Optimizing Shareholder Structure

Transcription

1 Optimizing Shareholder Structure Petra Thorén Senior Vice President Investor Relations Copenhagen June 18,

2 Contents YIT Group Corporate Governance and Shareholder Structure- Some Theory and Research Capital Market Development in Finland Ownership Structure and Investor Relations Strategy in YIT 2

3 3 YIT Group

4 YIT leading service company in Northern Europe Revenue 2007: EUR 3.7 billion Personnel: 23,000 More than 450 offices in 8 countries Revenue in 2007 Sweden, Norway, Denmark 33% Finland 52% Russia 9% Lithuania, Estonia, Latvia 6% Building Systems 44% All technical building systems Technical maintenance and repair works Facility management and expert services Construction Services Finland 30% Residential development Real estate development Building construction Civil engineering International Construction Services 13% Residential development Real estate development Building construction Industrial Services 13% Investments in industrial projects Maintenance of industrial processes and facilities Percentage of Group revenue 4

5 Revenue development MEUR 4,000 Average annual growth : 17% 3,707 3,500 3,000 3,033 2,780 3,024 3,284 2,500 2,390 2,000 1,623 1,763 1,500 1, ,168 1,222 1, FAS IFRS

6 Operating profit (EBIT) development MEUR Average annual growth : 24% FAS IFRS

7 Dividend per share Increase 13 years in a row EUR

8 8 Corporate Governance and Shareholder Structure -Some Theory and Research

9 Corporate governance Theoretical framework Corporate governance deals with the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment (Shleifer and Vishny, 1997) Corporate governance has its roots in the fundamental agency problems associated with the separation of ownership and control (Jensen and Meckling, 1976) 9

10 Corporate governance Theoretical framework Control forces for agency problems: External governance mechanisms Takeover (capital) market Legal system Internal governance mechanisms Board of directors Ownership structure 10

11 Corporate governance research La Porta et al (1998) Legal protection of investors: Common-law countries- Civil-law countries German- and Scandinavian civil-law countries* - strongest - weakest - in the middle Common-law countries are English in origin and civil-law derives from Roman law, with three major families; French, German and Scandinavian. * Quality of law enforcement is highest in Scandinavian and German-civil-law countries. 11

12 Corporate governance research La Porta et al (1998) Companies in countries with weaker investor protection have more concentrated ownership to compensate for weaker shareholder rights Highest concentration of ownership in French-civil-law countries US and UK have more diversified ownership structures 12

13 Corporate governance research Large shareholder hypothesis Pros: Incentive to monitor Cost efficiency Cons: Private benefits Expropriation of minority shareholders - equality all shareholder interests 13

14 Corporate governance research Ownership concentration On average public companies have some kind of concentration, level varies. Finance textbook model of management faced by multitudes of dispersed shareholders is an exception and not the rule Ownership structure to be taken into consideration together with other governance mechanisms 14

15 Capital Market Development in Finland 15

16 Development of capital market in Finland Finland has moved from bank-centered towards capital market driven governance model Focus on shareholder wealth maximization Restrictions on foreign ownership abolished in Finland in 1993 increased foreign capital and ownership Wider requirements for disclosure Regulation and transparency 16

17 Development of capital market in Finland Management expected to an increasing degree put time on investor relations and meeting existent and potential shareholders in addition to operative working hours Investor relations developed towards professionalism, nowadays common title in stock listed companies Differences in IR-roles and organisations between companies 17

18 Ownership Structure and Investor Relations Strategy in YIT 18

19 Investor Relations in YIT Part of Group strategy management High profile and commitment to managementinvestor meetings -Relationships management Active communications, service-mindedness, candor, transparency Maintain confidence and credibility 19

20 Principal shareholders May 31, Owners Suomi Mutual Life Assurance Company Sampo Life Insurance Company Ltd Varma Mutual Pension Ins. Company Ilmarinen Mutual Pension Ins. Company Tapiola Group Etera Mutual Pension Ins. Company Svenska litteratursällskapet i Finland r.f. Brotherus Ilkka Odin Norden State Pension Fund Others Nominee registered shares total Total Shares 7,071,180 5, ,750,908 2,334,579 1,912,077 1,666,400 1,602,655 1,424,740 1,399,166 1,100,000 33,306,248 65,090, ,223,422 %

21 Ownership outside Finland % /2008: 53.1%

22 Number of shareholders at end of period /

23 YIT ownership structure 12/2003 5/ % Finnish ownership Top 10 Institutions 29 % 47 % Finnish ownership (-) Top 10 Institutions 24 % (-) Other institutions 13 % Other institutions 12 % Households 11 % Foreign ownership 46% Households 12 % Management & Board 0,4 % Foreign ownership 53% (+) Management & Board 0,4 % 23

24 Trading in YIT share % of shares

25 YIT and OMX Helsinki Cap 5 years YIT OMXHCap 25

26 More information 26