Road Show, Stockholm 27 September, Antti Heinola, CFO Milena Hæggström, Head of Investor Relations

Transcription

1 Road Show, Stockholm 27 September, 2013 Antti Heinola, CFO Milena Hæggström, Head of Investor Relations

2 Contents Business operations Market overview Strategy and key strengths Financial development Financial position Summary Appendix 2 Road Show, Stockholm 27 September 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 approximately 37,500 shareholders at the end of July. YIT shareholders received shares as demerger consideration in proportion to their shareholdings in YIT (1:1). 5 Road Show, Stockholm 27 September 2013

6 in brief Main activities Service and maintenance of building systems and industrial processes Project deliveries of building systems Project deliveries to industry Key figures* Revenue 2012: EUR 2,803 million EBITDA 2012: EUR 85 million (3.0% of revenue) EBIT 2012: EUR 61 million (2.2% of revenue) Distribution of revenue 2012 Sweden 25% Finland 22% Norway 21% Germany 19% Austria 6% Energy efficiency services for properties and industry Personnel 6/2013: 18,125 Denmark 5% Other countries 3% *) Carve-out figures **) Country split of revenues is based on the Group company location 6 Road Show, Stockholm 27 September 2013

7 Services cover all building systems throughout the entire life cycle of the property and industrial facility Design Installation Service and maintenance Heating Water Airconditioning Electricity Tele ICT Automation and remote monitoring Security Fire-safety Technical Facility Management Energyefficiency Energy certificates forbuildings Pre-fabricates for industry Cooling 7 Road Show, Stockholm 27 September 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, Stockholm 27 September 2013

9 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 9 Road Show, Stockholm 27 September 2013

10 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 June 2013: 14,751 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 June 2013: 3,291 Finland Operating areas Sweden Norway Denmark Russia Germany Austria Poland, Czech Republic, Romania Estonia, Latvia, Lithuania *) Carve-out figures **) Based on reported segment level country split in annual report Road Show, Stockholm 27 September 2013

11 Aiming to increase long-term service agreements o Incorporating services into project deliveries: After designing and delivering the building systems can operate, service and maintain the building for up to twenty years (life cycle model). o Developing service concepts: ServiFlex allows the customer to combine extensive range of services flexibly in one agreement and from one service provider. Special know-how in remote monitoring of buildings. Development in April June Group revenue in service and maintenance decreased by 9% compared to April June o Additional service and maintenance work postponed in Northern Europe o In Central Europe service and maintenance volume increased by 8% from April June Northern Europe Service and maintenance revenue, EUR million % of total revenue % 64% 63% 63% 62% 61% 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 Central Europe % 30% 32% 33% 35% 38% 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 11 Road Show, Stockholm 27 September 2013

12 Improving the business mix in projects aims to grow as a supplier of Design and Build projects and total deliveries of building systems: Higher profitability than in individual tenderbased contracting projects, less competition has special competence in demanding properties, such as laboratories and hospitals Clean rooms, cooling, sprinklers, security and AV, energy efficiency Own R&D centre in Aachen, Germany Development in April June: Postponed project kick-offs in Central Europe Profitability in project business still low in Northern Europe Northern Europe Central Europe 207 Project business revenue, EUR million % of total revenue % 36% 37% 37% 38% 39% 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/ % 70% 68% 67% 65% 62% 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 12 Road Show, Stockholm 27 September 2013

13 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 13 Road Show, Stockholm 27 September 2013

14 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 14 Road Show, Stockholm 27 September 2013

15 Market overview

16 Competitive environment in Building Systems in Europe has strong growth potential in fragmented markets Largest Building Systems companies in Europe (Revenue in 2012) Total BS market size above EUR 70 billion in Europe in 2012 Vinci Energies Service & Industry (FRA) Bilfinger Berger Services Europe (GER) Building Systems Imtech (NL) SPIE Europe (FRA) BSNE Industrial Services St. Petersburg and Moscow ISS Property Services (DK) Bravida (SWE) TBI Techniek (NL) Coor (SWE) BSCE Hochtief Services Europe (GER) Ortner (AUT)* Alpine Energie s market positions** Finland Sweden 1# with 8% market share 2# with 6% market share Norway Denmark 1# with 9% market share 3# with 3% market share Germany Austria 2# with 2% market share 3# with 3% market share *) Estimate from web page **) management s estimates 16 Road Show, Stockholm 27 September 2013

