YIT Oyj — Audit Report / Information 2017

Apr 4, 2018

YIT publishes pro forma financial information for 2016 and 2017

YIT publishes pro forma financial information for 2016 and 2017

YIT Corporation Stock Exchange Release April 4, 2018 at 3:00 p.m.
YIT publishes pro forma financial information for 2016, 2017 and for each
quarter of 2017. YIT has prepared the following unaudited pro forma financial
information to illustrate the effects of the merger of YIT and Lemminkäinen to
its results of operations and financial position and to facilitate the
comparability of the combined company’s financial information. Pro forma
financial information includes key figures, income statement and balance sheet
as well as notes to pro forma financial information that explains the basis of
presentation and segment information.

The merger of YIT and Lemminkäinen was completed on February 1, 2018, creating
the largest construction company in Finland and a major player in Northern
Europe. The combined company’s pro forma revenue was EUR 3,862.5 million and
adjusted pro forma operating profit was EUR 138.9 million in 2017.

The unaudited pro forma financial information is based on the historical
financial information of YIT and Lemminkäinen presented in accordance with IFRS
adjusted for the impact of the merger. This unaudited pro forma financial
information assumes the new segment reporting structure and the reporting
practices adopted by YIT at the effective date of the merger.

Residential sales

YIT reports residential sales in units by market areas for Finland, CEE
countries and Russia. The sold apartments have been divided by sales from
projects initially started to consumers and projects started to investors. Sales
from projects initially started to consumers comprise also sales from projects
initially started to consumers with separate units sold to institutional
investors. The number sales of these units have also been reported separately.
Sales from projects started to investors comprise sales of whole projects to
housing funds or other institutional players. YIT does not report the number of
apartments from residential contracting. The presented residential sales figures
are based on historical figures reported by YIT and Lemminkäinen and they are
not a part of pro forma financial figures.

In the CEE countries, YIT improves its capital efficiency by selling residential
projects to YCE Housing I fund. The projects sold to the fund, which was
established during the last quarter of 2016, have been reported as investor
sales. YIT acts as an estate agent for the fund and sells the apartments from
the projects owned by the fund to consumers.

The reporting practices of the merged companies and especially the grouping into
consumer and investor sales have been harmonised as a part of the unification of
reporting. The principles used earlier have differed somewhat from each other
and therefore the consumer sales of the first quarter 2017 differ slightly from
the information published in the Investor news, March 16, 2018. The specified
apartment sales figures for the first quarter will be published in connection
with the first quarter 2018.

               Annual             Additional quarterly information

Units 1–12/17 1–12/16  10–12/17  7–9/17  4–6/17  1–3/17

Finland
       of which 2,156  1,838  520  539  484  613
initially started
to
       consumers,
YIT*
       investors, 830  892  284  28  305  213
YIT
     Total, YIT 2,986  2,730  804  567  789  826
       of which 1,344  1,003  403  362  267  312
initially started
to
       consumers,
Lemminkäinen**
       investors, 234   235  42  77  71  44
Lemminkäinen
     Total, 1,578  1,238  445  439  338  356
Lemminkäinen
     Total 4,564  3,968  1,249  1,006  1,127  1,182
CEE
       consumers, 919  957  201  216  252  250
YIT
       investors, 694  240  342  246  0  106
YIT
       Total 1,613  1,197  543  462  252  356
     consumer 253 0 107 50 66 30
sales from the
       projects
earlier sold to

investors***
Russia
       sold, YIT 2,894  3,523  952  812  584  546
       sold, 5  49  -  1  3  1
Lemminkäinen
   Total        3,572  952  813  587  547
2,899

* Includes apartments sold to investors in bundles: 1-12/17: 226 units; 1-12/16:
242 units; 10-12/17: 35 units; 7-9/17: 64 units; 4-6/17: 23 units; 1-3/17: 104
units
** Includes apartments sold to investors in bundles: 1-12/17: 261 units; 1
-12/16: 241 units; 10-12/17: 77 units; 7-9/17: 66 units; 4-6/17: 30 units; 1
-3/17: 88 units
*** Apartments sold to customers in the projects that YIT has earlier sold to
YCE Housing I fund and reported them then as investor sales

Pro forma performance related key figures for the years 2017 and 2016 and
quarters 2017

