1. YIT’s Interim Report January-June/2003 August 1, 2003 Group CEO
Reino Hanhinen
August 1, |
YIT CORPORATION

2. YIT’s Interim Report January-June/2003 YIT Group Financials
Strategy and financial targets
YIT share
Future outlook
Events after the end of the review period: Building Systems acquisition
Appendices
August 1, |
YIT CORPORATION

3. YIT’s Interim Report January-June/2003 YIT Group August 1, 2003 |
YIT CORPORATION

4. Major events
Net sales growth of 11% amounting to EUR million (1-6/2002: EUR million).
Backlog of orders at all time high level of EUR 1,091.8 million (EUR million). Order backlog growth was 24%.
Return on investment at good 20.4% level (18.1%).
Operating profit amounting to EUR 57.9 million (EUR 39.2 million). The effect of non-recurring items was about EUR 24.3 million.
The share of net sales accounted for by service and maintenance operations was 22% (20%).
International operations order backlog growth of 30% rising to EUR million (EUR million).
After the end of the review period, YIT acquired from ABB by an agreement signed on July 4, 2003, ABB’s Building Systems operations, which offer technical building systems and property and industrial services in Finland, Sweden, Norway, Denmark, the Baltic states and Russia. The Finnish Competition Authorities approved the acquisition on behalf of Finland on July 18, 2003, and the Swedish Competition Authorities on behalf of Sweden on July 23, The transaction is estimated to be completed by September 1, 2003.
August 1, |
YIT CORPORATION

5. YIT Group structure as of June 2003
YIT Corporation
Reino Hanhinen
Corporate Management, Corporate Services, Corporate Communications
YIT Construction Ltd
Ilpo Jalasjoki
YIT Installation Ltd
Juhani Pitkäkoski
YIT Primatel Ltd
Hannu Leinonen
Building Systems
Capital Investment Services for Industry
Industrial Maintenance
Scandinavia
Building Construction
Property Services
Infra Services
International Operations
Tele Networks
Mobile Networks
Property Networks
Net sales 1-6/2003 MEUR 624
Personnel 6/ ,212
Net sales 1-6/2003 MEUR 260
Personnel 6/ ,088
Net sales 1-6/2003 MEUR 56
Personnel 6/ ,502
August 1, |
YIT CORPORATION

6. YIT Construction Net sales by division Jan-June/2003 (year 2002)
Building Construction
63% (56%)
- Residential construction
54% (46%)
International Operations
14% (15%)
Infraservices
9% (11%)
- Other building construction
9% (10%)
Property Services
14% (18%)
Net sales MEUR (1,111.8)
August 1, |
YIT CORPORATION

7. Net sales by business sectors
YIT Installation
Net sales by business sectors
Jan-June/2003 (year 2002)
Investment services for building systems
18% (18%)
Investment services for industry
21% (19%)
Maintenance services for building systems
28% (27%)
Maintenance services for industry
33% (36%)
Net sales MEUR (581.7)
August 1, |
YIT CORPORATION

8. YIT Primatel Distribution of net sales Jan-June/2003 (June-Dec/2002)
International operations 2% (1%)
Maintenance, repairs and subscriber deliveries
57% (59%)
Project operations
41% (40%)
Net sales MEUR 56.4 (95.8)
August 1, |
YIT CORPORATION

9. YIT’s Interim Report January-June/2003 II. Financials August 1, 2003 |
YIT CORPORATION

10. Consolidated income statement
MEUR
Jan-June/
2003
2002
Change
Jan-Dec/
Net sales
932.1
840.5
11%
1,763.0
share of international activities
181.6
185.7
-2%
386.9
Operating income and expenses
-860.3
-788.0 9%
-1,643.5
Depreciation and write-downs
-8.3
-8.0 4%
-16.9
Amortization of goodwill
-5.6
-5.3 6%
-12.8
Operating profit
57.9
39.2
48%
89.8
% of net sales
6.2%
4.7% ..
5.1%
Financial income and expenses, net
-6.4
-5.8
10%
-12.2
Profit before extraordinary items
51.5
33.4
54%
77.6
Extraordinary income
Extraordinary expenses
Profit before taxes
Profit for the report period
35.5
11.9*)
198%
43.0*)
*) The result was burdened by residual tax of MEUR 10.9.
August 1, |
YIT CORPORATION

