YIT Oyj — Investor Presentation 2020

Feb 19, 2020

YIT in brief 2019

Year of success

The core of our business model and the engine of our growth is sustainable urban development and an exceptional ability to develop and implement self-developed projects as well as other projects involving responsibility for planning and design.

The highlight of YIT's year was the opening of Mall of Tripla. Tripla is an excellent example of a project that fits our vision of bringing more life to sustainable cities. It is an enormous hybrid project that has given us the opportunity to utilise the full range of our expertise, from project development to construction and ownership in cooperation with our partners.

In September, we published our updated strategy, which sees us focus, in addition to urban development, on the improvement of profitability as well as the development and growth of the Partnership properties business and the services business, which help level out cyclicality. In the Partnership properties business, we will expand our role in the value chain towards managing real estate assets, property management and lifecycle responsibility. In the services business, we aim to become, for instance, a comprehensive service provider in housing. This means that rental apartments, for example, will become an increasingly important part of our offering.

Stepping up sustainability is another one of our key objectives for the coming years. We have set a target of halving the carbon dioxide emissions of our operations and self-developed projects by 2030. We have made a commitment to reporting project-specific CO2 figures for our self-developed projects starting from this year. A further objective is to develop carbonneutral properties whose use creates no emissions.

All in all, we had a successful year in 2019. The Group's full-year adjusted operating profit grew to EUR 166 million. Our adjusted operating profit for the final quarter was the best we have ever achieved, and we expect our strong order backlog and stable demand to continue to support our profitability in 2020.

Apartment sales were brisk in spite of the slight uncertainty in the market. In Finland and the CEE countries, the consumer sales of apartments strengthened substantially towards the end of the year. In Russia, our business returned to profitability and housing sales picked up in the latter part of the year. In the summer, we decided to focus our operations in Russia on four cities and the maintenance business, and we closed down five units. Our capital invested in Russia was reduced during the year by more than EUR 50 million at comparable exchange rates.

The result of the Infrastructure projects segment improved significantly year-on-year. The segment achieved a positive adjusted operating profit following a loss in the previous year, and the order backlog grew to exceed EUR 1.1 billion.

In the summer, we announced the sale of our Nordic paving and mineral aggregates businesses to Peab. We prepared the sale of the business during the autumn, and it is currently being reviewed by the competition authorities. We expect the transaction to be finalised during the first or the second quarter of 2020.

The success of our company is built on the professional competence of our people. It is important for us to build a working community that develops itself and boldly takes the entire construction industry forward. We focused even more heavily on the management of occupational safety, and these efforts will continue in the new year. One of our commitments is that everyone has the right to a safe and respectful working environment wherein their well-being is genuinely cared about.

I want to take this opportunity to thank our personnel and partners for their commitment to our shared goals and our customers for their trust and cooperation.

Kari Kauniskangas President and CEO

More life in sustainable cities

YIT is the largest Finnish and a significant North European construction company.

We develop and build apartments and living services, business premises and entire areas. We are also specialised in demanding infrastructure construction. Together with our customers, we create more functional, more attractive and more sustainable cities and environments.

In continuing operations YIT employs on average over 7,500 professionals in 10 countries: Finland, Russia, Scandinavia, the Baltic States, the Czech Republic, Slovakia and Poland. Our revenue in 2019 was approximately EUR 3.4 billion. YIT Corporation's share is listed on Nasdaq Helsinki Oy.

In summer 2019, YIT announced the sale of its Nordic paving and mineral aggregates businesses, and the transaction is estimated to be closed during the first or the second quarter of 2020.

The year in figures

Top performance Happy people

Profitability

Dividend proposal

+25%

improved adjusted operating profit

0.28

EUR per share

Stepping up

Commitment index

77%

personnel satisfaction

1st the most attractive construction industry employer among students

Employer image

Success with customers and partners

Customer satisfaction

Service on site

53

NPS Promoter Score, scale: -100–100

4.5 Site personnel's

service-mindedness, scale: 1–5

sustainability

Carbon dioxide emissions

214

kt CO2 e of own energy consumption

10.5 accidents per one million hours worked

Occupational safety

100 Good Deeds – more than 200 good deeds have already been done in our responsibility programme.

Find out more at yitgroup.com/ 100hyvaatekoa (in Finnish)

Helsinki-Vantaa Airport, Vantaa, Finland

Highlights from 2019

At the Henriksdal wastewater treatment plant in Stockholm,

we won a four-year infrastructure construction contract in January and a new wastewater tunnel construction contract in June. Henriksdal wastewater treatment plant is the largest in Sweden and one of the largest in Europe.

