YIT - Interim report (Q1 and Q3)

YIT's Interim Report January-March 2024

YIT Corporation Stock Exchange Release 30 April 2024 at 09:00 a.m.

YIT's Interim Report January-March 2024

Cash flow and financial position improved, profitability impacted by the Finnish
housing market and rising yields

First quarter 2024 in brief

  ·
Order book was EUR 3,091 million (31 Dec 2023: 3,157). Order book remained
stable in Housing and Business Premises and decreased slightly in
Infrastructure. At the end of the quarter, 74% of the order book was sold (31
Dec 2023: 74%).

  ·
Revenue decreased to EUR 412 million (455). In Housing, revenue decreased mainly
due to lower number of completions in the Baltic and CEE countries. Revenue
increased in Business Premises and decreased in Infrastructure, mainly due to
revenue decrease in businesses to be closed down.

  ·
The underlying operating performance was on the previous year's level, but the
adjusted operating profit decreased to
EUR -14 million (-3). The decrease was mainly due to a decrease in the fair
value of Tripla Mall caused by a yield increase, impacting the adjusted
operating profit by EUR -12 million. The adjusted operating profit margin was
-3.4% (-0.7).

  ·
Operating cash flow after investments increased significantly to EUR 1 million (
-216). Cash and cash equivalents at the end of the period amounted to EUR 268
million (31 Dec 2023: 128), supported by the successful financing arrangement.

  ·
Net interest-bearing debt decreased to EUR 768 million (837), and gearing
improved to 89% (101). Both net interest-bearing debt and gearing also decreased
compared to the previous quarter.

  ·
In Housing, adjusted operating profit decreased to EUR -4 million (4), impacted
by low consumer sales in Finland and a lower number of completions in the Baltic
and CEE countries. Consumer apartment start-ups increased to 478 (29), All the
start-ups in the first quarter were in the Baltic and CEE countries. The number
of unsold completed apartments increased to 1,359 (31 Dec 2023: 1,267).

  ·
In Business Premises, adjusted operating profit decreased to EUR -11 million (
-7). The underlying performance for the segment improved and was positive. Based
on market data, the yield for the Tripla Mall was increased during the quarter.
The increase in the yield impacted the adjusted operating profit of the segment
by EUR -12 million.

  ·
In Infrastructure, adjusted operating profit amounted to EUR 1 million (1).

  ·
On 9 January 2024, YIT announced that it had agreed on the sale of the entire
share capital of service equipment business YIT Kalusto Oy to Renta Oy. The
transaction was completed on 29 February 2024.

  ·
Result for the period was EUR -16 million (-14).

  ·
On 12 March 2024 YIT announced that it had executed a substantial financing
arrangement including equity and enhancements to existing loan terms, leading to
an improvement in liquidity in excess of EUR 100 million. The financing
arrangement comprised a directed share issue of EUR 33.5 million at market
price, an issue of EUR 36 million convertible notes due in March 2029 with a
coupon of 8% p.a. and a strike price of EUR 2.25 per share. Furthermore, lenders
agreed to make amendments to the existing revolving credit facility (EUR 300
million) and the term loan (EUR 140 million) including maturity extensions and
other positive amendments to key loan terms and postponements of amortisations.
Combined, the amendments to loan terms increase available liquidity by over EUR
30 million. Above mentioned agreed amendments to existing loan facilities have
entered into force in April 2024.

