SRV Investor Presentation

Transcription

1 SRV Investor Presentation March 2018

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3 Presenters Juha Pekka Ojala CEO Ilkka Pitkänen CFO 3

4 Agenda 1) SRV in brief 2) Market overview and positioning 3) Financials 4) SRV going forward 5) Contemplated transaction Appendices 4

5 SRV in brief

6 SRV at a glance Finnish construction company, founded in 1987, publicly listed since 2007 Both builder and increasingly a real estate developer (more capital intensive) Mostly family/founder-owned, over 50% Employs about 1,100 people, of which about 1/3 are shareholders SRV is responsible for the implementation of approximately 70 construction projects and near future development projects in Finland, order backlog in total over EUR 1.5 billion ( ) Operates in the Helsinki Metropolitan Area as well as in other attractive growth centres in Finland Over 30 years history in operations in Russia and Estonia Selected key figures (EUR million) Revenues 1, EBITDA Operative Operating profit 1) Operating profit Order backlog 2) 1, ,758.5 Equity ratio % 3) Net debt Balance sheet total Operations in Finland Housing construction 34 % Revenue split 2017 Business premises construction 66 % SRV has not had a lossmaking year during its 30- year history 6 1) Operative Operating profit is determined by deducting the calculated exchange difference included in financial items in Russian operations and their potential hedging impacts from operating profit. 2) The number corresponds to the last available day of the period 3) Equity ratio = (total equity / (total assets advances received)) x 100%

7 Operating Regions Revenue split by region, 2017 Finland: Selected growth centres Helsinki Metropolitan area, Turku, Tampere, Jyväskylä, Joensuu, Oulu International 2 % Other 0 % Business premises Housing Infrastructure Oulu Jyväskylä Joensuu Russia: Moscow and St. Petersburg Development of shopping centres Management of facilities Revenue EUR 1,116.1 m Finland 98 % Tampere Vyborg Turku St Petersburg Helsinki Tallinn Moscow Total assets split by region, 2017 International 30 % Other 1 % Estonia Development of own plots; business premises, housing Assets EUR 888,5 m Finland 69 % 7

8 Three pillars of business operations FY 2017 Operations in Finland 98% share of Group revenue International Operations Business premises 64% share of Group revenue Housing Housing 34% 31% share of Group share of revenue Group revenue 2% Share of Group revenue Offices and retail facilities Hotels and logistics facilities Public buildings Hospitals and other specialised facilities Underground facilities and infrastructure construction Owner-occupied flats Rental housing Investor sales Area development projects Development and management of shopping centres Pearl Plaza, St. Petersburg (08/2013) Okhta Mall, St. Petersburg (08/2016) 4Daily, Moscow (04/2017) Partial and temporary ownership of shopping centres 8

9 The SRV Approach tool for successful, customer oriented construction projects (end to end) SRV Competitive advantages Innovative real estate and project development Operating model; end to end Able to be temporary owner and/or manager of properties Knowhow and expertise in complicated projects Customer oriented implementation Flexible overlapping of different project phases Large and skilled implementation partner network 9 Full service Cost efficiency Fast project implementation Realisation of customer needs

10 Focus of operations to increase profitability 10

11 Not just a construction company, but also a real estate investor and developer SRV is currently working on numerous projects in which we are also in the role of an owner, which ties up our capital Our large shopping centre projects in Finland and Russia as well as the land plots ties up the most capital We have also committed capital into building a huge number of developercontracted housing units in growth centres Segment reporting is considered to be changed from the beginning of 2019 SRV would report on construction and property development segments separately compared to the existing geographic segmentation Would provide investors with a better picture of how different types of business produce results and where the capital is committed EUR million Return on investment, % Invested capital Invested capital, construction Invested capital, property development

12 Market overview and positioning 12

13 Megatrends in our operating environment affecting also our clients Ageing populations URBANISATION Increase in prosperity and service culture as well as polarisation of society Changes in consumer behaviour and ways of working Global shift in economic and business power Digitalisation and use of technology in everyday life Rise of communality, ecological thinking and well-being 13