11. Consolidated balance sheet
MEUR
June/2003
June/2002
Change
Dec/2002
ASSETS
Intangible assets
9.2
7.7
19%
9.7
Goodwill on consolidation
69.3
78.4
-12%
71.8
Tangible assets
57.1
74.4
-23%
61.9
Investments
Own shares
7.2 0%
Other investments
7.4
6.4
16%
7.1
Inventories
396.5
280.2
42%
338.1
Receivables
599.0
550.8 9%
503.5
Marketable securities
10.7
1.9
463%
Cash and cash equivalents
19.9
17.5
14%
28.2
Total assets
1,176.3
1,024.5
15%
1,038.2
August 1, |
YIT CORPORATION

12. Consolidated balance sheet
MEUR
June/2003
June/2002
Change
Dec/2002
SHAREHOLDERS´ EQUITY AND LIABILITIES
Share capital
59.6
59.3 1%
59.5
Other shareholders’ equity
323.3
281.5
15%
313.7
Minority interests
2.2
2.6
-15%
2.9
Provisions for liabilities and charges
8.8
11.4
-23%
14.2
Non-current liabilities
114.6
139.6
-18%
138.2
Current liabilities
667.8
530.1
26%
509.7
Total shareholders’ equity and liabilities
1,176.3
1,024.5
1,038.2
August 1, |
YIT CORPORATION

13. Key figures Return on investment 20.4 %*) 18.1%**) .. 17.8%
June/2003
June/2002
Change
Dec/2002
Return on investment
20.4 %*)
18.1%**) ..
17.8%
Equity ratio
34.8%
35.5%
38.2%
Net interest-bearing debt, MEUR
139.5
156.3
-11%
104,1
Gearing ratio
36.9%
46.5%
28.2%
Earnings/share, EUR
1.22
0.41
198%
1.49
Earnings/share, EUR, excl. residual tax
0.79
1.86
Equity/share, EUR
12.85
11.48
12%
12.54
Average share price, EUR
16.02
16.39
-2%
16.40
Share price at end of period, EUR
17.00
18.50
-8%
16.79
Gross capital expenditures, MEUR
14.2
52.3
-73%
60.6
Order backlog, MEUR
1,091.8
879.9
24%
938.8
Average personnel
12,606
10,989
15%
11,990
*) July 1, 2002 – June 30, **) July 1, 2001 – June 30, 2002
August 1, |
YIT CORPORATION

14. Net sales by division Building Construction 395.2 318.8 24% 695.8
MEUR
Jan-June/
2003
2002
Change
July/2002-
June/2003
Jan-Dec/
Building Construction
395.2
318.8
24%
695.8
619.4
Property Services
88.5
106.9
-17%
188.4
206.8
Infraservices
52.4
48.7 8%
122.5
118.8
International Operations
88.7
75.7
17%
181.4
168.4
Other items
(YIT Construction)
-0.4
-0.9
-56%
-1.1
-1.6
YIT CONSTRUCTION
624.4
549.2
14%
1,187.0
1,111.8
YIT INSTALLATION
260.3
295.6
-12%
546.4
581.7
YIT PRIMATEL *)
56.4
12.5
351%
139.7
95.8
Other items (Group)
-9.0
-16.8
-46%
-18.5
-26.3
YIT GROUP
932.1
840.5
11%
1,854.6
1,763.0
*) On June 1, 2002, into the YIT Group.
August 1, |
YIT CORPORATION

15. Operating profit by division
MEUR
Jan-June/
2003
2002
Change
July/2002-
June/2003
Jan-Dec/
Building Construction
28.6
24.6
16%
53.3
49.3
Property Services
0.6
7.4
-92%
6.3
13.1
Infraservices
0.9
1.5
-40%
3.5
4.1
International Operations
30.0
2.7
1,011%
33.5
6.2
Other items
(YIT Construction)
-2.8
-3.8
-26%
-1.4
-2.4
YIT CONSTRUCTION
57.3
32.4
77%
95.2
70.3
YIT INSTALLATION
5.5
9.2
17.4
21.1
YIT PRIMATEL *)
0.7
2.0
-65%
4.7
6.0
Other items (Group)
-5.6
-4.4
27%
-8.8
-7.6
YIT GROUP
57.9
39.2
48%
108.5
89.8
*) On June 1, 2002, into the YIT Group.
August 1, |
YIT CORPORATION

16. Operative cash flow before taxes MEUR
Cash flow from operating activities + Change in net working capital +
Cash flow from investing activities
August 1, |
YIT CORPORATION

