELD, %
0.09 572%
6.7% 0.07 0.12 5.3% 4.2% 4.2% 3.9% 0.05 3.7% 145% 2.9% 68% 41% 59% 56% 0.03 0.38 0.28 0.01 0.25 0.27 0.22 0.22 0.18 0.14 -0.01
-5.00 -389% -0.03 2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019
Annual dividend Additional dividend Payout ratio Effective dividend yield
23 YIT Investor presentation / Strategy SÄHKÖTTÄJÄNPUISTO PARK, HELSINKI, FINLAND 3
Environmental Social Governance
24 YIT Investor presentation / ESG The foundation for our sustainable operations Six most material sustainability topics for YIT
ESG Creating sustainable, G Compliance with good S Occupational comfortable and safe corporate governance safety 1 urban development by 2 and preventing 3 We continuously improve our utilising the corruption and the safety practices. We also opportunities provided grey economy monitor compliance with by the circular economy occupational safety practices Our operations are ethical and among our subcontractors and We build long-lasting and attractive transparent. We comply with throughout the supply chain. living environments. We promote responsible business practices. low-carbon construction and develop life cycle services for properties.
S Promoting the G Implementing E Reducing the personnel’s responsible environmental 4 ocupational well-being 5 subcontracting and 6 impacts of YIT’s and competence procurement own operations development We are committed to respecting We increase use of renewable We aim to be an attractive labour and human rights. We set energy and aim to improve waste employer and offer equal environmental and social sorting in our production opportunities to our employees. responsibility requirements for our processes. We mitigate climate We invest in the continuous subcontractors and supply chain. change by decreasing the development of employee emissions of our own operation. competence.
25 YIT Investor presentation / ESG PILIAMIESTIS, KAUNAS, LITHUANIA Long-term environmental targets to mitigate climate change -50%
CO2 emissions by 2030
CO2 reporting CARBON starting from NEUTRALITY 2020
26 YIT Investor presentation / ESG Progress on emission reduction targets
EMISSION INTENSITY OF EMISSION INTENSITY OF 2 OWN OPERATIONS, tCO2e/M€ SELF-DEVELOPED PROJECTS, kgCO2e/m /year
Focus on developing the Switch to renewable carbon footprint calculation electricity in capability of YIT’s own Finland and Norway personnel
BASE YEAR BASE YEAR ~ -6% -21%
-50% -50%
n/a n/a // 2 // 2018 2019 2020 Target 2018 2019 2020 Target 2 The company updated its calculation method during 2020 and carried out the calculation on a project-by-project basis at the design phase. The change in the calculation method will result in a maximum difference of 13% compared to 2019, with lower results according to the updated method.
27 YIT Investor presentation / ESG Occupational safety essential throughout the supply chain
LTIF, ROLLING 12 MONTHS Target of
16
<9 12 combined lost time injury frequency (LTIF) of 8 Target level YIT personnel and 4 subcontractors by 2021 0 Rolling 12 months
YIT personnel YIT personnel and subcontractors
28 YIT Investor presentation / ESG KONEPAJA, HELSINKI, FINLAND Ensuring employee wellbeing, equality and human rights
Personnel Employee commitment rate
in 2020 Women 24%
80% ~7,400 (77)
Men 76%
Employee turnover in 2020
Employed over 13.3% 800 trainees in 2020 (13.4)
29 YIT Investor presentation / ESG WORKERY WEST, HELSINKI, FINLAND Ensuring transparent actions and fighting corruption and grey economy
Good ESG governance: AA-rating YIT Code of Conduct (MSCI 2020) ~80% of personnel completed online training in 2020 YIT Ethical Channel in use
30 YIT Investor presentation / ESG YIT’s Board of Directors
HARRI-PEKKA EERO ALEXANDER FRANK OLLI-PETTERI KRISTINA BARBARA TIINA KAUKONEN HELIÖVAARA EHRNROOTH HYLDMAR LEHTINEN PENTTI- TOPOLSKA TUOMELA VON WALZEL Chairman Vice Chairman Member Member Member Member Member Member YIT’s Group Management Team (as of 1 Aug)
