Road Show Paris March 7, Antti Heinola, CFO Milena Hæggström, Head of Investor Relations

Transcription

1 Road Show Paris March 7, 2014 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 in brief Main activities o o Building systems Industrial services o Design, installation and maintenance o Energy efficiency incorporated in all services and solutions Revenue by country Sweden 26% Finland 21% Norway 20% Germany 18% 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 2,544 EUR million EBITDA 70.9 EUR million 2.8% of revenue EBIT 49.4 EUR million 1.9% of revenue Personnel 17,673 employees at the end of December 2013 Based on the Group company location 2013 figures: 1-6/2013 carve-out /2013 actual. 4

5 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 5

6 Up in the value chain by changing the business mix Group business mix % of revenue 1-12/2013 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 2013 Targeting to increase the share of long-term contracts Projects Tenderbased contracting Project business Targeting to increase the share of Design and Build projects Design & Build 6

7 Offering that covers all building technologies Service and maintenance related business accounted for 55% of revenues in 2013 Building systems Industrial services in Finland and Sweden Service and maintenance Project deliveries Industrial service and maintenance Project deliveries to industry Description of main activities Services can be divided: 1. Fixed maintenance contracts 2. AD-HOC services Service contracts are typically: year contracts based on fixed pricing 2. 1 year contracts based on official price lists of Design and installation of Building systems, e.g.: Heating Plumbing Cooling Electrification Automation Safety systems Networks technology systems All other supply systems Tender-based as well as more comprehensive Design & Build projects Services ranging from single service measures to comprehensive maintenance of production processes Field services include Mechanical maintenance Electrification and automation Power plant maintenance Project deliveries including design, procurement, prefabrication, installation and project management 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 Share of revenues 2013 ~ 49% ~ 41% ~ 6% ~ 4% 7

8 Goal is to increase the share of service and maintenance as well as focus on more profitable Design & Build Service and maintenance Fixed maintenance contracts 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 8

9 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 9

10 Value chain and customers Low customer concentration supports stability of the business Customer concentration 2013 (% of revenue) Customers 1-10: 10% Others: 90% 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 10

11 Market overview

12 Megatrends support the demand for our services Increasing amount of technology in 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.

13 is one of the leading service companies in building systems and industrial services in Europe The main operators in the European building systems and industrial services market Revenue, EUR million s market positions in building systems Text Text GDF Suez Energy Services, Europe* 14,693 Text Text Vinci Energies, Europe Bilfinger SE** Royal Imtech 8,476 5,954 5,433 Text Text SPIE(incl. Hochtief) 4,917 2,544 5 Bravida 1,317 3 Strabag Property and Facility Services 960 Coor 814 Alpiq Intec 753 s revenue in Others in Source: s calculations based on the companies published figures and Euroconstruct 12/ *) Includes following segments: Energy Services, Installations & Engineering **) Includes following segments: Industrial and Building & Facility

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 % Market size (EUR billion) 2. Lemminkäinen* % 3. ARE % 4. L&T** % 5. Imtech % Norway Company M Market share % 2. Imtech % % 4. Coor % 5. Midroc Europe % Denmark Company M Market share 1. Kemp & Lauritzen % Total size of the market : EUR 70 billion Russia (St. Petersburg, Moscow) 3.6 (Baltic countries) 2. Gunnar Karlsen % 2. Bravida % 3. Bravida % 4. Oras % 5. Imtech % Germany Company M Market share % 4. Lindpro % 5. Wicotec % Austria Company M Market share (Poland, Czech Republic, Romania) 1. Imtech 1, % 1. Ortner % 2. Bilfinger FS** 1, % 2. Alpine Energie % 3. Strabag PFS*** % % 4. Hochtief **** % % 4. Cofely % 5. Stolz % Building systems Industrial services 14 *) Technical Building Services **) Facility Services ***) Property and Facility Services ****) SPIE s

15 Short-term prospects by country for 2014 Service and maintenance Project deliveries Sweden Finland Norway Germany Austria Denmark Russia Source: Euroconstruct, December 2013, management estimate 15