Changes in business segments.

More information on our highlights of the year: yitgroup.com/year2019

In July, we decided to sell our Nordic paving and mineral aggregates businesses to Peab. We also announced in June that we will scale back our operations in Russia.

We established our first joint ventures focused on rental apartments with FinCap and Ålandsbanken, which saw us enter the rental housing business.

We made our first plot purchase and expanded to Gdańsk, Poland. We are planning a mixed-use project for the plot, comprising business premises and apartments. Prior to this move, our operations focused on Warsaw, Poland.

Construction began in June on the 25-kilometre Jokeri Light Rail line. We operate as a contractor in the alliance. The project will continue until 2024.

Mall of Tripla in Helsinki's Pasila district opened on schedule on October 17, 2019. Measured by the number of shops, it is the largest shopping centre in the Nordic countries and also the shopping centre with the highest LEED score in Finland. LEED is an international environmental classification of premises and buildings.

x.x

Strategy

Performance through cycles

Our mission is to create better living environments. The improvement of profitability and maintaining financial stability remain as key objectives in our updated strategy.

External factors — megatrends — have a significant impact on our operations and strategic choices. Urbanisation is continuing and cities are growing denser around public transport hubs. Digitalisation enables us to improve customer experience and enhance productivity. The demand for sustainable products and services is growing, legislation is changing and natural resources are becoming increasingly scarce.

The four cornerstones of YIT's success

Top performance is pursued through construction site productivity and a high level of capital efficiency. We will leverage digital opportunities in improving the efficiency of services and processes.

Happy people gravitate towards working communities where the company culture, leadership practices, tools, compensation and benefits together with the overall atmosphere foster commitment and satisfaction. Our target is to be the most desired employer in our field among current employees, students and professionals.

We achieve success together with customers and partners. Better customer insight, the use of data, conceptualisation and active daily customer work enable us to improve the customer experience. By collaborating with our partners, we increase innovation, speed and financing.

We step up sustainability in our operations and products through, among other things, our choices of materials and the improved efficiency of operations. We create new business and services in line with the principles of sustainable development throughout the property life cycle.

Strategic priorities — where we seek growth and profitability

Urban development

Urban development is focused on demanding urban development projects that enable us to leverage our strengths in project development, design management and the management of demanding projects. These projects allow us to maximise the added value and productivity benefits we create for our customers.

Partnership properties

The Partnership properties business is based on a strong generated project flow, structuring of investment products, asset management and further on rental income from own investments, their value development and eventual asset sales. We will extend our role in the value chain towards managing real estate assets, property management and life-cycle responsibility.

Services

The services business is based on long-term service agreements, maintaining and developing the built environment and customer service. These business operations currently include road maintenance, renovation, property management and living services. In housing, we aim to become a comprehensive service provider.

More life in sustainable cities

Strategy

Development programmes execute our strategy

We support our strategy execution with four Group-wide development programmes.

In connection with the review of the Group's strategy, the Performance, Customer Focus and Green Growth development programmes were complemented by a fourth development programme: Services Development. The programmes support our development, engagement and practical implementation efforts required for the execution of our strategy.

Performance

We support the development of productivity by decreasing waste and turnaround times, without compromising quality. In 2019, we focused on the development of industrial construction through a management system, prefabrication, takt time production, logistics and digitalisation. We adopted new digital tools and developed analytics to improve our project management and productivity. We carried out pilot projects to support the development of the supply chain. The lessons learned from the pilot projects will be scaled for broader use in production.

Customer Focus

Growth and profitability through customer focus. In 2019, we placed a particular priority on more active sales, our work with key accounts, digitalisation of consumer services and deepening our knowledge of our customers.

