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Since the previous investor report, we have published an update to our strategy for 2020-2022. The strategy has not been changed but reviewed: our target continues to be to improve profitability and to maintain financial stability.
Our strategic priorities are, as before, sustainable urban development and the non-cyclical Partnership properties and services businesses. In Partnership properties, we aim to extend our role in the value chain towards managing real estate assets, property management and life-cycle responsibility. The Services business includes e.g. long-term service agreements, maintaining and developing the built environment and customer service. At the moment, road maintenance, renovation, property management and living services of our businesses are counted as services.
As last year, these priorities are supported through our cornerstones of success: top performance, success with customers and partners and happy people. As a new one, we have introduced stepping up sustainability; here we have an ambitious target of halving the CO2 emissions of our own operations and self-developed projects in the next ten years.
YIT’s Board of Directors confirmed the company’s long-term financial targets for return on capital employed (ROCE) above 12% and gearing ratio 30-50% including the impact of IFRS 16 by the end of the strategy period as well as an annually growing dividend. These targets are unchanged; the only change is that the BoD has decided to propose to the Annual General Meeting a change in dividend payment to be done in two tranches starting with the dividend paid for the year 2019.
You can read the stock exchange release on our strategy here: https://www.yitgroup.com/en/news-repository/stock-exchange-releases/yit-reviews-its-strategy-sustainable-urban-development-to-drive-performance-through-cycles
In our Capital Markets Day last week, we shared additional information on YIT’s financial development and the key focus areas of the strategy: improving profitability, the Partnership properties business, growing the services business as well as actions related to stepping up sustainability.
All CMD presentations are available on our web pages at https://qsb.webcast.fi/y/yit/yit_2019_0926_cmd/ , and all presentation materials are available at https://www.yitgroup.com/en/investors/reports-and-presentations/capital-markets-day.
Residential consumer demand has remained stable on a normal level in Finland and Russia and continued to be brisk in the CEE countries. The outlook is stable in all market areas. In the third quarter, the company has started residential housing projects for consumers as follows: approximately 600 units in Finland and approximately 400 units in the CEE countries. In Russia, during the third quarter, approximately 500 apartments have been started for consumers. Based on the number of housing starts, we estimate that the housing completions targeted directly to consumers in Finland in 2020 will be approximately 2,600 units (estimate 2019: approximately 2,700 units), in the CEE countries approximately 1,600 units (estimate 2019: approximately 1,600) and in Russia approximately 3,100 units (estimate 2019: approximately 3,900). The reduction in Russia is above all due to the fact, as announced in June, we will discontinue residential construction in Moscow, Moscow region and Rostov-on-Don.
The silent period before the third quarter financial report begins on 1st of October. Our interim report will be published on Friday 1 November at approximately 8:00 a.m. EET.