14 Economy grows and urbanization continues in SRV`s main business areas The Finnish economy is continuing to see broad-scale growth. GDP is expected to grow by +2.5%* in 2018 (3.1% in 2017) Construction volume projected to grow by +2 %** in Finland in 2018 (4% in 2017) Urbanisation and population shift will continue to be the general drivers of construction growth Helsinki s new master plan enables population to grow to 860,000 inhabitants by 2050 (growth almost 35 per cent) In 2017, history was made in the number of housing start-ups, around 43,000 housing units The Confederation of Finnish Construction Industries forecasts start-ups for around 40,000 housing units this year On the whole, new business construction start-ups increased in 2017, but are expected to decline slightly in The growth rate in renovation is forecast to remain at last year s level of about 1.5 per cent. Civil engineering investments are expected to grow by about one per cent. The Russian economy has turned into slow growth. GDP is expected to grow by +1.5%*** or slightly higher in 2018 (about 1.5% in 2017) The Russian real estate market and the share of foreign investors has increased significantly last year. 14 Sources: SRV management s estimation based on available information, *Bank of Finland global economic forecast **Confederation of Finnish Construction Industries RT (Fin: Rakennusteollisuus) *** The Bank of Finland Institute for Economies in Transition, BOFIT, Weekly Outlook Russia

15

16 SRV has a key role as a developer of the Helsinki-area rail hub KEIMOLANMÄKI KIVISTÖ VANTAANKOSKI TIKKURILA METROLINE RING RAIL LINE RAIDEJOKERI, TRAM LINE SRV PROJECTS SÄTERINPORTTI PERKKAA OTANIEMI PASILA KALASATAMA 16 KIVENLAHTI NIITTYKUMPU ESPOONLAHTI TAPIOLA KEILANIEMI KOIVUSAARI JÄTKÄSAARI

17 Financials

18 Year 2017 Strengths and challenges STRENGTHS Revenue grew and exceeded EUR 1 billion level Operative operating profit was improved by revenue growth in Operations in Finland and by a near doubling the number of apartments recognised as income Order backlog is still good, over EUR 1.5 billion, and new orders, entered in early part of the year and in practice certain known several for this year Visitor numbers and sales volumes at the shopping centres in Russia are still rising Russian strategy proceeding after the review period it was announced that the possible sale of Pearl Plaza shopping centre in St. Petersburg being explored CHALLENGES Level of operative operating profit still weak operating profit weakened by increased costs and extended delivery times due to market situation, by a lower than anticipated margin of certain projects under construction as well as by the cost impact of one project already completed The exposure of operations in Russia to changes in the rouble exchange rate is reflected in the consolidated Group result total impact of change in rouble exchange rate was EUR million. Exchange rate risk will fall significantly after planned conversions of loans in

19 Financial highlights 2017 Revenue +26.2% EUR 1,116.1 million (884.1) Operations in Finland EUR 1,097.8 million (832.2) New contracts -23.9% International Operations EUR 18.0 million (52.4) EUR million (1,013.1) Operative operating profit 1) +9.1% EUR 28.7 million (26.3) Operations in Finland EUR 40.3 million (38.3) Order backlog -12.0% 2) International Operations EUR -6.7 million (-5.5) EUR 1,547.9 million (1,758.5) Equity ratio 35.5% (38.3%) Gearing 105.0% (83.4%) Operations in Finland EUR 1,526.7 million (1,726.1) International Operations EUR 21.2 million (32.4) Operating profit -38.3% EUR 17.1 million (27.7) Operations in Finland EUR 40.3 million (38.3) 19 International Operations EUR million (-4.2) Result before taxes EUR 4.6 million (16.4) 1) Operative Operating profit is determined by deducting the calculated exchange difference included in financial items in Russian operations and their potential hedging impacts from operating profits. 2) At the end of period.