16 Market outlook for s business in 2014 Service and maintenance Project business o Growth opportunities favorable in all of s operational areas. o o Decision-making on new investments is still slow, but positive signs can be seen. New investments in building systems expected to increase slightly. Energy efficiency o o The demand for energy efficiency services is expected to remain stable. Increasing energy costs and tightening legislation support the demand for energyefficient solutions. 16

17 Strategy and key strengths

18 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

19 Strategic milestones for Key target: EBITDA over 6% of the revenue by the end of % Reach Create Most efficient service company Fix o Demerger and restructuring Build Lean organization Developing internal processes and harmonization Winning team Developing business mix (FM and D&B) Back on the growth path Strong own concepts and capabilities in both projects and services Strong company image 19

20 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. 20

21 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 2013: Central Europe 38%, Northern Europe 61% 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 21

22 What is Service Efficiency? Key elements Common processes and tools in use in all operating countries: work management, planning & scheduling, mobile solutions Efficient metrics in place: personnel-level follow-up in throughput times, work duration and quality, additional sales results, customer satisfaction Personnel rewarded based on their individual / team level performance in selected performance indicators Work done at the first customer visit within target time and costs 22

23 Acquisitions have contributed to revenue growth through the cycle Revenue EUR Revenue, million EUR million 1,680 1,797 1,892 2,140 2,396 2,125 2,353 2,876 2,803 2, , Calor AB ABB Building Systems MCE AG caverion GmbH Acquisition period Integration and development Acquisition period Integration and development figures based on official segment reporting, i.e. sum of building systems and industrial services related revenue figures of YIT, including also internal sales figures are external revenue figures based on s carve-out segment reporting figures: 1-6/2013 carve-out /2013 actual. 23

24 M&A criteria o o o o o o Good strategic fit Geographical coverage Business portfolio Customer sectors Complementary skills & resources Business culture Value creation potential Profitability turn-around Strong local market position 24

25 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

26 Aiming to increase long-term service agreements Group revenue in service and maintenance decreased by 6% in October December 2013 compared to the previous year. Service and maintenance revenue up by 5% in Central Europe in 10-12/2013, in line with our strategy. monitoring of buildings Increasing the share of service and maintenance, long-term service agreements and life cycle projects. Developing service concepts (ServiFlex) and remote monitoring of buildings. o Northern Europe Service and maintenance revenue, EUR million % of total segment revenue 1-12/12: 1,323 (63%) 1-12/13: 1,174 (61%) % 64% 63% 63% 61% 62% 61% 59% Central Europe 1-12/12: 220 (31%) 1-12/13: 236 (38%) % 30% 32% 33% 35% 38% 39% 40% 26

27 Improving the business mix in projects Group revenue in projects decreased in October December by 10% from previous year. The revenue decreased mainly in Central Europe due to postponed project kick offs in Germany. Northern Europe Project business revenue, EUR million % of total segment revenue 1 12/12: 767 (37%) 1 12/13: 749 (39%) % 36% 37% 37% 38% 39% 41% 6% 39% In Northern Europe own selectiveness in projects. Focus areas: Total technical solutions and Design Total & technical Build projects solutions and Design & Build projects Strengthening technical Strengthening technical expertise and R&D expertise and R&D Improving profitability Improving of project profitability business of project business Central Central Europe Europe 1 12/12: 494 (69%) 1 12/13: 385 (62%) % 70% 68% 67% 65% 62% 61% 60% 27

28 Financial development

29 Key figures EUR million 10-12/ /12 1) Change 1-12/ /12 1) Change Revenue % 2, , % EBITDA % % EBITDA margin, % Operating profit % % Operating profit margin, % Net profit for the period % % Working capital % % Operating cash flow after investments % % Interest-bearing net debt, end of period 2) Gearing, end of period, % 2) Earnings per share, basic, EUR 3) % % Personnel, average for the period 17,753 18,767-5% 18,071 19,132-6% 1) The effects of the revised IAS 19 standard on the consolidated income statement for 1-12/2012 have been presented in the financial tables to the Financial Statements Bulletin. 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, Interest-bearing net debt as per June 30, 2013 amounted to EUR million. 3) 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 the new loan agreement would have been drawn down at the beginning of the financial year, the net financing expenses in January December would have amounted to approximately EUR 8.4 million. 29

