Yit Oyj · OMXHEX:YIT

Yit Oyj — Investor Presentation (June 2014)

101 slides from Yit Oyj's investor presentation, June 2014

  1. Slide 1: YIT – Well-managed, profitable growth from emerging markets

    Novo Orlovsky St. Petersburg, Russia YIT – Well-managed, profitable growth from emerging markets with Western Corporate Governance Sanna Kaje, VP, Investor Relations

  2. Slide 2: Contents

    Contents 1 Demerger and new YIT 3 2 Strategy and business model 11 3 Key financials 20 4 Housing 35 5 Business Premises and Infrastructure 54 6 Looking ahead and conclusions 62 7 Appendices 70 YIT | 2 | Investor presentation, June 2014

  3. Slide 3: Demerger and new YIT

    Staadioni residential area Tallinn, Estonia 1 Demerger and new YIT

  4. Slide 4: Right time to move to the next development phase

    Right time to move to the next development phase Over 100 years of experience in Finland, over 50 in Russia YIT expands into building system services in the Nordic countries and Central Europe. Allmänna Ingeniörsbyrån Ab (AIB) establishes an office in Residential and business premises Helsinki and b

  5. Slide 5: Rationale for the partial demerger

    Rationale for the partial demerger Building Services sales exceeding • Independent strategies and different EUR 50 million Construction Services sales Finland is the only country with business models exceeding EUR 50 million* both Building Services and • Capital intensive Construction Services Figur

  6. Slide 6: YIT Group in brief

    YIT Group in brief • Residential development, business premises and Revenue by geographical area 2013 infrastructure • Focus on own-developed projects Russia, 27% • Operations in 7 countries • Revenue EUR 1.9 billion in 2013 Finland, 66% • Operating profit EUR 153 million in 2013 The Baltic countrie

  7. Slide 7: Strong market position in all markets in Housing

    Strong market position in all markets in Housing Market leader in Finland, largest foreign residential developer in Russia Construction companies on YIT’s markets YIT’s markets and market sizes 2013 Number of apartments sold in 2013 Number of apartments*** 11,858 Russia* 10,415 5,478 4,480 Finland R

  8. Slide 8: YIT a significant player on European level in housing

    YIT a significant player on European level in housing Housing sales (pcs) in 2013 EBIT % in 2013 13,663 11,858 11,814 11,528 10,415 22.4% 20.4% 7,780 16.7% 16.0% 13.6% 5,487 12.5% 4,876 9.7% 8.2% 3,391 7.3% 3,265 4.0% 2,034 1.4% Barratt LSR Taylor W Persimmon Pik YIT Etalon Ncc Skanska JM Peab YIT |

  9. Slide 9: Board of Directors

    Board of Directors Versatile expertise on board work, finance, construction industry and Russia Reino Hanhinen Kim Gran Satu Huber Erkki Järvinen Juhani Pitkäkoski Teuvo Salminen Chairman Vice Chairman Board Member Board Member Board Member Board Member Born 1943 Born 1954 Born 1958 Born 1960 Born 1

  10. Slide 10: Group structure and composition of the Group Management Board

    Group structure and composition of the Group Management Board Group structure as of January 1, 2014 Group Management Board Kari Tero Kiviniemi, EVP, YIT Group Kauniskangas Head of Business President and Premises and CEO, Infrastructure Housing Head of Housing Business Finland, the Baltic Premises an

  11. Slide 11: Strategy and business model

    2 Strategy and business model Smolny St. Petersburg, Russia

  12. Slide 12: YIT's Strategy 2014-2016

    YIT’s Strategy 2014-2016 Well managed and profitable growth Growth in own development 5-10% growth per year • Strong growth in residential development and construction in emerging markets (Russia, the Baltic countries and CEE) • Further strengthening the position in the Finnish residential market –

  13. Slide 13: Focused development to improve profitability and strengthen the forerunner position

    Focused development to improve profitability and strengthen the forerunner position Group-wide development programs Centralized coordination, decentralized development Housing development • New housing concepts: mini-apartments, reasonably priced living ”Best living • Area development – ”creating be

