Road Show Frankfurt December 2, Antti Heinola, CFO Milena Hæggström, Head of Investor Relations

Transcription

1 Road Show Frankfurt December 2, 2013 Antti Heinola, CFO Milena Hæggström, Head of Investor Relations

2 Contents Business operations Market overview Strategy and key strengths Financial development Financial position Guidance and conclusions Appendix 2 Roadshow 6 June 2013

3 Business operations

4 designs, builds and maintains user-friendly and energy-efficient building systems and offers industrial services in Northern and Central Europe.

5 Introducing Corporation was established through the partial demerger of YIT Corporation on June 30, 2013 when YIT s Building Services and Industrial Services operations were transferred to an independent company. Trading in shares at Helsinki stock exchange began on July 1, had 39,250 shareholders at the start of the listing in the beginning of July. YIT shareholders received shares as demerger consideration in proportion to their shareholdings in YIT (1:1). 5 Road Show December 2013

6 in brief Main activities o Building systems o Industrial services o Design, installation and maintenance o Energy efficiency incorporated in all services and solutions Revenue by country Sweden 25% Finland 22% Norway 21% Germany 19% Austria 6% Denmark 5% Other countries 3% Revenue 2,803 EUR million Personnel 17,890 employees at the end of September 2013 EBIT 61 EUR million 2.2% of revenue Revenue 2,803 EUR million EBITDA 85.3 EUR million 3.0% of revenue EBIT 61.1 EUR million 2.2% of revenue Personnel 17,890 employees at the end of September 2013 Based on the Group company location 2012 carve-out figures 6 Road Show December 2013

7 Services cover all building systems throughout the entire life cycle of the property and industrial facility Design Installation Service and maintenance Heating Sanitary Ventilation Electric AV ICT Automation Security Fire alarm and extinguishing FM Energy Building certification Piping Cooling 7 Road Show December 2013

8 Offering that covers all building technologies Service and maintenance related business accounted for 55% of revenues in 2012 Building systems Industrial services in Finland and Sweden Service and maintenance Project deliveries Industrial service and maintenance Project deliveries to industry Services can be divided: 1. Facility Management (FM) and fixed maintenance contracts Design and installation of Building systems, e.g.: Heating Plumbing Services ranging from single service measures to comprehensive maintenance of production processes Project deliveries including design, procurement, prefabrication, installation and project management Description of main activities 2. AD-HOC services Service contracts are typically: year contracts based on fixed pricing Cooling Electrification Automation Safety systems Networks technology systems All other supply systems Field services include Mechanical maintenance Electrification and automation Power plant maintenance Operating in Finland and Sweden, prefabricates delivered to projects globally Serving all branches of industry, with forest and energy industries being the major customer segments 2. 1 year contracts based on official price lists of Tender-based as well as more comprehensive Design & Build projects Share of revenues 2012 ~ 49% ~ 41% ~ 6% ~ 4% 8 Road Show December 2013

9 reporting segments Building Services Northern Europe segment accounted for 75% of revenues in 2012 Building Services Northern Europe (BSNE) Building Services Central Europe (BSCE) Building systems Technical building systems Service and maintenance of building systems Service and maintenance (% of revenue 2012) Building systems Technical building systems Service and maintenance of building systems Service and maintenance (% of revenue 2012) Offering Industrial services and projects (mainly Finland and Sweden) Project deliveries of technical systems and processes to industry Industrial maintenance Energy efficiency services for properties and industry 64% Energy efficiency services for properties 31% Key figures* in 2012 Revenue: EUR 2,089.2 million EBITDA: EUR 59.5 million (2.8% of revenue) EBIT: EUR 41.1 million (2.0% of revenue) Personnel at the end of September 2013: 14,469 Revenue: EUR million EBITDA: EUR 33.2 million (4.7% of revenue) EBIT: EUR 27.4 million (3.8% of revenue) Personnel at the end of September 2013: 3,336 Operating areas Finland Sweden Norway Denmark Russia Estonia, Latvia, Lithuania Germany Austria Poland, Czech Republic, Romania *) Carve-out figures **) Based on reported segment level country split in annual report Road Show December 2013

10 Goal is to increase the share of service and maintenance as well as focus on more profitable Design & Build Service and maintenance FM and fixed contracts Often part of facility management contract, fixed price task or time period based pricing Remote monitoring through control rooms have been available in Finland already one decade Over 1,000 buildings are under s 24/7 remote monitoring Offering of control room services being expanded into other countries AD-HOC services Often based on frame agreements with customers, but sold also separately Design & Build Participating in design from an early stage, provides significantly better margins Often based on frame agreements with customers, but sold also separately Long-lasting and demanding process do not attract smaller competitors Able to assume responsibility for maintenance throughout property life cycle Tender-based Project deliveries One- or multi-discipline (TTS) projects tendered based on buyer s call for bids Buyer often provides complete drawings and sometimes even material lists Low profit: relatively easy and low-risk also for smaller and one-discipline entrepreneurs Buyer can split different disciplines and/or materials and labour 10 Road Show December 2013