30 EBITDA continued to increase EBITDA, Group 1 12/12: 85.3 (3.0%) 1 12/13: 70.9 (2.8%) % 3.6% 4.0% % 3.7% % 1.3% 1.5% EBITDA, EUR million EBITDA margin, % EBITDA, Northern Europe 1 12/12: 59.5 (2.8%) 1 12/13: 52.3 (2.7%) % 3.6% 4.3% % 3.6% % 1.3% 2.0% 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 7-9/ /13 Significant increase in Northern Europe due to own efficiency improvement actions October December: Finland: good performance Sweden and Denmark: profitability developing according to plan. Norway: weak profitability in project business. Germany and Austria: EBITDA decreased due to lower volumes. EBITDA, Central Europe 1 12/12: 33.2 (4.7%) 1 12/13: 23.6 (3.8%) % 4.4% 3.8% 6.2% 3.2% 2.9% 4.3% 4.7% 30

31 Right-sizing of the organization Announced measures to decrease personnel finalised in Q3/2013 Decrease in number of employees from 9/2011 to 12/2013: Number of employees 16,273 15,900 15,640 15,736 15,489 15,159 14,870 14,751 14,469 14,259 Northern Europe: ~2,000 employees 3,569 3,506 3,505 3,465 3,441 3,380 3,311 3,291 3,336 3,328 Central Europe: ~240 employees 9/ /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 Personnel by country at the end of December 2013 Finland 27% Sweden 23% Personnel expenses EUR million 1,127 o Personnel expenses decreased by almost EUR 65 million from 1 12/2012 to 1 12/2013 Norway 20% Germany 14% Austria 4% Denmark 6% Other countries 7% 1, / /

32 Personnel expenses account most of the cost base Revenue to EBITDA waterfall in 2013 EUR million (% of cost base before EBITDA) Personnel expenses accounted for 43% of the total cost base in 2013 Right-sizing the organisation key for margin improvement 2, ,063 (43%) Total cost base EUR 2,476 million 432 (17%) 675 (27%) Revenue Other op. income Personnel expenses External services Materials & supplies Other items* (net) EBITDA *) Includes: Other operating expenses, change in inventories of finished goods and work in progress and production for own use 32

33 Group revenue EUR 688 million in October December Group revenue EUR million Northern Europe EUR million 1 12/12: EUR 2, /13: 2, /12: 2, /13: 1, /12: X,XXX /12 4-6/12 7-9/ /12 1-3/13 4-6/13 7-9/ /13 Revenue in H2/2013 was slightly lower than estimated in June 2013 Increased selectiveness in projects Lower than expected service and maintenance revenue Postponements in German project start-ups Changes in foreign exchange rates decreased the revenue in October December by approx. EUR 21 million in Northern Europe compared to the previous year. In Central Europe, revenue decrease was influenced by weak order backlog in late Central Europe EUR million 1 12/12: /13:

34 Revenue by country Revenue development EUR million Distribution of revenue 1 12/ Sweden Finland Norway Germany Austria Denmark Other countries 1 12/ / /13 Sweden 26% Finland 21% Norway 20% Germany 18% Austria 6% Denmark 5% Other countries 3% Revenue by country based on Group company location. 34

35 Order backlog at the end of December increased from the previous year Order backlog EUR million 1,470 1,429 1,340 1,199 1,315 1,274 1,296 1,241 Group order backlog increased by 6% since December 2012, taking foreign exchange rates into account. Increase in Central Europe by 25% since December 2012: Northern Europe Central Europe Improved order backlog in Germany in 2013 expected to contribute favorably to the revenue development during the first half of /12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 Decrease in Northern Europe was partly due to s own selectiveness in project business. 35