  14. Slide 14: Financial targets for 2014 – 2016

    Financial targets for 2014 – 2016 Strategic • The business is managed according Target level Status in 2013 target to the market situation, with focus on: • Profitability 5 - 10% annually Revenue on average -5.1% • Improving cash flow and ROI growth (Previously: More than 10% annually on average) •

  15. Slide 15: Roadmap to ROI > 20%

    Roadmap to ROI > 20% Invested capital Off-balance sheet partnerships facilitate growth without incremental invested capital - + Inventory Strengthening reduction in position in EBIT >20% Finland Finland ROI Both EBIT Releasing and Profitable slow-moving invested + growth in assets emerging 1/3 Both

  16. Slide 16: Value creation: Long value chain with key competences in-house

    Value creation: Long value chain with key competences in-house Assets Outputs Project and Land bank risk management Skilled employees Market knowledge Excellent brand Plot Pricing skills Shareholder value management and sales Specialized equipment tactics Taxes and other contributions to society Own

  17. Slide 17: Business model – Self-developed housing

    Business model – Self-developed housing Finland Russia DD & market Plot • Zoning DD & market • Zoning analysis analysis development • Permitting • Permitting • Design • Social infra and management utilities planning • Design mgmt Construction • Duration 12-15 months • Duration 14-20 months • 1 phase

  18. Slide 18: Business model – Business Premises and Infrastructure

    Business model – Business Premises and Infrastructure Business Premises Infrastructure • Contracting Different types of projects: • Schools, hospitals, offices etc. • Very low capital employed • PPP • Cash flow positive, advance • E.g. major route projects payments • Life-cycle model • Low capital e

  19. Slide 19: Market trends and opportunities

    Market trends and opportunities The pace of change is accelerating and the complexity increasing Trends Implications for YIT Diverging generations • Wealthier middle class desires high quality housing • Smaller average size of households  more smaller and effective flats needed • Lack of workforce

  20. Slide 20: Key financials

    Tripla Helsinki, Finland 3 Key financials

  21. Slide 21: Q1 Highlights

    Q1 Highlights • Good result in Housing due to strong housing sales in Russia and the Baltic countries and Central Eastern Europe • Start-ups on a neutral level • Weak performance in Business Premises and Infrastructure -segment Tammi Dubravka residential area Bratislava, Slovakia YIT | 21 | Investor

  22. Slide 22: Key figures

    Key figures EUR million 1-3/2014 1-3/2013 Change 1-12/2013 Revenue 403.1 452.0 -11% 1,858.8 Operating profit 26.9 35.9 -25% 152.8 Operating profit margin 6.7% 7.9% 8.2% Operating profit, excluding non-recurring items 26.9 35.9 -25% 154.0 Operating profit margin, excluding non-recurring items 6.7% 7.

  23. Slide 23: Revenue growth and healthy profitability through economic cycles

    Revenue growth and healthy profitability through economic cycles Revenue development (EUR million) by business segment Business Premises and Infrastructure Housing Russia Housing Finland, the Baltic countries and CEE International Construction Services CAGR Construction Services Finland +7% 1,929 1,

  24. Slide 24: Housing Finland, the Baltic countries and CEE

    Housing Finland, the Baltic countries and CEE 2008 2009 2010 2011 2012 2013 • Weakening • Focus on • Focus turned to • Focus on direct • Favourable • Soft consumer residential investor deals in direct consumer consumer sales in residential sales demand in the market Finland sales in Finland Finland

  25. Slide 25: Housing Russia

    Housing Russia 2008 2009 2010 2011 2012 2013 • Prices • Housing prices • Slight increases • Prices increased • Prices • Stable residential declined, stabilising in H2 in residential (regional increasing and prices especially in prices differences) good residential H2 • Fixed cost cuts sales • Sales

  26. Slide 26: Business Premises and Infrastructure

    Business Premises and Infrastructure 2008 2009 2010 2011 2012 2013 • Good • Weakening • Signs of • Infrastructure • Stable • Weak business development in business improvement in weak in H1, development in premises market Business premises market the business improvement in in Business Premises due p

