YIT Corporation’s Annual General Meeting on March 15, 2013 Juhani Pitkäkoski President and CEO
YIT | 1 | Annual General Meeting March 15, 2013 Smolny St. Petersburg, Russia Contents
• Financial Statements 2012 • YIT today • Building Systems • Construction Services • Guidance for 2013
Vita Nova St. Petersburg, Russia
YIT | 2 | Annual General Meeting March 15, 2013 2012 in brief
Construction Services
• Good profitability in Construction Services Finland • Large road projects proceeded as planned • Operating profit nearly doubled in International Construction Services • All-time high residential sales in Russia during the fourth quarter (1,300 units)
Building Systems
• Profitability at a satisfactory level in service and maintenance • In Northern Europe, the focus is on the service business; measures to improve profitability in project business are being implemented • The share of service and maintenance grew in Central Europe • Higher operating profit and profitability in Building Services Central Europe during the fourth quarter
YIT Group
• Cash flow was clearly better than during the previous year • Net debt decreased: EUR 746 million (Net debt/ EBITDA: 2.4x, IFRIC) • Equity ratio reached the target level of 35%
YIT | 3 | Annual General Meeting March 15, 2013 Revenue at the same level as the year before
Revenue (EUR million)
4,525 4,676
3,940 3,847 3,707 3,452 3,284 3,024 2,780 2,390
1,763 1,623 1,235
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
All figures based on segment reporting (POC= Percentage of completion)
YIT | 4 | Annual General Meeting March 15, 2013 Operating profit grew
Operating profit (EUR million)
338
259 261 241 249 228 229
157 166
90 100 90 99
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
All figures based on segment reporting (POC= Percentage of completion)
YIT | 5 | Annual General Meeting March 15, 2013 Order backlog grew by 4 percent
Order backlog (EUR million)
3,753 3,902 3,509 3,250 3,234
2,802 2,774
1,823 1,879 1,490
939 736 575
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
All figures based on segment reporting (POC= Percentage of completion)
YIT | 6 | Annual General Meeting March 15, 2013 Solid financial position
Gearing ratio YIT has a diverse capital structure percent • Borrowings EUR 922 million • Of the loans, 40 percent had been 79.8 80.4 75.1 72.6 72.1 raised directly from the capital and 69.2 62.9 money markets, 45 percent from banks and other financial institutions and 15 percent from insurance companies
Balanced maturity structure • EUR 106 million of long-term loans will mature in 2013
2006 2007 2008 2009 2010 2011 2012 Strong liquidity position • Cash and cash equivalents EUR 176 million • Undrawn committed credit and overdraft All figures according to Group reporting (IFRIC 15) facilities EUR 359 million
YIT | 7 | Annual General Meeting March 15, 2013 Board proposal for AGM: Increase in dividend
Dividend / share EUR 0,80 0,75 *) 0,70 0,65 0,65
0,55
0,50
0,40 0,35 0,30
0,22 0,23 0,19 0,15 0,11 0,09 0,07
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Strategic target: Dividend payout *) The proposal by the Board 40-60% of net result 2012: 55 %*) YIT | 8 | Annual General Meeting March 15, 2013 YIT today and strategy Current long-term strategic priorities
Group targets
Focused, balanced and Leader in service Forerunner in housing profitable growth
Building Services Construction Services
• Strong growth in Germany • Strong growth in Russia Geographical focus • Strengthening position in Northern • Strengthening position in Finland Europe
• Long-term service agreements • Strengthen presence in current • Large Design &Build projects in CE locations and neighbourhood cities in Strongest growth • Large acquisitions in CE Russia initiatives • Technical arrowhead competences, • Residential development e.g. clean room, cooling • Energy efficiency and renewable • Energy efficiency energy
YIT | 10 | Annual General Meeting March 15, 2013 Result of the demerger: two independent, stock listed companies
Building Systems (Caverion) Construction Services (YIT)
Residential development Service and maintenance of building systems and industrial processes Business premises Technical building systems installations Infrastructure (in Finland) Project deliveries to industry Building construction
Finland, Sweden, Norway, Denmark, Russia, Estonia, Latvia, Finland, Russia, Estonia, Latvia, Lithuania, Lithuania, Germany, Austria, Poland, the Czech Republic and the Czech Republic, Slovakia Romania
Revenue 2012: EUR 2,803 million Revenue 2012: EUR 1,929 million
EBIT 2012: EUR 69 million EBIT 2012: EUR 201 million
Operative invested capital 12/2012: EUR 420 million Operative invested capital 12/2012: EUR 1,290 million
Personnel 12/2012: ~19,400 Personnel 12/2012: ~6,200
2012 reported figures, according to segment reporting (POC= Percentage of completion), excl. Other items of EUR -20.7 million from EBIT. Building Systems figures include reported combinedYIT segments | 11 ‘ | figures Annual of Building General Services Meeting Northern March 15,Europe 2013 and Building Services Central Europe, Construction Services figures include reported combined segments ‘ figures of Construction Services Finland and International Construction Services 11 Building Systems Market drivers in Building Systems