Green Growth

We support the growth of our operations and the development of productivity by applying the principles of sustainable development. In 2019, we carried out two extensive function-specific

responsibility surveys, began the implementation of CO2 calculations for our projects and started assessing new businesses based on sustainable development.

Services Development

We are building new service business models to support YIT's profitability through cycles. Through service design and a customer-focused development model, we are creating new business initiatives together with our partners to support YIT's strategy as a sustainable urban developer.

Sustainability

The foundation for our sustainable operations

Creating sustainable, comfortable and safe urban development by utilising opportunities provided by the circular economy. We build long-lasting and attractive living environments. We promote carbon-neutral construction and develop life-cycle services for properties.

Compliance with good corporate governance and preventing corruption and the grey economy. Our operations are ethical and transparent. We are committed to compliance with our Code of Conduct.

Occupational safety. We continuously improve our safety practices. We also monitor compliance with occupational safety practices among our subcontractors and throughout the supply chain.

Promoting the personnel's occupational well-being and competence development.

We aim to be an attractive employer and offer equal opportunities to our employees. We invest in the continuous development of employee competence.

Implementing responsible subcontracting and procurement. We are committed to respecting labour and human rights. We set environmental and social responsibility requirements for our subcontractors and supply chain.

Reducing the environmental impacts of YIT's own operations. We improve the energy efficiency of our operations and increase recycling in production processes. Through our actions, we aim to e.g. mitigate climate change throughout our supply chain.

Our long-term targets Sustainability

CO2 emissions

We will halve the carbon dioxide emission of our operations and self-developed projects by 2030 (compared to 2019). This target helps us fight to mitigate climate change and enable the reduction of emissions for our customers. To achieve this target, we will implement measures related to energy efficiency, renewable energy sources and choices of materials.

Carbon neutrality

We will enable the carbon-neutral use of our self-developed projects. This target enables us to help our customers and the users of properties reduce their carbon footprint. To achieve this target, we will implement measures related to energy efficiency, renewable energy sources and choices of materials.

CO2 reporting

We will report the project specific CO2 emissions of our self-developed projects from 2020 onwards. This target helps us increase our understanding of project emissions and enables us to explore opportunities for reducing emissions. To achieve this target, we have started to use a calculation programme and we are training our personnel on CO2 calculation.

We are currently determining the 2019 baseline for our CO2 emissions target.

Targets and actions 2019

Read more about YIT's impacts on the UN Sustainable Development Goals (SDGs): yitgroup.com/sustainabilitymanagement

SDG	Theme	Target 2019	Indicator	Result in 2019
	1. Sustainable, comfortable and safe urban development by utilising the opportunities presented by the circular economy
	Circular economy	Defining YIT's potential for the circular economy and setting targets		implemented with circular economy measures
		Initiating circular economy pilot projects		work in progress
	Sustainable urban development Expanding the key indicators for sustainable urban development 2. Compliance with good corporate governance and preventing corruption and the grey economy
	Responsible business principles Fighting corruption and transparent actions	Updated YIT Code of Conduct (YIT Code II) online course: coverage 100% of the personnel	%	79
		Number of resolved crimes and misdemeanours: the target is zero incidents	qty	59
	3. Occupational safety	Observations and corrective measures concerning controls carried out by the internal audit	qty	150, 25 incomplete
	Preventive
		Work Safety Challenge workshops: Executive management and 500 participants from operating countries	qty	over 1,000
		Weekly site assessments and occupational safety observations (YIT Finland Ltd): digital tool implemented
	Reactive Accident frequency LTIF <5 (Group personnel) LTIF 10.5
		4. Promoting the personnel's occupational well-being and competence development
	Happy people	Spirit index for the Voice HR survey: >78%	%	75
		Number of trainees: 1,000 trainees/summer workers	qty	888
		Trainee feedback (recommendation index): > 90% (YIT Finland Ltd)	%	99
		Participation in supervisor training: 100 people	qty	183
		Exit rate %: max. 4.5% (rolling review period of 6 months, resignation for personal reasons)	%	3.2
		Human rights assessment: Survey completed and its results factored into annual planning
	5. Implementing responsible subcontracting and procurement
	Transparency	Real-time supplier monitoring (YIT Finland Ltd): implementation of the tool
		Risk assessment for responsible procurement: completed and results factored into annual planning
	Audits and the procurement process	Harmonising the audit policy and auditing processes and implementing best practices		implementation in progress
		Harmonising supplier audits and implementing best practices		implementation in progress
	6. Reducing the environmental impact of the YIT's own operations
	Energy and material efficiency	Determining the potential for operational efficiency/circular economy and setting targets		work in progress
	Carbon calculations	Developing energy reporting and CO2 calculation model (Group and project-specific calculation)		work in progress
		Developing the waste reporting model (YIT Finland Ltd)
	Recycling and reuse of materials	The proportion of reclaimed asphalt (RAP) 20% out of all asphalt produced in 2021	RAP %	20.8
	Management of environmental impacts	ISO 14001 certification of business operations (YIT Finland Ltd)