MARKKU ILKKA TOM TEEMU MARKO ANTTI JUHA ILKKA JUHANI PII MOILANEN SALONEN EKMAN HELPPOLAINEN OINAS INKILÄ KOSTIAINEN TOMPERI NUMMI RAULO President CFO, Deputy to EVP, Business EVP, Housing EVP, Housing EVP, Infrastructure EVP, Urban EVP, Partnership EVP, Operations SVP, and CEO the President premises segment Russia segment Finland and CEE segment (acting) Development properties segment Development Human Resources and CEO segment (acting)
31 YIT Investor presentation / ESG Key ESG metrics
SDG KPI metric 2020 2019 2018 Sustainable urban development Net impact Upright model +0.5 - -
Environmental
CO2 emissions (Scope 1, Scope 2, Scope 3) ktCO2e 71.8 100.6 -
CO2 intensity (Scope 1, Scope 2, Scope 3) tCO2e/revenue M€ 23.4 29.7 -
Social Combined accident frequency rate (YIT personnel, LTIF, rolling 12 9.8 10.7 - subcontractors) months Personnel commitment index % 80 77 74 Employee turnover % 13.3 13.4 15.0 Customer satisfaction rate NPS, rolling 12 51 50 - months Governance Code of Conduct training % ~80 79 80 Investigations regarding potential crimes, qty 84 59* 71* misconduct or other deviations related to corporate security *includes Nordic paving and mineral aggregates businesses
32 YIT Investor presentation / ESG ESG ratings and memberships
ESG RATINGS MEMBERSHIPS
33 YIT Investor presentation / ESG 4
Business segments
34 YIT Investor presentation / Segments HELSINGIN BARISTA, HELSINKI, FINLAND Housing Finland and CEE
Wide housing Development of portfolio for sale CUSTOMER SATISFACTION SOLD APARTMENTS residential and renting for areas and several living services customer 62 61% segments Net Promoter Score to consumers
Continuing EUR million 2020 2019 2018* Enabling Revenue 1,286 1,240 1,158 industrialisation sustainable Adj. operating profit 108 91 103 and lifestyle digitalisation Adj. operating profit margin, % 8.4 7.4 8.9 Order book 1,437 1,737 1,729 Good Capital employed 700 697 585 performance level * Pro forma EBIT >10%
35 YIT Investor presentation / Segments Housing operations in Finland and CEE countries
SHARE OF PROJECTS SHARE OF PROJECTS Tallinn BY REGION BY REGION
Helsinki, Espoo, Vantaa Baltic countries
>4,200 Greater Helsinki >1,600 Riga completed area completed Cental European apartments apartments countries in 2020 Turku, Tampere, in 2020 Klaipéda Hämeenlinna Kaunas Rest of Finland Vilnius
Gdansk
Warsaw
Prague
Bratislava 36 YIT Investor presentation / Segments SUITA, KAZAN, RUSSIA Housing Russia
Sustainable CUSTOMER SATISFACTION RESIDENTIAL MANAGEMENT homes and Growth in residential living services areas 60 94,000 Net Promoter Score service customer
Focus on plot EUR million 2020 2019 2018* acquisitions New operating model and Revenue 305 240 274 and project Adj. operating profit 27 1 -33 development in standardised Adj. operating profit margin, % 8.8 0.5 -12.0 optimal products Order book 195 356 349 locations Good Capital employed 180 277 294 performance level * Pro forma EBIT >12%
37 YIT Investor presentation / Segments Housing operations in Russia
SHARE OF PROJECTS BY REGION
Continuing units >2,700 completed Closing units apartments in 2020
Nadym
Arkhangelsk Surgut Kirovo-Chepetsk Seversk St. Petersburg Perm Tobolsk Kirov Glazov Tomsk Yekaterinburg Tyumen Moscow Kazan Kemerovo Novosibirsk Kurgan Samara Chelyabinsk Berdsk SERVICES: Rostov-on-Don Property maintenance and living services Krasnodar Gelendzik
Sochi
38 YIT Investor presentation / Segments A Housing B Different customer profiles’ financial impacts SERVICES Sustainable urbanX development
Housing consumer projects
• High capital employed Housing investor • Higher EBIT margin
projects
% -
EBIT • Low capital employed • Lower EBIT margin than in consumer projects
ROCE-%
39 YIT Investor presentation / Segments Based on company’s own estimates. TRIPLA, HELSINKI, FINLAND Business premises
Focus on CUSTOMER SATISFACTION The leading developer of project Reliable partner business premises in development in life-cycle Finland and an emerging and alliance player in the Baltic and and controlled Central European tendering projects 34 countries. Our focus is Net Promoter Score on capital regions.