17 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, Stockholm 27 September 2013

18 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, Stockholm 27 September 2013

19 Market outlook for s services in 2013 Service and maintenance market is estimated to remain stable or grow slightly in 2013 in all major operating countries. o The opportunities for growth are still favorable in all s operational areas o In Russia the services market is expected to improve further. In Poland, growth but oversupply in the market. The demand for energy efficiency services is expected to remain stable. In project business, decisionmaking on new investments is still slow, but positive signs can be seen. o New investments expected to increase slightly in Norway and Germany. o In Sweden and Finland demand expected to weaken further. o In the Baltic countries, demand in both projects and service markets is estimated to remain at a low level. o High energy prices and tightening legislation support the demand for energy efficient solutions 19 Road Show, Stockholm 27 September 2013

20 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 the German-speaking areas. Road Show, Stockholm 27 September

21 Strategy and key strengths

22 Strategic target is to achieve a leading position within building systems services market in Europe Increasing profitability in Northern Europe Strong growth in Central Europe organically and through acquisitions Wide, new and advanced projects and services Restructuring cost base Continue right-sizing of the organisation in all countries Close and merge low-performing units Reduce fixed and other variable costs Margin improvement Selectiveness in tendering: keep minimum project margins Margin slippages reduction and improvement of project management Selected acquisitions especially in German speaking areas Organic growth Increase the share of service and maintenance business as well as focus on more profitable Design & Build projects Total technical systems projects with Design & Build and guaranteed maintenance cost Total technical FM based on customer demand with guaranteed maintenance cost Long-term service agreements Technical arrowhead competences, e.g. clean room, cooling Energy efficiency 22 Road Show, Stockholm 27 September 2013

23 Measures to improve profitability in Northern Europe continue Key factors: Lean organization and centralized project business Increased selectiveness of projects and more systematic risk management Efficient sourcing and tendering process Efficient process for service Focus is currently on Norway, turnaround already seen in Sweden In 2011 announced measures to carry out cost savings of EUR 40 million have been executed: o Personnel cuts of 800 carried out by the end of 2012 o Personnel expenses in 6/2013 EUR 27.5 million lower than in 1 6/2012 On-going negotiations to reduce further 600 persons in 2013, of which approximately 400 already reduced during January June. 23 Road Show, Stockholm 27 September 2013

24 Potential to improve profitability in both Building Services Northern Europe and Central Europe Building Services Northern Europe The impact of cost savings will be seen during the rest of the year Personnel reduction negotiation of approx. 600 persons in 2013 on-going 400 reduced by the end of Q2 Cost adjustments Selectiveness in tendering: keep minimum project margins Improvement in project management Focus in more profitable Design and Build projects Normal business seasonality Suspended service orders since Q4/12 cannot be postponed indefinitely Room for improvement in long term, increase in the order backlog in Q1 was a positive issue Building Services Central Europe Targeting to increase share of service and maintenance in Central Europe 24 Road Show, Stockholm 27 September 2013

25 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. 25 Road Show, Stockholm 27 September 2013

26 Financial development

27 Key figures EUR million 4-6/13 4-6/12 1) Change 1-6/13 1-6/12 1) Change 1-12/12 1) Revenue % 1, , % 2,803.2 EBITDA % % 85.3 EBITDA margin, % Operating profit % % 61.1 Operating profit margin, % Financial income and expenses, net 2) Net profit for the period % % 40.8 Operative cash flow after investments Interest-bearing net debt, end of period 3) Gearing, end of period,% 3) Earnings per share, EUR 2) % % 0.32 Personnel, average for the period 18,106 19,185-6% 18,229 19,258-5% 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 1-6/2012: personnel expenses increased by EUR 0.3 million and EBITDA and operating profit and profit before taxes decreased correspondingly by EUR 0.3 million. The revised IAS 19 standard has had the following effects on the consolidated income statement for 4-6/2012: 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) Excluding the financial cost effect 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-June would have amounted to approximately EUR 3.6 million. 3) 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, Road Show, Stockholm 27 September 2013

28 Group revenue EUR 653 million in April June Group (EUR million) 1-6/12: 1, /13: 1, /12: X,XXX Northern Europe (EUR million) 1-6/12: 1, /13: /12 4-6/12 7-9/ /12 1-3/13 4-6/13 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 Group revenue in April June 2013 decreased by 9% from April June 2012 Central Europe (EUR million) Northern Europe: postponements in additional service and maintenance work, increased selectiveness in project business in Norway 1-6/12: /13: In Central Europe, weaker order intake especially in the end of Postponed projects in Germany 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 28 Road Show, Stockholm 27 September 2013