Happy people

We are building a better future together

At YIT, we build better living environments together, from homes and schools to streets, city blocks and entire cities. Whether the project concerns a sustainable city district, the home of a customer's dreams, business premises or an extensive infrastructure project, we are proud of what can be achieved through teamwork between YIT employees, our partners and our customers.

Together, we are building a better working community that boldly takes itself and the entire construction industry forward. We are a small giant in our industry, but our culture has a warm heart. In our 2019 personnel survey, the cooperation between units and teams was highlighted as one of our strengths. Of the YIT employees who participated in the survey, 81% said they are happy to come to work. The questions related to

sustainability indicators (ethical operations, conduct in line with values and putting safety first) produced an excellent result at 86%.

Good progress has been made with regard to open cooperation and employee representation through the targets and operating methods established after the merger, which emphasise the importance of day-to-day cooperation and openness.

We support our personnel in improving their competencies and building their careers. At the Group level, more than 300 supervisors honed their skills during the year in leadership training and supervisor training programmes in addition to various segmentlevel and division-level training activities. As an example of the professionalism and uncompromising attitude of

our personnel, Helsinki Central Library Oodi won the Project of the Year 2019 award.

Our large organisation provides employees with room to grow, new things to learn and new boots to fill. Our large projects offer attractive assignments and our focus on internal career paths creates plenty of opportunities for development.

We helped nearly 900 young people get started on their careers in summer jobs and trainee positions. According to the feedback from our trainees, 96% of them want to work for YIT again in the future. We were ranked as the most attractive employer in the construction industry in Universum's annual Students survey.

We believe that we can build a better future together.

Happy people

Cooperation takes all of us forward

Our focus on safety reflects our respect for life

YIT employees have the right to a safe and respectful working environment that genuinely cares about their well-being. The culture of respecting life is reflected in our carefully planned work, response to risky situations and commitment to harmonised ways of working. We have harmonised our occupational safety reporting and monitoring as well as our occupational health processes.

We continued to develop our values and corporate culture with occupational safety as the main theme. We organised Work Safety Challenge workshops for nearly 1,000 YIT employees in our various operating countries to influence attitudes in particular. Representatives of our management made more than 1,000 site visits to discuss safety.

Developing together creates the foundation for diverse career paths

Our wide-ranging project portfolio provides opportunities for upward career mobility as well as paths for in-depth specialisation. We plan the key resources of important projects in advance and focus on enabling a smooth transition into new roles for personnel from completed projects.

We take a long-term approach to developing our trainees into highly competent professionals. Some 47% of the Group's trainees were promised a job for the following summer, hourly jobs or permanent employment upon graduation. Students serving as YIT Agents at our partner institutions strengthen our networking efforts.

We developed our applicant experience and employee experience by engaging our personnel from various positions and countries.

Ambitious projects are built with competence and cooperation

We harmonised our induction practices in order to strengthen our corporate culture, ensure smart working methods, highly competent supervisory work and smooth work in general.

Result and development discussions held semiannually or in accordance with project schedules serve as the foundation for setting clear targets, seeing the big picture, developing competence and promoting career development.

As part of our strategy process, we identified key competencies to focus on as well as anchor roles that will be particularly targeted in recruitment and competence development activities.

