Yit Oyj Unsp/Adr

Good morning and welcome to YIT's third quarter earnings webcast. My name is Tommi Järvenpää. I'm the head of YIT's investor relations. We will be discussing today how our good profitability progress continued in the third quarter. The results will be presented by our CEO Markku Moilanen and CFO Ilkka Salonen. After the presentation, we will be taking questions from the conference call lines. At this point, I would like to hand over to Markku. Please go ahead.

Thank you, Tommi, and good morning and welcome on my behalf as well. We'll start, as always, from health and safety, which is, as we have said, number one in our priorities. Unfortunately, I have to start today by telling that during the third quarter, we have had two fatal accidents. one in Latvia and one in Lithuania. We have of course analysed the cases thoroughly, have done an action plan and are implementing the actions, reviewing and adjusting our processes and practices to prevent these kind of accidents to happen in the future. As we are doing on every occasion in our organisation, when we have been informing about these cases, we have had a silent moment for a while, so let's have it even in this case. This year in health and safety, our measures have been quite much around fighting against the COVID-19 pandemic. And now during the third quarter, the situation in all those countries that we are working is getting to a better direction, thanks to the vaccinations. But we have continued our actions to make sure that our personnel, both on sites and offices, can continue working in a healthy environment and the results have been good. If we are looking at our combined lost time injury frequency, which is our key KPI on this area, that is still on a too high level for us. We are targeting to get it below nine. And during Q3, the rolling KPI was 9.8. what we have done is that we have started a rigorous plan and starting from management walks in the sites we have started that from the management teams i've been several sites myself and all the directors are doing the same as well that has led to a higher than every number of safety observations and fixing things but the good observations so we are in the process to change and improve our health and safety culture with these actions. If we are looking then the results during Q3 so we had a good profitability progress so this is the third a quarter in order where we have a good result. And our group adjusted operating profit ended up to be 18 million euros compared to 16 last year. More importantly, our January-September result more than doubled, our adjusted operating profit more than doubled compared to last year during January-September to 69 million euros. The result was a result from our solid performance in our housing segments. where we have improved margins all over, but a favorable sales mix as well. So we have sold higher price apartments, especially in the CEE countries as well. In addition, we have been able to shorten our lead time, so earlier project completions have led to higher results on that area. Our hard work in improving our profitability and performance in business premises continued. We were having black numbers and positive numbers, but the underlying work is really a question of cleaning up the old projects. And even with all that work, we ended up to a positive result. And the same happened in infra. We have started the turnaround or the transition to a new mode in infra about a year later than in business premises, but the work has continued very well. And we had the underlying operative result was very good. So despite of the margin reduction in certain old projects, our infra result during Q3 remained positive. The key things that we have done during this year have been our focus on improving our process management. We have looked at our operational model and then we have had the work to make our new strategy. On project management, the work has continued. To remind you, we started the work end of 2020, actually, and we have launched new processes, practices, systems, reports, training for personnel controls. And again, you can see the results already paying off in business premises and in infrastructure segments. Secondly, we started last spring our operating model work and the target was to create a more customer oriented, closer to the customer operating model and a more efficient model as well. And we have concluded that work, and the related statutory negotiations, we have ended as well during Q3, as we have earlier communicated. So the result is that we will reduce maximum 230 employees in the whole group globally, of which 190 employees in Finland. Out of these 190, approximately 110 will be achieved through redundancies, and the rest 80 through voluntary departures, terminations, retirements and fixed-term employment endings. We will start the new operating model from 1 January as part of our strategy as well, so now we are in in a process to implement the needed changes. So we are coming back to the model when we tell about the new strategy. The strategy work has progressed very well as well. And we are ready to tell about our new strategy then before our capital markets day, which is on the 23rd of November. And let's go a bit more in detail in Q3 results. So Ilkka, please, the floor is yours.

Thank you, and good morning, everyone. Yes, if we look at from the revenue side, starting from that part, that was roughly about 100 million lower than last year. And there are two major topics over there. One is related for infra, roughly about 70 million lower. and that is pretty much driven by the fact that we have been more selective in projects when we are tendering. Also, as we sold our Estonian operations in infra, there is lower volumes in the Baltic countries, and then the large projects are, a couple of large projects are in their final stage, so it means less revenue from there. from the order book increasing quarter by quarter this year, and also it is higher than the Q3 last year. And the growth is seen in the right places, meaning that housing Finland and CE, business premises and partnership properties. Where we see decreasing order book is in Russia as well as in infra, And there are explanations for those ones as well. And as I mentioned earlier, we have been more selective in tendering of projects. And also in some alliances, we are in the design phase at the moment. So the amount of the projects in millions is very small compared to the full project. And then in RASM, actually two topics as we I've announced earlier that we are leaving from some areas, and that is progressing, so it means that there is less operations in those areas, and also in Q3, we didn't have any startups in our Russian operations. In the adjusted operating profit side, 80 million compared to the last year, 16 million. If we look at the year-to-date figures, they are 69 compared to 29. So the track has been improving this year. And what is also good to mention is that all the segments, all the business lines were delivering positive adjusted operating profit for for the third quarter. And if we look at the deviations compared to the last year, and for this year, in housing Finland and housing Russia, solid performance over there, although there were lower number of completions in Finland than last year. In business premises, there we see operational performance stabilizing, and in infrastructure, Yes, we have made some margin reductions in certain projects, so it has a negative impact over there. Partnership properties, more or less for the quarter of cyclicality. And then in others, there is somehow more eliminations than last year. And we end up to 18 million over there. Operating cash flow. uh minus 23 last year minus nine for pretty much on the same level than last year even our startups during this q3 was higher than higher than last year and if we look at for the first nine months operating cash flow we have generated more than 160 million on that side and investments for the plots as well as for the associated companies, has continued also in Q3 this year. And then net interest bearing debt. As we mentioned in Q2, that we are boosting the startups. It can be seen over here, as well as in the capital employed side. and then in the maturity structure of interest-bearing debt. That has been restructured quite heavily during this year. As you remember, in the beginning of the year, we had two bonds, a hybrid bond over there, and we have also renegotiated our bilateral loans, a number of those ones during this year. And then to the matrices. Equity ratio as well as gearing, both of those have improved during the last one year, and then the debt to adjusted EBITDA ratio as well as interest cover ratio are also reflecting about our performance. And now I pass that to Mark, please.