20 Revenue grew due to the business and housing construction 400 REVENUE 18 OPERATIVE OPERATING PROFIT ,1 4,1 6,7 15,4 2,7 2,8 9,0 14, REVENUE, LAST 12M 35 OPERATIVE OPERATING PROFIT, LAST 12M ,7 24,9 27,6 26,3 29,0 27,7 30,0 28,7 0 0

21 Operating profit was weakened by the decline in the operating profit of International Operations 20 OPERATING PROFIT 40 OPERATING PROFIT, LAST 12M ,4 4,9 6,0 9,6 2,5 0,8 4,1 17,0 0,0 4,1 7,3 16,2 7,3-9,3 7,7 11, ,6 20,8 19,9 24,9 23,0 19,0 17,1 24,4 21,9 25,2 28,4 27,7 34,9 21,5 21,9 17,

22 Key Financials When analyzing SRV please recall capital intensive property development EBITDA (EUR million) & EBITDA MARGIN (%) GEARING RATIO (%) 3,93% 3,88% 3,88% 2,04% , ,0 27, , EBITDA Net Gearing 7,6 NET DEBT/ EBITDA 8,3 7,2 5,9 6,2 5,9 13,1 10,6 EBITDA INTEREST COVERAGE RATIO EQUITY RATIO (%) 11, , ,1 2, Net Debt / EBITDA Net Debt /EBITDA (ex housing loans) EBITDA Interest coverage ratio Equity ratio

23 Order backlog still good a number of new projects recognised EUR million New projects valued at EUR 770 million / / / / / / /2015 3/2016 6/2016 9/ /2016 3/2017 6/2017 9/ / Several new agreements valued at a total of nearly EUR 770 million were signed in 2017 In the early part of the 2018, new agreements valued over EUR 370 million were signed (Siltasairaala Hospital, Central Deck and Arena) Tampere Central Deck and Arena project confirmed in January 2018 increases order backlog in by a total of EUR 340 million International Operations Operations in Finland; Housing construction Operations in Finland; Business premises construction 23

24 SRV s debt portfolio - overview Current and non-current interest bearing liabilities Non-current EUR million 2017 Current EUR million 2017 Loans from financial institutions 15.3 Loans from financial institutions 6.7 Bonds 99.5 Bonds 75.0 Housing corporation loans 56.0 Commercial papers 68.5 Total non-current liabilities Housing corporation loans 0.1 Total current liabilities Debt Maturity profile overview end of 2017 EUR million 1) Bonds Commercial papers 80 Housing loans 60 Bank loans Contemplated new bond later Housing loans 18 % Commercial paper 21 % Debt portfolio Bank loans 7 % Total interest bearing debt: EUR 321 million Net interestbearing debt MEUR Bonds 54 % The EUR 75 million bond due in Dec 2018 will be partially refinanced with the contemplated bond issue depending on tendered amount Current weighted average loan maturity 5.8 years SRV also has an outstanding EUR 45 m hybrid bond with first call in 03/2020 (included in equity in the balance sheet) 1) Based on the contractual value as of

25 Estimated implementation of on-going shopping centre projects Pearl Plaza 1 (50% ownership) Okhta Mall (45% ownership) 4Daily (20% ownership) REDI shopping mall (40 % ownership) Construction and leasing Leasing stabilization (appr. 2-4 years) Exit Debt maturity structure of main associated companies SRV is investigating the possible sale of the Pearl Plaza shopping centre and has discussed the matter with the other owner of the shopping centre SRV intends to sell its holdings once stable rental income has been achieved. Stable rental income is usually reached 3 4 years after opening. Project Project completion Debt maturity Capital employed Pearl Plaza 1 (Saint Petersburg) MEUR 30 Okhta Mall (Saint Petersburg) MEUR 98 Daily (Moscow) MEUR 10 REDI shopping mall & parking premises (Helsinki) MEUR

