Investor Relations in YIT as part of Group strategy management
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Investor Relations in YIT as part of Group strategy management Petra Thorén Vice President, Investor Relations May 29, 2007. Contents. YIT Group IR development IR in YIT Cases. Building Systems. Construction Services. Industrial and Network Services.

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Investor relations in yit as part of group strategy management petra thor n vice president

Investor Relations in YIT as part of Group strategy management

Petra Thorén

Vice President,

Investor Relations

May 29, 2007


Investor relations in yit as part of group strategy management petra thor n vice president

Contents

  • YIT Group

  • IR development

  • IR in YIT

    • Cases


Yit service portfolio

Building Systems

ConstructionServices

Industrial and

Network Services

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

Networks, connections and help desk services

Technical maintenance and repair works

Civil engineering

YIT service portfolio

Revenue 2006 MEUR 1,415

Revenue 1-3/2007 MEUR 368

Personnel 3/200711,569

Revenue 2006 MEUR 1,452

Revenue 1-3/2007 MEUR 369

Personnel 3/2007 5,734

Revenue 2006 MEUR 477

Revenue 1-3/2007 MEUR 111

Personnel 3/2007 4,787


Investor relations in yit as part of group strategy management petra thor n vice president

Revenue 1994 - Q1/2007

MEUR

Average annual growth

1994-2006: 17%

IFRS

Q1/06

IFRS

2004

IFRS

2005

IFRS

2006

IFRS

Q1/07

FAS 1994 - 2004

Strategic target level: growth 10% per year on average


Investor relations in yit as part of group strategy management petra thor n vice president

Operating profit (EBIT) 1994 - Q1/2007

MEUR

Average annual growth

1994-2006: 24%

IFRS

2004

IFRS

2005

IFRS

2006

IFRS

Q1/06

IFRS

Q1/07

FAS 1994 - 2004

Strategic target level: EBIT margin 9% of revenue


Investor relations in yit as part of group strategy management petra thor n vice president

Dividend payout 1995-2006

Dividend/share, EUR

Dividend/earnings, %

2001

2005

1999

2003

1997

YIT´s dividend policy: 40–60% of the annual profit

after taxes and minority interests

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.


Strong market position within yit s business segments and market areas

Strong market position within YIT’s business segments and market areas

In Finland the biggest services provider in all Business Segments

In the Nordic countries the biggest Building Systems services provider

In Russia the biggest foreign player within Residential Construction

In the Baltic countries among top market leaders within Construction Services


Investor relations in yit as part of group strategy management petra thor n vice president

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


Investor relations in yit as part of group strategy management petra thor n vice president

Corporate Governance

  • Markets

    • “Market for corporate control”

    • Mergers & acquisitions, public offer

  • Debtors

  • Owners

  • Securities Market Act, Finnish Companies Act

External

Corporate Governance

  • Board of directors

  • Management

  • Incentive systems and share ownership

  • Organisation and reporting

Internal

Corporate Governance


Investor relations in yit as part of group strategy management petra thor n vice president

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


Investor relations in yit as part of group strategy management petra thor n vice president

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


Investor relations in yit as part of group strategy management petra thor n vice president

IR in YIT

  • Part of Group strategy management

  • Management priority and availability

  • Systematic approach to managing IR


Investor relations in yit as part of group strategy management petra thor n vice president

Good internal co-operation

Link between company and capital markets

CEO,

EVP

Finance and

accounting

Communi-

cations

Capital

markets

Investor

Relations

Information

Corporate

planning

Business

segments


Investor relations in yit as part of group strategy management petra thor n vice president

IR-team

  • CEO, Executive Vice President, Investor Relations

  • Communications Management

  • Business Management

  • Other Management


Investor relations in yit as part of group strategy management petra thor n vice president

Big strategic IR-events

  • Acquisitions

  • New management and strategic target levels

  • Russia

  • IFRS


Investor relations in yit as part of group strategy management petra thor n vice president

Case ABB-acquisitionValuation

YIT

670 %

ABB Building Systems acquisition

4 July, 2003

OMXHCAP

105 %


Investor relations in yit as part of group strategy management petra thor n vice president

Case ABB-acquisition

Investment 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


Investor relations in yit as part of group strategy management petra thor n vice president

1-12

1-12

1-12

1-12

1-12

1-12

2004 2005 2006

2004 2005 2006

Building SystemsStill following ABB acquisition

Operating profit, MEUR

Operating profit margin,%

2)

2)

1)

1)

2007

2007

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.


Investor relations in yit as part of group strategy management petra thor n vice president

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


Investor relations in yit as part of group strategy management petra thor n vice president

Yaroslavl (0.6)

Yaroslavl Oblast (1.3)

Tver (0.4)

Ivanovo (0.4)

Ivanovo Oblast (1.1)

Tver Oblast (1.4)

Moscow Oblast (6.5)

Vladimir (0.3)

Vladimir Oblast (1.5)

Moscow (10.1)

Kaluga (0.3)

Ryazan (0.5)

Kaluga Oblast (1.0)

Ryazan Oblast (1.1)

Tula (0.5)

Tula Oblast (1.6)

Average annual growth target in Russia 50% 2006-2009

Current business locations

Potential expansion 2007-

  • 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

  • Strengthening plot reserve in existing cities (apartments)

  • Novo-Orlovskij 10/2006, starting

  • from 2008 (over 15,500)

  • 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)


Investor relations in yit as part of group strategy management petra thor n vice president

YIT Group invested capital

Mar/2007

Dec/2005

Dec/2006

Russia 26%

MEUR 314

Russia 23%

MEUR 279

Russia 11%

MEUR 100

Other YIT Group 89%

MEUR 799

Other YIT Group 77%

MEUR 928

Other YIT Group 74%

MEUR 898

Total Dec/2005

MEUR 899

Total Mar/2007

MEUR 1,212

Total Dec/2006

MEUR 1,207

Invested capital= balance sheet total - non interest-bearing liabilities


Investor relations in yit as part of group strategy management petra thor n vice president

Business insight

Capital 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


Investor relations in yit as part of group strategy management petra thor n vice president

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!


Principal s hareholders april 30 2007

Principal shareholders April 30, 2007

Total number of shareholders 13,474.Share capital EUR 146,688,843.82


International ownership

International ownership

4/2007:50.4%

2002 2003 2004 2005 2006 2007


Investor relations in yit as part of group strategy management petra thor n vice president

Trading and volatility

Trading as percentage of share capital

%

Volatility sep 2003 28 % (3,5 years)

Volatility jan 2006 24 % (3,5 years)

2001

2002

2003

2004

2005

2006


Investor relations in yit as part of group strategy management petra thor n vice president

Number of shareholders

YIT Corporation was formed on September 2, 1987. YIT’s share has been quoted on Helsinki Exchanges since September 4, 1995.


Investor relations in yit as part of group strategy management petra thor n vice president

Thank you for your attention

More information on our web site

www.yitgroup.com


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