TRIPLA PROJECT HELSINKI, FINLAND Interim report January-March 2019 Kari Kauniskangas, President and CEO
Contents 1 Group development in Q1/2019 2 Segment reviews 3 Financial position and key ratios 4 Outlook and guidance 5 Appendices All 2018 figures are pro forma, please see slide 29 for additional information. Figures in brackets refer to comparison period unless otherwise stated. KONEPAJA AREA DEVELOPMENT PROJECT 2 Interim report January-March 2019 HELSINKI, FINLAND
Q1/2019 1 Group development in KEILANIEMI DEVELOPMENT PROJECT 3 Interim report January-March 2019 ESPOO, FINLAND
Q1 in brief Paving’s and Good cash Synergies Housing flow Strong order realised Russia’s faster than considering backlog result estimated seasonality improvements +19.6 25 -3 4,556 EUR million EUR million realised EUR million EUR million order combined adjusted operating cumulative synergies by operating cash flow backlog on 31 March the end of Q1/2019 (31 Dec 18: 4,434) profit improvement after investments (-153) 4 Interim report January-March 2019
Positive development in key figures ADJUSTED OPERATING PROFIT, EUR million, % REVENUE PER SEGMENT, EUR million ORDER BACKLOG PER SEGMENT, EUR million 99.6 5,068 4,991 1,269 4,641 4,556 4,434 979 53.8 909 7.8% 5.5% 702 24.4 602 2.7% -4.4% -7.2% -30.7 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 -43.2 Housing FIN & CEE Housing Russia Housing FIN & CEE Housing Russia Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Business premises Infra projects Business premises Infra projects Adjusted operating profit Paving Partnership properties Paving Partnership properties Adjusted operating profit % 5 Interim report January-March 2019
Performance by segment in Q1 REVENUE PER SEGMENT, EUR million ADJUSTED OPERATING PROFIT PER SEGMENT, EUR million, % 50.0 300 40.0 256 Q1/2018 Q1/2019 Q1/2018 Q1/2019 243 239 250 Adjusted operating profit % 30.0 3.6% (8.5) in Q1/19 (Q1/18) 20.5 20.0 200 183 2.1% (-1.2) 9.3 10.0 5.0 150 0.0 -0.2 -1.5 -2.2 -4.8 110 -6.6 -10.0 -8.6 94 100 -13.8 -6.0% (-9.2) -20.0 -20.2 -10.8% (-36.1) 59 53 -30.0 44 50 38 -30.8 -40.0 -34.1% (-58.4) 0 -50.0 Housing FIN Housing Business Infrastructure Paving Partnership Housing FIN Housing Business Infrastructure Paving Partnership & CEE Russia premises projects properties & CEE Russia premises projects properties 6 Interim report January-March 2019
Synergies and integration costs CUMULATIVE SYNERGIES INTEGRATION COSTS 2 MAIN SOURCES OF SYNERGIES Cumulative integration costs Measures done EBIT impact 60 60 Automati External 1 sation services 45-50 45-50 45 Harmoni Overlaps sation 40 40 40 40 25 IT 23 22 19 6 20 20 19 Premises 0 Actual (2018) Actual (Q1/2019) Target (2020) 0 Actual (2018) Actual (Q1/2019) Estimate (2020) Additional synergy benefits expected from refinancing 1 According to the original target, full EBIT improvement potential per annum by the end of 2020, original target was set in June 2017. The target was raised in connection with Interim Report January – March 2018. 2 Integration costs for 2017, EUR 4 million included in the cumulative figure
Market outlook for the next 12 months Housing Finland and Housing Business Infrastructure Partnership CEE Russia premises projects Paving properties Finland Russia The CEE countries The Baltic countries The Czech Republic, Slovakia, Poland Scandinavia Sweden Norway Denmark Weakened outlook compared to the past Improved outlook compared to the past Unchanged outlook compared to the past 12 months’ development 12 months’ development 12 months’ development 8 Interim report January-March 2019
YIT’s key sustainable development themes – materiality matrix YIT’s key sustainable development themes were identified together with over 2,000 stakeholders in 2018 YIT’S MATERIALITY MATRIX Material topics: SIGNIFICANCE FOR STAKEHOLDERS 4 1. Creating sustainable, comfortable and safe urban development by utilising opportunities 1 provided by the circular economy 5 2. Compliance with good corporate governance. Preventing corruption and the grey economy 2 6 3 3. Occupational safety 4. Promoting the personnel’s occupational well -being and competence development 5. Implementing responsible subcontracting and procurement 6. Reducing the environmental impacts of YIT’s own operations SIGNIFICANCE FOR YIT 9
2 Segment reviews OODI CENTRAL LIBRARY 10 Interim report January-March 2019 HELSINKI, FINLAND