Adaptable EUR million 2020 2019 2018* offices, Improving Revenue 761 1,177 1,045 retail premises, project Adj. operating profit -44 -7 68 public spaces management and hybrid Adj. operating profit margin, % -5.8 -0.6 6.5 Order book 745 897 1,327 projects Good Capital employed -44 65 38 performance level * Pro forma EBIT 5-7%
40 YIT Investor presentation / Segments A Business premises B Different project types’ financial impacts SERVICES Sustainable urbanX development
Growth areas Self developed projects
Life cycle
% Competence - based incl. PPP, open
collaboration EBIT Price driven
Potential risk
41 YIT Investor presentation / YIT Segments Based on company’s own estimates. TAMPEREEN RATIKKA, TAMPERE, FINLAND Infrastructure
Demanding infrastructure construction CUSTOMER SATISFACTION Building foundation for such as sustainable urban public transport systems, development in Finland, power plants, wind parks, Sweden and the Baltic water supply plants, data centres, countries. Our focus is roads, bridges, mines, underground premises, 47 on demanding industrial plants and ports Net Promoter Score infrastructure projects.
Focus on Project EUR million 2020 2019 2018* improving development and Revenue 791 807 717 profitability competence- Adj. operating profit 13 15 -7 through risk based expertise 1.6 1.9 -0.9 and project Adj. operating profit margin, % Order book 829 1,128 861 management Good Capital employed 48 52 77 performance level * Pro forma EBIT >5%
42 YIT Investor presentation / Segments A Infrastructure projects B Different project types’ financial impacts SERVICES Sustainable urbanX development
Growth areas
Self developed
projects
% - Competence based incl.
EBIT PPP, open Road collaboration maintenance
Price driven
Potential risk
43 YIT Investor presentation / Segments Based on company’s own estimates. KEILANIEMIE, ESPOO, FINLAND Partnership properties
Enables Financing and Investment portfolio and carrying out PORTFOLIO VALUE ownership of real estate management large urban large property operations in Finland and development the CEE countries. development projects in line projects ~260 with the strategy EUR million
Income from EUR million 2020 2019 2018*
asset Growing Revenue 17 0 - ownership and investment Adj. operating profit 5 83 27 real estate portfolio 30.2 - - management Adj. operating profit margin, % Order book 323 - - Good Capital employed 331 254 145 performance level * Pro forma ROCE >15%
44 YIT Investor presentation / Segments A Partnership properties B Different investment types’ financial impacts SERVICES Sustainable urbanX development
Retail premises
Office premises Results from: Housing Equity investment
% • Fair value change
- portfolio
Joint venture
EBIT City / state • Rental income premises Plot funds Results from: • Fair value change incl. life cycle Joint venture • Rental income Potential sales profit • Fair value change when exited Results from: • Life cycle service fee Potential sales profit when exited
Potential risk
45 YIT Investor presentation / Segments Based on company’s own estimates. PIKKUSIRKKU, RIIHIMÄKI, FINLAND 5
Market environment
46 YIT Investor presentation / Market environment YIT has strong market position in urban development
SHARE OF TOTAL REVENUE IN 2020
BUILDING CONSTRUCTION CIVIL ENGINEERING ~14%
Housing Business premises Infrastructure projects ~22% ~2% ~1% ~4% ~7% ~1% ~2% ~12% ~4%
Source: Eurostat, company own estimate. ~1% Turnover data for building and civil engineering based on harmonized country- specific industry statistics collected by Eurostat. Only the comparable share of enterprises with more than 50 employees in the total turnover of the statistics has ~2% been taken into account. In the EU28, the share is on average 48% in the ~2% building construction industry and 71% in the civil engineering industry. Revenue data is based on confirmed figures collected by Eurostat and changes in output by country and industry in the Euroconstruct report. The calculated share of revenue has been compared to YIT's comparable revenue.