17. Gross capital expenditures
MEUR
% of net sales
Year 2001 included the acquisition of Calor and year 2002 the acquisition of Primatel.
August 1, |
YIT CORPORATION

18. YIT’s Interim Report January-June/2003
III. Strategy and financial targets
August 1, |
YIT CORPORATION

19. YIT´s strategic path Service provider
Maintainer
Telecommunications
contractor
Content of life cycle service chain
Developer
Contractor
HEPACE contractor
Building contractor
Earthworks contractor
Scope of the range of services
August 1, |
YIT CORPORATION

20. YIT’s life-cycle service chain Properties, infrastructure, industry, telecom networks
Building systems maintenance
and upkeep services
YIT Building Systems (2003)
Acquisitions
Telecom network
maintenance YIT Primatel (2002)
Jointing insulation business
Makroflex (2003)
Building systems maintenance
and upkeep services Calor (2001)
Surface-treatment business
(2001)
Property maintenance services
YIT Rapido (1999)
Testing business
Huber Testing Oy (2000)
Industrial maintenance
YIT Service (1996)
Steel construction
PPTH Teräs Oy (1999)
Building systems maintenance
and upkeep services
YIT Huber (1995)
Divestments
August 1, |
YIT CORPORATION

21. YIT’s strategic target levels
Average annual growth in net sales 5–10%
Return on investment 18%
Equity ratio 40%
Dividend payout 30–50% of net profit for the year after taxes and minority interests
August 1, |
YIT CORPORATION

22. Net sales and operating profit
Net sales, MEUR
Operating profit, MEUR
Strategic target level: Annual growth 5-10%
August 1, |
YIT CORPORATION

23. Return on investment and
equity ratio
Return on investment, %
Equity ratio, %
6/ /03
6/ /03
Strategic target level: 18%
Strategic target level: 40%
August 1, |
YIT CORPORATION

24. Earnings per share and equity per share Earnings per share, EUR
Equity per share, EUR *) *)
* Excl. residual tax of MEUR 10.9
6/ /03
6/ /03
August 1, |
YIT CORPORATION

25. 30–50% of annual profit after taxes and minority interests
Dividend payout
Dividend per share, EUR
Dividend payout
% of annual profit *)
*)Excl. residual tax
of MEUR 10.9
Strategic target level:
30–50% of annual profit after
taxes and minority interests
August 1, |
YIT CORPORATION

26. YIT’s Interim Report January-June/2003 IV. YIT share August 1, 2003 |
YIT CORPORATION

27. Building Systems acquisition
YIT share and HEX portfolio
indexed development
YIT
July 4, 2003
Announcement of
Building Systems acquisition
+19%
HEX
Portfolio
Source: Reuters
August 1, |
YIT CORPORATION

28. YIT’s market capitalization
MEUR
July 30, 2003
6/02
6/03
August 1, |
YIT CORPORATION

29. Principal Shareholders July 30, 2003
No %
1. Suomi Group 2,937,
2. Sampo Life Insurance Company Ltd 2,667,
3. Tapiola Group 2,160,
4. Varma-Sampo Mutual Pension Ins.Co 2,033,
5. Pohjola Group 1,633,
6. Ilmarinen Mutual Pension Ins.Co 1,147,
7. Kaleva Mutual Insurance Company ,
8. Local Government Pensions Inst ,
9. YIT Corporation ,
10. Security Trading Ltd ,
Nominee-registered 6,009,
Other shareholders 8,784,
Total ,806,
Total number of shareholders 3,631. Nominal value of the share 2 euros.
Share capital EUR 59,613,372.
August 1, |
YIT CORPORATION

30. Nominee-registered shareholders + other foreign ownership as percentage of equity
1999
2000
2001
2002
2003
August 1, |
YIT CORPORATION

31. YIT’s Interim Report January-June/2003 V. Future outlook
August 1, |
YIT CORPORATION

32. Order backlog by quarter MEUR at end of period
1,091.8
August 1, |
YIT CORPORATION

33. YIT Building Systems Strong market position within the Baltic Sea area
YIT Building Systems (Sweden)
Net sales about MEUR 570
Personnel 5/2003 4,533
Local offices 159
YIT Building Systems Ltd (Finland)
Net sales 2002 about MEUR 490
Personnel 5/2003 4,110
Local offices 79
YIT Building Systems AS (Norway) Net sales 2002 about MEUR 340
Personnel 5/2003 2,795
Local offices 63
YIT Installation AS (Denmark) Net sales 2002 about MEUR 100
Personnel 5/
Local offices 13
YIT Building Systems (Baltic and Russia)
Net sales 2002 about MEUR 15
Personnel 5/
Local offices 5
August 1, |
YIT CORPORATION

