YIT Oyj — Interim / Quarterly Report 2021

Jul 30, 2021

YIT’s Half-year report January-June 2021

YIT’s Half-year report January-June 2021

YIT Corporation Stock exchange release 30 July 2021 at 9:00 a.m.

YIT’s Half-year report January-June 2021

Satisfactory quarter driven by good housing results. Group adjusted operating
profit at EUR 30 million.

· YIT’s adjusted operating profit improved to EUR 30 million (5).
· Good results in the housing businesses.
· Infrastructure’s adjusted operating profit at loss due to margin reductions
on certain projects.
· Solid operating cash flow after investments of EUR 109 million (247).
· Net interest-bearing debt decreased to EUR 353 million (715). Gearing
continued to improve reaching 35% (73).

· Strong residential sales continued. Number of unsold completed apartments at
a low level.
· Housing start-ups in Finland and CEE increased substantially to 1,878 (889).
· YIT signed a committed EUR 300 million revolving credit facility linked to
sustainability targets.
· Measures to improve performance progressed at a fast pace. Focus on project
management, operating model and Infrastructure business.

· Ilkka Tomperi appointed as Executive Vice President of the Partnership
properties segment as of August 2021.
· Pasi Tolppanen appointed as Executive Vice President of the Infrastructure
segment as of August 2021.
· Tuomas Mäkipeska appointed as Chief Financial Officer as of beginning of
February 2022 at the latest.

Key figures

+-----------------------------+------+------+------+------+-------+
|EUR million |4-6/21|4-6/20|1-6/21|1-6/20|1-12/20|
+-----------------------------+------+------+------+------+-------+
|Revenue |733 |700 |1,339 |1,407 |3,069 |
+-----------------------------+------+------+------+------+-------+
|Operating profit |25 |0 |40 |-4 |35 |
+-----------------------------+------+------+------+------+-------+
|Operating profit margin, % |3.5 |0.0 |3.0 |-0.3 |1.1 |
+-----------------------------+------+------+------+------+-------+
|Adjusted operating profit |30 |5 |51 |13 |85 |
+-----------------------------+------+------+------+------+-------+
|Adjusted operating profit |4.1 |0.7 |3.8 |0.9 |2.8 |
|margin, % | | | | | |
+-----------------------------+------+------+------+------+-------+
|Result before taxes |17 |-8 |23 |-25 |-6 |
+-----------------------------+------+------+------+------+-------+
|Result for the period, |11 |-9 |15 |-18 |-8 |
|continuing operations | | | | | |
+-----------------------------+------+------+------+------+-------+
|Result for the period, |11 |45 |15 |13 |27 |
|including discontinued | | | | | |
|operations | | | | | |
+-----------------------------+------+------+------+------+-------+
|Earnings per share, EUR |0.05 |0.22 |0.06 |0.06 |0.13 |
+-----------------------------+------+------+------+------+-------+
|Operating cash flow after |109 |247 |178 |199 |336 |
|investments | | | | | |
+-----------------------------+------+------+------+------+-------+
|Net interest-bearing debt |353 |715 |353 |715 |628 |
+-----------------------------+------+------+------+------+-------+
|Gearing ratio, % |35 |73 |35 |73 |68 |
+-----------------------------+------+------+------+------+-------+
|Equity ratio, % |41 |33 |41 |33 |33 |
+-----------------------------+------+------+------+------+-------+
|Return on capital employed, %|8.0 |9.5 |8.0 |9.5 |5.2 |
|(ROCE, rolling 12 months) | | | | | |
+-----------------------------+------+------+------+------+-------+
|Order book |3,890 |4,074 |3,890 |4,074 |3,528 |
+-----------------------------+------+------+------+------+-------+
|Combined lost time injury |10.2 |10.0 |10.2 |10.0 |9.8 |
|frequency (LTIF, rolling 12 | | | | | |
|months) | | | | | |
+-----------------------------+------+------+------+------+-------+
|Customer satisfaction rate |51 |53 |51 |53 |51 |
|(NPS) | | | | | |
+-----------------------------+------+------+------+------+-------+

Nordic paving and mineral aggregates businesses sold on 1 April 2020, are
reported as discontinued operations.
Unless otherwise noted, the figures in brackets refer to the corresponding
period in the previous year.