29 Revenue by country Revenue development (EUR million) Germany: Postponed projects Finland: revenue in Industrial Services decreased (-5%) (-8%) (-11%) (-18%) Norway: increased selectiveness in project tendering (+4%) (-7%) (-9%) Distribution of revenue 1-6/2013 Sweden 27% Finland 21% Norway 21% Germany 17% Sweden Norway Finland Germany Austria Denmark Other countries 1-6/12 1-6/13 (Russia, Estonia, Lithuania, Latvia, Poland, Czech Republic, Romania) Austria 6% Denmark 5% Other countries 3% 29 Road Show, Stockholm 27 September 2013

30 EBITDA decreased clearly in April June compared to the previous year Group Northern Europe 1-6/12: 49.2 (3.5%) 1-6/13: 22.3 (1.8%) 25,6 26,3 23,6 12,9 3.5% 3.6% 4.0% 9,8 9,4 2.0% 1.3% 1.5% EBITDA, EUR million EBITDA margin, % 1-6/12: 38.5 (3.7%) % 3.6% 4.3% 1-6/13: 16.2 (1.7%) % 0.1% 1.3% 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 o Excluding one-offs, EBITDA in April June was EUR 16.0 million o Northern Europe: Additional service and maintenance work postponed Profitability in project business still low Restructuring costs EUR 1.4 million in April June o Central Europe: Postponed project kick-offs Lower volumes in Germany M&A costs EUR 1.4 million in April June o Demerger related costs EUR 0.3 million in April June Central Europe 1-6/12: 14.3 (4.2%) 1-6/13: 8.9 (3.0%) % 4.4% 3.8% 6.2% 3.2% 2.9% 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 30 Road Show, Stockholm 27 September 2013

31 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 31 Road Show, Stockholm 27 September 2013

32 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 32 Road Show, Stockholm 27 September 2013

33 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 0,1% 1,3% 2,0% 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/ 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 H2 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. 33 Road Show, Stockholm 27 September 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%.

34 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% 6,2% 4,0% 4,4% 3,8% 4,5 4,4 3,2% 2,9% 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/ 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%) 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 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 M&A related project costs. EBITDA margin in Q2/13 excluding these costs would have been 3.8%. 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. 34 Road Show, Stockholm 27 September 2013

35 Operating profit and margin development in Building Services Northern Europe segment 63,4 EBIT, EURm EBIT margin, % 23,8 5,0% 31,4 5,8% 34,8 6,8% 10,4% 31,5 6,2% 41,0 7,0% 42,9 43,7 8,1% 7,4% 25,9 25,6 22,3 5,7% 5,8% 5,7% 32,2 6,8% 19,9 4,9% 25,1 5,4% 20,2 23,5 4,8% 4,5% 17,1 18,8 19,9 23,0 14,5 15,2 15,4 3,6% 3,7% 3,9% 3,8% 2,8% 2,8% 3,2% -4,0 2,2 6,1 0,5% 1,2% -0,7% 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/ EUR million (7.4%) 2008 EUR million (7.2%) 2009 EUR million (6.0%) 2010 EUR 88.7 million (4.9%) 2011 EUR 78.8 million (3.9%) 2012 EUR 41.1 million (2.0%) Good non-residential market supported project demand Industrial investments at high level Sales of Network Services to Relacom Good non-residential market supported project demand Weakening nonresidential market, execution of projects received in good market situation Fixed cost cuts 2009 Weak non-residential market, weak project demand Industrial investments in Finland started to increase slightly from low level in 2010 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 H2 Tight price competition in projects Cost overruns in projects Restructuring actions accelerated Profitability at satisfactory level in Service and maintenance EBIT in Q2/11 was affected (decreased) by EUR 3.0m due to a reservation related to a single customer project. EBIT margin in Q2/11, excluding the reservation, would have been 4.3%. EBIT in Q2/12 was affected (decreased) by EUR 2.8m due to a final settlement of a single customer project. EBIT margin in Q2/12, excluding the settlement, would have been 3.3%. EBIT in Q3/12 was affected (decreased) by EUR 0.9m due to a final settlement of a single customer project. EBIT margin in Q2/12, excluding the settlement, would have been 3.4%. EBIT in Q4/12 was affected (decreased) by EUR 3.0m due to restructuring costs. EBIT margin in Q4/12, excluding the restructuring costs, would have been -0.2%. EBIT in Q1/13 was affected (decreased) by EUR 2.8m due to restructuring costs. EBIT margin in Q1/13, excluding restructuring costs would have been 1.1% EBIT in Q2/13 was affected (decreased) by EUR 1.4m due to restructuring costs. EBIT margin in Q2/13, excluding these costs would have been 1.5% 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. 35 Road Show, Stockholm 27 September 2013