34. Migration between municipalities in Finland
persons
1-6/2003:
122,800
1-6/2002:
123,700
Source: Statistics Finland, July 25, 2003
August 1, |
YIT CORPORATION

35. Housing loans and interest rates in Finland
MEUR %
Source: Bank of Finland, July 31, 2003
August 1, |
YIT CORPORATION

36. Number of start-ups in YIT’s housing production in Finland
3,278
3,169
2,944
2,791
2,634
1,727
1,507
August 1, |
YIT CORPORATION

37. YIT’s main strategy and
outlook for year 2003
YIT´s main strategy is profitable growth.
As a result of the strong order backlog and the acquisition of Building Systems, YIT’s net sales will grow strongly. Profit before taxes is expected to improve in 2003.
August 1, |
YIT CORPORATION

38. YIT’s Interim Report January-June/2003
VI. Events after the end of the review period:
Building Systems acquisition
August 1, |
YIT CORPORATION

39. YIT’s new corporate structure as of September 1, 2003
YIT Corporation
Reino Hanhinen
Corporate Management, Corporate Services, Corporate Communications
Building Systems
Juhani Pitkäkoski
Construction Services
Ilpo Jalasjoki
Services for Industry
Raimo Poutiainen
Telecom Services
Hannu Leinonen
Building Systems
Automation and security
Property maintenance services
Housing
Business environments
Infrastructure
Piping and tanks
Maintenance
Fixed networks
Mobile networks
Net sales 2002 MEUR 1,520
Personnel 5/ ,618
Net sales 2002 MEUR 1,086
Personnel 5/ ,552
Net sales MEUR 230
Personnel 5/2003 2,889
Net sales MEUR 78 *)
Personnel 5/ ,350
*) Primatel incl. in the YIT Group
as from June 1, 2002
August 1, |
YIT CORPORATION

40. Net sales,
MEUR
about
2,890
Building Systems operations to be acquired
about MEUR 1,130
1,623
1,235
1,168
1,222
YIT before the acquisition
MEUR 1,763
August 1, |
YIT CORPORATION

41. Breakdown of YIT Group’s net sales after the acquisition
Building Systems 52%
MEUR 1,520
Telecom Services 3%
MEUR 78 *)
Services for Industry 8%
MEUR 230
Construction Services 37%
MEUR 1,086
*) Primatel incl. in the YIT Group
as from June 1, 2002
Net sales 2002
about MEUR 2,890
August 1, |
YIT CORPORATION

42. Breakdown of YIT’s net sales by geographical region after the acquisition
Other MEUR 20 1%
Finland MEUR 1,670
58%
Russia MEUR 40 1%
Baltic countries MEUR 110 4%
Other Nordic countries MEUR 1,040 36%
Net sales 2002
about MEUR 2,890
August 1, |
YIT CORPORATION

43. YIT 12,600 and Building Systems to be acquired 9,080
YIT’s post-acquisition personnel
21,680
11,990
10,118
8,721
8,189
7,340
Total 5/ ,680 of which
YIT 12,600 and Building Systems to be acquired 9,080
August 1, |
YIT CORPORATION

44. Acquisition rationale
The acquisition is part of YIT’s strategy of expanding its building systems investment and maintenance services in the Nordic countries.
The operations of YIT and the acquired Building Systems business complement each other and overlapping operations are minimal.
In Finland and Sweden the present heating and plumbing know-how of YIT’s Building Systems units will be complemented by the electrical and air conditioning expertise of the acquired Building Systems operations. Completely new markets will open up to YIT in Norway and Denmark.
The acquisition will strengthen YIT’s market position. YIT will be able to offer its customers improved and more comprehensive services during the entire life cycle of properties.
The acquisition will strengthen the development and application of new technology.
The Building Systems business is characterized by strong cash flow generation, low investment requirements and a good return on investment.
August 1, |
YIT CORPORATION

45. Non-overlapping business operations that complement each other
Strenghts of Building Systems operations to be acquired:
electricity and air conditioning
YIT’s strengths:
Heating and plumbing
Electricity
Automation
Air
Maintenance and servicing
of building systems
Heating
and plumbing
Illumination
Project management
Fire security systems
Inauguration and customer training
Refrigeration
Information technology
Security and access control
August 1, |
YIT CORPORATION