11 Industrial services in Finland and Sweden serves all fields of industry Industrial service and maintenance Services provided in Finland and Sweden The leading industrial service company in Finland with solid experience also in Sweden Maintenance for different fields of industry E.g. mechanical maintenance, electrification and automation and power plant maintenance Different service concepts Design as well as outsourcing services Special competence and capacity in forest industry maintenance and engineering Comprehensive process maintenance of five Metsä Fibre pulp mills in Finland through a joint venture Botnia Mill Service Industrial project deliveries #1 in high pressure piping systems in Northern Europe Mainly high-pressure piping systems for production plants and power plants Also tanks, gas holders, heat accumulators, reactors, mass towers, boilers, electricity and automation projects and industrial ventilation Offering comprehensive project deliveries Including design, procurement, prefabrication, installation and project management Special expertise in design and extensive industrial prefabrication in own workshops Specialized in manufacturing piping prefabricates, pipe modules, tanks and boiler components 11 Road Show December 2013

12 Value chain and customers Low customer concentration supports stability of the business Customer concentration 2012 (% of revenue) Customers 1-10: 14% Others: 86% Suppliers Wholesalers Manufacturers Subcontractors Special workforce, e.g. electricity, piping systems, air conditioning etc. Customer types Developers and construction companies Property investors and owners Property service companies and building managers Public institutions Industry 12 Road Show December 2013

13 Market overview

14 Competitive environment in Building Systems in Europe has strong growth potential in fragmented markets Finland Sweden Company M Market share Company M Market share % 1. Bravida % 2. Lemminkäinen* % 3. ARE % 4. L&T** % 5. Imtech % 2. Imtech % % 4. Coor % 5. Midroc Europe % St. Petersburg and Moscow 3.6 Norway Company M Market share Denmark Company M Market share % 1. Kemp & Lauritzen % Gunnar Karlsen % 2. Bravida % 3. Bravida % % 4. Oras % 4. Lindpro % 5. Imtech % 5. Wicotec % Germany Company M Market share 1. Imtech 1, % 2. Bilfinger FS** 1, % 3. Strabag PFS*** % Austria Company M Market share 1. Ortner % 2. Alpine Energie % % *) Technical Building Services **) Facility Services ***) Property and Facility Services ****) SPIE s Total BS market size above EUR 70 billion in Europe in 2012 Building Systems Industrial Services 4. Hochtief **** % 4. Cofely % % 5. Stolz % 14 Road Show December 2013

15 Megatrends support the demand for our services Increasing amount of technology in buildings Building systems account for about 40% of costs of new buildings. Increasing demand for special technical competence as well as continuous service and maintenance. Outsourcing of services. Extensive service packages from one partner. Climate change, energy efficiency Tightening legislation, growing energy consumption and need for modernizations in energy sector. Energy efficiency key criterion for customers when selecting service provider. Digitalization Demand for automation and remote monitoring is increasing. Maintenance is increasingly based on preventive measures as well as on actual needs and conditions. Fragmented market A lot of small companies in the market. Extensive services is a competitive advantage especially in large projects. Growth potential especially in Germanspeaking areas. 15

16 General economic outlook for 2014 Text Real GDP growth rate estimates, % < 1% 1-2 % 2-3 % > 3 % Text Text Text GDP Growth (constant prices, national currency) for Euro Area is estimated to be approximately 1.1 % in Source: Nordea Markets (Economic outlook, September 2013), Eurostat, Economy Watch 16 Capital Markets Day. November 19, 2013

17 Short-term prospects of s core markets in 2014 Modest growth expected in the near future Stable demand is estimated for service and maintenance during Sweden Finland Service and maintenance Project deliveries The new non-residential construction volumes are forecasted to moderately increase in Norway Germany Austria Denmark Russia Source: Euroconstruct, June 2013, management estimate 17 Capital Markets Day, November 19, 2013

18 Market outlook for s business in 2013 Service and maintenance Project business o Growth opportunities favorable in all of s operational areas o Decision-making on new investments is still slow, but positive signs can be seen o New investments expected to increase slightly Energy efficiency o The demand for energy efficiency services is expected to remain stable o Energy costs and tightening legislation support the demand for energyefficient solutions 18 Road Show December 2013