36 Operating profit and margin development in Building Services Central Europe segment 12.1 EBIT, EURm EBIT margin, % 10,8 8,9 7,9 9,3 6,6 0,0 0,0 2,3 2,6 2,6 2,7 0,5 0,9% 1,9% 3,0% 3,0% 3,0% 5,3 5,3% 1,7 2,4% 3,1 3,6% 2,7 2,0% 4,0 3,4% 2,3% 6,3% 3,7% 4,6% 5,2 3,3% 4,8 3,7% 2,7% 5,5% 3,4 3,2 2,4% 2,1% 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/ EUR 2.9 million (1.6%) 2009 EUR 13.2 million (3.6%) 2010 EUR 16.4 million (3.0%) 2011 EUR 33.3 million (4.3%) 2012 EUR 27.4 million (3.8%) 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 EBIT in Building Services Central Europe in Q2/11 includes EUR 5.0m sales gain related to the divestment of Hungarian operations. EBIT margin in Q2/11 excluding the sales gain would have been 3.7%. EBIT in Building Services Central Europe in Q2/13 includes EUR 1.4m of M&A related project costs. EBIT margin in Q2/13 excluding these costs would have been 3.0%. 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. 36 Road Show, Stockholm 27 September 2013

37 Right-sizing of the organization EUR 40 million cost savings have been finalized and some more savings in pipeline Personnel amount decreased from 9/2011 to 6/2013 in BS NE ~1500 employees BS CE ~280 employees Still 200 personnel reduction in pipeline in BS NE in BSNE BSCE , / /2011 3/2012 6/2012 9/ /2012 3/2013 6/2013 Personnel expenses decreased from H1/2012 to H1/2013 by 27.5 EUR million 575,0 570,0 565,0 560,0 572,5 555,0 550,0 545,0 540,0 535,0 530,0 545,0 H1/2012 H1/2013 Personnel expenses EUR million 37 Road Show, Stockholm 27 September 2013

38 Personnel expenses account for a major share of the cost base Revenue to EBITDA waterfall 2012 (EURm) Personnel expenses accounted for 41 % of the total cost base in 2012 (% of cost base before EBITDA) Right-sizing the organisation in all countries is key for margin improvement 2, ,127 (41%) 469 (17%) 800 (29%) Total cost base of EUR 2,730 million Personnel by segment** Total 18,539 Revenue Other op. income Personnel expenses External services Materials & supplies Other items* (net) EBITDA BSNE BSCE 3,380 (18%) 15,159 (82%) *) 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 38 Road Show, Stockholm 27 September 2013

39 Order backlog on a par with the end of March EUR million Group order backlog grew by 6% from December ,470 1, , , ,315 1, Northern Europe Central Europe Northern Europe: Stable order backlog on a par with December 2012 and March 2013 Central Europe: Increase by 17% since December Decrease by 5% since March /12 6/12 9/12 12/12 3/13 6/13-3% 39 Road Show, Stockholm 27 September 2013

40 Cash flow weakened in Q2/2013 Operative cash flow after investments (EUR million) 2012: EUR 40.5 million o Demerger related IT investments EUR 13 million in April June o Increase in working capital as no significant advance payments were received in Central Europe 79,3 o Cash flow historically cyclical, October December usually the strongest 5,1-2,2-18,4-25,5-35,3 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 40 Road Show, Stockholm 27 September 2013

41 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. 41 Road Show, Stockholm 27 September 2013

42 Acquisitions over the cycle The profitability of the acquired businesses has successfully been improved M&A criteria Largest acquisitions (purchase price) Return on investment > 20 % Good strategic fit (geographical coverage, business portfolio, customer sectors) Complementary skills & resources Business culture Value creation potential Profitability turn-around Strong local market position 2001: Calor Sweden (EUR 57 million) 2003: ABB (EUR 203 million) 2008: MCE (EUR 55 million) 2010: caverion GmbH (EUR 73 million) Cash flow effect of acquisitions * Significant acquisitions (EURm) Road Show, Stockholm 27 September 2013