46. Expanding maintenance services
Properties, infrastructure, industry, telecom networks
Net sales of maintenance and upkeep services and
their share of the entire Group’s net sales
MEUR
30%
Building Systems operations to be acquired
24%
22%
YIT before the acquisition
20 %
16%
August 1, |
YIT CORPORATION

47. Financial effects of the acquisition
YIT will finance the acquisition with debt capital. As a consequence of the acquisition, the company’s equity ratio will fall. YIT’s objective is to restore the equity ratio to the target level in 2006 at the latest.
It is estimated that the acquisition will be earnings per share enhancing starting from 2004.
August 1, |
YIT CORPORATION

48. Structure of YIT Building Systems
President Juhani Pitkäkoski
Vice President Sakari Toikkanen
YIT Building Systems
Ltd Finland 1
President Antti Rantanen
Vice President
Pekka Hämäläinen
YIT Building Systems Sweden
Country Manager
Kari Kallio
YIT Building Systems AS Norway
President
Arne Malonæs
YIT Installation AS Denmark
President
Leo G Sørensen
Building Systems
Property maintenance services
Security
Industrial piping
Telecom
Building Systems
Property maintenance services
Security
Industrial electricity
Building Systems
Property maintenance services
Security
Industrial electricity
Industrial piping
Telecom
Building Systems
Property maintenance services
Security
Industrial electricity
Industrial piping
Telecom
Net sales 2002 MEUR 570
Personnel 5/2003 4,533
Net sales 2002 MEUR 510
Personnel 5/ ,340
Net sales MEUR 340
Personnel 5/2003 2,795
Net sales MEUR 100
Personnel 5/
1 Includes the Russian and Baltic operations
August 1, |
YIT CORPORATION

49. YIT Building Systems Breakdown of net sales using figures of year 2002
Sweden 38%
MEUR 570
YIT Installation AS
Denmark 7%
MEUR 100
YIT Building Systems Ltd Finland 1 33%
MEUR 510
YIT Building Systems AS
Norway 22%
MEUR 340
Net sales 2002
about MEUR 1,520
1 Includes the Russian and Baltic operations
August 1, |
YIT CORPORATION

50. YIT Building Systems Breakdown of net sales Net sales 2002
Investments 61%
Maintenance and upkeep services
39%
Net sales 2002
about MEUR 1,520
August 1, |
YIT CORPORATION

51. www.yit.fi More information on our site at Petra Thorén Manager,
Esko Mäkelä Executive Vice President
tel fax
Veikko Myllyperkiö
Vice President,
Corporate Communications
tel
mobile
fax
Petra Thorén Manager,
Investor Relations tel mobile fax
August 1, |
YIT CORPORATION

52. YIT’s Interim Report January-June/2003 Appendices August 1, 2003 |
YIT CORPORATION

53. Order backlog by division MEUR June/2003 June/2002 Change Dec/2002
Building Construction
389.2
283.5
37%
292.6
Property Services
172.2
129.0
33%
117.6
Infraservices
51.3
67.8
-24%
50.5
International Operations
124.3
39%
158.6
YIT CONSTRUCTION
784.9
604.6
30%
619.3
YIT INSTALLATION
216.9
221.7
-2%
225.5
YIT PRIMATEL *)
90.0
53.6
68%
94.0
YIT GROUP
1,091.8
879.9
24%
938.8
*) On June 1, 2002, into the YIT Group.
August 1, |
YIT CORPORATION

54. Net sales by quarter
MEUR
August 1, |
YIT CORPORATION

55. Operating profit by quarter
MEUR
August 1, |
YIT CORPORATION

56. share of international activities MEUR 181.6
Net sales by division
Jan-June/2003
Building Construction
MEUR (42%)
YIT Primatel
MEUR (6%)
Scandinavia
MEUR 90.3 (9%)
Property Services
MEUR (9%)
Industrial
Maintenance
MEUR 49.8 (5%)
Infraservices
MEUR (6%)
International Operations
MEUR 88.7 (9%)
Capital Investment Services for Industry
MEUR 69.5 (7%)
Building Systems
MEUR 67.2 (7%)
Total MEUR 932.1
share of international activities MEUR 181.6
August 1, |
YIT CORPORATION

57. Consumers’ confidence in their own household’s and Finland’s economy within the next 12 months
Saldo (%-share of positive answers - %-share of negative answers
Own economy
Finland’s economy
Source: Statistics Finland’s Consumer Survey, July 2003
August 1, |
YIT CORPORATION