  27. Slide 27: Consolidated balance sheet

    Consolidated balance sheet as of March 31, 2014 (EUR million) Revenue* Assets - Inventories, WIP in particular, account for a major share Equity and liabilities 2,515 2,515 128 Non-current assets 246 Equity 92 636 (12%) (5%) 649 1,701 (32%) Non-current borrowings 673 277 (33%) 2,036 2,009 Inventorie

  28. Slide 28: Target to have positive cash flow in 2014

    Target to have positive cash flow in 2014 • Stronger cash flow 2013: EUR -88 million 1-3/2014: EUR -12 million than planned in Q1/2014 59 76 • Dividend of EUR 43 million paid in March -5 -12 -77 -82 • Cash flow of plot -79 -88 investments -95 EUR 44 million in Q1/2014 -156 Q1 Q2 Q3 Q4 Q1 • Modest re

  29. Slide 29: Net debt has increased – Liquidity buffer remains strong

    Net debt has increased – Liquidity buffer remains strong Interest-bearing debt (EUR million), IFRS • Net debt increased due to negative 910 920 cash flow 814 858 742 52 80 50 76 64 • Strong liquidity buffer 678 764 857 782 840 • Undrawn committed credit facilities EUR 330 million • Account overdraft

  30. Slide 30: Invested capital stable

    Invested capital stable Invested capital (EUR million) Return on investment (%), rolling 12 months Strategic target: Return on investment 20% 1,593 1,559 1,554 1,493 1,443 15.0 13.9 12.3 10.3 10.2 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2013 2014 2013 2014 All figures according to segment reporting (POC) YIT

  31. Slide 31: Gearing and equity ratio on an unsatisfactory level

    Gearing and equity ratio on an unsatisfactory level Gearing (%) Equity ratio (%) Net Debt/EBITDA (Multiple, x) 6.9 40.7 132.1 38.5 5.8 123.7 37.0 37.8 109.8 112.0 35.0 4.8 37.3 94.0 108.4 34.9 3.6 4.8 33.6 34.3 101.1 4.2 91.2 91.3 31.6 3.0 3.9 76.4 3.2 2.7 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q

  32. Slide 32: Modest progress in capital release

    Modest progress in capital release Target for capital release Actions in Q1/2014 Cumulative progress • No positive net progress so far Reducing the inventory of unsold • Active sales to investors covering a wide variety of due to high completions, success completed apartments in Finland apartments i

  33. Slide 33: Financial flexibility is good

    Financial flexibility is good • Good ability to manage cash flow Housing start-ups 2000-2013 (pcs) • Start-ups adjusted according to demand 8,873 • Opportunity to adjust plot investments; existing 8,239 8,305 7,590 7,406 7,257 plot reserve provides a good base for growth and 6,590 6,695 profitabilit

  34. Slide 34: A solid dividend payout

    A solid dividend payout Payout ratio (%) Dividend / share (EUR) Note: Historical figures are YIT Group pre demerger Note: Historical figures are YIT Group pre demerger 75 73 0.80 0.75 0.70 60 0.65 0.65 56 56 55 51 48 48 0.55 44 45 0.50 43 43 40 40 38 0.40 0.38 0.35 29 27 0.30 0.22 0.23 0.19 0.15 0.1

  35. Slide 35: Housing

    4 Housing Tähystäjä Espoo, Finland

  36. Slide 36: Housing

    Housing Market leader in residential development Business areas • Finland, the Baltic countries and CEE Russia • Eg. Blocks of flats, terraced houses, leisure homes Finland Tyumen • Focus on self-developed projects, St. Petersburg Yekaterinburg selectively contracting Estonia • Russia Latvia Kazan •

  37. Slide 37: Key market drivers

    Key market drivers Finland • Internal migration to growth centres • Decreasing family-sizes • Ageing population • Energy efficiency • Consumerism and lifestyles The Baltic Countries and CEE • Low living space and poor quality, demand for modern apartments • Housing markets very fragmented in Central