19 Building Systems indicators in Northern Europe Modest growth expected in the near future New non-residential construction volumes in NE, index Non-residential service and renovation volumes in NE, index E 2014E 2015E Finland Sweden Norway Denmark The Baltic countries E 2014E 2015E Finland Sweden Norway Denmark New non-residential investments forecasted to remain stable in Northern Europe in Stable demand estimated for service and maintenance in Northern Europe during Source: Euroconstruct, June The Baltic countries figure includes both new non-residential construction and renovation indexed to Road Show December 2013

20 Building Systems indicators in Central Europe Modest growth expected in the near future New non-residential construction volumes in CE, index Non-residential service and renovation volumes in CE, index E 2014E 2015E E 2014E 2015E Germany Austria Poland the Czech Republic Germany Austria Poland the Czech Republic New non-residential investments forecasted to increase slightly in Central Europe in Stable demand in service and maintenance continues in Source: Euroconstruct, June indexed to Road Show December 2013

21 Strategy and key strengths

22 Strategy by the end of 2016 Vision The leading and most efficient building systems company in Europe Financial targets Profitability: EBITDA over 6% of the revenue Average annual growth in revenue more than 10% Negative working capital Key objectives Increasing profitability in Northern Europe Strong growth in Central Europe organically and through acquisitions Wide, new and advanced projects and services Strong company image Excellent leadership Eagerness for profit Mission We design, build and maintain user-friendly and energy-efficient solutions for buildings, infrastructure and industrial plants. Values Step ahead + Cooperation + Responsibility + High performance Road Show December 2013

23 Key strengths Comprehensive services, geographically extensive operations and strong market position Competitive advantage in a market where most service providers focuse on a few individual solutions locally. Technological forerunner with own innovative solutions Cleanroom, laboratory and hospital technologies. Building automation and comprehensive remote monitoring, industrial high pressure piping systems. Own product development > innovative and cost saving solutions. Energy efficiency as part of all services and solutions Incorporated in all service contracts and project deliveries. Essential selection criterion for customers. Ability to grow also through acquisitions Preconditions for strong cash flow Fragmented markets offer numerous opportunities for acquisitions. Solid experience in acquisitions. Service and maintenance account for significant share of business, long-term customer relationships and extensive customer base decrease the dependency on economical cycles. Labour-intensive business requires little investments. 23 Road Show December 2013

24 Strategic targets Increasing profitability in Northern Europe Strong growth in Central Europe organically and through acquisitions Wide, new and advanced projects and services Continuous development of service efficiency by developing operations and tools Lower organization and centralizing project business in centres of excellence. More careful project selection in terms of profitability and risks Better project management, more systematic risk management and more efficient procurement and tendering process Service and maintenance productization - ServiFlex Selected acquisitions especially in German-speaking areas Increasing the share of service and maintenance business: The share of service and maintenance of revenue in 2012: Central Europe 31%, Northern Europe 64% Total technical solutions (TTS) and large Design & Build projects, where is involved from the beginning, including design Long-term service agreements in service and maintenance, developing service concepts Strengthening technical expertise and R&D 24 Road Show December 2013

25 The impact of efficiency measures already visible in Northern Europe Restructuring of operations proceeded in all countries during July September The focus has been on closing unprofitable units and improving the business mix in Sweden and Norway. Increased selectiveness in project business Previously announced measures to decrease personnel by further 600 employees finalized during July September. Restructuring has had a positive impact on regaining profitability in Sweden Profitability improved in July September according to plan. Profitability improvement actions still ongoing in Norway, especially in project business. Impact expected to be seen in Adjustment of costs continues during the rest of 2013 Service efficiency programme is ongoing in all countries. 25 Road Show December 2013

26 M&A criteria o Good strategic fit geographical coverage business portfolio customer sectors o Complementary skills & resources o Business culture o Value creation potential o Profitability turn-around o Strong local market position 26 Road Show December 2013

27 Key acquisitions Purchase price, EUR million Revenue, EUR million EBIT, EUR million Personnel Calor Sweden ,565 ABB Ltd, BS operations , ** 9,080 MCE AG ,900 GmbH 73.0* , *) value of the shares **) management estimate

28 Up in the value chain by changing the business mix Group business mix % of revenue 1-9/2013 Service and maintenance 55% Projects 45% Service and maintenance Long-term contracts Ad hoc orders from customers One-timers Service and maintenance Service and maintenance generated 55% of the Group revenue in 2012 Targeting to increase the share of long-term contracts Projects Tenderbased contracting Design & Build Project business Targeting to increase the share of Design and Build projects due to better profitability prospects Several new agreements reached during Q3/ Road Show December 2013

