YIT Annual Report 2003

Annual Report 2003 Together we can do it. FinancialAnnual statements Report 2003 2003 Contents Information for shareholders and investors 3 cYIT in brief 4 Business segments in brief 5 2003 in brief 7 Group CEO’s review 8 Strategy 10 Market outlook 12 Corporate responsibility 16 Building Systems 32 Construction Services 40 Services for Industry 48 Data Network Services 54 Financial statements Board of Directors’ report 59 Income statement 69 Balance sheet 70 Cash flow statement 72 Accounting policy 73 Management of financial risks 74 Definitions of financial indicators 75 Risk management 76 Key financial indicators, 1994-2003 78 Notes to the income statement 80 Notes to the balance sheet 83 Shares and shareholders 96 Board of Directors’ proposal for the distribution of profit 101 Auditor’s report 101 Corporate Governance 102 Board of Directors 106 Management Board 107 Auditor 108 IR policy 109 Analyst coverage 110 Main Stock Exchange Releases in 2003 111 Glossary 112 YIT Group’s organization 113 Contacts 114 Annual Report 2003 Annual Report 2003 Information for shareholders and investors Annual General Meeting tThe Annual General Meeting of YIT Corporation will be held at 3:00 p.m. (Finnish time) The Board of Directors on Thursday, March 18, 2004 at the company’s head office, Panuntie 11, 00620 Hel- sinki, Finland. The right to participate in the meeting rests with a shareholder who by will propose to the Annual March 8, 2004, at the latest has been entered as a shareholder in the company’s shareholder register that is kept by the Finnish Central Securities Depository Ltd. General Meeting that Shareholders who wish to participate in the Annual General Meeting must notify the company thereof no later than by 4:00 p.m. on March 15, 2004, either by telephon- a dividend of EUR 1.20 per ing +358 20 433 2257 or +358 20 433 2453 or by emailing [email protected] or [email protected], or by writing to YIT Corporation, Marja Salo, P.O. Box 36, share be paid for the 2003 FI-00621 Helsinki, Finland. It is requested that the company be notified of any proxies at that time and that any proxies be sent to the above address before the expiry of the fi nancial year. registration period. Dividend The Board of Directors will propose to the Annual General Meeting that a dividend of EUR 1.20 per share be paid for the 2003 financial year. The right to a dividend rests with a shareholder who by the record date March 23, 2004 has been entered as a shareholder in the company’s shareholder register that is kept by the Finnish Central Securities Depository Ltd. The Board of Directors proposes that the dividend be paid on March 30, 2004. Financial information in 2004 YIT Corporation publishes the 2003 financial statement bulletin on February 20, 2004, and the Annual Report during the week beginning on March 15, 2004. Interim Reports will be published as follows: Interim Report for the January 1 - March 31 period May 4, 2004 Interim Report for the January 1 - June 30 period August 5, 2004 Interim Report for the January 1 - September 30 period November 2, 2004 The Annual Report, Interim Reports and stock exchange releases are published in Finnish, English and Swedish. They can be read on YIT’s site at www.yit.fi. You may also sign up for the release emailing list on the site. Financial reports can be ordered from: YIT Corporation, Corporate Communications, P.O. Box 36, FI-00621 Helsinki, Finland Email: [email protected] Fax +358 20 433 3746 Internet www.yit.fi > English > Feedback > Order financial information and press releases Address changes Printed copies of the Annual Report are mailed to all shareholders included in the register kept by the Finnish Central Securities Depository Ltd. Shareholders are requested to make notification of changes in their address to the bank branch office in which their book-entry account is handled. If the account is handled at the Finnish Central Securities Depository Ltd, notifications of address changes should be sent to the Finnish Central Securities Depository Ltd, P.O. Box 361, FI-00131 Helsinki, Finland. This Annual Report is a translation of YIT Corporation’s Finnish Vuosikertomus 2003 (Annual Report 2003). Annual Report 2003 Annual Report 2003 YIT in brief Net sales YIT is a Nordic service company offering capital investment and maintenance services for the property and construction sector and for industry and telecommunications. Data Network y Services for Services 5% Building In 2003, YIT’s net sales amounted to EUR 2.4 billion and operating profit to EUR 99 Industry 9% Systems million. The Group employs about 22,000 people. The main markets are the Nordic and 28% Baltic countries and Russia. The YIT Group’s roots extend back to 1912, when Yleinen Insinööritoimisto began its operations in the Grand Duchy of Finland. Over more than 90 years in business, the service chain has expanded to cover the entire life cycle of projects and YIT has grown into the market leader in all its business segments in Finland. Construction Services 58% Following the Building Systems acquisition in July 2003, YIT became the leading building systems company in the Nordic countries. YIT’s share is quoted on the Main List of Helsinki Exchanges under the Other Services business sector. Operating profit MEUR Mission 120 YIT’s mission is to build and maintain a good living environment for people. 