47 YIT Investor presentation / Market environment Q3 market outlook stable
Housing Real estate Infrastructure market market market
Finland 73%
Russia
Baltic countries
Central European countries
Sweden
Q2/2021 market environment* Q3/2021 market outlook* Good Normal Weak Improving Stable Weakening
48 YIT Investor presentation / Market environment *Estimates of the market environment and market outlook are based on the company's own assessment Strong housing demand remains in Finland
APARTMENT START-UPS IN FINLAND units, rolling 12 months 50,000 700,000 new apartments needed 45,000 by 2040*, worth 200B€ 40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000 00 // 2000 2005 2010 2015 2020 2040 Total residential projects started Privately funded home construction Subsidised home construction Demand by 2040 (VTT June, 2020*)
Source: Statistics Finland, building and residential development, ARA, RT, VTT 49 YIT Investor presentation / Market environment Residential market outlook Market volume 2020 (M€) Index at constant prices, 2017=100
FINLAND NEW RESIDENTIAL CONSTRUCTION OUTPUT ESTONIA
8,000 150 8,000 150
6,000 130 6,000 130
4,000 110 4,000 110
M€ M€
2,000 90 2,000 90
0 70 0 70
CZECH REPUBLIC LATVIA
8,000 150 8,000 150
6,000 130 6,000 130
4,000 110 4,000 110
M€ M€
2,000 90 2,000 90
0 70 0 70
SLOVAKIA POLAND RUSSIA LITHUANIA
8,000 150 60,000 150 60,000 150 8,000 150
6,000 130 130 130 6,000 130 40,000 40,000
4,000 110 4,000 110 M€
M€ 110 110
M€ M€ 20,000 20,000 2,000 90 90 90 2,000 90
0 70 0 70 0 70 0 70
50 YIT Investor presentation / Market environment Source: Forecon (Jun 2021), Euroconstruct (Jun 2021) Non-residential market outlook Market volume 2020 (M€) Index at constant prices, 2017=100
FINLAND NEW NON-RESIDENTIAL CONSTRUCTION OUTPUT ESTONIA
8,000 150 8,000 150
6,000 130 6,000 130
4,000 110 4,000 110
M€ M€
2,000 90 2,000 90
0 70 0 70
CZECH REPUBLIC LATVIA
8,000 150 8,000 190
6,000 130 6,000 150
4,000 110 4,000
M€ M€ 110 2,000 90 2,000
0 70 0 70
SLOVAKIA POLAND LITHUANIA 8,000 150 8,000 150 20,000 150 6,000 130 6,000 130 15,000 130
4,000 110 4,000 110 M€
M€ 10,000 110 M€ 2,000 90 2,000 90 5,000 90 0 70 0 70 0 70
51 YIT Investor presentation / Market environment Source: Forecon (Jun 2021), Euroconstruct (Jun 2021) Infra market outlook Market volume 2020 (M€) Index at constant prices, 2017=100
FINLAND CIVIL ENGINEERING CONSTRUCTION OUTPUT ESTONIA
18,000 150 18,000 150 15,000 15,000 130 130 12,000 12,000
9,000 110 9,000 110
M€ M€ 6,000 6,000 90 90 3,000 3,000 0 70 0 70
SWEDEN LATVIA
18,000 150 18,000 150 15,000 15,000 130 130 12,000 12,000
9,000 110 9,000 110
M€ M€ 6,000 6,000 90 90 3,000 3,000 0 70 0 70
NORWAY LITHUANIA
18,000 150 18,000 150 15,000 15,000 130 130 12,000 12,000
9,000 110 9,000 110
M€ M€ 6,000 6,000 90 90 3,000 3,000 0 70 0 70
52 YIT Investor presentation / Market environment Source: Forecon (Jun 2021), Euroconstruct (Jun 2021) HELSINKI-VANTAA AIRPORT, FINLAND 6
Key financial development
53 YIT Investor presentation / Financials Stable performance, order book strenghtening
REVENUE, € million ORDER BOOK, € million
4,131 3,890 3,392 3,528 3,069 3,001
2019 2020 2Q21 2019 2020 2Q21 12-month r.