We continued to harmonise our practices concerning compensation and benefits and established a vision and common principles for compensation and benefits.

Segments

premises

Infrastructure projects

Partnership properties

We develop and build apartments and entire residential areas and provide living services. Our customers include households as well as private and institutional investors.

Market area

Ranta-Tampella,

We operate in Finland, Estonia, Latvia, Lithuania, Poland, the Czech Republic and Slovakia. We are the market leader in Finland and a major player in the CEE countries.

Result in 2019

Revenue grew to EUR 1,240.1 million (1,157.9), and adjusted operating profit was EUR 91.4 million (103.3). In 2019, we completed 4,282 (4,510) apartments in Finland and 1,740 (1,427) apartments in the CEE countries. Consumer demand in Finland remained at a good level, while the demand for residential investment properties showed signs of growth. In the CEE countries, the demand for apartments remained strong.

Key projects

Tripla, Helsinki, Finland; Ranta-Tampella, Tampere, Finland; Nuppu, Bratislava, Slovakia; Suomi Hloubetin, Prague, Czech Republic; Piliamiestis, Kaunas, Lithuania; Aroma Park, Warsaw, Poland.

Focus areas

Our focus areas include the development of living services, improving the customer experience and productivity, increasing the use of prefabricates in construction and reducing the carbon footprint of housing. We aim to start reporting the site-specific CO2 emissions of our self-developed projects starting from 2020.

Ranta-Tampella will be the pearl of Lake Näsijärvi. Much of the area is open to the public.

We create sustainable living environments in cities. We build apartments and residential areas on a self-developed basis. We provide property management and maintenance services for apartments and make the daily life of our customers easier by offering a wide range of living services.

Market area

We are focusing on strengthening our housing business in St. Petersburg, Kazan, Yekaterinburg and Tyumen. We also provide property management, maintenance and living services in over ten cities, from St. Petersburg to Novosibirsk.

Result in 2019

Revenue was EUR 240.0 million (274.1) and the adjusted operating profit was EUR 1.2 million (-32.8), representing a substantial increase compared to the previous year. YIT completed 3,819 (2,974) apartments in Russia in 2019 and was responsible for the maintenance and services for more than 42,000 apartments, 8,000 parking places and 5,000 commercial premises.

Key projects

We began offering completely ready to move and furnished apartments in St. Petersburg. We expanded our offering of easily adaptable Transformer apartments from St. Petersburg to Tyumen. We also decided to expand our living services to Surgut and Novosibirsk in Western Siberia.

Based on YIT's operational experience, NOSTROY, a nationwide trust organization for Russian construction companies, selected the TR meter developed by the construction industry in Finland as the recommended system for measuring the level of occupational safety at construction sites in Russia.

Focus areas

In addition to building high-quality apartments and residential areas, we aim to develop the service business, increase customer satisfaction and improve the accessibility of our services through our digital platforms. In 2019, we also focused on strengthening the profitability of our business and streamlining our operating model.

YIT's Tarmo won an award as the best residential project in St. Petersburg in the Construction Quality Leader 2019 competition. The first phase of the block was completed in November.

Tarmo, St. Petersburg,

Russia

We focus on the construction and renovation of business premises as well as property development and life cycle projects. Our projects include offices, business, production and logistics premises as well as public buildings. We also carry out hybrid projects that combine various uses. Our self-developed projects are located in growth centres with good transport connections. We carry out contracting operations in a carefully managed manner, and our premises solutions are always tailored to the needs of the individual customer.

Market area

We are the leading developer of business premises in Finland and a significant player in the Baltic countries and Slovakia. We focus on capital regions and growth centres.

Result in 2019

Revenue grew to EUR 1,176.9 million (1,045.2), and adjusted operating profit was EUR -7.1 million (67,8). The order backlog stood at EUR 897.4 million (1,326.9) at the end of the year.

Key projects

Keilaniemenranta, Espoo, Finland; Tripla office properties, hotel and apartments, Helsinki, Finland; Central Pasila Trigoni towers, Helsinki, Finland; Vaasa Central Hospital Building H, Finland; Pudasjärvi multi-purpose building, Finland; Helsinki Airport terminal expansion and alteration project, Vantaa, Finland.

