YIT (YIT) Pre-Silent call summary

Executive summary

• New strategy emphasizes resilience, core business strengthening, productivity, and capital efficiency, with ambitious financial and non-financial targets for the strategy period.

• Segment structure will change in 2025, splitting housing into Residential Finland and Residential CEE, with interim leadership until permanent heads are recruited.

• Strategic use of joint ventures in CEE residential projects enables capital-efficient growth and risk sharing, with several large-scale projects underway.

• Recent joint venture projects in Latvia, Slovakia, and Czech Republic will enable construction of approximately 2,000 new homes.

• Focus on increasing capital efficiency and returns to ensure financial resilience over the next fiscal year.

Trading performance and revenue trends

• Residential sales in CEE and Baltics remain strong, with starts aligned to sales to maintain supply-demand balance.

• Finnish residential market shows early signs of recovery, with increased reservations and new project starts, though overall activity remains low.

• Revenue from joint ventures is recognized as a share of net results, with internal revenue and margin eliminated in consolidation.

• Project and plot sales to joint ventures generate immediate capital release and cash flow.

• Infrastructure and Building Construction segments have secured major contracts, supporting a robust order book.

Profitability and margins

• Financial targets include at least 7% adjusted operating profit margin group-wide, with higher targets for CEE (15%) and Finland (10%).

• Capital efficiency is improved by lowering completed apartment inventory, faster plot conversion, and new project financing models.

• Infrastructure segment achieved over 5% rolling 12-month adjusted operating profit margin.

• Free cash flow is generated after growth through capital release measures and retained earnings.

• Low number of new starts in Finland this year will limit profit generation in that segment next year.