Key figures

+-----------------------------+-------+-------+--------+
|        EUR million          |1-3/24 |1-3/23 |1-12/23 |
+-----------------------------+-------+-------+--------+
|Revenue                      |   412 |   455 |  2,163 |
+-----------------------------+-------+-------+--------+
|Operating profit             |    -8 |    -7 |     51 |
+-----------------------------+-------+-------+--------+
|Operating profit, %          |  -2.0 |  -1.6 |    2.4 |
+-----------------------------+-------+-------+--------+
|Adjusted operating profit    |   -14 |    -3 |     41 |
+-----------------------------+-------+-------+--------+
|Adjusted operating profit    |  -3.4 |  -0.7 |    1.9 |
|margin, %                    |       |       |        |
+-----------------------------+-------+-------+--------+
|Result before taxes          |   -22 |   -19 |     -5 |
+-----------------------------+-------+-------+--------+
|Result for the period        |   -16 |   -14 |      3 |
+-----------------------------+-------+-------+--------+
|Earnings per share, EUR      | -0.08 | -0.07 |  -0.01 |
+-----------------------------+-------+-------+--------+
|Operating cash flow after    |     1 |  -216 |   -137 |
|investments                  |       |       |        |
+-----------------------------+-------+-------+--------+
|Net interest-bearing debt    |   768 |   837 |    795 |
+-----------------------------+-------+-------+--------+
|Gearing ratio, %             |    89 |   101 |     94 |
+-----------------------------+-------+-------+--------+
|Equity ratio, %              |    33 |    33 |     33 |
+-----------------------------+-------+-------+--------+
|Return on capital employed, %|   1.8 |   6.0 |    2.5 |
|(ROCE, rolling 12 months)    |       |       |        |
+-----------------------------+-------+-------+--------+
|Order book                   | 3,091 | 3,542 |  3,157 |
+-----------------------------+-------+-------+--------+
|Combined lost time injury    |  11.4 |  13.5 |   12.1 |
|frequency (cLTIF, rolling 12 |       |       |        |
|months)                      |       |       |        |
+-----------------------------+-------+-------+--------+
|Customer satisfaction rate   |    53 |    47 |     54 |
|(NPS)                        |       |       |        |
+-----------------------------+-------+-------+--------+

Unless otherwise noted, the figures in brackets in this report refer to the
corresponding period in the previous year.

Comments from the President and CEO, Heikki Vuorenmaa

”Year 2024 started on a positive note, with continued strong housing sales in
Central Eastern Europe and a clear pick-up in the Baltic countries, and in
total, our consumer apartment sales increased by 59% compared to the previous
year. Expectations of a decline in the euro area interest rates have moderated
since the end of last year, and the outlook for interest rates remains subject
to considerable uncertainty. As expected, this led to a continued low level of
housing sales in Finland during the first quarter. The unique characteristics of
the Finnish housing market and its sensitivity to interest rates is postponing
the recovery of the market.

We improved our Group operating cash flow after investments by over EUR 200
million on a year-on-year basis. Our cash flow for the last 12 months was
positive, and indebtedness decreased. Progress is connected to the successful
execution of the transformation program and the capital release actions. There
is still work to be done to bring the capital efficiency to the desired level
and to reduce the indebtedness of the company. We will determinately continue to
take the required measures towards these goals.

The Housing segment's profitability continued to be muted due to prevailing
market conditions in Finland and significantly less completions in the quarter
in the Baltic and CEE countries. In the Baltic and CEE countries, the market
recovery started earlier and has continued positively, especially in Poland, the
Czech Republic, and Latvia. The past quarter was the fifth consecutive quarter
with increased consumer apartment sales for YIT in the Baltic and CEE countries.
This year, over 70% of our apartments will be completed outside Finland, so the
good market conditions are key to the segment's performance. While there remains
uncertainty regarding the timing of the recovery of the Finnish housing market,
we are at full speed with our housing operations in our other operating
countries.

In Business Premises, revenue increased and the underlying performance improved.
Burden from the fixed price contracts starts to be behind and segment can focus
on increasing margins. While the segment's underlying performance improved and
was positive, the reported adjusted operating profit decreased mainly due to a
decrease in fair values driven by the increase of the market yield for Tripla
Mall.

In Infrastructure, the operations continued to be solid in the quarter. As a
result of the decision to close down the Swedish operations and the successful
divestment of the equipment services business, we focus on businesses in which
we have a competitive advantage. The Finnish infrastructure market is active and
there are several tenders ongoing, that fit our expertise well. As an example of
the recent successes, we signed an agreement on the implementation of the
excavation contract for Espoo City Rail in March.

Given the market uncertainty in Finland, we have focused on securing our cash
and liquidity position. The substantial financing arrangement announced in March
was a major milestone on our journey, including equity, convertible notes and
enhancements to existing loan terms. It improved our liquidity by more than EUR
100 million and enables us to carry out the required capital release measures
with optimized timing. We continue to firmly focus on improving our segments'
profitability and completing our transformation. As we do this, a strong
financial position will allow us to evaluate growth opportunities, both in the
contracting segments and in the Baltic and CEE operations.”

