YIT’s Capital Markets Day today in Helsinki, reviewed strategy as the topic
YIT Corporation Investor news September 26, 2019 at 8:00 a.m.
YIT’s Capital Markets Day for investors and analysts will be held today, on September 26, 2019, in Kamppi, Helsinki, Finland, at the Start-up campus Maria 01 premises. The extensive expansion of the campus is one of YIT’s large urban projects. The main theme of the day is the Group’s reviewed strategy for 2020–2022, published on September 18, 2019.
The target of YIT’s new strategy continues to be to improve profitability and to maintain financial stability. The company’s sources of growth and structural profitability are, as previously, urban development and the non-cyclical Partnership properties and services businesses. Cornerstones of success supporting these priorities are top performance, success with customers and partners, happy people and, most recently, stepping up sustainability.
At the Capital Markets Day, YIT’s business model, financial development and the main focus areas of the strategy will be discussed: improving profitability, the Partnership properties business, growing the services business as well as actions related to stepping up sustainability.
Actions targeted to improving profitability
The company has improved the profitability of its new projects through development actions done in the segments and through company-wide development programmes. The action area with the greatest impact is improving the degree of uniformity and control through the new GRIP management system taken into use. Productivity is improved, among other things, through the Lean principles taken widely into use and through increasing the share of prefabrication. Healthy pricing is part of developing the corporate culture. In general, directing the business portfolio towards the most profitable business ideas will lead to improved average profitability.
Strategic development programmes
Each segment sees to its own competitiveness in its market area through development work done in the segment. Additionally, YIT implements its strategy through four group-wide development programmes supporting the cornerstones of success and growth. The Performance, Green Growth and Customer Focus programmes started last year will continue with adjusted content supporting the strategy review, such as actions targeting carbon neutrality and reduced CO2 emissions.
As a new one, a Services Development programme will be started. In the programme, the service architecture of the Group will be designed, a common service platform will be developed, and the segments will be supported in service development and service design for their businesses.
Estimates of housing starts for the current quarter and completions in 2020
Residential consumer demand has remained stable on a normal level in Finland and Russia and continued to be brisk in the CEE countries. The outlook is stable in all market areas. In the third quarter, the company has started residential housing projects for consumers as follows: approximately 600 units in Finland and approximately 400 units in the CEE countries. In Russia, during the third quarter, approximately 500 apartments have been started for consumers. Based on the number of housing starts, we estimate that the housing completions targeted directly to consumers in Finland in 2020 will be approximately 2,600 units (estimate 2019: approximately 2,700 units), in the CEE countries approximately 1,600 units (estimate 2019: approximately 1,600) and in Russia approximately 3,100 units (estimate 2019: approximately 3,900).
Synergy targets to be achieved
Total synergy benefit measures recorded by the end of June amounted to approximately EUR 46 million. Technical integration related to the merger between YIT and Lemminkäinen has been completed apart from certain IT and accounting related operations. Strengthening corporate culture and implementing new ways of working continues. The company has specified the estimated synergy timetable and estimates that it will reach cumulative annual synergy benefits impacting the result of approximately EUR 48 million by the end of 2020. Previously the company estimated the synergy benefits to be approximately EUR 46–50 million.
Cumulative integration costs at the end of June totalled approximately EUR 25 million, including the costs recorded for Lemminkäinen in January 2018. The company has specified the estimated integration costs. The cost impact of completing the decisions made and remaining actions is estimated to total approximately EUR 35 million. Previously the company estimated the integration costs to result in a non-recurring negative cash flow effect and an effect on the result of approximately EUR 40 million during 2017–2019.
Capital Markets Day
The Capital Markets Day programme starts today, September 26, 2019, at 9:00 a.m. EET. The presentations can be followed live on YIT’s website.
During the President and CEO’s presentation, starting at approximately 9:00 a.m., a teleconference is available for investors and analysts.
Conference call numbers are below for participants from:
- Finland +46 (0)8 5033 6574
- Norway +47 2100 2610
- Sweden +46 (0)8 5033 6574
- Germany +49 (0)89 20303 5709
- USA +1 323 794 2551
- and UK and other countries +44 (0)330 336 9105
The participants will be asked to provide the following confirmation code: 5633996.
The presentations are available on YIT’s website at www.yitgroup.com/en/investors/reports-and-presentations/capital-markets-day.
Additional information:
Ilkka Salonen, CFO, YIT Corporation, tel. +358 45 359 4434, ilkka.salonen@yit.fi
Tiina Kuusisaari, Manager, Investor Relations, YIT Corporation, tel. +358 40 52 88 154, tiina.kuusisaari@yit.fi
YIT Corporation
Ilkka Salonen
CFO
Distribution: Nasdaq Helsinki, major media, www.yitgroup.com
YIT is the largest Finnish and significant North European construction company. We develop and build apartments and living services, business premises and entire areas. We are also specialised in demanding infrastructure construction and paving. Together with our customers, our nearly 10,000 professionals are creating more functional, more attractive and more sustainable cities and environments. We work in 11 countries: Finland, Russia, Scandinavia, the Baltic States, the Czech Republic, Slovakia and Poland. The new YIT was born when over 100-year-old YIT Corporation and Lemminkäinen Corporation merged on February 1, 2018. Our restated pro forma revenue for 2018 was approximately EUR 3.2 billion. YIT Corporation's share is listed on Nasdaq Helsinki Oy. www.yitgroup.com