26 SRV going forward

27 Strategic financial objectives Target Status 12/2017 Status Revenue (EUR million) Operative operating profit margin (%) Return on equity (%) Return on investment (%) Equity ratio (%) Faster than industry growth (old target) * 8 per cent 2.6 At least 15 per cent 2.0 At least 12 per cent 3.4 Above 35 per cent 35.5 Dividend (EUR) Dividend of per cent of the annual result 0.06** *The old target means the following: SRV s strategy and all of its operations were guided by the strategic financial objectives that were approved in February Therefore the old target implied the company will seek to outpace industry growth using large-scale projects. The new financial objectives were approved in February **Proposed dividend

28 How to reach the long-term profitability targets SRV s goal is to improve its long-term profitability Targeted operative operating profit margin (8%)* Better project mix Limited participation in low margin construction tenders Increased focus on developer-contracting projects Participation in special, complex and less competition projects with better profitability Initiatives Shopping centre projects Increased profit from associated companies (when the shopping centre projects are completed) Capital gains and release of eliminated construction margin when a shopping centre is sold Utilization of shopping centre management functions Operational efficiency Must Win Battle: Improve profitability and project efficiency Tight capital and cost controlling Relative fixed cost increase lower than revenue growth 28 * The strategic profitability target will not be achieved until the end of Of this objective, 6 percentage points will arise from construction margin and 2 percentage points from shopping centre rental income as part of associated company holdings.

29 MEUR MEUR SRV in the future Revenue Revenue years 2 Business construction 1 Housing construction New areas? 4 3 New services? New products? Asunnot, PU, varmat Asunnot, NU+muut, varmat Asunnot, PU, arvio Asunnot, NU+muut, arvio Toimitilat, NU+muut, varmat Toimitilat, PU, varmat Toimitilat, NU+muut, arvio Toimitilat, PU, arvio Balance sheet Exit from the shopping centres

30 Outlook for 2018 Fewer developer-contracted housing units will be completed in 2018 than in the comparison period. It is estimated that a total of 526 housing units will be completed in 2018 (782 in 2017). Although housing will be completed on a steadier schedule in 2018 than in the previous year, a significant part of the operating profit will still be made in the second half of the year. In addition, earnings in 2018 will be impacted by the lower-than-expected margins of certain ongoing projects. Full-year consolidated revenue for 2018 is expected to decline compared with 2017 (revenue EUR 1,116.1 million). Operative operating profit is expected to be lower than in 2017 (operative operating profit EUR 28.7 million.) After 2018, an atypical year, the company anticipates that it will achieve its strategic earnings level by the end of

31 SRV Key investment highlights Megatrends support the business Strong brand and excellent references Good financial track record and strong order backlog Megatrends, such as Urbanisation, supports SRV s business SRV has completed significant and complicated projects, both for the public and private sector SRV has not had a single loss-making year during its 30-year history Megatrends Customer needs Highly competitive operating model Customer network SRV Approach Partner network Use of property Efficient, qualified and flexible organisation Strong experience and knowhow at project management Customer and service-oriented work culture Entrepreneurial attitude Light organisational structure Broad partner network Experienced key management team Strong order backlog of over EUR 1.5 billion providing healthy future prospects SRV s end to end operating model, and ability to be a temporary owner provides a competitive advantage SRV has a highly efficient organisation with broad based know-how and excellent references The management team has extensive experience from the construction sector and real estate development 31