29 Financial development

30 Key figures EUR million 9/13 7 9/12 1) Change 9/13 1 9/12 1) Change 1 12/12 1) Revenue % 1, , % 2,803.2 EBITDA % % 85.3 EBITDA margin, % Operating profit % % 61.1 Operating profit margin, % Net profit for the period % % 40.8 Working capital % % 94.0 Operating cash flow after investments Interest-bearing net debt, end of period 2) Gearing, end of period, % 2) Earnings per share, EUR 3) % % 0.32 Personnel, average for the period 18,016 19,172-6% 18,174 19,254-6% 18,592 1) The revised IAS 19 standard has had the following effects on the consolidated income statement for 1-12/2012: personnel expenses increased by EUR 0.1 million and EBITDA and operating profit and profit before taxes decreased correspondingly by EUR 0.1 million. The revised IAS 19 standard has had the following effects on the consolidated income statement for 1-9/2012: personnel expenses increased by EUR 0.5 million and EBITDA and operating profit and profit before taxes decreased correspondingly by EUR 0.5 million. The revised IAS 19 standard has had the following effects on the consolidated income statement for 7-9/2012: personnel expenses increased by EUR 0.2 million and EBITDA and operating profit and profit before taxes decreased correspondingly by EUR 0.2 million. 2) Interest-bearing net debt and gearing for 2012 are not comparable to the figures in 2013 due to the new credit facility transferred to Corporation as a result of the partial demerger as per June 30, ) Excluding the financial cost effect for January-June 2013 of the new financing arrangements transferred to Corporation as a result of the partial demerger. If the refinancing under new loan agreement would have been drawn down in the beginning of the financial year, the net financing expenses in January-September would have amounted to approximately EUR 6.1 million. 30 Road Show December 2013

31 Profitability improved according to plan EBITDA, Group EBITDA, Northern Europe 9/12: 75.4 (3.7%) 9/13: 45.6 (2.5%) % 3.6% 4.0% % % 1.3% 1.5% EBITDA, EUR million EBITDA margin, % 9/12: 59.2 (3.8%) % 3.6% 4.3% 9/13: 33.8 (2.4%) % % 1.3% 2.0% 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 7-9/13 EBITDA for July September decreased from the previous year by 11%, but improved from the previous two quarters. o Excluding demerger-related costs EBITDA for July September was EUR 26.8 million (7 9/12: EUR 26.3 million). EBITDA, Central Europe 9/12: 21.2 (4.1%) 9/13: 15.7 (3.5%) % 4.4% 3.8% 6.2% 3.2% 2.9% 4.3% 31 Road Show December 2013

32 Right-sizing of the organization Announced measures to decrease personnel finalised in Q3/2013 Decrease in number of employees from 9/2011 to 9/2013: Number of employees Northern Europe: ~1,800 employees Central Europe: ~230 employees , / /2011 3/2012 6/2012 9/ /2012 3/2013 6/2013 9/2013 Northern Europe Central Europe o Previously announced measures to decrease personnel by further 600 employees finalised in Q3/2013 o Personnel expenses decreased by almost EUR 40 million from 1 9/2012 to 1 9/2013 Personnel expenses EUR million / / Capital Markets Day, November 19, 2013

33 Personnel expenses account most of the cost base Revenue to EBITDA waterfall in 2012 EUR million (% of cost base before EBITDA) Personnel expenses accounted for 41% of the total cost base in 2012 Right-sizing the organisation key for margin improvement 2, ,127 (41%) Total cost base EUR 2,730 million 469 (17%) 800 (29%) Personnel by segment in 2012** Northern Europe 18% (3,380) Central Europe 82% (15,159) Revenue Other op. income Personnel expenses External services Materials & supplies Other items* (net) EBITDA Total of 18,618 employees *) Includes: Other operating expenses, change in inventories of finished goods and work in progress and production for own use **) At the end of the period; Based on segment reporting in the YIT annual reports 33 Road Show December 2013

34 Group revenue EUR 595 million in July September Group (EUR million) Northern Europe (EUR million) 673 9/12: 2,055 9/13: 1, /12: X,XXX /12: 1,537 9/13: 1, /12 4-6/12 7-9/ /12 1-3/13 4-6/13 7-9/13 Increased selectiveness in project business in Norway and Sweden Low project volume in Germany Changes in foreign exchange rates decreased the revenue in July September by EUR 15 million compared to the previous year. Central Europe (EUR million) 159 9/12: /13: Lower volume in service and maintenance 34 Road Show December 2013