43 Group s non-current assets mainly comprise of goodwill formed in connection to the past acquisitions Non-currents assets amounted to EUR million on 30 June 2013, EUR million on 31 March 2013 and to EUR million on 31 December 2012 The amount of goodwill was EUR million on 30 June, 31 March and on 31 December 2012 Non-current assets on (EURm) 431 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 analyzed 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 As at 31 December 2011 and 2010 the goodwill of Group amounted to EUR million and EUR million, respectively. Goodwill Other non-current assets 336 (78%) 95 Non-current assets 43 Road Show, Stockholm 27 September 2013

44 Opportunity to reduce operative working capital Focus on effective invoicing and collecting the cash flow Service and maintenance business accounted approx. 55% of s revenue in 2012 Due to advance payments, the project business employs less working capital than service and maintenance business Business related receivables/liabilities* (EUR million) Trade and POC receivables (% of revenue) Trade and POC liabilities +advance payments (% of revenue) % 26% % % 16% % *) Carve-out figures 44 Road Show, Stockholm 27 September 2013

45 repeats the guidance announced in June 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. Management estimates for H2/2013 Normal business seasonality Suspended service orders since Q4/12 cannot be postponed indefinitely in BSNE Recovery of project business in Germany Implemented cost savings will be seen during the rest of the year in BSNE Cost adjustments Personnel reduction negotiation of approximately 600 persons in 2013 on-going (400 reduced in H1) 45 Road Show, Stockholm 27 September 2013

46 Long-term financial targets during strategic period up to % Annual revenue growth more than 10 per cent on average 2,353 2,876 2,803 Revenue (EUR million) Profitability: EBITDA over 6 per cent of revenue EBITDA* EBITDA-% Strong operating cash flow after investments to enable organic growth, repayment of loans and distribution of dividend 5.0% % % 2012 Dividend policy: Dividend payout at least 50 per cent of net profit for the period *) Based on carve-out figures 46 Road Show, Stockholm 27 September 2013

47 Financial position

48 Refinancing relating to the partial demerger finalized as planned New credit facility with a Nordic bank group and certain other amortizing loans transferred to Corporation. External financing EUR 140 million new amortizing term loan facility due June 2016 EUR 60 million new revolving credit facility due June 2016 (EUR 15 million drawn) EUR 22 million new bridge loan due June 2014 EUR 59 million other amortizing loans. New amortizing term loan facility 59% Drawn revolving credit facility 7% Bridge loan facility 9% Other amortizing loans 25% 48 Road Show, Stockholm 27 September 2013

49 Financing position enables the implementation of the Group s strategy Net debt increased to EUR 194 million mainly due to the new credit facilities drawn in June. Net debt, 4 6/2013 EUR million Liquidity reserve, 4 6/2013 EUR million Solid liquidity reserve of EUR 108 million to meet the debt repayments and potential funding need of business operations Unused credit facilities Cash and cash equivalents Long-term borrowings Short-term borrowings Cash and cash equivalents Net debt 49 Road Show, Stockholm 27 September 2013

50 Diversified debt structure Debt maturity EUR million Loan portfolio Banks 93% Insurance companies 6% Others 1% Interest rate type (after hedges) Fixed interest 15% Floating interest 85% Loan portfolio total: EUR million Average interest rate after hedges: 2.36% 50 Road Show, Stockholm 27 September 2013

51 Summary

52 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 52 Road Show, Stockholm 27 September 2013