32 Contemplated transaction

33 SRV is considering issuing 4 year notes Issuer Rating Amount Status Use of proceeds Tenor Coupon Call structure Co-manager 33 SRV Group Plc Unrated Up to EUR [75] million Senior, unsecured Redemption of existing EUR 75m bond due 12/2018, and general corporate purposes 4 years Fixed rate coupon, paid annually in arrears, ACT/ACT March +[50] % of coupon; March +[25] % of coupon Investor put event Change of %; % Financial covenants Other terms and covenants Redemption Documentation Min. subscription / Denominations Listing Noteholders Agent Lead Managers Equity ratio > 26% (maintenance) ICR 2.0x (incurrence) Negative pledge, Cross acceleration (>EUR2m), Disposals (>EUR30m / 12 months), Mergers Bullet, at maturity Standalone, Finnish law EUR 100,000 / EUR 1,000 Nasdaq Helsinki, Open Market of the Frankfurt Stock Exchange Nordic Trustee OP Corporate Bank (Coordinator) and Swedbank Bankhaus Scheich SRV is considering a new bond issue to finance the tender offer for the existing EUR 75 million due 2018 bond and to lengthen its maturity profile SRV is meeting investors ahead of a potential issue of new 4 year notes

34 Tender offer for SRV s due 2018 outstanding bond Target security Maturity date 18 Dec 2018 Status Amount outstanding SRV Group Plc 5.000% senior notes (ISIN: FI ) Senior, unsecured EUR 75 million Purchase price Fixed cash price, % Offer amount Conditions Accrued interest Any and all New issue condition Tender offer period begins 7 Mar 2018 Tender offer period closes Settlement Offeror and Dealer Manager To be paid in cash until the settlement date 16 Mar 2018 at 4:00pm EET Expected 1 business day prior to the new issue settlement. No later than 3 April. OP Corporate Bank OP is undertaking, on behalf of SRV, a tender offer for the due 2018 senior unsecured notes at a tender price of % Tender offer is subject to the successful completion of the new issue The planned new issue execution is expected shortly after the tender period has closed Formal priority allocation codes are available for tendering accounts also participating in the new issue 34

35 Thank You! 35

36 Appendices

37 SRV ownership structure SRV listed on the Helsinki stock exchange since 2007 Some shareholders Approximately 1/3 of SRV s employees are shareholders Distribution by shareholder type (% of shares) 36 % 1 % 5 % 2 % 5 % 51 % Households Corporations Financial and insurance institutions Public sector institutions Nominee registered and non- Finnish holders Non-profit institutions Major shareholders (10 largest total) % of shares Kolpi Investments Oy 19.0 % Kokkila Timo Tapani 12.6 % Kokkila Tuomas 10.7 % Kokkila Lauri 10.7 % Tiiviste-Group Oy 10.6 % Nordea Life Assurance Finland Ltd. 2.0 % The State Pension Fund 1.9 % OP-Finland Value Fund 1.6 % Ilmarinen Mutual Pension Insurance Company 1.6 % SRV Yhtiöt Oyj 1.5 % 10 largest total 72.4 % Status as of 28 February

38 Consolidated income statement EUR million 1-12/ / /2015 Revenue Other operating income Change in inventories of finished good and work in progress Use of materials and services Employee benefit expenses Share of profits of associated and joint venture companies Other operating expenses EBITDA Depreciation and impairments Operating profit (EBIT) Financial income Financial expenses Financial income and expenses. total Profit before taxes Income taxes Net profit for the financial year

39 Consolidated Balance sheet EUR million % % Non-current assets % % Inventories % % Other current assets % % Cash and cash equivalents % % Total assets % % Equity % % Non-current interest bearing liabilities % % Other non-current liabilities % % Current interest bearing liabilities % % - Housing loans (current and non-current) included above Other current liabilities % % - thereof advance payments related to construction contracts Total equity and liabilities % % Net debt as of Dec : EUR 297.6m (31/12/16: EUR 246.4m) Net debt as of Dec , excluding housing loans : EUR 241.5m (12/31/16: EUR 204.2m) 39

40 Indebtedness in detail EUR million Non-current interest bearing liabilities Loans from financial institutions Bonds Housing corporation loans Subtotal Current interest bearing liabilities Loans from financial institutions Bonds Commercial papers Housing corporation loans Subtotal Total interest bearing liabilities Cash and cash equivalents Net debt Total interest bearing liabilities (excl. housing loans) Net debt (excl. housing loans)