  38. Slide 38: Housing: Revenue and order backlog stable

    Housing: Revenue and order backlog stable • Revenue grew by 6% at comparable exchange rates Q1/2014 • Profitability decreased in both business areas Revenue and profitability (EUR million, %) Order backlog (EUR million) -2% 348 286 281 2,093 2,116 2,071 2,027 270 1,996 248 12.2 12.3 12.9 10.2 10.3 Q

  39. Slide 39: Housing: Operating environment in Q1/2014 in Finland

    Housing: Operating environment in Q1/2014 in Finland • Consumers continued to • Residential prices have • Interest rates of be cautious, but remained relatively stable mortgages stayed on a investors’ activity stayed low level and margins on a good level decreased slightly • Consumers’ access to fin

  40. Slide 40: Housing: Operating environment in the Baltic countries and CEE

    Housing: Operating environment in Q1/2014 in the Baltic countries and Central Eastern Europe (CEE) • Positive development in • Consumer confidence • Interest rates of the macro economy has has strengthened and mortgages have supported the residential prices have remained on a low level residential m

  41. Slide 41: Housing Finland, the Baltic countries and CEE: Revenue decreased

    Housing Finland, the Baltic countries and CEE: Revenue decreased • Sales volumes have grown strongly in the Baltic countries and CEE in recent quarters • Q1/2014 Comparison period exceptionally strong in Finland due to the change in transfer tax rate Revenue (EUR million) Order backlog (EUR million)

  42. Slide 42: Housing Finland, the Baltic countries and CEE: Positive trend continued in EBIT

    Housing Finland, the Baltic countries and CEE: Positive trend continued in EBIT • Change in sales mix impacts profitability • Q1/2014 comparison period exceptionally strong due to high sales volumes in Finland • ROI has been burdened by operating profit in Finnish housing decreasing faster than inve

  43. Slide 43: Housing: Sales volume satisfactory in Finland, growing in Baltics and CEE

    Housing: Sales volume satisfactory in Finland, growing housing sales in the Baltic countries and CEE Sold apartments (pcs) Finland 2013: Total of 3,300 • Activity in investor sales has complemented lower consumer 824 851 868 833 sales 757 109 134 145 180 133 275 383 323 • Consumer demand has been 24

  44. Slide 44: Sales portfolio now better in line with current demand

    Housing Finland, the Baltic countries and CEE: Sales portfolio now better in line with current demand • The share of the Apartment inventory (pcs) Baltic countries and CEE of the sales portfolio has 5,816 5,794 increased recently 5,441 5,252 5,266 (to 33% in 3/2014 660 683 633 from 26% in 3/2013) 63

  45. Slide 45: Housing: Operating environment in Q1/2014 in Russia

    Housing: Operating environment in Q1/2014 in Russia • Weakening of the ruble • Residential prices • Mortgage interest rates boosted housing sales remained stable on have remained stable average • Consumers’ access to financing has remained good Prices of new apartments, Mortgage stock and average in

  46. Slide 46: Housing Russia: Revenue increased

    Housing Russia: Revenue increased • Strong growth in sales volume continues • Increased share of sales in St. Petersburg with higher average prices in Q1/2014 • Revenue grew by 33% y-o-y at comparable exchange rates in Q1/2014 Revenue (EUR million) Order backlog (EUR million) +11% 152 1,106 1,062 1,

  47. Slide 47: Housing Russia: EBIT and ROI remained stable

    Housing Russia: EBIT and ROI remained stable • Profitability was impacted by modest price development and lower completion rate of sold apartments in Q1/2014 • ROI remained stable Operating profit and profitability (EUR million, %) Return on operative invested capital (EUR million, %) -3% 20.1 20.5

  48. Slide 48: Housing Russia: Growing sales volume

    Housing Russia: Growing sales volume Sold apartments (pcs) and share of sales financed with a mortgage (%) • For a Q1, very strong 2013: Total of 4,480 (44%) sales volume 1,392 1,162 1,132 1,037 889 • Sales have slowed down slightly in April 51% 46% 38% 43% 41% Q1 Q2 Q3 Q4 Q1 • Start-ups moderated 2