                Annual              Additional quarterly information

EUR million 1–12/17  1–12/16  10–12/17  7–9/17  4–6/17  1–3/17
Revenue 3,862.5 3,387.0 1,123.6 1,059.5 983.4 696.0
Operating profit 77.4 73.8 37.1 60.1 32.6 -52.4
Operating profit   2.0% 2.2% 3.3% 5.7% 3.3% -7.5%
margin, %
Adjusted operating 138.9 89.8 60.4 66.1 39.5 -27.1
  profit
Adjusted operating 3.6% 2.6% 5.4% 6.2% 4.0% -3.9%
  profit margin, %
Earnings per share 0.13 0.14 0.05 0.21 0.09 -0.23
– basic, EUR
Adjusted earnings 0.35 0.18 0.14 0.23 0.11 -0.12
per share, EUR
Order backlog at 4,218.3 4,313.4 4,218.3 4,378.9 4,617.1 4,655.7
the end of period

Pro forma capital structure related key figures

                                    As at December 31, 2017

Interest-bearing net debt, EUR million 668.5
Gearing*, % 59.9%
Equity ratio, % 40.2%

*YIT has changed the definition of gearing on January 1, 2018 to include
interest-bearing receivables in the calculation of this key figure. The pro
forma gearing for the comparison period is given according to the new
definition.

Pro forma segment information

Pro forma segment information has been prepared to reflect the Group’s new
segment structure consisting of six reportable segments: Housing Finland and
CEE, Housing Russia, Business premises, Infrastructure projects, Paving and
Partnership properties. Pro forma segment information is based on historical
financial information of YIT and Lemminkäinen prepared under IFRS, adjusted for
changes in the composition of the segments, the established new segment
Partnership properties and elimination of intercompany items between YIT and
Lemminkäinen and new segments.
The Housing Finland and CEE segment consists of YIT’s former Housing Finland and
CEE segment and the Finnish residential construction business of Lemminkäinen’s
Building Construction Finland segment. Segment’s business comprises of the
development and construction of apartments, entire residential areas and leisure
-time residences. The segment’s main focus is on self-developed projects and YIT
mainly sells the constructed apartments themselves to both consumers and
investors. YIT also offers and develops different living services and concepts.
The segment’s geographical markets are Finland, the Czech Republic, Slovakia,
Poland, Estonia, Latvia and Lithuania.

Housing   Finland and 1–12/17 1–12/16 10–12/17 7–9/17 4–6/17 1–3/17
CEE
pro forma, EUR
million
Revenue 1,156.2 929.4 270.7 329.1 298.2 258.3
Revenue from external 1,156.1 929.3 270.7 329.1 298.2 258.2
  customers
Revenue Group 0.1 0.1 0.0 0.0 0.0 0.0
internal
Depreciation,   -1.6 -2.5 -0.4 -0.5 -0.4 -0.4
amortisation and
impairment
Operating profit 78.1 38.5 10.4 33.2 25.9 8.5
Operating profit   6.8% 4.1% 3.9% 10.1% 8.7% 3.3%
margin, %
Adjusting items 4.9 - 4.9 - - -
Adjusted operating   83.0 38.5 15.3 33.2 25.9 8.5
profit
Adjusted operating   7.2% 4.1% 5.7% 10.1% 8.7% 3.3%
profit margin, %
Order   backlog at 1,580.1 1,378.5 1,580.1 1,438.8 1,521.4 1,434.1
the end of the period

The table below presents the segment’s business according to the percentage of
completion (POC) based reporting which is additional information used by the
management to follow the development of the segment’s business.

Housing   Finland and 1–12/17 1–12/16 10–12/17 7–9/17 4–6/17 1–3/17
CEE
pro forma, EUR million
Revenue (POC) 1,185.9 1,045.0 299.1 278.8 281.7 326.2
Operating profit (POC) 96.6 73.5 20.1 27.3 25.8 23.4
Operating profit   8.1% 7.0% 6.7% 9.8% 9.2% 7.2%
margin (POC), %
Adjusting items (POC) 4.9 - 4.9 - - -
Adjusted operating   101.5 73.5 25.0 27.3 25.8 23.4
profit (POC)
Adjusted   operating 8.6% 7.0% 8.4% 9.8% 9.2% 7.2%
profit margin (POC), %
Order   backlog at the 1,337.4 1,148.4 1,337.4 1,245.6 1,298.9 1,381.1
end of the period (POC)

The Housing Russia segment consists of YIT’s former Housing Russia segment and
Lemminkäinen’s residential construction and property management business in
Russia. Segment’s business comprises development and construction of apartments
and entire residential areas in Russia. YIT has operated in Russia over 55
years. YIT pursues both self-developed projects and contracting. YIT focuses on
self-developed housing construction, while the role of providing maintenance,
property management and additional services has increased during the recent
years, in respect of residential projects.