100 80 Operational concept 60 YIT helps customers to invest productively and maintain the value of their investments. 40 20 0 -20 YIT Corporation Building Systems MEUR -19.7 Corporate Management Construction Services MEUR 107.8 Corporate Services Services for Industry MEUR 8.8 Data Network Services MEUR 10.7 Building Systems Construction Services Building Systems Housing Personnel Automation and security Business environments Property maintenance services Infrastructure Data Network Services 7% Others 1% Building Systems Services for 54% Industry Services for Industry Data Network Services 14% Piping and tanks Fixed Networks Con- Maintenance Mobile Networks struction Services 24% Annual Report 2003 Annual Report 2003 Business segments in brief Building Systems bYIT Building Systems offers a complete range of building system services covering the entire life cycle of properties. It provides design, contracting, maintenance and servicing for all types of technical building systems, facility management, property services, business premise services, and telecom and industrial services and system deliveries locally in all the Nordic countries, the Baltic countries and Russia. Net sales: EUR 681.0 million Operating result: EUR -19.7 million Employees: 11,812 Construction Services Construction Services offers customer-focused residential and premises solutions and capital investment services and helps customers to maintain the value of their investments. Its service chain encompasses the entire life cycle of a property, from the imple- mentation of an investment to its maintenance, as well as repairing and modernizing old buildings. YIT offers construction services in Finland, the Baltic countries and Russia. Water and environmental services are offered in Northern Europe and certain countries in the Middle East and Asia. Net sales: EUR 1,398.5 million Operating profit: EUR 107.8 million Employees: 5,268 Services for Industry In its product areas, Services for Industry is the largest provider of maintenance and capital investment services for industry in the Nordic countries. Customers are the forest, energy, food, oil and chemical industries as well as shipyards and the offshore industry. Services for Industry’s main market is the Nordic countries, but projects are exported worldwide. Net sales: EUR 209.7 million Operating profit: EUR 8.8 million Employees: 3,117 Data Network Services Data Network Services offers end-to-end services for all types of data transfer. Its service range encompasses consulting, design, network construction and maintenance, deliveries of telecom connections and services, and IT helpdesk services, all the way to the customers’ user equipment. The Data Network Services business segment mainly offers its services in Finland. In the rest of its home territories, YIT offers telecom services through YIT Building Systems. Net sales: EUR 130.0 million Operating profit: EUR 10.7 million Employees: 1,463 Annual Report 2003 Annual Report 2003 Annual Report 2003 Annual Report 2003 2003 in brief YIT purchased from ABB, by an agreement signed on July 4, 2003, its Building Systems YIT is the market leader in boperations offering technical building systems, property and industrial services in Finland, Sweden, Norway, Denmark, the Baltic countries and Russia. The acquired business had all its business segments net sales in 2002 of about EUR 1,130 million and approximately 9,100 employees in Finland and the Nordic Post-acquisition, the Group’s four business segments are: Building Systems, Construc- tion Services, Services for Industry and Data Network Services. YIT’s market position leader in Building changed significantly. The company became the market leader, in terms of net sales, in all its business segments in Finland and the Nordic leader in Building Systems. Systems. The company has about 22,000 employees, of whom 55 per cent work in Finland. In 2003, the Group’s net sales grew by 36 per cent to EUR 2,389.7 million (2002: EUR 1,763.0 million). The share of net sales accounted for by the Group’s international activities grew from 22 to 28 per cent. The business operations of Building Systems accounted for EUR 335.1 million of the Group’s net sales In line with its strategy, YIT extended its service chain encompassing the entire life cycle of properties in all its business segments. The share of the Group’s net sales accounted for by its maintenance and servicing business rose from 24 to 27 per cent.

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