  49. Slide 49: Housing Russia: Solid sales portfolio

    Housing Russia: Solid sales portfolio • Share of sold Apartment inventory (pcs) apartments under 9,986 10,135 10,459 11,196 10,808 416 346 562 construction has 696 617 10,780 10,462 increased 9,290 9,518 9,897 34% 36% 38% 37% 39% • Completed unsold Q1 Q2 Q3 Q4 Q1 apartments on a very 2013 2014 Under

  50. Slide 50: Impacts of the Ukrainian crisis for YIT

    Impacts of the Ukrainian crisis for YIT Effects of the crisis on Russia • Increased uncertainty • The ruble exchange rate (RUB:EUR) has weakened clearly • The Central Bank of Russia has increased its Finland benchmark interest rate Russia • Growth forecasts have been cut • Risk of further sanctions

  51. Slide 51: Construction business is not a politically sensitive sector in Russia

    Construction business is not a politically sensitive sector in Russia Militarily and economically Militarily sensitive industries sensitive Defense/weapon industry Strategic metals Oil & Gas Television, radio, internet Transportation infrastructure Telecom Significance to military operators Electric

  52. Slide 52: YIT's cash flow profile has clearly improved in Russia

    YIT’s cash flow profile has clearly improved in Russia after the financial crisis Before Today Several 2.7 1.8 years years years Selling of apartments Plot acquisition Construction Construction after the completion Plot acquisition Selling the apartments during the construction Total: Cash conversio

  53. Slide 53: Framework for YIT's regional expansion strategy

    Framework for YIT´s regional expansion strategy • Target market share in operating cities up to 10% • Bigger market share would increase competitive/political risks with major players and uncontrolled volume drop risk • Expansion strategy based on ”triangles” • One main city and satellite cities 100

  54. Slide 54: Business Premises and Infrastructure

    5 Business Premises and Infrastructure Commercial centre Dixi Vantaa, Finland

  55. Slide 55: Business Premises and Infrastructure

    Business Premises and Infrastructure Business areas • Business Premises: Offices, shopping centres, public premises, renovation of existing Finland: premises Business Premises and • Infrastructure: Roads and bridges, rock Infrastructure BS: 4,898 construction, water works, road maintenance CS: 3,574

  56. Slide 56: Business Premises and Infrastructure: Key market drivers

    Business Premises and Infrastructure: Key market drivers Business Premises • Concentration to growth centres • City centre development, area development • Demand for modern and energy efficient premises • Modernisation needs, change of purpose Infrastructure • Urbanisation increases need for more co

  57. Slide 57: Business Premises and Infrastructure: Operating environment in Q1/2014

    Business Premises and Infrastructure: Operating environment in Q1/2014 • Business premises market • End-users cautious in the • Positive macro-outlook remained weak business premises market supports the business • Tough competition for • Investor interest on a good premises market in the tender-base

  58. Slide 58: Business Premises and Infrastructure: Decreased volumes

    Business Premises and Infrastructure: Decreased volumes • Low production volumes and leasing activity impact the results in Business Premises • Low volume in Q1/2014 in infra services due to normal seasonality and timing of projects Revenue (EUR million) Order backlog (EUR million) -24% 177 181 714

  59. Slide 59: Business Premises and Infrastructure: Weak profitability

    Business Premises and Infrastructure: Weak profitability • The segment’s low volume has a negative impact on profitability • No sales of major ongoing business premises projects impacted invested capital and operating profit negatively in Q1/2014 Operating profit and profitability (EUR million, %) R

  60. Slide 60: Business Premises: Recent development and major projects

    Business Premises: Recent development and major projects • Sale of Bisnespaja Avia in April The largest ongoing self-developed business premises projects • Existing Lauttasaari mall acquired, the Value, Project Completion Estimated Sold/ Leasable Project, location EUR area new hybrid complex will co