41 Consolidated cash flow statement EUR million 1-12/ /2016 Cash receipts from customers Cash receipts from other operating income Cash paid to suppliers and employees Net cash before interests and taxes Interests received and other financial income Interests paid and other expenses from financial costs Income taxes paid Cash flows from operating activities Cash flow from investing activities Cash flow from financing activities Net change in cash and cash equivalents Effect of exchange rate changes in cash and cash equivalents Cash and cash equivalents at the beginning of financial year Cash and cash equivalents at the end of period

42 SRV business divisions 42

43 Largest commercial premises projects under construction (estimated figures) Project, location Value of SRV contract, MEUR Project type Level of Completion, % Completion date (estimated) REDI, shopping centre and parking facility, Helsinki 390 Retail, parking 85 Q3/2018 Aleksintori, shopping centre, Kerava * Retail 45 Q4/2018 BUSINESS PREMISESS Central Finland Hospital Nova, Jyväskylä 290 Public 20 Q3/2020 TAYS Etupiha, Tampere 170 Public 53 Q2/2019 Tapiola city centre (Phase 2), Espoo 100+ Retail 11 Q1/2020 Aalto University, Espoo 76 Public 60 Q2/2018 Ring Road I, Keilaniemi, Espoo 49 Public 68 Q4/2018 Kaitaa metro station excavation 32 Public 94 Q2/2018 Renovation of Lappeenranta University 31 Public 78 Q4/2018 HDC TeliaSonera, Helsinki * Industry 75 Q1/2018 New Children s Hospital, Helsinki * Public 85 Q4/ Q2/2018 Autokeskus Konala, Helsinki * Retail 21 Q2/2019 Jätkäsaari primary school, Helsinki 23 Public 7 Q3/2019 Hotel Marriot, Tampere * Retail 0 Q2/ At the end of period. * The value of individual contracts has not been published.

44 The largest developer-contracted housing projects under construction in Finland (estimated figures) Project, location Value of SRV contract, MEUR Completion Sold For sale REDI Majakka, Helsinki 106 Q2/ Espoo Piruetti 31 Q1/ Espoo Kulmaniitty 22 Q1/ Vantaa Maalisuora 17 Q4/ Vantaa Tikkurilan Starlet 14 Q4/ Helsinki Smokki 13 Q2/ Kerava Aleksinkaarre 22 Q4/

45 The largest ongoing housing projects in Finland, housing contracting (estimated figures) Housing project, location SRV, contract value, MEUR Completion level, %* Completion date (estimated)* Suurpelto Puistokatu, Espoo, Ilmarinen * 84 Q1/2018 Wood City, Helsinki, ATT** * 65 Q2/2018** Vantaa Neilikkatie, Ilmarinen * 78 Q2/2018 Kerava Orno, Ilmarinen * 79 Q2/2018 Vantaa Hernetie, OP * 71 Q2/2018 Helsinki Välimerenkatu 10, Ilmarinen * 55 Q3/2018 Suurpelto Puistokatu D, TA Yhtiöt * 72 Q3/2018 HOAS Kumpula, Helsinki * 43 Q3/2018 Kerava Aleksinkulma and -puisto, Etera*** * 28 Q1/2019 Kerava Aleksinhuippu, LocalTapiola * 20 Q1/2019 Espoo Pihapuisto and Puistoniitty, LocalTapiola * 8 Q3/2019 Helsinki Punanotko, Ilmarinen * 1 Q2/ *The value of individual contracts has not been published ** Schedule to be defined during Q1/2018 ***Ilmarinen and Etera merged on 1 January 2018