Housing   Russia  1–12/17 1–12/16 10–12/17 7–9/17 4–6/17 1–3/17
pro forma, EUR
million
Revenue 421.0 287.8 200.3 45.1 107.1 68.5
Revenue from external 421.0 287.8 200.3 45.1 107.1 68.5
  customers
Revenue Group - - - - - -
internal
Depreciation,   -1.1 -3.2 -0.2 -0.4 -0.2 -0.2
amortisation and
impairment
Operating profit 1.7 -37.6 15.3 -6.9 -1.5 -5.2
Operating profit   0.4% -13.0% 7.6% -15.2% -1.4% -7.6%
margin, %
Adjusting items 3.2 30.5 3.2 - - -
Adjusted operating   4.9 -7.1 18.5 -6.9 -1.5 -5.2
profit
Adjusted operating   1.2% -2.5% 9.2% -15.2% -1.4% -7.6%
profit margin, %
Order   backlog at 448.6 702.1 448.6 576.2 585.4 729.9
the end of the period

The table below presents the segment’s business according to the percentage of
completion (POC) based reporting which is additional information used by the
management to follow the development of the segment’s business.

Housing   Russia  1–12/17 1–12/16 10–12/17 7–9/17 4–6/17 1–3/17
pro forma, EUR million
Revenue (POC) 320.3 284.1 115.2 66.2 73.3 65.6
Operating profit (POC) 1.4 -35.3 2.1 0.1 1.1 -2.0
Operating profit   0.4% -12.4% 1.8% 0.2% 1.5% -3.0%
margin (POC), %
Adjusting items (POC) 3.2 30.5 3.2 - - -
Adjusted operating   4.6 -4.8 5.3 0.1 1.1 -2.0
profit (POC)
Adjusted   operating 1.4% -1.7% 4.6% 0.2% 1.5% -3.0%
profit margin (POC), %
Order   backlog at the 396.1 542.2 396.1 440.4 467.3 562.5
end of the period (POC)

The Business premises segment consists of the business premises construction and
project development businesses that were previously under YIT’s Business
premises and Infrastructure segment, along with the commercial construction,
project development and commercial property and facilities management businesses
of Lemminkäinen’s Building Construction Finland segment. The majority of the
revenue comes from the Finnish operations. In this segment, YIT pursues both
self-developed projects and contracting. For self-developed projects YIT
acquires users and tenants for the premises, and develops, constructs and
divests the premises. Self-developed projects are typically offices, retail
premises or logistics or care sector premises. In contracting, projects are
typically public facilities, industrial properties and business premises. In
addition to new construction, YIT carries out renovation projects. The segment’s
geographical markets are Finland, Estonia, Latvia, Lithuania and Slovakia.

Business   premises  1–12/17 1–12/16 10–12/17 7–9/17 4–6/17 1–3/17
pro forma, EUR
million
Revenue 902.2 825.9 279.7 203.5 220.1 198.9
Revenue from external 894.2 818.1 278.5 201.4 217.5 196.8
  customers
Revenue Group 8.0 7.8 1.2 2.0 2.6 2.1
internal
Depreciation,   -0.2 -0.2 -0.0 -0.0 -0.0 -0.0
amortisation and
impairment
Operating profit 45.6 27.5 28.9 8.0 6.8 1.8
Operating profit   5.1% 3.3% 10.3% 4.0% 3.1% 0.9%
margin, %
Adjusting items 5.9 - 5.9 - - -
Adjusted operating   51.5 27.5 34.7 8.0 6.8 1.8
profit
Adjusted operating   5.7% 3.3% 12.4% 4.0% 3.1% 0.9%
profit margin, %
Order   backlog at 1,306.8 1,365.7 1,306.8 1,380.5 1,476.0 1,437.2
the end of the period

The Infrastructure projects segment consists of the Infra Services division of
YIT’s Business premises and Infrastructure segment, excluding the Maintenance
unit, and Lemminkäinen’s Infra Projects segment. The operations include
construction of roads, bridges, railway and metro stations and ports and parking
facilities as well as energy, water supply and industrial plants. YIT also
offers wind power plant foundation solutions with related services and
maintenance. YIT also quarries tunnels and mines and reinforce the soil using
different methods. The segment operates in Finland, Sweden, Norway, Estonia,
Latvia and Lithuania.