  61. Slide 61: Infrastructure: Projects progressing well, new orders ensured

    Infrastructure: Projects progressing well, new orders ensured • The upgrade of Ring Road III in Helsinki capital region started in Q1, total value of EUR 42 million • Good progress in wind power projects • Seasonally lower activity in E18 projects • Several smaller projects won The largest ongoing b

  62. Slide 62: Looking ahead and conclusions

    6 Looking ahead and conclusions Pushkin St. Petersburg, Russia

  63. Slide 63: Key achievements post demerger

    Key achievements post demerger • Progress in strategic projects • The Tripla project in Pasila, Helsinki • Own-developed wind power projects in Finland • City plan for several large area development projects in Russian Housing • Several key plot acquisitions of new area projects in Finland, Russia a

  64. Slide 64: Key priorities in 2014

    Key priorities in 2014 Customer focus 1 • • • • Faultless handover Improving the customer experience Online services Concept development 2 Cost efficiency • Development of reasonably priced products • Improving internal processes • Continuous education of design management in all operating countries

  65. Slide 65: Market outlook 2014, Housing

    Market outlook 2014, Housing Finland Housing starts* • Housing start-ups expected to decrease. Forecasted start-ups 26,500 units in Finland in 2014 (RT Confederation of Finnish Construction Industries, April 2014) while the Housing prices estimated long-term annual need is 24,000-29,000 units (VTT T

  66. Slide 66: Market outlook 2014, Business Premises and Infrastructure

    Market outlook 2014, Business Premises and Infrastructure Business premises in Finland Market* • Business Premises market expected to remain weak as the market reacts to improvements in the economy with a lag Commercial construction* • Forecasts vary: commercial construction is expected to increase

  67. Slide 67: Guidance for 2014 unchanged

    Guidance for 2014 unchanged The Group revenue based on segment reporting is estimated to grow by 0–10% at comparable exchange rates. The operating profit margin based on segment reporting is estimated to be in the range of 7.5–8.5% excluding non-recurring items. Continuing uncertainty over the gener

  68. Slide 68: Key investment propositions

    Key investment propositions – Unique growth opportunities, superior profitability Strong market knowledge, over 50 years’ experience in Russia and over 100 years’ in Finland • Plot acquisitions – local know how • Superior sales process – design management, own sales, end user orientation Strengths •

  69. Slide 69: Concluding remarks

    Concluding remarks Growth from self-developed projects, especially residential development and emerging markets Solid track record in profitability through economic cycles. Room for further improvement Unique growth opportunities Strong market position as well as long experience from emerging market

  70. Slide 70: Appendices

    7 Appendices Tripla Pasila, Helsinki, Finland Kirovogradskaya street Moscow, Russia

  71. Slide 71: Appendices

    Appendices I. Additional financial information II. General economic indicators III. Housing indicators IV. Business premises and infrastructure construction indicators V. Construction costs VI. Ownership Wilhelm Helsinki, Finland YIT | 71 | Investor presentation, June 2014

  72. Slide 72: I Additional Financial information

    I Additional Financial information

  73. Slide 73: Balanced debt portfolio

    Balanced debt portfolio Debt portfolio 3/2014, EUR 920 million Maturity structure Maturing long term debt per year (EUR million), 3/2014 2014 2015 2016 2017 2018 2019 Bonds, 29% 76.9 176.2 132 58.8 14.0 1.8 Commercial papers, 21% 700 Construction stage financing, 29% 600 Commercial Papers Insurance

  74. Slide 74: Weakening of the ruble impacts the figures

    Weakening of the ruble impacts the figures Revenue split 2013 • The Russian ruble has weakened clearly • 8% compared to 2013 end • 20% compared to Q1/2013 average RUB 27% Principles of managing currency risks • Sales and costs typically in same currency, all Other foreign currency items hedged 4% 

  75. Slide 75: YIT's cost base in 2013

    YIT’s cost base in 2013 External services account major share of YIT’s costs EUR million (% of cost base before EBITDA) Total cost base of EUR 1,608 million 1,743 16 208 287 (18%) 928 (58%) 393 (28%) 237 121 104 17 Change in Depreciation inv. of finished Other op. Personnel External Materials & Othe

