YIT - Other information disclosed according to the rules of the Exchange

Impacts of the adoption of the IFRS 16 standard at YIT and change in reporting practices

YIT Corporation Stock exchange release April, 18 2019 at 3:00 p.m.
Impacts of the adoption of the IFRS 16 standard at YIT and change in reporting
practice

YIT will change its reporting practices from 2019. This release describes the
impacts of the adoption of the IFRS 16 “Leases” standard that entered into force
on January 1, 2019. In addition, going forward, the company will not report
figures under the percentage of completion (POC) principle.

Impacts of the adoption of the IFRS 16 standard

The new IFRS 16 “Leases” standard entered into force on January 1, 2019. The
adoption of the standard will not have an impact on the company’s financial
targets or guidance for 2019, in which the adoption of the IFRS 16 standard is
already taken into account. Furthermore, the adoption of the standard has no
negative impacts in respect of the company’s financial covenants.

The adoption of the IFRS 16 standard will have an impact on several key
indicators reported by YIT: gearing ratio will increase and equity ratio
decrease, among others. In order to improve comparability, the company will
present the net debt, gearing ratio and equity ratio adjusted without lease
agreement items. The company’s adjusted net debt on January 1, 2019, was EUR
545.1 million (reported EUR 863.5 million), adjusted gearing ratio 51.9%
(reported 82.3%) and adjusted equity ratio 38.6% (reported 34.4%).

The annual impact on EBITDA is expected to be approximately EUR 45 million
positive and on operating profit approximately EUR 10 million positive, of which
approximately half is allocated to the Housing Finland and CEE segment. It is
estimated that the impact on the Group’s result before taxes is approximately
EUR 8 million negative and on the result for the financial year approximately
EUR 6 million negative. The application of the standard will not have a material
impact on the Group’s revenue or earnings per share.

The adoption of the standard will have an impact on the company’s capital
employed. The most significant items increasing the capital employed are leased
plots, leased properties as well as machinery and equipment. Leased plots
increase the capital employed by approximately EUR 190 million, leased
properties by approximately EUR 90 million and machinery and equipment
approximately by EUR 30 million. The company’s lease plot reserve is mainly
located in Finland. The table below specifies the impacts of the adoption of the
IFRS 16 standard on the capital employed by segments. It is estimated that the
annual effect on the result will be distributed between the segments
approximately in the same proportion.

EUR         Housing  Housing  Business  Infra     Paving  Partnership   Other
Group,
million     Finland  Russia   premises  projects            Properties
functions     IFRS
            and                                                         and
              CEE
eliminations

Capital     755.7    307.3    44.6      90.2      155.4   145.0         403.6
1,901.8
employed
after the
adoption
of
the IFRS
16
standard
on
January 1,
2019
from which  170.8    13.0     6.4       7.2       31.7    0.0           71.5
300.6
the
impact of
the
adoptionof
the IFRS
16
standard

The adoption of the standard will also have an impact on the company’s interest
-bearing net debt. Borrowings and lease liabilities are included in the interest
-bearing debt. Borrowings will not increase due to the application of the
standard. The amount of the lease liabilities is approximately EUR 300 million.
Furthermore, the cash flow from operating activities will improve and cash flow
from financing activities will decrease as repayment of the principal portion of
the lease liabilities is classified as cash flows from financing activities.

The IFRS 16 standard replaced the previous IAS 17 Leases standard and related
interpretations. Under the new standard, all leases are recognised on the
balance sheet, with the exception of leases for which the underlying asset is of
low value and short-term leases. Leases other than finance leases were
previously reported as off-balance sheet minimum lease payment obligations.
Following the adoption of the IFRS 16 standard, both items are reported as lease
liabilities. The company will not adjust the figures of the comparison period or
year retrospectively.

The attached tables present the opening balance sheet 2019 and the most
significant key indicators calculated on the basis of the opening balance sheet
in accordance with the IFRS 16 standard as well as the definitions of the most
significant key indicators. Furthermore, the key accounting policies related to
the IFRS 16 standard are published as an appendix to this release.

Terminating the reporting under the percentage of completion (POC) principle

In future, YIT will be reporting only in accordance with IFRS. The company
previously reported certain figures for the Housing Finland and CEE segment and
the Housing Russia segment under the percentage of completion (POC) principle in
addition to IFRS reporting. In IFRS reporting, revenue is recognised for
consumer housing projects when the projects are completed.

For further information, please contact:

Hanna Jaakkola, Vice President, Investor Relations, YIT Corporation, tel. +358
(0)40 566 6070, hanna.jaakkola@yit.fi

Ilkka Salonen, CFO, YIT Corporation, tel. +358 (0)45 359 4434,
ilkka.salonen@yit.fi

Attachment:

IFRS 16 adoption and accounting principles

YIT CORPORATION

Hanna Jaakkola

Vice President, Investor Relations

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

YIT is the largest Finnish and significant North European construction company.
We build and develop

apartments and living services, business premises and entire areas. We are also
specialised in demanding infrastructure construction and paving. Together with
our customers, our almost 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 Countries, 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 pro
forma revenue for 2018 was approximately EUR 3.8 billion. YIT Corporation's
share is listed on Nasdaq Helsinki Oy. www.yitgroup.com

Attachments:

04180526.pdf