Focus areas

The focus of our operations is on sustainable urban development projects and renovation. We aim to achieve an industry-leading position in energy efficiency, material efficiency and the use of circular economy solutions.

We are a partner to property owners and developers to help increase property values. We develop a new operating concept for properties, carry out renovation and alterations and find users for the new premises. Urbanisation, the densification of the urban structure and the ageing of the building stock create a growing need for renovation: our services include repairs on business premises and housing companies, changes in the use of buildings and area development for city blocks.

The terminal expansion at Helsinki Airport provides a significant increase in attractive and highly functional space for passengers.

Helsinki-Vantaa Airport, Vantaa, Finland

We are a comprehensive infrastructure construction partner that provides customers with the best solutions for demanding infrastructure projects.

Market area

In Finland, we are the leading infrastructure developer and we maintain 30,000 kilometres of streets and roads. In the Baltic countries, we focus on road construction and demanding infrastructure projects. In Sweden, we engage in rock construction and industrial projects, amongst others. In Norway, we focus on renewable energy construction.

Result in 2019

Revenue grew to EUR 806.7 million (716.8) and adjusted operating profit improved to EUR 14.9 million (-6.5). The order backlog remained strong and amounted to EUR 1,127.6 million (860.7) at the end of the year.

Key projects

Jokeri Light Rail, Helsinki–Espoo, Finland; Tampere Tramway, Tampere, Finland; Blominmäki wastewater treatment plant, Espoo, Finland; Kaitaa and Soukka

metro stations, Espoo, Finland; Crown Bridges alliance, Helsinki, Finland; Peuralinna self-developed wind power project, Kyyjärvi, Finland; Regional road maintenance contract 2019–2024, Vantaa, Finland; Hamina–Vaalimaa life cycle project maintenance period 2019–2034, Finland; Henriksdal wastewater treatment plant, Stockholm, Sweden; Data centre, Sweden; Løkjelsvatn hydropower plant, Etne, Norway; Via Baltica A14, Lithuania; Tallinn Ring Road, Luige–Saku, Estonia.

Focus areas

The focus of our operations is on demanding infrastructure and urban development projects that support sustainable development, such as rail, tram, wind power and hydropower projects. We use open and participatory cooperation models in our operations. We also carry out self-developed infrastructure projects.

The tramway under construction in Tampere will make daily life more convenient while supporting the city's growth and sustainable development.

Tampereen Tramway, Tampere, Finland Photo: Pasi Tiitola Image: Tramway Alliance

We implement large and long-term projects in cooperation with our investor partners, which increases our investment capacity and risk-carrying capacity. Our property investment projects are aimed at generating stable returns.

Market area

We operate in Finland, the Baltic countries, Slovakia, the Czech Republic and Poland.

Result in 2019

The Partnership properties segment earns revenue through rental income and changes in the valuation of assets. The segment also earns revenue from various service agreements. The Partnership properties segment reported an operating profit of EUR 82.7 million (26.9) in 2019.

Key projects

Mall of Tripla, Helsinki, Finland; Keilaniemenranta, Espoo, Finland; joint investment projects investing in rental apartments, ÅB Kodit and FinCap Asunnot, Finland.

Focus areas

The focus of our operations is on joint investment structures that are grounded on urbanisation and sustainable development.

The ownership, rental income and increase in value of partnership projects are reported in the Partnership properties segment. The construction of the projects is carried out, and revenue recognised, under the Business premises segment, the Housing Finland and CEE segment as well as the Infrastructure projects segment.

The renovation of Accountor Tower into a new, modern head office in Keilaniemi will be completed in 2020.

Build cities that are full of life and will develop for a long time to come.

At YIT, we build better jobs and career paths. Construction is a team sport and we have paths for professionals in various fields at our construction sites and offices. People are the key factor behind our success, which is why we consider it important to keep them motivated and develop their competence.

Find out more about our career opportunities: yitgroup.com/en/careers

Follow us on Instagram @raksaduuni

YIT CORPORATION

P.O. Box 36 (Panuntie 11) 00621 Helsinki, Finland

Tel. +358 20 433 111 firstname.lastname yit.fi

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