53 Appendix

54 35,775 shareholders on August 30, 2013 Major shareholders Shares, pcs Major shareholders on June 28,2013 % of share capital Change, pcs Change from June 28, % 1. Structor S.A. 17,140, % 1,710, % 2.Keskinäinen työeläkevakuutusyhtiö Varma 7,732, % % 3. Antti Herlinin omistamat rahastot 4,750, % 169, % 4. OP funds 4,212, % 1,902, % 5. Fondita funds 2,580, % 1,566, ,44% 6. Ilmarinen Mutual Pension Insurance Company 2,322, % 0 0,00 % 7. Nordea funds 1,998, % 107, % 8. Odin funds 1,776, % -23, % 9. Svenska litteratursällskapet i Finland r.f. 1,680, % 0 0,00 % 10. Danske Invest funds 1,594, % 311, % 11.The State Pension Fund 1,470, % 100, % 12. Brotherus Ilkka 1,304, % 0 0,00 % 13. Etera Mutual Pension Insurance Company 1,156, % 625, % 14. Tapiola Mutual Pension Insurance Company 1,009, % -971, % 15. Aktia funds 1,004, % 333, % Owners by category on August 30 by shares owned (June 28) Nominee registered and non-finnish holders 39% (35%) Households 21% (22%) General government 12% (13%) Financial and insurance corporations 11% (13%) Non-profit institutions 7% (7%) Non-financial and housing corporations 10% (9%) 35,775 owners (39,250) 16. Evli funds 730, % 204, % 17. Veritas Pension Insurance Company Ltd. 497, % 328, % 18. Foundation of Brita Maria Renlunds minne 412, % % 19. Säästöpankki funds 371, % 231, % 20. Sigrid Jusélius Foundation 361, % 0 0,00 % 20 largest, total 54,103, % All shares 125,596, ,00 % 54 Road Show, Stockholm 27 September 2013

55 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. 55 Road Show, Stockholm 27 September 2013

56 s Key Management Juhani Pitkäkoski (b. 1958) LL.M. President and CEO Segments and Business areas Corporate functions Matti Malmberg (b. 1960) M.Sc. (Eng.) Head of Building Services Northern Europe segment and Service efficiency Antti Heinola (b. 1973) M.Sc. (Econ.) CFO Karl-Walter Schuster (b. 1950) M.Sc. (Eng.) Head of Building Services Central Europe segment and Project excellence Sakari Toikkanen (b. 1967) Lic. Tech. Senior Vice President, Business Development Secretary to the Management Board 56 Road Show, Stockholm 27 September 2013

57 Strong competence in building systems project deliveries.

58 Project deliveries for various types of properties The Squaire, Germany. HVAC, electric, automation and sprinkler systems for an office and commercial building in the Frankfurt Airport area. Value approx. EUR 200 million. DC Tower, Vienna, Austria. The tallest building in Austria: 60 storeys, floor area 137,600 m². HVAC, cooling, fire prevention and automation systems. Value approx. EUR 25 million. Stockholm Pop Museum, Sweden Heating, cooling, electric and plumbing solutions. Oslo Opera House, Norway. The delivery included sound and audiovisual systems that are among the most advanced in Europe. 58 Road Show, Stockholm 27 September 2013

59 Arrowhead technology for demanding properties. Own products and R&D are among our strenghts. Special technological competence Clean rooms Cooling Extinguishing and sprinkler solutions Security and AV systems Energy efficiency R&D centre in Aachen, Germany Specialises in the research and development of advanced products related to ventilation, cooling and heating. Test stations to simulate functioning of building systems in demanding properties, such as surgeries, laboratories, TV studios and large exhibition halls. Own products and brands LuxCool (integration of building systems in one element) KRANTZ KOMPONENTEN (air distribution, cooling and heating, clean room systems) Aachen, Germany 59 Road Show, Stockholm 27 September 2013

60 The trend: Preventive service and maintenance based on actual needs

61 ServiFlex: Extensive range of services flexibly through a single agreement Service concept that cover the maintenance of all customer s building systems in one service agreement. Working with only one service provider makes purchasing services easy for the customer Focus on preventive service and maintenance Services tailored according to customer s individual needs. Quality-assured processes and standardised service descriptions always equally good service ServiFlex comprises of: ~80 services in 15 techical fields ~30 energy efficiency services ~40 services for industrial service and maintenance 61 Road Show, Stockholm 27 September 2013

62 Remote monitoring decreases unnecessary on-site service visits In Finland, our control room services celebrated their tenth anniversary in Over 1,000 properties in Finland monitored from it: retail premises, industrial plants, computer rooms, student dormitories and residential buildings, among others. Monitoring covers all HVAC, electricity and security systems. Most adjustments to the systems can be done from control room. Continuous monitoring decreases energy consumption and guarantees conditions in the building according to targets set. 62 Road Show, Stockholm 27 September 2013