35 54% of revenue from service and maintenance Group % of revenue in 7 9/13 Northern Europe Service and maintenance 54% (7 9/12: 54%) Projects 46% (46%) Service and maintenance 59% (7 9/12: 63%) Projects 41% (37%) Central Europe Service and maintenance 39% (7 9/12: 32%) Projects 61% (68%) 35 Road Show December 2013

36 Revenue by country Revenue development (EUR million) Distribution of revenue 9/ (-5%) 399 (-11%) (-11%) (-15%) Sweden 26% (-1%) (-8%) (-10%) Sweden Finland Norway Germany Austria Denmark Other countries 9/12 9/13 (Russia, Estonia, Lithuania, Latvia, Poland, the Czech Republic, Romania) Finland 21% Norway 20% Germany 18% Austria 6% Denmark 5% Other countries 3% 36 Road Show December 2013

37 Aiming to increase long-term service agreements Development in Q3/2013: Group revenue in service and maintenance was EUR 320 million in July September (7 9/12: EUR 361 million) Northern Europe Service and maintenance revenue, EUR million % of total revenue % 64% 63% 63% 62% 61% 59% Focus on: Increasing the share of service and maintenance, long-term service agreements and life cycle projects. Developing service concepts (ServiFlex), facility management concept and remote monitoring of buildings. o Central Europe % 30% 32% 33% 35% 38% 39% 37 Road Show December 2013

38 Improving the business mix in projects Development in Q3/2013: Lower volumes in Germany: Order backlog increased, but has not yet turned into revenue. Northern Europe Project business revenue, EUR million % of total revenue Increased selectiveness in projects and lower project sales in Norway and Sweden. 36% 36% 37% 37% 38% 39% 41% Focus on: Total technical solutions and Design & Build projects Central Europe Strengthening technical expertise and R&D Improving profitability of project business % 70% 68% 67% % 61% 65% 38 Road Show December 2013

39 Key events that have affected the top-line and profitability Revenue growth through the economic cycles Key acquisitions: 2001: Acquisition of Calor AB 2003: Acquisition of BS operations of ABB Ltd 2008: Acquisition of MCE AG 2010: Acquisition of caverion GmbH Background: 2008: Acquisition of MCE and its low initial profitability 2009: Weakening non-residential market, execution of projects received in good market situation, fixed cost cuts : Weak non-residential market and project demand. Acquisition of with low initial profitability 2011: Tight price competition in projects. Relatively low volume in new investments in building systems. Weak profitability in Industrial Services in Finland. Right-sizing of the organization started. 2012: Tight price competition in projects. Cost overruns in projects. Restructuring actions accelerated. Revenue development (EUR million) Building Systems BS Central Europe BS Northern Europe +15% 2,140 1,680 1,797 1,892 1, EBIT development (EUR million) Building Systems EBIT-% BS Central Europe BS Northern Europe % % % 5.6% % 0.0% 2, % 2, % 2, % 2, % 2, % Note: Segment level figures, i.e. sum of BS related segment figures in YIT financial reporting; Building Systems divided into Northern Europe and Central Europe in 2010; official carve-out figures; EBIT figures exclude EBIT from other operations of EUR -6.1m, -7.1m and -7.4m respectively; In order to present the development of Group, revenue include YIT Group internal sales 39 Road Show December 2013