Housing Finland and CEE Risk level adjusted for current demand Operating profit declined due to no completions in the CEE • COMPLETED APARTMENTS, units countries and a lower year-on-year number of completed apartments in the Helsinki metropolitan area. 1,938 2,000 300% • The segment sold almost 600 completed apartments or 643 apartments in the final stage of construction in Finland to a new 1,800 joint venture partly owned by YIT. 250% 1,600 1,450 1,415 The revenue impact was approximately 40 M€ and it had a • 1,400 123 weakening impact on profitability. 499 200% 1,327 1,134 1,295 1,200 Number of unsold completed units at the end of the period was • 162 216 in Finland (12/18: 422) and 73 in CEE countries (12/18: 130). 1,080 1,000 150% 972 916 800 92% EUR million Q1/2019 Q1/2018 88% 87% 100% 79% 75% reported pro forma 600 Revenue 256 243 400 50% Adjusted operating profit 9.3 20.5 200 (3.6%) (8.5%) 0 0% Order backlog 1,607 1,720 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 ** Finland CEE countries of which for consumers Capital employed 679 571 *) ** Includes projects in the CEE sold to YCE housing I fund that is reported in the Partnership properties segment * Reported, excl. IFRS 16 impact 11 Interim report January-March 2019
Housing Russia Low result, but better performance in contracting • Weak comparison period due to project write-down in COMPLETED APARTMENTS, units contracting. • Revenue increased due to higher year-on year number of 2400 completed apartments. 2,042 • Number of unsold completed units at the end of the 720 1900 period was 584 (12/18: 683). • The majority of completions in 2019 will be in Q4/2019. 1400 979 EUR million Q1/2019 Q1/2018 reported pro forma 900 699 Revenue 44 38 274 487 Adjusted operating profit -4.8 -13.8 400 266 180 (-10.8%) (-36.1%) 343 245 233 221 Order backlog 405 466 0 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 -100 Capital employed 314 393 *) St Petersburg Moscow area Russian regions * Reported, excl. IFRS 16 impact 12 Interim report January-March 2019
Business premises Major projects boosted revenue and operating profit • Revenue and operating profit improved mainly due to ORDER BACKLOG BY PROJECT TYPE, EUR million higher renovation volumes as well as the start of Tripla offices’ revenue and profit recognition. • Operating profit was also supported by overall higher 1,400 1,327 year-on-year margins. 1,230 735 1,200 636 • Large projects such as Tripla progressed as planned. • Several projects won during Q1, not yet in order backlog. 1,000 800 EUR million Q1/2019 Q1/2018 600 52 reported pro forma 75 540 Revenue 239 183 519 400 Adjusted operating profit 5.0 -2.2 200 (2.1%) (-1.2%) Order backlog 1,230 1,250 0 Q4/18 Q1/19 Capital employed 65 122 *) * Self developed Negotiated contracting Others * Reported, excl. IFRS 16 impact * Includes tender-based projects as well as lifecycle projects and their service agreements. 13 Interim report January-March 2019
Infrastructure projects Positive development in order backlog and margins of new projects • Revenue increased due to higher year-on-year volumes. ORDER BACKLOG AND ILLUSTRATIVE SHARE OF POST MERGER ORDERS, EUR million • Operating profit improved, but the result was still 900 burdened by low margin level of old projects. 800 • Positive development in order backlog and margins of 700 new projects during the quarter. New orders won during Q1 will be started in Q2. 600 500 400 EUR million Q1/2019 Q1/2018 reported pro forma 300 Revenue 110 94 200 Adjusted operating profit -6.6 -8.6 (-6.0%) (-9.2%) 100 Order backlog 765 672 0 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Capital employed 83 98 *) Share of pre merger orders Share of post merger orders * Reported, excl. IFRS 16 impact 14 Interim report January-March 2019
Paving Efficiency measures improved result • Operating profit improved due to better results in ADJUSTED OPERATING PROFIT AND ORDER BACKLOG, EUR million Sweden and Norway where sizeable measures were 551 533 taken in 2018 to improve operational efficiency and decrease winter planning costs. • Revenue grew slightly due to increased volumes in road maintenance. • Strong order inflow during the quarter in all Nordic countries. EUR million Q1/2019 Q1/2018 reported pro forma Revenue 59 53 Order backlog Adjusted operating profit -20.2 -30.8 (-34.1%) (-58.4%) Order backlog 551 533 -20.2 Capital employed 167 143 *) -30.8 Adjusted operating profit * Reported, excl. IFRS 16 impact Q1/2018 Q1/2019 15 Interim report January-March 2019
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