54 YIT Investor presentation / Financials Profitability weakened in 2020 due to negative fair value changes ADJUSTED OPERATING PROFIT, € million AND PROFIT MARGIN, %
180 165 10.0% 160 9.0% 8.0% 140 123 7.0% 120 6.0% 100 4.9% 85 5.0% 80 4.1% 4.0% 60 2.8% 3.0% 40 2.0% 20 1.0% 0 0.0% 2019 2020 2Q21 12-month r.
55 YIT Investor presentation / Financials TRIPLA, HELSINKI, FINLAND Cash flow improving, 2020 included cash flow from the sale of Nordic paving and mineral aggregates businesses OPERATING CASH FLOW AFTER INVESTMENTS, CASH FLOW OF INVESTMENTS, rolling 12 months, € million rolling 12 months, € million
336 316
n/a -116 -153 -155
-30 -34 -24 -146 51 -187 -179
2019 2020 2Q21 2019 2020 2Q21 12-month r. 12-month r. Plots Associatedtotalcompanies
56 YIT Investor presentation / Financials and joint ventures Financial key ratios
NET DEBT / ADJUSTED EBITDA RATIO EQUITY RATIO AND GEARING, % AND INTEREST COVER RATIO
5.8 81% 68% 5.0 4.2
3.9 3.0 41%
34% 33% 35% 2.2
2019 2020 2Q21 2019 2020 2Q21 Gearing Equity ratio Net debt / adjusted EBITDA ratio Interest cover ratio 57 YIT Investor presentation / Financials Net debt decreasing
NET INTEREST-BEARING DEBT, MATURITY STRUCTURE1 € million AS OF 2Q21, € million
2Q21 862 1Q21
628
121 353 100 66 58 50 9
2019 2020 2Q21 2021 2022 2023 2024 2025 2026- 1 Excluding housing company loans related to unsold apartments, €106 million and lease liabilities, €204 million.
The hybrid bond, €100 million, is recorded as part of equity and therefore 58 YIT Investor presentation / Financials excluded from this paragraph. Debt structure stable
DISTRIBUTION OF INTEREST RATE DISTRIBUTION OF INTEREST-BEARING DEBT AS OF 2Q21 INTEREST-BEARING DEBT1 AS OF 2Q21
7% 28%
29% 41% €713 million 0% 59% 15%
21%
Bonds Commercial papers Housing company loans related to unsold apartments Fixed rate Floating rate Loans from financial institutions Lease liabilities 1 Including interest-bearing debt and interest rate derivatives, Other interest-bearing debt but excluding lease liabilities, €204 million
59 YIT Investor presentation / Financials Group key financial figures
€ million 2Q21 2020 2019 12-month r. Revenue 3,001 3,069 3,392 Operating profit 78 35 80 Operating profit margin, % 2.6 1.1 2.4 Adjusted operating profit 123 85 165 Adjusted operating profit margin, % 4.1 2.8 4.9 Result before taxes 42 -6 40 Result for the period, continuing operations 25 -8 5 Result for the period, incl. discontinued operations 28 27 15 Earnings per share, EUR 0.14 0.13 0.07 Operating cash flow after investments 316 336 51 Net interest-bearing debt 353 628 862 Gearing, % 35 68 81 Equity ratio, % 41 33 34 Return on capital employed, % (ROCE, rolling 12 months) 8.0 5.2 9.7 Order book 3,890 3,528 4,130