46 Growth in housing construction continues Housing construction revenue 1 12/ MEUR change 39.3% Housing construction order backlog 1 12/ MEUR change 7.8% Housing construction 34% Business premises construction 66 % Housing construction 39% Business premises construction 61% In line with its strategy, SRV focuses on housing production in urban growth centres in locations with good transport links focus particularly on developer-contracted housing production For a number of years, SRV has been one of the largest housing constructors in the Helsinki metropolitan area a total of 3,524 (2,696) housing units currently under construction, of which most are located in growth centres In 2017, total of 782 developercontracted housing units were completed and a record number of 825 recognised as income. A very strong year for housing sales, with 1,627 housing units sold 46

47 Result impacted by housing units recognition as income Developer-contracted housing start-ups and recognitions as income (units) In 2017, nearly double the number of housing units were recognised as income than in the previous year, 825 (499) units A total of 188 new RS housing units start-up decisions was made by the end of December Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Aloitukset (kpl/12 kk) Tuloutuneet kvartaaleittain The lower number of start-ups in 2016 will reflect in the 2018 result the situation will be rebalanced in the early part of 2019

48 Kalasatama Health and wellbeing centre, Helsinki New Children s Hospital, Helsinki Central Finland Hospital Nova, Jyväskylä Tays Central Hospital, Tampere SRV has a major role in healthcare and hospital projects in Finland Women s hospital, Helsinki, 2016 HUSLAB, 2015 Jorvi, Espoo,

49 Breakdown of revenue for large projects over the coming years (estimate) Nova Hospital in Central Finland EUR 290 million Period Siltasairaala Hospital EUR 243 million Period Breakdown of revenue for large projects over Tampere Deck and Arena EUR 550 million Period NOVA Siltasairaala Kansi ja Areena 49

50 REDI residential towers progressing at a good pace Hybrid project, Helsinki Advance marketing of Loisto, the next residential tower, begins in April 2018 A total of 249 apartments on 32 floors higher room height and conservatories as special features Selection from one-room to fiveroom apartments with spectacular views Construction will likely begin in summer 2018 Only just under 30 apartments unsold in Majakka tower ready to move into in spring 2019 MAJAKKA LOISTO 50

51 Central Deck and Arena Hybrid project, Tampere The implementation of the SRV-developed Central Deck and Arena in Tampere city centre was confirmed in January 2018 construction work in the heart of Tampere on top of the railway station is in full swing Several cooperation agreements have already been signed Restamax for restaurant services and Lappland Hotels for a hotel, also Veikkaus second casino and agreements with Tappara and Ilves ice hockey teams, KALASATAMA The total value of the project is approximately EUR 550 million the final parts of the complex are due to be completed in 2024 The value of the investment agreement for Phase 1 of the project, approximately EUR 340 million will be entered into SRV s order backlog in 2017 and 2018 JANUARY 2018 IMPLEMENTATION CONFIRMED 2021 AREENA COMPLETED 2024 WHOLE PROJECT COMPLETED Total value over EUR 500 million Over 13,000 capacity multipurpose arena 5 tower buildings, around 1,000 apartments Partners: OP, LocalTapiola, City of Tampere and SRV

52 Pressi Vantaankoski, Vantaa 3 office buildings 5 metres high connecting ground floor KALASATAMA 18,000 gross square metres of reconfigurable space FEBRUARY 2018 CONSTRUCTION WORK STARTED 12/2018 C-BUILDING COMPLETED COMPLETION OF B- AND A-BUILDINGS To be built in the developing Vantaankoski area, at the intersection of the Ring Rail Line, Ring Road III and the Hämeenlinnanväylä highway The design of the new kind of multifunctional office sets as a priority the modularity, energy efficiency and environmental criteria of the premises The premises are designed from the beginning in accordance with the customer s needs nearly half of the premises already leased Construction work started in February 2018 the first building will be ready in late 2018