36 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 36

37 Cash flow strengthened in October December Operating cash flow after investments EUR million Historically seasonality within a year Rolling 12 months Operating cash flow for October December was seasonally very strong, supported by release in working capital Cash flow was burdened by demerger-related IT investments of EUR 21 million in January December Limited investments (excl. M&A) /12 4 6/12 7 9/ /12 1 3/13 4 6/13 7 9/ /13 37

38 Working capital decreased significally Focus on more efficient use of capital Working capital EUR million 145 5% 94 3% 46 2% Working capital Working capital to sales, % Working capital EUR 46.0 million at the end of December (12/12: EUR 94.0) Target: Negative working capital by the end of 2016 Operative working capital EUR million % 12% % 428 Management focus on business related receivables and liabilities POC receivables (internal actions, more efficient invoicing) Trade receivables (payment terms) Advances received to be negotiated Trade and POC receivables + inventories Trade and POC liabilities + advances received Operative working capital to sales, % 38

39 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) excl. demerger related IT investments Capital expenditures (EUR million)* Gross capital expenditure totalled EUR 27.8 million in 2013, representing 1.1 percent of revenue. % of sales 0.21% 0.24% 0.26% IT investments in totalled EUR 22.5 million (1 12/2012: EUR 1.3) and were primarily demerger-related IT investments (EUR 21.3 million in 2013) % Other investments amounted to EUR 5.3 million (1 12/2012: EUR 5.3 million) *) Capital expenditures consist of investments in tangible (property, plant and equipment) and intangible assets, excluding acquisitions and demerger related IT investments. 39

40 Group s non-current assets mainly comprise of goodwill formed in connection to the past acquisitions The amount of goodwill was EUR million on 31 December 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) 420 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 (80%) 84 Non-current assets 40

41 Financial position

42 Balanced debt structure Debt maturity EUR million External financing EUR 198 million amortizing loans EUR 22 million bridge loan due June 2014 EUR 60 million revolving credit facility due June 2016 (fully undrawn) Loan portfolio Banks 94% Interest rate type (after hedges) o Loan portfolio total: EUR million Insurance companies 5% Others 1% Fixed interest 38% Floating interest 62% o Average interest rate after hedges: 2.31% 42

43 Financing position enables the implementation of the Group s strategy Sarake1 Net debt decreased to EUR 87 million due to decreased short-term loans and increased cash and Sarak cash equivalents e1 6/13 9/13 12/13 Development of net debt EUR million /13 9/13 12/13 Net debt at the end of 2013 EUR million Liquidity reserve at the end of 2013 EUR million 149 Long-term borrowings 71 Short-term borrowings 133 Cash and cash equivalents 87 Net debt Solid liquidity reserve of EUR 212 million to meet the debt repayments and potential funding need of business operations Unused credit facilities Cash and cash equivalents 43

44 Guidance and conclusions

45 Guidance for 2014 REVENUE GUIDANCE EBITDA GUIDANCE estimates that the Group s revenue for 2014 with comparable exchange rates will remain at the previous year's level. estimates that EBITDA for 2014 excluding non-recurring items will grow clearly to EUR million. In 2014 the EBITDA increase will be executed by Improving the operational efficiency Growing the service and maintenance business Increasing the project business in Germany The potential changes in general macroeconomic environment nonetheless may have an effect on s business and customers. 45

46 Dividend proposal The Board of Directors proposes a dividend of EUR 0.22 per share 78% of the Group's net profit for the period Effective dividend yield of 2.5% Dividend policy: Dividend payout at least 50 per cent of the net profit for the period 46

47 Financial targets for the strategy period Amended on October 31, Revenue 100 Annual revenue growth 50 more than 10 per cent on average 0 EBIT DA* EBIT DA-% Profitability EBITDA over 6 per cent of revenue Sarja 1 Working capital Negative working capital Sarja Revenue (EUR million) EBITDA EBITDA (EUR million) EBITDA margin (%) Working capital (EUR million) 2,876 2, , % 3.0% 2.8%