Technical • Increasing share of technology in buildings service and • Very low portion of service and maintenance maintenance outsourced to professional service companies
• Very fragmented market Market • Economics of scale for large players consolidation – Wider service portfolio
• Tightening legislation Requirements • Energy consumption continues growing for energy • Need for modernisation and investments in efficiency energy sector
Growth potential in • German-speaking areas new countries
YIT | 13 | Annual General Meeting March 15, 2013 Energy efficiency and lifecycle thinking in Building Systems
Halsnæs, Denmark Porvoo, Finland Siilinjärvi, Finland ESCO energy saving Lifecycle project ESCO energy saving
• Energy-saving solutions for • 3 day care centres • 9 buildings the municipality’s 120 • Design, construction, • Modernisation of buildings energy solutions automation, changes in • Total value of the project • Property maintenance heating methods, changes EUR 12.1 million services and responsibility in ventilation machines • The calculated savings for energy consumption • Implementation of the impact of ESCO for the • Remote property change investments in 2013 customer EUR 0.8 million monitoring • Term of the ESCO service per year • Agreement term 20 years agreement 10 years • Use of renewable energy • Total value of the project • Total value of the project • Warranty and use period EUR 12 million EUR 1.1 million until 2021 • ESCO= Energy Service • ESCO= Energy Service Company Company
YIT | 14 | Annual General Meeting March 15, 2013 Strong project operations in Central Europe
DC Tower in Vienna • The tallest building in Austria: 220 m + 28 m antenna • 60 floors, floor area 137,600 m² • A hotel, offices, apartments, restaurants, gym • Green Building certificate: LEED Gold as the target • YIT Austria GmbH implements heating, cooling, ventilation, sanitary, instrumentation, control and automation technology • Ventilation capacity 500 000 m3 per hour, heat demand 9 MW, cooling capacity 10 MW • Hand-over in September 2013 • The value of YIT’s contract approximately EUR 25 million
YIT | 15 | Annual General Meeting March 15, 2013 Construction Services Strengthening our position and growth in Construction Services • Urbanisation • In Finland, migrtion, smaller family sizes, increasing rents Need for new • In Russia and CEE countries, need for housing modern apartments • Increasing share of middle class with improving purchasing power in Russia
• Concentration to growth centres Need for • City centre development, area development business • Modernisation needs, change of purpose premises
Possibilities in • Traffic-related projects infra services • Road and regional maintenance In Finland
YIT | 17 | Annual General Meeting March 15, 2013 Residential production at a good level in Finland
• Focus on our own residential development projects Number of apartments under construction On sale • Balanced sales inventory: Sold more than 70 percent of the apartments on sale are medium-priced (price EUR 300,000 at the most) • Completed apartments and 4,109 4,288 4,240 4,302 3,875 4,105 4,049 those nearing completion are 3,637 focused on in sales 1,642 1,879 1,831 1,748 1,897 1,651 1,816 • Price development has been 1,894 stable, official control 2,660 increases cost pressures 2,127 2,208 2,398 2,293 2,409 2,409 1,743 • Consumer confidence and the availability and terms of Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 mortgages central issues in 2013 2011 2012 • Solutions for affordable housing at the core of At the end of the period development
YIT | 18 | Annual General Meeting March 15, 2013 Residential production in Russia geographically balanced
Number of apartments under construction Yekaterinburg, • The first plot acquisition in Kazan, Rostov-on- by city Don, Moscow city Tyumen, one of the richest Moscow Oblast and fastest growing cities in St. Petersburg Russia • Plan to start the first 8,995 project in 2013, overall 8,670 8,662 8,313 size of the project almost
7,365 2,413 900 apartments 2,364 2,180 2,329 6,346 6,472 1,827 • In 2012, 4,209 apartments 5,495 975 1,343 were sold in Russia 914 3,796 (in 2011: 3,561) 4,016 4,259 3,142 3,882 3,570 3,141 2,646 • Residential sales supported by extensive mortgage cooperation with banks 2,396 2,290 2,323 2,686 1,935 1,801 1,988 2,102
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2011 2012 At the end of the period
YIT | 19 | Annual General Meeting March 15, 2013 Operations started in 8 new cities in Moscow Oblast
• Operations were started in eight new cities in the Moscow region in 2012 • Plot acquisitions Pushkino made Dolgoprudniy ɄorolevSchelkovo Krasnogorsk Noginsk • Construction has Balashikha Rozhdestveno Moscow Elektrostal been started in five Zvenigorod Ljubertsy Gorki-10 Kratovo cities Lytkarino Ramenskoje Zhukovsky
Bronnitsy Egoryevsk
Serpukhov
YIT | 20 | Annual General Meeting March 15, 2013 Guidance for 2013
YIT estimates the Group revenue based on segment reporting for 2013 to remain at last year’s level and operating profit to grow in 2013.
The uncertainty about the general macroeconomic development is still high and impacting YIT's business operations and customers.
YIT | 21 | Annual General Meeting March 15, 2013 YIT | 22 | Annual General Meeting March 15, 2013