  76. Slide 76: Capital invested in plot reserves

    Capital invested in plot reserves Housing Finland, the Baltic countries and CEE Housing Russia* Business Premises and Infrastructure 3/2013: 3/2014: 3/2013: 3/2014: 3/2013: 3/2014: EUR 278 million EUR 276 million EUR 314 million EUR 285 million EUR 98 million EUR 88 million Finland: 73.6% Finland: 7

  77. Slide 77: Construction stage financing

    Construction stage financing Financing of construction in a typical residential During construction: development project in Finland: YIT Customers • YIT’s subsidiary YIT Construction sells the contract receivables from Housing corporations (also owned by YIT) to Customer financial institutions payme

  78. Slide 78: II General economic indicators

    II General economic indicators

  79. Slide 79: Strongest growth expected in the Baltic countries

    Strongest growth expected in the Baltic countries Russia Finland 3.5 St. Petersburg 1.1 8.3 1.3 1.0 0.3 4.9 0.2 -0.8 3.8 -1.4 2.5 12 13 14E 15E 12 13 14E 15E 11 12 13E 14E Estonia Moscow 3.9 Region 8.0 3.2 2.4 5.0 0.8 3.2 2.4 Lithuania 12 13 14E 15E 11 12 13E 14E 3.6 3.5 Latvia 3.3 3.3 5.6 4.1 3.8 4

  80. Slide 80: Macro Economics - Market outlook

    Macro Economics - Market outlook Finland Russia 2013 2014 2013 2014 Consumption Consumption Investment Investment Industry Industry Exports Exports Imports Imports Growth rate GDP (% p.a.) -1.4 0.3-1.5 Growth rate GDP (% p.a.) 1.3 0.0-1.0 Forecast for 2015 slight growth (1.0-2.0%) Forecast for 2015

  81. Slide 81: III Housing indicators

    III Housing indicators

  82. Slide 82: Household indebtedness

    Household indebtedness Household debt per capita in 2011, EUR 25,000 Euro area 104% (17 countries) Gross debt-to-income ratio of households % (2011) 99% 20,000 88% 15,000 66% 56% 10,000 41% 42% 5,000 0 Russia Estonia Latvia Lithuania the Czech Slovakia Finland Republic Sources: Eurostat and East Cap

  83. Slide 83: Finland – Housing start-ups expected to decrease in 2014

    Finland – Housing start-ups expected to decrease in 2014 Residential start-ups are estimated to decrease Consumer confidence - Views on economic situation in one year Pcs Balance 40,000 30 33,946 33,503 Own economy 35,000 32,833 31,091 20 30,175 28,334 30,000 27,120 26,500 27,500 25,000 22,903 10 22

  84. Slide 84: Housing indicators have weakened slightly in Finland

    Housing indicators have weakened slightly in Finland Housing start-ups by building type Building permits, start-ups and completions Pcs Million m3 Block of flats Terraced houses Single family houses Building permits Start-ups Completions Unsold completed units (residential development projects) Cons

  85. Slide 85: Household debt relatively low in Finland

    Household debt relatively low in Finland House price index in different countries Households debt to GDP (%) 200 160 180 140 160 120 140 100 120 80 100 60 80 40 60 20 40 0 European Union Euro area The Czech Republic European Union Euro area The Czech Republic Denmark Germany Estonia Denmark Germany

  86. Slide 86: Russia – Housing indicators support demand

    Russia – Housing indicators support demand House prices in primary markets, thousand RUB (1/2009-3/2014) New residential construction, EUR billion 100 200 100 Tuhannet 90 180 80 160 90 70 140 80 60 120 50 100 70 40 80 30 60 60 20 40 50 2010 2011 2012 2013E 2014E 2015E Moscow (right axis) Yekaterinbu

  87. Slide 87: The Baltic countries – Growth is expected in residential construction

    The Baltic countries – Growth is expected in residential construction Residential completions in Estonia Residential completions in Latvia Pcs Pcs 10,000 12,000 9,000 11,000 10,000 9,400 8,000 7,100 9,000 8,100 7,000 8,000 6,000 5,300 7,000 5,100 5,900 5,000 6,000 4,000 5,000 4,200 3,000 2,400 2,700