Results

January-March
YIT's order book decreased slightly from the previous quarter to EUR 3,091
million (31 Dec 2023: 3,157). The order book remained stable in Housing and
Business Premises and decreased slightly in Infrastructure. At the end of the
quarter, 74% of the order book was sold (31 Dec 2023: 74%).

YIT's revenue decreased from the comparison period to EUR 412 million (455). In
Housing, revenue decreased mainly due to lower number of completions in the
Baltic and CEE countries. Revenue increased in Business Premises and decreased
in Infrastructure, mainly due to the revenue decrease in businesses to be closed
down.

The underlying operating performance was on the previous year's level, but the
adjusted operating profit decreased to EUR -14 million (-3). The decrease was
mainly due to a decrease in the fair value of Tripla Mall caused by a yield
increase, impacting the adjusted operating profit by EUR -12 million. Adjusted
operating profit margin was -3.4% (-0.7). In Housing, adjusted operating profit
was negatively affected by low consumer sales in Finland and the lower number of
completions in the Baltic and CEE countries. In Business Premises, adjusted
operating profit decreased. The underlying performance for the segment improved
and was positive. Based on market data, the yield for the Tripla Mall was
increased during the quarter. In Infrastructure, adjusted operating profit
remained stable.

YIT's operating profit was EUR -8 million (-7). Adjusting items were EUR -6
million in the first quarter (4), mainly related to the gain on sale of the
equipment services business YIT Kalusto Oy, offset by the costs of
transformation program and operating profit from operations to be closed down.
Net finance costs increased to EUR 14 million (12) due to increased market
interest rates and interest rate margins. The result for the period was EUR -16
million (-14).

Guidance and outlook for 2024

YIT expects its Group adjusted operating profit for continuing operations to be
EUR 20-60 million in 2024. The operating cash flow after investments is expected
to be positive.

The housing market recovery in the Baltic countries and Central Eastern Europe
is expected to continue. In Finland, the housing market is expected to continue
to be weak in the second and third quarters of the year. In Business Premises
and Infrastructure, the underlying operational performance is expected to
improve.

YIT's performance will be supported by the increased efficiencies from the
transformation program launched on 10 February 2023.

Changes in the macroeconomic environment, especially in interest rates, may
impact the housing market demand and the fair value of investments. Delayed
apartment completions could lead to the postponement of revenue and profit from
one quarter or year to another. Actions to release capital may have an impact on
the company's profit.

Webcast for investors and the media

A webcast and an international telephone conference will be arranged on 30 April
2024 at 10:00 a.m. EEST (7:00 a.m. GMT). The results will be presented by Heikki
Vuorenmaa, President and CEO of YIT Corporation, and CFO Tuomas Mäkipeska.

The webcast can be followed at https://yit.videosync.fi/q1-2024/ and at the
company's web site
at www.yitgroup.com/investors (https://www.yitgroup.com/en/investors). A
recording of the webcast will be available at the same address later that
day.

The teleconference can be accessed by registering
at: https://palvelu.flik.fi/teleconference/?id=50048710. After the registration,
participants will be provided with phone numbers and a conference ID to access
the conference. To ask a question, please dial *5 on your telephone keypad to
enter the queue.

The event is targeted for investors, analysts and the media. Welcome!

For further information:
Essi Nikitin, Vice President, Investor Relations, YIT Corporation, tel. +358 50
581 1455, essi.nikitin@yit.fi

YIT Corporation

Tuomas Mäkipeska
CFO

Distribution: Nasdaq Helsinki, major media, www.yitgroup.com

YIT is a leading construction and development company. Building on over 110
years of experience, we develop and build sustainable living environments:
functional homes, future-proof public and commercial buildings, and
infrastructure to support the green transition. We employ approximately 4,300
professionals in eight countries. Our revenue in 2023 was EUR 2.2 billion. YIT
Corporation's shares are listed on Nasdaq Helsinki.

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Attachments:

04300547.pdf