40 EBITDA development in Building Services Northern Europe 66,8 EBITDA, EURm EBITDA margin, % 26,4 5,5% 33,9 6,3% 37,7 7,4% 10,9% 44,5 34,8 6,8% 7,5% 46,7 47,4 8,7% 8,0% 35,8 29,4 29,0 7,5% 25,8 6,5% 6,5% 6,5% 23,4 5,8% 28,7 6,2% 24,2 27,4 5,8% 5,3% 20,8 22,6 23,8 27,1 4,4% 4,4% 4,6% 4,5% 19,0 19,5 20,7 3,7% 3,6% 4,3% 0,3 6,3 10,0 17,5 0,1% 1,3% 2,0% 4,0% Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/ EUR million (7.7%) Good non-residential market supported project demand Industrial investments at high level Sales of Network Services to Relacom 2008 EUR million (7.8%) Good non-residential market supported project demand 2009 EUR million (6.7%) Weakening nonresidential market, execution of projects received in good market situation Fixed cost cuts EUR million (5.7%) Weak non-residential market, weak project demand Industrial investments in Finland started to increase slightly from low level in EUR 94.2 million (4.5%) Tight price competition in projects Relatively low volume in new investments in building systems Weak profitability in Industrial Services in Finland Right-sizing of the organisation started in H EUR 59.5 million (2.8%) Tight price competition in projects Cost overruns in projects Restructuring actions accelerated Profitability at satisfactory level in Service and maintenance EBITDA in Q2/11 was affected (decreased) by EUR 3.0m due to a reservation related to a single customer project. EBITDA margin in Q2/11, excluding the reservation, would have been 5.0%. EBITDA in Q2/12 was affected (decreased) by EUR 2.8m due to a final settlement of a single customer project. EBIT DA margin in Q2/12, excluding the settlement, would have been 4.1%. EBITDA in Q3/12 was affected (decreased) by EUR 0.9m due to a final settlement of a single customer project. EBITDA margin in Q2/12, excluding the settlement, would have been 4.4%. EBITDA in Q4/12 was affected (decreased) by EUR 3.0m due to restructuring costs. EBITDA margin in Q4/12, excluding the restructuring costs, would have been 0.6%. EBITDA in Q1/13 was affected (decreased) by EUR 2.8m due to restructuring costs. EBITDA margin in Q1/13, excluding restructuring costs would have been 1.9% EBITDA in Q2/13 was affected (decreased) by EUR 1.4m due to restructuring costs. EBITDA margin in Q2/13, excluding these costs would have been 2.3%. EBITDA in Q3/13 was affected (decreased) by EUR 2.7m due to demerger related costs. EBITDA margin in Q3/13, excluding these costs would have been 4.7%. 9/2013 EUR 33.8 million (2.4%) Profitability improving according to plan Efficiency programme progressing well in Sweden Weak profitability in project business in Norway Low capacity utility rate in service and maintenance Note: 2013 and the comparative figures for 2012 are presented according to the revised IAS 19 Employee benefits standard, prior periods according to the old reporting standards. 40 Road Show December 2013

41 EBITDA development in Building Services Central Europe EBITDA, EURm EBITDA margin, % ,1 0,0 0,0 0,9 1,5% 2,7 3,2 3,1 3,2 2,1% 3,7% 3,6% 3,5% 5,8 5,8% 10,2 5,2 3,5 3,5 2,2 3,1% 2,6% 4,0% 3,9% 3,0% 7,0% 10,4 9,2 7,9 6,4 6,8 4,3% 5,2% 4,0% 4,4% 3,8% 6,2% 4,5 4,4 6,9 3,2% 2,9% 4,3% Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/ EUR 3.6 million (1.9%) 2009 EUR 15.3 million (4.2%) 2010 EUR 19.4 million (3.5%) 2011 EUR 38.1 million (4.9%) 2012 EUR 33.2 million (4.7%) 9/2013 EUR 15.7 million (3.5%) Acquisition of MCE Low initial profitability 100 days integration program Development and profitability improvement according to our plans Execution of order backlog with lower initial profitability Fixed cost cuts Acquisition of caverion with low initial profitability: diluting segment s profitability 100 days integration program Good demand for projects Development and profitability improvement according to plans Fixed cost cuts Sale of Hungarian operations in Q2 Weakening large project market in Germany The profitability was at a good level in the fourth quarter, in Germany and Austria in particular Low profitability in Poland and the Czech Republic Restructuring on-going Lower volume of German operations due to the weaker order intake in H1/2013 EBITDA in Building Services Central Europe in Q2/11 includes EUR 5.0m sales gain related to the divestment of Hungarian operations. EBITDA margin in Q2/11 excluding the sales gain would have been 4.3%. EBITDA in Building Services Central Europe in Q2/13 includes EUR 1.4m of HOCHTIEF Service Solutions M&A related project costs. EBITDA margin in Q2/13 excluding these costs would have been 3.8%. EBITDA in Building Services Central Europe in Q3/13 includes EUR 0.8m of demerger related costs. EBITDA margin in Q3/13 excluding these costs would have been 4.8%. Note: 2013 and the comparative figures for 2012 are presented according to the revised IAS 19 Employee benefits standard, prior periods according to the old reporting standards. 41 Road Show December 2013

42 EBITDA development (EUR million) Building Systems BS Central Europe BS Northern Europe EBITDA-% % 7.4% % % 5.9% 6.2% 5.2% 4.6% 3.3% Note: Segment level figures, i.e. sum of BS related segment figures in YIT financial reporting; Building Systems divided into Northern Europe and Central Europe in 2010; official carve-out figures; EBITDA figures exclude EBITDA from other operations of EUR -6.1m, -7.1m and -7.4m respectively; In order to present the development of Group, revenue, of which the EBITDA-% is being calculated, includes YIT Group internal sales 42 Road Show December 2013

43 Order backlog has increased by 8% since December 2012 EUR million Increase in Central Europe by 31% since December: 1,470 1,429 1,340 1,199 1,315 1,274 1,296 Northern Europe Increased order intake in Germany expected to contribute favorably to the revenue development during the first half of Central Europe Decrease in Northern Europe is partly due to s own selectiveness in project business /12 6/12 9/12 12/12 3/13 6/13 9/13 +2% 43 Road Show December 2013

