YIT CORPORATION
Investor Relations in YIT as part of Group strategy management
Petra ThorénVice President, Investor Relations
May 29, 2007
YIT CORPORATION
Contents
• YIT Group • IR development• IR in YIT
– Cases
YIT CORPORATION
YIT service portfolioBuilding Systems
ConstructionServices
All technical building systems
Housing and area development
Investments in industrial projects
Facility management andexpert services
Office premises andproject development
Maintenance of industrial facilities and processes
Industrial andNetwork Services
Technical maintenance and repair works
Civil engineeringNetworks, connections and
help desk services
Revenue 2006 MEUR 1,415Revenue 1-3/2007 MEUR 368Personnel 3/2007 11,569
Revenue 2006 MEUR 1,452Revenue 1-3/2007 MEUR 369Personnel 3/2007 5,734
Revenue 2006 MEUR 477Revenue 1-3/2007 MEUR 111Personnel 3/2007 4,787
YIT CORPORATION
3033.4
2780.1
3023.8
768.8 833.5
3284.4
1235.4
1623.1
545.6660.0
876.3 941.4
1167.71222.1
1763.0
2389.7
0
500
1,000
1,500
2,000
2,500
3,000
3,500
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Revenue 1994 - Q1/2007MEUR
Average annual growth 1994-2006: 17%
FAS 1994 - 2004
Strategic target level: growth 10% per year on average
IFRS 2004
IFRS 2005
IFRS 2006
IFRS Q1/06
IFRS Q1/07
YIT CORPORATION
135.1
157.4
227.7
258.8
53.761.2
89.799.7
16.5 19.0
42.254.0 54.5
62.3
89.898.6
0
50
100
150
200
250
300
Operating profit (EBIT) 1994 - Q1/2007
FAS 1994 - 2004
Average annual growth1994-2006: 24%
MEUR
Strategic target level: EBIT margin 9% of revenue
IFRS 2004
IFRS 2005
IFRS 2006
IFRS Q1/06
IFRS Q1/07
YIT CORPORATION
Dividend payout 1995-2006
The doubling amount of shares wich came into effect on March 24, 2006 (split) has been taken into account. Year 2004 and 2005 are IFRS numbers.
Dividend/share, EUR Dividend/earnings, %
YIT´s dividend policy: 40–60% of the annual profit after taxes and minority interests
0.02
0.23
0.35
0.30
0.220.19
0.150.11
0.090.07
0,65
0.55
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.701
99
5
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
43.0
60.4
73.2
28.8
47,8
43.239.5 39.7
37.7
27.4
43.7
0
10
20
30
40
50
60
70
80
19
96
19
98
20
00
20
02
20
04
20
06
200
5
199
7
199
9
200
1
200
3
YIT CORPORATION
Strong market position within YIT’s business segments and market areas
In Russia the biggest foreign player within Residential Construction
In the Nordic countries the biggest Building Systems services provider
In Finland the biggest services provider in all Business Segments
In the Baltic countries among top market leaders within Construction Services
YIT CORPORATION
Development of capital markets
In Finland restrictions on foreign ownership were abolished in 1993
Change from bank-centered model to a market-based model focus on shareholder value
Increased need of information in order to attract foreign capital
Regulation and governance Transparency
YIT CORPORATION
Corporate Governance
External Corporate Governance
Markets “Market for corporate control” Mergers & acquisitions, public offer
Debtors Owners Securities Market Act, Finnish Companies Act
InternalCorporate Governance
Board of directors Management Incentive systems and share ownership Organisation and reporting
YIT CORPORATION
Development of capital markets
More pressure for top management to put time on IR on top of business strategy
Role of IR and IR employees has changed essentially towards professionalism and standard job task within corporations
Role of IR still differs between companies
YIT CORPORATION
YIT´s IR policy
The aim of YIT´s Investor Relations is to communicate all the essential information of YIT to all the market parties, and to do so continuously, consistently and equitably, so that the value of YIT´s share reflects its fair value
Maintain openness and transparency
Honesty and credibility; we do what we say
Service-minded attitude in all Investor Relations
YIT CORPORATION
IR in YIT
Part of Group strategy management
Management priority and availability
Systematic approach to managing IR
YIT CORPORATION
Good internal co-operation
Communi-cations
Finance and accounting
InvestorRelations
Business segments
Corporate planning
CEO,EVP
InformationCapital markets
Link between company and capital markets
YIT CORPORATION
IR-team
CEO, Executive Vice President, Investor Relations
Communications Management
Business Management
Other Management
YIT CORPORATION
Big strategic IR-events
Acquisitions
New management and strategic target levels
Russia
IFRS
YIT CORPORATION
0
100
200
300
400
500
600
700
800
900
YIT 670 %
OMXHCAP 105 %
Case ABB-acquisitionValuation
ABB Building Systems
acquisition 4 July, 2003
YIT CORPORATION
Case ABB-acquisitionInvestment story and IR
• Pricing
• Fit to YIT strategy
• YIT valuation and positioning closer to that of “service company”
• Well prepared and communicated to the market• Day of release • Follow-up
• 1.integration 2.profitability 3. growth
• Credibility
YIT CORPORATION
1) Includes a loss provision of EUR 4 million due to an electrification project on two ships for the Royal Danish Navy (non-recurring item) in Q3/2004.