53 Siltasairaala Hospital Meilahti, Helsinki 71,500 gross square metres KALASATAMA 8+1 floors 243 MEUR The new Siltasairaala Hospital to be built in the Meilahti hospital campus is the biggest construction project in the history of HUS It will replace the Töölö Hospital and some of the functions of the present Department of Oncology It will provide high quality care in an attractive, safe, accessible and environmentally friendly setting for example, 215 beds in four long-stay wards, 58 intensive 2017 DEVELOPMENT PHASE AGREEMENT 2018 CONSTRUCTION LAUNCHED 2023 NEW HOSPITAL IN USE care beds, 69 day-hospital beds and 16 operating theatres Construction work began in January 2018 and hospital will be completed in 2022

54 Leasing of REDI shopping centre proceeding at a good pace construction work is progressing on schedule the doors will open in autumn 2018 leasing of premises is proceeding according to plan more than 70 per cent of the just over 200 retail premises have already been leased and negotiations on the rest are under way The shopping and experience centre is expected to attract over 12 million visitors in its first full year of operation 54

55 Over 70 per cent of business premises at REDI shopping centre have been leased 55

56 Largest projects in Russia 56

57 Recently completed transactions Kalasatama health and wellbeing centre 18,200 sqm Niittykumpu Metro Centre 5,400 sqm 280 apartments REDI Shopping Centre in Central Helsinki (Kalasatama) 480 MEUR Health and wellbeing centre sold to a special fund managed by Deka Immobilien. City of Helsinki will be the main user. Under construction, will be completed in Derby Business Park 20,000 sqm Sale of shopping centre to OP Group and apartments to housing investment company SATO. Opening in spring 2017, tenants eg. HOK Elanto and Ruokakesko. Housing Portfolio of 500 aparments 100 MEUR Joint investment with Ilmarinen, OP Group, and Local Tapiola. Under construction, opening in Stockmann Distribution Centre 29,000 sqm Sale of office buildings to Niam. Users include Siemens and SRV headquarters. Construction completed in A framework agreement with Ilmarinen in 2016 for the construction of nearly 500 housing units in the Helsinki Metropolitan Area. Sale of a logistics building to Ilmarinen. User department store Stockmann. Construction completed in

58 Wood City Hybrid project, Helsinki 8-storey office building 2 apartment buildings 1 hotel 1 parking facility MEUR 100, project s total value 2010 PLANNING BEGAN 2012 ARCHITECTURAL COMPETITION 2020 WOOD CITY COMPLETED KALASATAMA On 6 October 2017, SRV and Supercell signed a conditional agreement on the purchase of the office building and parking facility belonging to Wood City Construction work on Helsingin Asuntotuotantotoimisto (ATT) apartment buildings is under way Construction work on the office building and parking facility is due to begin in spring 2018

59 Lapinmäentie Hybrid project, Helsinki Included manually 7 apartment buildings Construction of 200 apartments will start in summer 2018 KALASATAMA Tower A is being planned, with retail premises, for example 2016 CITY PLAN ADOPTED 2017 DEMOLITION WORK 2018 CONSTRUCTION OF FIRST APARTMENTS The Lapinmäentie project, located in Munkkivuori, Helsinki, proceeds demolition work started on October Work to develop the Lapinmäentie area continues in accordance with the city plan adopted in August 2016 Seven apartment blocks, in addition to the maintained Tower A, will be implemented in the area

60 Niittykumpu centre Hybrid project, Espoo The shopping centre Niitty opened summer 2017 Above the shopping centre rose 2 residential towers, one of them Niittyhuippu being the highest in the city of Espoo Substitute to the old shopping centre will be built 3 more residential buildings Niitty is in many ways a different kind of shopping centre. It has been built on the Western Metro line and the centre therefore offers direct access to the metro KALASATAMA 2015 THE SHOPPING CENTRE WAS SOLD TO OP INVESTMENT FUND 2017 NIITTY SHOPPING CENTRE OPENED ITS DOORS 2017 ALL THE APARTMENTS ARE COMPLETED (above the shopping centre) Two SRV-built residential towers, a total of 300 apartments, rose above the shopping centre.