Infrastructure  projects  1–12/17 1–12/16 10–12/17 7–9/17 4–6/17 1–3/17
pro forma, EUR million
Revenue 686.0 676.6 202.7 186.2 175.2 121.9
Revenue from external 651.2 628.4 191.0 179.4 166.0 114.7
customers
Revenue Group internal 34.8 48.2 11.7 6.7 9.2 7.2
Depreciation,   -13.3 -13.9 -3.2 -3.5 -3.3 -3.3
amortisation and
impairment
Operating profit 17.4 27.7 5.8 7.6 5.2 -1.3
Operating profit   2.5% 4.1% 2.9% 4.1% 3.0% -1.1%
margin, %
Adjusting items - - - - - -
Adjusted operating   17.4 27.7 5.8 7.6 5.2 -1.3
profit
Adjusted operating   2.5% 4.1% 2.9% 4.1% 3.0% -1.1%
profit margin, %
Order   backlog at the 471.0 467.6 471.0 471.7 553.7 549.4
end of the period

The Paving segment consists of Lemminkäinen’s Paving segment and YIT’s
Maintenance unit. The operations of the segment include paving and mineral
aggregate production as well as stabilisation, milling and waterproofing. The
segment’s operations also include road and street network maintenance. The
company cooperates with its customers to produce pavements for especially
demanding works, such as airport runways with special quality demands.
Approximately half of the segment’s revenue originate from public procurement by
states and municipalities. Paving and mineral aggregate production are capital
-intensive businesses that tie capital to machinery and equipment, land areas
and current assets. The Paving segment operates in Finland, Sweden, Norway,
Denmark and Russia.

Paving    1–12/17 1–12/16 10–12/17 7–9/17 4–6/17 1–3/17
pro forma, EUR
million
Revenue 768.9 753.1 191.2 312.7 202.3 62.7
Revenue from external 740.3 721.2 183.2 304.7 194.8 57.7
  customers
Revenue Group 28.6 31.9 8.0 8.0 7.5 5.0
internal
Depreciation,   -22.1 -21.4 -5.5 -8.8 -5.8 -2.0
amortisation and
impairment
Operating profit 4.7 23.9 -6.9 27.4 9.1 -25.0
Operating profit   0.6% 3.2% -3.6% 8.8% 4.5% -39.9%
margin, %
Adjusting items - - - - - -
Adjusted operating   4.7 23.9 -6.9 27.4 9.1 -25.0
profit
Adjusted operating   0.6% 3.2% -3.6% 8.8% 4.5% -39.9%
profit margin, %
Order   backlog at 411.8 399.6 411.8 511.8 480.5 504.9
the end of the period

Partnership properties segment was established on January 1, 2018. The income
for the segment derives from investments, i.e. from rental income (cash flow
from rents) and increased value of the assets. Additionally, the segment will
potentially have revenue from different service agreements related to managing
or sourcing the assets it partially owns. Until the beginning of 2018, the
income has been close to zero from the assets transferred under this segment.
The adjusted operating profit amounted to EUR -0.5 million for the year ended
December 31, 2017.

The objective of the segment is to improve visibility on the reporting of
partnership projects, improve the capability of executing large projects
together with partners and to enable the creation of a project portfolio of
rental cash flow. In the long run, YIT’s aim is to continue its practice of
divesting its holdings to final investors at the time it sees fit.

Appendix: Unaudited pro forma financial information

For further information, please contact:

Hanna Jaakkola, Vice President, Investor Relations, YIT Corporation, tel. +358
40 5666 070, hanna.jaakkola@yit.fi

Ilkka Salonen, Chief Financial Officer, YIT Corporation, tel. +358 45 359 4434,
ilkka.salonen@yit.fi

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 develop and build apartments, business premises and entire areas. We are also
specialised in demanding infrastructure construction and paving. Together with
our customers our 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 pro forma revenue
for 2017 was over EUR 3.8 billion. YIT Corporation's share is listed on Nasdaq
Helsinki Oy. www.yitgroup.com (https://www.yitgroup.com/en)

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