63 Aiming for long-term service and maintenance agreements Varma Mutual Pension Insurance Company, Finland. Technical management and service and maintenance in approx. 80 business premises. In addition, the energy management of approx. 70 retail and business premises. Munich University of Technology, Germany. Facility management covering all building systems. Approx. 30 employees on site. Karolinska University Hospital, Sweden. Maintenance properties and building systems in the hospital area of 400,000 m². Securing the operation of reserve power and vacuum-operated systems. Control room operating 24/7, approx. 50 employees on site. Amalienborg and Rosenborg castles, Denmark. Service and maintenance of building systems in more than 40 properties of cultural and historical value in Copenhagen. 63 Road Show, Stockholm 27 September 2013

64 Aiming for long-term service and maintenance agreements Palladium Shopping Centre, Prague Approximately 200 shops and restaurants, 69,000 m². Technical facility management. The m.pire, Munich. Technical facility management and delivery of HVAC, electrical and fire safety systems. Golden Certificate by the German Council for Sustainable Development. Statoil, Norway. Service and maintenance for Statoil s office buildings in more than 10 locations, total area over 400,000 m². Over 50 separate service agreements with different partners were replaced with one ServiFlex agreement with. Jysk, Denmark. Service and maintenanve of cooling and ventilation systems in more than 90 Jysk stores in Denmark. ServiFlex agreement. Photo: Oyvind Hagen / Statoil 64 Road Show, Stockholm 27 September 2013

65 Energy efficiency is integrated in all of our products and services

66 Ever more extensive range of energy efficiency services Energy efficient building systems, their correct adjustment, service and maintenance as well as automation can achieve up to 10-20% savings in energy consumption. ServiFlex concept includes approx. 30 energy efficiency services of which we tailor a customised entity that best meets the needs of each customer in one agreement. Examples of our services Energy inspections and assessing the property s energy consumption Modernization of building systems and their service and maintenance Building systems optimization: adjustments, automation and remote monitoring Building certification ESCO energy-saving contracts, in which the service pays for itself through achieved cost-savings during the guarantee phase. Energy efficient technology LED lighting, solar and wind energy, seawater cooling, phase-change materials for façades, intelligent control of street lighting, among others. Envac automated vacuum waste collection system, which covers entire residential areas. Introduced in three areas in Finland, for example. 66 Road Show, Stockholm 27 September 2013

67 Energy efficiency brings cost savings to the customer Halsnæs municipality, Denmark. 120 buildings. The goal to achieve at least 28% energy savings by 2021 through modernization of building systems. Utilisation of solar panels and wind power. ESCO agreement, with which the client gains calculated savings of EUR 0.8 million per year. The new European Central Bank Headquarters, Frankfurt. Energy efficient building systems. Ground heat and heat recovery, utilisation of rainwater and natural ventilation. Under construction. Kesko grocery stores, Finland. The premises energy consumption is analysed in the control room and optimised by adjusting the automation systems. Corrective measures in 250 facilities. Energy savings of approximately one million euros in the first year. City of Kuopio, Finland. Modernization of heating systems by introducing 4 pellet-operated systems, generating over 50% savings in fuel costs. Annual energy savings of 230 MWh through the utilisation of ground heat. 5-year ESCO agreement. 67 Road Show, Stockholm 27 September 2013

68 Examples of orders received in April June 2013 Energy efficiency incorporated in projects and services University of Applied Sciences Düsseldorf, Germany. General contractor for the new building of Electrical Engineering and Mechanical Engineering departments. Several building systems, including clean room technology. Includes facility management. Value EUR 10 million. Raiffeisen Informatik GmbH, Austria. Several building systems for the new SPACE data centre in Vienna. Energy efficient refrigeration systems in server rooms, among others. Value EUR 8.5 million. Hornbach, Sweden. Service and maintenance of four construction and gardening market outlets, covering 88,000 m². Scheduled maintenance and standby as well as trouble-shooting services for all building systems. Contract time 2 years. Stockholm City Line, Sweden. Power, lighting and automation at the Odenplan station and stretch of railway track in Stockholm underground railway line. Value EUR 7.5 million. Town of Beckum, Germany, energy efficiency project covering over 50 buildings, including various schools and the town s indoor swimming pool. ESCO agreement for 12 years. Value EUR 4.8 million. Metsä Fibre, Äänekoski pulp mill, Finland. Industrial maintenance of the bio power plant owned by Äänevoima. Extension of partnership in which Botnia Mill Service has full responsibility of Metsä Fibre pulp mill maintenance in Äänekoski. 68 Road Show, Stockholm 27 September 2013