Markku Moilanen, President and CEO

“YIT’s second quarter was satisfactory in many ways. We swiftly took immediate
measures to improve our performance, and the progress has been promising.
Regarding the business performance, our cash flow was solid resulting in a lower
net debt of EUR 353 million (715). Furthermore, the results of the housing
businesses were very good, supporting our overall profitability. The Group’s
adjusted operating profit improved to EUR 30 million (5).

I am proud of the excellent work the organisation has done in responding to
strong housing demand by boosting sales and margins in all regions. Supported by
the strong balance sheet, we have accelerated our housing start-ups
significantly and expect this trend to continue throughout the year. With this,
we are answering to customer needs and ensuring our solid market position also
for next year.

In Business premises, performance improvement continued. Last year, our
profitability was burdened by certain financial settlements, and the positive
adjusted operating profit in this year’s second quarter is evidence that we are
moving in the right direction. We are still finalising some old projects, but
apart from these, Business premises’ project portfolio is healthy.

In Infrastructure, we took control of the business and went through the entire
project portfolio in detail and found several areas for improvement where
management attention was needed. This led to margin reductions in some of the
projects and consequently, Infrastructure’s second quarter adjusted operating
profit was negative. We expect challenges in Infrastructure to continue for the
rest of the year while we are defining new direction for this business.

As Infrastructure strategy work has progressed, we have at this point made
several important conclusions. First and foremost, we see that the
Infrastructure business will continue to have a strategic role in the YIT Group.
Our sustainable urban development agenda requires a wide portfolio of offerings,
including top-notch infrastructure expertise. We already see that in large urban
development projects, having our own infrastructure business enables us to
achieve clear synergy benefits and financial opportunities. Our aim is to be
differentiated, leading and an innovative partner for demanding infrastructure
projects.

However, as the performance of this segment has not been satisfactory, changes
are needed. Going forward, our focus will be on our core capabilities, such as
rock tunnelling, foundation engineering, rail & tram and urban bridges & marine.
We will take a look at our offering to become more competitive and efficient and
in particular, be more selective in projects. Our future Infrastructure business
will be somewhat smaller than today, but clearly more predictable and
profitable.

Parallel to the Infrastructure strategy efforts, we have taken swift measures in
project management and our operating model. The work is progressing according to
our plans, and we expect to communicate the outcomes over the next couple of
months. While actions are still needed, I am confident that we have all it takes
to achieve steady operational performance with an efficient cost structure which
will be the key for our future success.”

Results

April-June

At the end of the second quarter 2021, YIT’s order book amounted to EUR 3,890
million (31 Mar 2021: 3,716). Compared to the first quarter, the order book
remained stable in the Partnership properties segment and increased in all other
segments. At the end of the quarter, 79% of the order book was sold (31 Mar
2021: 80).

The Group’s revenue was EUR 733 million (700). Revenue increased in Housing
Finland and CEE, Housing Russia and Partnership properties. Revenue decreased in
the Infrastructure and Business premises segments.

The Group’s adjusted operating profit amounted to EUR 30 million (5) and the
adjusted operating profit margin to 4.1% (0.7). The result improved in the
Housing Finland and CEE, Business premises, Housing Russia, and Partnership
properties segments, but weakened in the Infrastructure segment.

YIT’s operating profit was EUR 25 million (0). The adjusting items amounted to
EUR 5 million (5), including operating profit from operations to be closed.

January-June

The Group’s revenue was EUR 1,339 million (1,407). Revenue increased in the
Housing Finland and CEE and Partnership properties segments, but decreased in
the Business premises, Infrastructure and Housing Russia segments.