48 New reporting segment structure The segments based on geographical areas (Building Services Northern Europe and Building Services Central Europe) are replaced by one single operative segment as of January 1, 2014: Includes also the nonsegment related items within the Group The new structure better matches the company s new management structure and development of business across all countries. The previous segment structure was based on different development phases in Northern and Central Europe. Strategic targets remain unchanged. First report under the new structure: Interim Report January March 2014 (published on April 24, 2014) 48

49 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 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 49

50 Appendix

51 33,158 shareholders on February 28, 2014 Largest shareholders Major shareholders on June 28,2013 Shares, pcs % of all shares Change after Jan. 31, pcs Change, % 1. Structor S.A. 17,140, Antti Herlin, incl. direct holdings 8,280, ,030, Varma Mutual Pension Insurance Company 6,930, , OP funds 5,021, , Ilmarinen Mutual Pension Insurance Company 4,056, Fondita funds 3,946, , Nordea funds 3,714, , Aktia funds 1,743, Odin funds 1,736, Danske Invest funds 1,522, , The State Pension Fund 1,470, Tapiola Mutual Pension Insurance Company 1,344, Brotherus Ilkka 1,304, Evli funds 992, Etera Mutual Pension Insurance Company 757, Säästöpankki funds 506, Föreningen Konstsamfundet rf 423, Foundation of Brita Maria Renlunds minne 412, Sigrid Jusélius Foundation 361, The Central Church Fund 323, largest, total 61,986, All shares 125,596, Owners by category by shares owned Nominee registered and non-finnish holders 35% (Jan. 31: 36%) Households 20% (20%) General government 13% (13%) Financial and insurance corporations 15% (14%) Non-profit institutions 6% (6%) Non-financial corporations and housing corporations 12% (10%) 33,158 owners (33,233) 51

52 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. 52

53 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 areas Country managers Karl-Walter Schuster Project excellence business area Germany Jarno Hacklin Finland, Russia, Baltic Countries Erkki Huusko Industrial Services Matti Malmberg Service efficiency business area Ulf Kareliusson Sweden Knut Gaaserud Norway Peter Rafn Denmark Manfred Simmet Austria 53

54 Fredrik Strand to be appointed as s new CEO Will take up the new position during the second quarter Born Swedish citizen. Currently works as President and CEO at Sodexo, where he has been responsible for the company s Nordic businesses since In he worked at Ericsson in several leadership positions: led e.g. Ericsson s global service delivery operations and was responsible for the company s service business in Latin America and the United States. Has held a number of management positions related to marketing, sales and supply of services within mobile systems. Education: military schools 54

55 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 and cost overruns in projects. Restructuring actions accelerated. 2013: Increased selectiveness in projects, lower than expected service and maintenance revenue, postponements in projects in Germany. EBITDA improved according to plan, weak profitability in Norway. Revenue development (EUR million) 678 Building Systems BS Central Europe BS Northern Europe , , , , EBIT development (EUR million) 4.0% 27 Building Systems BS Central Europe BS Northern Europe 0.0% % % 2,396 2,140 Note: 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; 2013 figures: 1-6/2013 carveout /2013 actual EBIT figures exclude EBIT from other operations of EUR -6.1m, -7.1m, -7.4m and -5.8m respectively; In order to present the development of Group, revenue include YIT Group internal sales % EBIT-% 5.6% % % 2, % 2, % 2, % 2, % 2, %

56 EBITDA development (EUR million) Building Systems BS Central Europe BS Northern Europe EBITDA-% % 7.4% % % 6.2% 5.2% 4.6% % 3.3% 3.0% 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; 2013 figures: 1-6/2013 carve-out /2013 actual EBITDA figures exclude EBITDA from other operations of EUR -6.1m, -7.1m, -7.4m and -5.0m respectively; In order to present the development of Group, revenue, of which the EBITDA-% is being calculated, includes YIT Group internal sales 56

57 EBITDA development in Building Services Northern Europe 66.8 EBITDA, EURm EBITDA margin, % % % 7.4% % 6.8% 7.5% % 8.0% % 6.5% 6.5% 6.5% % % 5.8% 5.3% 4.4% 4.4% 4.6% 4.5% % 3.6% 4.3% % % 3.6% 0.1% 1.3% 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 Q3/13 Q4/ 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 nonresidential 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%. EBITDA in Q4/13 was affected (decreased) by EUR 1.0m due to demerger related costs. EBITDA margin in Q4/13, 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 EUR 52.3 million (2.7%) Profitability developing according to plan Efficiency programme progressing well in Sweden Weak profitability in project business in Norway Low capacity utility rate in service and maintenance