60 YIT Investor presentation / Financials Questions? Please, don’t hesitate to contact us!
YIT Investor Relations [email protected]
Tommi Järvenpää Vice President, Investor Relations +358 40 576 0288 [email protected]
Hanna Valonen Follow YIT IR Investor Relations Specialist on Twitter +358 408 846 556 [email protected] twitter.com/ YITInvestors yitgroup.com
61 YIT Investor presentation HELSINKI-VANTAA AIRPORT, FINLAND 7
Appendices
62 YIT Investor presentation /Appendices Appendices
I. Remuneration
II. ESG
III. History of YIT
IV. Key projects
KEILALAMPI, ESPOO, FINLAND
63 YIT Investor presentation / Appendices I. Remuneration
YIT REMUNERATION POLICY REMUNERATION PROGRAMMES
• Short-term incentives (STI) 1 year • Performance-based monetary bonuses • Most salaried emplyees included Strengthens our culture Motivates our people and • Business and individual performance targets and supports shareholder supports to retain and • Aim to motivate and compensate employees based on the value creation recruit the talents needed achievements and to drive efficient operation of the day- to-day business according to the company’s annual plan • Long-term incentives (LTI) 3 year Promote strategy execution Is responsibly managed, • Share-based incentive scheme and management by key flexible and in line with our • Key persons included results long-term financial goals • Return on capital employed (ROCE), total shareholder return (TSR), net promoter score (NPS) targets • Aim to inspire, engage and empower key people to execute the strategy and create higher shareholder returns and align the interests of employees with shareholders’ interests
64 YIT Investor presentation / Appendices II. YIT supports UN’s Sustainable Development Goals (SDG’s)
YIT’S KEY SUSTAINABILITY THEMES AND MOST MATERIAL SDG’S FOR YIT THEIR RELATIONS TO SDG’S 8 Decent work and economic growth 11. Creating sustainable, comfortable and safe 11 Sustainable cities and communities urban development by utilizing opportunities provided by the circular economy. 12 Responsible consumption and production 13 Climate action 22. Compliance with good corporate governance. Preventing corruption and the grey economy. 16 Peace, justice and strong institutions
33. Occupational safety.
4. Promoting the personnel’s occupational well- 4 being and competence development.
5. Implementing responsible subcontracting and 5 procurement.
66. Reducing the environmental impacts of YIT’s own operations.
65 YIT Investor presentation / Appendices III. initially operates in the in initiallyoperates It1910. in established is Lemminkäinen OsakeyhtiöAsfaltti ESTABLISHED IS LEMMINKÄINEN 1910 businesses. products concreteand bitumen waterproofing, 66 1910 Helsinki. in officean opens (AIB) AB BYRÅN INGENIÖRS ALLMÄNNA 1912
1912 1910 The history of YIT - starts in 1920.in starts felt roofing of production The BEGINS FELT ROOFING OF PRODUCTION 1920 plants. sewerage and supplywater of leadingbuilder Finland’s become to growscompany The operations. continuethe to INSINÖÖRITOIMISTO YLEINEN ESTABLISH BUSINESSMEN FINNISH 1920 1920 YIT Investor presentation / / InvestorYIT presentation – 2020 1930 paved in 1930.paved are roads first The PAVING IN DEVELOPMENTS 1930
1940 Appendices until 1990.until MiddleEast the to services construction exportto starts and OPERATIONS CONSTRUCTION ITS EXPANDS COMPANY THE 1950 1950 Vesto and Pellonraivaus Insinööritoimisto Yleinen by FORMED IS YIT MODERN THE 1960 decade. the endof the at pavingoperator Finland’slargest as Emerges EXPANDED OPERATIONS CONSTRUCTION 1960 1960 Perusyhtymä Russia. i EXPANDS YIT 1961 ts Insinööritoimisto operations to operations Oy. Oy , , exporter in Finland.in exporter construction and company construction largest the become to GROWS YIT 1970