The Group’s adjusted operating profit amounted to EUR 51 million (13) and the
adjusted operating profit margin to 3.8% (0.9). The result improved in the
Business premises, Housing Finland and CEE, and Housing Russia segments but
decreased in the Infrastructure and Partnership properties segments.

YIT’s operating profit was EUR 40 million (-4). The adjusting items amounted to
EUR 11 million (16) including, among others, operating profit from operations to
be closed.

Guidance for 2021

In Housing Finland and CEE, housing completions in 2021 are expected to decrease
compared to 2020 and volatility between the quarters is expected to be high. In
the third quarter, the number of completions is estimated to decrease to approx.
300 units compared to 874 units in the third quarter of 2020, which is expected
to have an approx.  EUR 15 million impact on the segment’s adjusted operating
profit year-on-year. On the other hand, the fourth-quarter completions are
expected to be at a high level.

For the full year, Housing Russia’s solid underlying performance is estimated to
continue. In Business premises, the stabilising development is expected to
continue. The infrastructure segment is expected to be impacted by certain low
performing projects during the second half of the year. In Partnership
properties, portfolio development is expected to continue.

YIT expects its full-year 2021 adjusted operating profit to be higher than in
2020 (EUR 85 million).

The result is dependent on certain project completions and contract closings
towards the end of the year. Temporary shutdowns or slower progress on
construction sites and delayed completions due to the COVID-19 pandemic could
lead to the postponement of revenue and profit from one quarter or year to
another. Changes in market yields or estimated future cash flows may have
impacts on the fair value of the investments.

Supported by the strong balance sheet, YIT has answered to market demand by
significantly increasing its apartment start-ups. This is expected to tie up
capital as the year progresses.

News conference for investors and media

YIT will arrange a news conference on Friday, 30 July 2021 at 10.00 a.m. Finnish
time (EET, at 8.00 a.m. GMT). The results will be presented by Markku Moilanen,
President and CEO of YIT Corporation, and CFO Ilkka Salonen. The news conference
will be held as a live webcast that can be followed on the company’s web site at
www.yitgroup.com/webcast. A recording of the webcast will be available at the
same address later that day.

The news conference can be participated also through a conference call.
Questions can be asked via the conference call and should be asked in English.
At the end of the event, the media has the opportunity to ask questions also in
Finnish.

Conference call participants are requested to dial in at least five minutes
prior to the start of the conference, at 9.55 a.m. (EET). Conference call
numbers are:

·
Participants from Finland +358 (0)9 8171 0310

· Participants from Sweden +46 (0)8 5664 2651
· Participants from UK and outside of Nordic countries +44 (0)33 3300 0804
· Participants from US +1 (0)63 1913 1422

The participants will be asked to provide the following confirmation code:
42034878#.

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

For further information:
Tommi Järvenpää, Vice President, Investor Relations, YIT Corporation, tel. +358
(0)40 576 0288, tommi.jarvenpaa@yit.fi
Ilkka Salonen, CFO, YIT Corporation, tel. +358 (0)45 359 4434,
ilkka.salonen@yit.fi

YIT Corporation

Tommi Järvenpää
Vice President, Investor Relations

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

YIT is the largest Finnish and a significant North European urban developer and
construction company. Our goal is to create more sustainable, functional and
attractive cities and living environments. We develop and build apartments,
business premises and entire areas. We also specialise in demanding
infrastructure construction. We own properties together with our partners, which
supports the implementation of our significant development projects. We also
provide our customers with services that increase the value of properties. We
employ approximately 7,400 professionals in ten countries: Finland, Russia,
Sweden, Norway, Estonia, Latvia, Lithuania, the Czech Republic, Slovakia and
Poland. Our revenue in 2020 was approximately EUR 3.1 billion. YIT Corporation's
share is listed on Nasdaq Helsinki Oy. www.yitgroup.com

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