44 Order backlog as an indicator of future revenue Only around 60% of revenue through order backlog Work type Order backlog Service and maintenance Long-term contracts Additional orders from existing contract customers Fixed period contracts = Remaining value of the total On-going contracts = Remaining value until the notice period Not included in order backlog Other ad-hoc orders/one timers Not included in order backlog Projects Design & Build Contracting Remaining value of the total contract value Remaining value of the total contract value 44 Road Show December 2013

45 Targeting to improve cash flow by decreasing operative working capital from the balance sheet Operating cash flow after investments, LTM EUR million Limited investments (excl. M&A) 40,5 33,2 16,3 47,1 Demerger-related IT investments of EUR 5.7 million in 7 9/ ,4-20,7 1-12/ / /12 4/12-3/13 7/12-6/13 10/12-9/13 Historically seasonality within a year Operating cash flow after investments EUR million 79,3 5,1 5,3-2,2-18,4-25,5-35,3 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 7-9/13 45 Road Show December 2013

46 Targeting to reduce working capital Focus on more efficient use of capital Working capital EUR million % 5% /2013 (LTM) 94 3% 120 5% Working capital (excl. non-current items) was EUR 120 million in the end of September Target: Negative working capital by the end of 2016 Working capital Working capital to sales, % Operative working capital EUR million % 12% 12% 12% /2013 (LTM) Trade and POC receivables + inventories Trade and POC liabilities + advances received Operative working capital to sales, % Management focus on business related receivables/liabilities POC receivables (internal actions, more efficient invoicing) Trade receivables (payment terms) Advances received to be negotiated *) Carve-out figures for Road Show December 2013

47 Low level of invested capital in Building Systems business Building system services business requires low level of investments, apart from possible acquisitions Capital expenditures (EUR million) Capital expenditures (EUR million)* % of sales s investments in tangible and intangible assets totalled EUR 14.2 million in The total amount of capital expenditures corresponded to only approximately 4% of the combined EBITDA for the years in question 0.21% % % 0.06% Sum *) Capital expenditures consist of investments in tangible (property, plant and equipment) and intangible assets, excluding acquisitions. 47 Road Show December 2013

48 Group s non-current assets mainly comprise of goodwill formed in connection to the past acquisitions The amount of goodwill was EUR million on 30 September 2013 In the end of 2012, 2011 and 2010 the Group goodwill amounted to EUR million, EUR million and EUR million, respectively. Non-current assets on (EURm) 423 Goodwill is subjected to an annual impairment test Goodwill is allocated to cash-generating units Goodwill is measured at the original acquisition cost less impairment. The amount of impairments has been assessed in proportion to different time periods and the sensitivity has been analysed in the changes of the discount rate, profitability and in the increase of the residual value In 2012, the goodwill testing caused an impairment amounting EUR 0.9 million regarding the goodwill of Poland Otherwise these analyses and estimations have not given an indication for impairment Goodwill Other non-current assets 336 (79%) 88 Non-current assets 48 Road Show December 2013

49 Financial position

50 Diversified debt structure Debt maturity EUR million External financing EUR 201 million amortizing loans EUR 22 million bridge loan due June 2014 EUR 23 million commercial papers due during 2013 EUR 60 million revolving credit facility due June 2016 (fully undrawn) Loan portfolio Banks 84% Commercial papers 9% Insurance companies 6% Others 1% Interest rate type (after hedges) Fixed interest 31% Floating interest 69% o Loan portfolio total: EUR million o Average interest rate after hedges: 2.09% 50 Road Show December 2013

51 Financing position enables the implementation of the Group s strategy Net debt decreased slightly to EUR 190 million mainly due to increased cash and cash equivalents Net debt, 7 9/2013 EUR million Liquidity reserve, 7 9/2013 EUR million 172 Long-term borrowings Short-term borrowings Cash and cash equivalents 190 Solid liquidity reserve of EUR 135 million to meet the debt repayments and potential funding need of business operations Net debt Unused credit facilities Cash and cash equivalents 51 Road Show December 2013

52 Guidance and conclusions

53 repeats the guidance for the second half of 2013 estimates that the Group s revenue for the second half of 2013 is more than EUR 1.3 billion and EBITDA more than EUR 50 million. The guidance does not take into account the non-recurring expenses related to the demerger, nor the expenses related to any potential mergers or acquisitions. 53 Road Show December 2013