  88. Slide 88: The Czech Republic and Slovakia – Start-ups forecasted to remain relatively low

    The Czech Republic and Slovakia – Start-ups forecasted to remain relatively low Residential start-ups in the Czech Republic Housing prices in the Czech Republic and Prague CZK/Sq. m. Pcs 50,000 70,000 43,700 43,800 43,500 60,000 40,000 37,300 50,000 30,000 28,200 27,500 40,000 23,800 21,900 20,700 2

  89. Slide 89: IV Business premises and infrastructure construction indicators

    IV Business premises and infrastructure construction indicators

  90. Slide 90: Non-residential construction forecasted to pick up slightly

    Non-residential construction forecasted to pick up slightly New non-residential construction in Finland, EUR million New non-residential construction in the Czech Republic, EUR million 2,500 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 201

  91. Slide 91: Finland – Yields have increased slightly

    Finland – Yields have increased slightly Prime yields in Helsinki Metropolitan Area, % Prime office rents in the Nordic countries, % and EUR / sq. m. / year Office yields in Helsinki Metropolitan Area, % Prime office yields in the Nordic countries, % Sources: Catella Property Market Trends Finland,

  92. Slide 92: Finland – Vacancy rates vary between sub-sectors in Helsinki

    Finland – Vacancy rates vary between sub-sectors in Helsinki Vacancy rates in Helsinki Metropolitan Area Transaction Volumes in the Nordic countries, EUR billion Office vacancy in Helsinki Metropolitan Area Rental levels of office space in Helsinki Metropolitan Area, EUR / sq. m. / year Sources: Cat

  93. Slide 93: Finland – Logistics yields expected to decrease

    Finland – Logistics yields expected to decrease Prime logistics yields in the Nordic countries, % Prime logistics rents in the Nordic countries, % and EUR / sq. m. / year Prime retail yields in the Nordic countries, % Prime retail rents in the Nordic countries, % and EUR / sq. m. / year Source: News

  94. Slide 94: The Baltic countries – Yields are expected to decrease

    The Baltic countries – Yields are expected to decrease Prime office yields in the Baltic countries, % Prime office rents in the Baltic countries, % and EUR / sq. m. / year Prime retail yields in the Baltic countries, % Prime retail rents in the Baltic countries, % and EUR / sq. m. / year Source: New

  95. Slide 95: Infrastructure construction – Market expected to decrease slightly in 2014

    Infrastructure construction – Market expected to decrease slighlty in 2014 Infrastructure market in Finland Infrastructure sectors in Finland (2013E) EUR million 7,000 Other 11% 6,000 Roads 5,000 36% 4,000 Energy & water works 25% 3,000 2,000 1,000 Telecommu Railways 0 nicatons Other 12% 2005 2006 2

  96. Slide 96: V Construction costs

    V Construction costs

  97. Slide 97: Construction costs

    Construction costs Finland – Construction cost index (2005=100) Russia – Inflation in building materials 6/2011-3/2014 125 12% 120 10% 115 8% 110 6% 105 4% 100 2% 95 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0% 6/2011 12/2011 6/2012 12/2012 6/2013 12/2013 Total index Labour Materials Other i

  98. Slide 98: VI Ownership

    VI Ownership

  99. Slide 99: YIT's major shareholders

    YIT’s major shareholders April 30, 2014 Shareholder Shares % of share capital 1. Structor S.A. 12,750,000 10.02 2. Varma Mutual Pension Insurance Company 8,432,100 6.63 3. Herlin Antti 4,274,180 3.36 4. Mandatum Life Insurance Company Limited 4,171,675 3.28 5. Elo Pension Company 3,335,468 2.62 6. N

  100. Slide 100: 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 where this presentation is made, or by reading the presentation slides, you agree to be bound by the fol

  101. Slide 101: Together we can do it.

    Together we can do it.

YIT — Investor Presentation (June 2014) on 6ix