opportunities. exportup opens acquisition The Ab. Palmberg A. Alfred Oycompany construction the acquires Lemminkäinen BEGINS GROWTH STRONG 1975 1970 construction in Finland.in construction housinginclude to in 1984 expanded are Operations BEGINS CONSTRUCTION HOUSING 1980
YIT forming MERGE PERUSYHTYMÄ AND YIT 1987 1980 - Yhtymä Oy. Yhtymä exchange. stock the onis listed LEMMINKÄINEN 1989 revenue. total Group’s the of half than more accounts business Foreign countries. in 11 operates Group the 1994,By WORLD THE AROUND PROJECTS 1990 1990 exchange. stock the is listedon YIT 1995 - YHTYMÄ YHTYMÄ buildingsystems. includeto expanded is offeringservice The REGION NORDICTHE IN CONTRACTORASPHALT SECOND THE 2000 Europe.Central andBaltic countries theto expanded is construction premises business andHousing Europe. Central and countries Nordic the in services buildingto operations EXPANDS YIT 2000s, THEIN 2000 - LARGEST its
company, publiclylisted formed newlya to transferredare buildingserviceswhile its operations, construction continuesYIT companies. separatetwo form to DEMERGER A UNDERGOES YIT 2013 2010 of growth.of pursuit the bylater Followedefficiency. operational and sheet balance stronga on Focus DIRECTION IN CHANGE 2014 Caverion . stable togetherstable more and Stronger MERGE YIT AND LEMMINKÄINEN 2018 on April 1, 2020,1, April on closedDeal was BUSINESS AGGREGATES MINERAL AND PAVING NORDICOF SALE
2020 IV. Key projects: Housing
RANTA-TAMPELLA ZWIRN PILIAMIESTIS TAMPERE, FINLAND BRATISLAVA, SLOVAKIA KAUNAS, LITHUANIA
Ranta-Tampella is one of the Zwirn is an urban residential Located on the banks of river largest areas under and office property in Neris in front of the Old Town construction in Tampere. Bratislava’s historical industrial and Kaunas Castle, Piliamiestis Construction began in district, on a plot of land is the most attractive places to autumn 2016 and the first known for being the location of live in Kaunas. Construction of residents moved into their a spinning mill. Construction this project started at 2015 and new homes in 2018. on the first phase of the it will be finished approximately project began in 2020. in 2026.
AROMA PARK SUOMI HLOUBĚTÍN SUOMEN RANTA WARSAW, POLAND PRAGUE, CZECH YEKATERINBURG, RUSSIA REPUBLIC The development of the Suomen Ranta is a residential Aroma Park residential area Suomi Hloubětín is a large area block under construction near near Warsaw includes the development project in Prague. the city centre of Yekaterinburg, renovation of an early 20th Nearly 900 apartments will be by the Iset river, right next to century yeast production plant built in the nine-hectare area. Mayakovsky Central Park. With and the construction of new five buildings, the project residential buildings. consists of more than 1,300 Construction is now under apartments and will be way on the third phase. completed in 2023.
67 YIT Investor presentation / Appendices IV. Key projects: Business premises
HELSINKI AIRPORT KEILANIEMENRANTA VAASA CENTRAL TERMINAL ESPOO, FINLAND HOSPITAL EXPANSION Keilaniemenranta will become an VAASA, FINLAND attractive district of jobs and Implemented as an alliance VANTAA, FINLAND housing by the sea, with stops for project, the new hospital the metro stop and the Jokeri Light We are the project building will have premises and Rail system. In addition to management contractor in the facilities that take advantage of apartments and businesspremises, Helsinki Airport terminal future technology. Customer the district will feature a hotel, day- expansion project, which will orientation and cost-efficient care centre, restaurants and other increase the airport’s capacity. life cycle have been the services. The Keilalampi property guiding criteria for design. was renovated in 2020.