2) Building Systems released provisions for certain ended contractual obligations in the Q4/2006 period. This had a positive impact of EUR 7.2 million on operating profit.
Building SystemsStill following ABB acquisition
Operating profit, MEUR Operating profit margin,%
1.4
2.22.7
3.8
2.62.6
4.14.1
5.2
4.13.6
5.7
6.3
8.6
6.2
5.1
0
2
4
6
8
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
813
21
12
35
19
87.6
56.8
34.1
7 9
14 1420
21
5
0
10
20
30
40
50
60
70
80
90
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2004 2005 2006 1-12 1-12 1-12
2004 2005 20061-12 1-12 1-12
2007 2007
2)
2)
1)
1)
YIT CORPORATION
YIT’s strategic target levels
• Average annual growth in revenue 10%
• Operating profit margin (EBIT) 9%
• Return on investment 22%
• Equity ratio 35%
• Dividend payout 40–60% of net profit for the year after taxes and minority interests
YIT CORPORATION
Potential expansion 2007-
Current business locations
Project development in St. Petersburg• For EPI Russia fund an office building and a logistics centre • For Atria a production plant and a logistics centre
Entering new big and satellite cities (apartments)• Kazan 5/2006 (over 1,000) • Jekaterinburg 10/2006 (ab. 300)• Moscow City 10/2006 (ab. 150)• Jaroslavl 10/2006 (ab. 160)
Strengthening plot reserve in existing cities (apartments)• Novo-Orlovskij 10/2006, starting from 2008 (over 15,500)
Moscow (10.1)
Moscow Oblast (6.5)
Tver (0.4)
Yaroslavl (0.6)
Ivanovo (0.4)
Vladimir (0.3)
Ryazan (0.5)Kaluga (0.3)
Tula (0.5)
Vladimir Oblast (1.5)
Ryazan Oblast (1.1)
Tula Oblast (1.6)
Kaluga Oblast (1.0)
Tver Oblast (1.4)
Yaroslavl Oblast (1.3)
Ivanovo Oblast (1.1)
Average annual growth target in Russia 50% 2006-2009
YIT CORPORATION
Total Dec/2005 MEUR 899
Total Dec/2006 MEUR 1,207
Dec/2005 Dec/2006
Invested capital= balance sheet total - non interest-bearing liabilities
YIT Group invested capital
Other YIT Group 89%MEUR 799
Russia 11%MEUR 100
Russia 23%MEUR 279
Other YIT Group 77%MEUR 928
Russia 26%MEUR 314
Other YIT Group 74%MEUR 898
Total Mar/2007 MEUR 1,212
Mar/2007
YIT CORPORATION
Business insightCapital Markets Days
• 2003 St Petersburg
• 2004 Oslo, Building Systems Day• ABB acquisition and new management
• 2005 Lithuania• New management and revised strategic target levels
• 2006 Moscow• Russia 50% growth target
YIT CORPORATION
IFRS
• Big accounting changes• Balance sheet, gearing, profit margin
• Pre-IFRS date communications to the market about major changes
• Internal working group 6 months (accounting, IR, communications)
• Stock exchange bullet, analyst and investor event
No surprises!
YIT CORPORATION
Principal shareholders April 30, 2007
Total number of shareholders 13,474.Share capital EUR 146,688,843.82
Owners Shares %
1 Suomi Mutual Life Assurance Company 8,571,180 6.762 Varma Mutual Pension Ins. Company 6,600,208 5.203 Sampo Life Insurance Company Ltd 6,400,000 5.054 Ilmarinen Mutual Pension Ins. Company 3,632,923 2.865 Tapiola Group 2,190,680 1.736 Etera Mutual Pension Ins. Company 1,874,400 1.487 Odin Norden 1,449,766 1.148 Brotherus Ilkka 1,224,740 0.979 State Pension Fund 1,150,000 0.9110 OP-Delta Equity Fund 876,470 0.69
Others 32,149,788 25.33
Nominee registered shares total 60,732,105 47.88
Total 126,852,260 100.00
YIT CORPORATION
0
5
10
15
20
25
30
35
40
45
50
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3
%
2002 2003 2004 2005 2006 2007
4/2007:50.4%
International ownership
YIT CORPORATION
Trading and volatility
146
97
75
50
34
16
0
20
40
60
80
100
120
140
20042001 2002 2003 2005
Trading as percentage of share capital%
Volatility sep 2003 28 % (3,5 years)Volatility jan 2006 24 % (3,5 years)
2006
YIT CORPORATION
YIT Corporation was formed on September 2, 1987. YIT’s share has been quoted on Helsinki Exchanges since September 4, 1995.
5191,4211,4901,716
3,3683,5103,3223,0932,969
4,928
13,47414,364
9,368
501742772708719722
3,271
7,456
01,0002,0003,0004,0005,0006,0007,0008,0009,000
10,00011,00012,00013,00014,00015,00016,000
Number of shareholders
YIT CORPORATION
More information on our web site
www.yitgroup.com
Thank you for your attention
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