54 Updated financial targets for the strategy period Revenue 100 Annual revenue growth 50 more than 10 per cent on 0average EBIT DA* EBIT DA-% Profitability EBITDA over 6 per cent of revenue Sarja Working capital Negative working capital (New 50 target) 0 Sarja Revenue (EUR million) +9% EBITDA EBITDA (EUR million) EBITDA margin (%) Working capital (EUR million) % 4.4% 3.0% /2013 *) EUR million, based on carve-out figures; working capital 9/2013 based on actuals, working capital as of end of period. 54 Road Show December 2013

55 Concluding remarks offers all building systems related services and seeks growth from developed Northern and Central Europe Focus in service and maintenance as well as profitable Design & Build projects Strong growth potential in a fragmented market Dividend policy: Dividend payout at least 50 per cent of net profit for the period Key strengths Comprehensive services and strong market position in selected geographical regions Solid experience in acquisitions supports growth opportunities in a fragmented market Low capital employed, extensive customer base and significant share of service business provide the preconditions for strong and stable cash flow Technological forerunner with own innovative solutions Energy efficiency as part of all services 55 Road Show December 2013

56 Appendix

57 34,311 shareholders on October 31, 2013 Largest shareholders Major shareholders on June 28,2013 Shares, pcs % of all shares Change after June 28, pcs Change, % 1. Structor S.A. 17,140, ,710, Varma Mutual Pension Insurance Company 7,732, Funds owned by Herlin Antti 5,780, ,199, OP funds 4,159, ,849, Ilmarinen Mutual Pension Insurance Company 3,556, ,234, Fondita funds 2,810, ,796, Nordea funds 1,769, , Odin funds 1,736, , The State Pension Fund 1,470, , Danske Invest funds 1,334, , Brotherus Ilkka 1,304, Aktia funds 1,297, , Etera Mutual Pension Insurance Company 1,212, , Tapiola Mutual Pension Insurance Company 1,009, , Evli funds 1,007, , Svenska litteratursällskapet i Finland r.f. 610, ,070, Veritas Pension Insurance Company Ltd. 529, , Foundation of Brita Maria Renlunds minne 412, Säästöpankki funds 371, , Sigrid Jusélius Foundation 361, largest, total 55,603, All shares 125,596, Owners by category by shares owned Nominee registered and non-finnish holders 39% (June 28: 35%) Households 21% (22%) General government 13% (13%) Financial and insurance corporations 11% (13%) Non-profit institutions 6% (7%) Non-financial corporations and housing corporations 10% (7%) 34,311 owners (39,250) 57 Road Show December 2013

58 s Board of Directors Board of Directors approved by the EGM on 17 June 2013, prior the listing Henrik Ehrnrooth (b. 1954) M.Sc. (Forest economics) Chairman of the Board Directors of Pöyry Plc Share ownership: 15,430,000* Independent of company: Yes Independent of owners: No Ari Lehtoranta (b. 1963) M.Sc. (electrical eng.) Member of the Board Executive Vice President of KONE Corporation, Central and North Europe, and Customer Experience. Member of the Executive Board. Share ownership: 0 Independent of company: Yes Independent of owners: Yes Michael Rosenlew (b. 1959) M.Sc. (Econ.) Vice Chairman of the Board Managing Director of Mikaros AB Share ownership: 0 Independent of company: Yes Independent of owners: Yes Eva Lindqvist (b. 1958) M.Sc. (Eng.), MBA Member of the Board Professional Board member Share ownership: 0 Independent of company: Yes Independent of owners: Yes Anna Hyvönen (b. 1968) Lic. Tech. Member of the Board Senior Vice President and Managing Director of Ramirent Finland Oy Share ownership: 0 Independent of company: Yes Independent of owners: Yes *) Henrik Ehrnrooth holds indirectly with his brothers Georg Ehrnrooth and Carl-Gustaf Ehrnrooth a controlling interest in Structor S.A., which will be the largest shareholder of Corporation. The evaluation is based on the assumption that there will be no changes in issues affecting the evaluation of independency prior to the registration of Corporation. 58 Road Show December 2013

59 Management Board Juhani Pitkäkoski President and CEO Antti Heinola CFO Group Services key people Merja Eskola HR Sakari Toikkanen Business Development Päivi Alakuijala Marketing & Communications Business Regions/ Business areas Country managers Karl-Walter Schuster Building Services Central Europe Germany Project excellence business area Matti Malmberg Building Services Northern Europe Service efficiency business area Jarno Hacklin Finland, Russia, Baltic Countries Ulf Kareliusson Sweden Erkki Huusko Industrial Services Knut Gaaserud Norway Peter Rafn Denmark Manfred Simmet Austria 59 Road Show December 2013

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