58 EBITDA development in Building Services Central Europe EBITDA, EURm EBITDA margin, % % 2.1% % 3.6% 3.5% % % 3.9% 3.1% 2.6% % 7.0% % % % 4.4% % 6.2% % 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 Q2/13 Q3/13 Q4/ 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%) 2013 EUR 23.6 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 Lower volume of German operations due to the weaker order backlog in the end of 2012 EBITDA decreased due to lower volumes in Germany and Austria 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. 58

59 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. Energy efficient technology LED lighting, solar and wind energy, seawater cooling, phasechange 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. 59

60 All About Service: ServiFlex ServiFlex is a scalable, multidiscipline agreement that helps customers bundle the required building services into one agreement. offers more than 100 different building services in more than 20 technical disciplines. Advantages for the customer A single point of contact for all technical issues Prevention of damage and operational disturbances. Difficulties with technical installations are noticed before severe damage occurs. Better sense of well-being and increased productivity with an optimized indoor climate Help to predict operational costs Documentation that meets the requirements of authorities Prolonged operations and increased value of the building s perspective: ServiFlex is easy to sell and manage Co-operation between disciplines: combines all areas of expertise Pre-designed service descriptions and work instructions Ready-made tender calculation tools All items included in one contract Existing contract customers Increasing the fixed part by including new services into fixed contract Significant potential for additional repair sales 60

61 Control room services Added value creation 24/7 alarm monitoring and processing HVAC process inspections Energy management Additional value for Creates bond between and customer Reduced number of service visits Key in energy efficiency services - providing data for follow-up, analyses, improvement proposals and adjustments Additional work generation Additional value for customers Elimination of unnecessary energy consumption - savings in energy costs Property value retained better: continuous condition review and preventive maintenance Professional 24/7 property monitoring & support 61

62 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. Products and brands LuxCool (integration of building systems in one element) KRANTZ KOMPONENTEN (air distribution, cooling and heating, clean room systems) Aachen, Germany 62

63 Examples of orders received in October December 2013 Jena University Hospital, Germany. Total delivery of building systems as a Design & Build project, including HVAC systems and sprinklers, among others. Contract value approx. EUR 30 million. Forum Hanau shopping centre, Germany. Delivery of HVAC, sprinkler and electrics systems. Contract value: EUR 17 million. Söderhamn municipality, Sweden. Energy service project (EPC model). Over 400,000 m 2 of rental housing, schools, preschools and other municipal facilities. Bank of Finland, facilities in Helsinki and Vantaa, Finland. Service and maintenance of the plumbing, ventilation, electrical and building automation systems. Development of the properties energy efficiency. Extension of previous cooperation, effective as of April 1, Kemijoki Oy, Finland. Outsourcing of operation and maintenance in 16 hydropower plants. Approximately 80 employees transferring to as of March 1, K29 business centre, Vilnius, Lithuania. Design and installation of HVAC and firefighting systems and building automation. Contract value: EUR 4 million. SINTEF Energy Laboratory, Trondheim, Norway. Total delivery of building systems (design and installation). Value: EUR 2.75 million. 63

64 New non-residential investments forecasted to increase slightly in New non-residential construction volumes in Northern Europe, index Finland Sweden Norway Denmark No data for Russia is available. Source: Euroconstruct, December 2013 New non-residential construction volumes in Central Europe, index Austria Czech Republic Germany Poland Source: Euroconstruct, December

65 Growing demand for service and maintenance estimated in Non-residential service and renovation volumes in Northern Europe, index Non-residential service and renovation volumes in Central Europe, index Finland Sweden Norway Denmark No data for Russia is available. Source: Euroconstruct, December 2013 Austria Czech Republic Germany Poland Source: Euroconstruct, December

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