UNIVERSITY OF HAMBURGER BÖRS VUOSAARI UPPER HELSINKI TURKU, FINLAND SECONDARY SCHOOL MAIN BUILDING The old hotel building from the HELSINKI, FINLAND HELSINKI, FINLAND 1970s will be demolished and replaced by a new hotel. The We are building Helsinki’s first Alliance project to renovate the oldest section of Hamburger school building implemented main building of the University of Börs, a protected building from under the life cycle model. The Helsinki: a protected building of 1885, will be renovated with school will have a significant role historical value in the heart of the respect for its historical value. as a public building in the area, city. The project won the Approximately 270 hotel rooms providing not only premises for Construction Site of the Year will be built in the new Scandic education but also recreational award in 2020. hotel. facilities for local residents.
68 YIT Investor presentation / Appendices IV. Key projects: Infraprojects
TAMPERE LIGHT BLOMINMÄKI JOKERI LIGHT RAIL RAIL ALLIANCE WASTEWATER HELSINKI–ESPOO, TAMPERE, FINLAND TREATMENT PLANT FINLAND Phase 1 to be completed in 2021. ESPOO, FINLAND The first light rail project in the Phase 2 started in 2020 and is Helsinki metropolitan area. About estimated to be completed Excavation and construction 25 km, 34 pairs of stops between 2024. The combined length is 23 contract for a wastewater Itäkeskus in Helsinki and kilometres. Also, a light rail treatment plant. When Keilaniemi in Espoo. Will make maintenance alliance contract for completed, the efficient cross-city public transport more the period 2/2019–5/2029. treatment plant will process the reliable and increase passenger wastewater of 400,000 people. comfort.
CROWN BRIDGES HENRIKSDAL MURTOMÄKI ALLIANCE WASTEWATER WIND FARM HELSINKI, FINLAND TREATMENT PLANT PYHÄJÄRVI, FINLAND The Crown Bridges project will STOCKHOLM, SWEDEN The project rights have been connect the Laajasalo, sold to Ålandsbanken Wind Korkeasaari and Kalasatama We construct multiple works for Power Fund with all the required districts to the centre of Stockholm Vatten, tunnels and the permits. The project consists of Helsinki with a 10-kilometre interior of the tunnels, equipment 15 wind turbines and their tramway. The construction and systems. The operation of the production capacity corresponds work can be started in 2021. existing plant will be ongoing to total power of approximately throughout the construction 90 MW. We are also building period. the wind farm’s infrastructure.
69 YIT Investor presentation / Appendices IV. Key projects: Partnerhip properties
REVENUE PHASE MALL OF TRIPLA YCE HOUSING 1 OP-VUOKRAKOTI KY HELSINKI FUND FINLAND Part of a complex of three blocks CEE COUNTRIES A company established by YIT and and Finland’s largest shopping OP-Vuokratuotto for residential centre in terms of the number of We are a partner in this fund, which investments. We have agreed on the shops. Also includes the Pasila invests in housing development sale of eight apartment buildings to railway station and a parking projects in the CEE countries. We be built for rental purposes to the facility. Tripla was completed in are responsible for the construction company. The investment value of its entirety in 2020. of the fund’s projects and selling the the projects is approximately EUR apartments to consumers. 130 million and YIT’s share of the joint investment is 40 %.
DEVELOPMENT PHASE THE MARIA GROWTH TRIGONI GARDEN HELSINKI AND TECHNOLOGY HELSINKI HELSINKI COMPANY HUB YIT won the Helsinki High Rise One of Finland’s largest urban design-build competition in 2018. development projects. Includes the HELSINKI, FINLAND The implementation agreement for world’s most modern event arena, the start-up area includes the design for example. Built largely The Maria growth and technology and construction of two high-rise underground. Mainly business company hub is a significant buildings and a podium structure premises and hotel services as well development project on the combining the buildings. as apartments aboveground. A international scale. When completed, Construction will begin after the local privately funded project that is it will be a campus with more than detailed plan has been confirmed, currently in the local detailed plan 4,000 jobs and 70,000 m2 of space. which is estimated to take place in phase. 2022.
70 YIT Investor presentation / Appendices yitgroup.com