YIT’s Financial statements release 2021
Adjusted operating profit margin improved from 2.8% to 4.0% in 2021. Finalised project portfolio clean-up and strengthened order book build a solid foundation for the future.
- Adjusted operating profit amounted to EUR 114 million (85).
- Adjusted operating profit margin improved to 4.0% (2.8).
- Operating profit was EUR 65 million (35)
- Operating cash flow after investments was strong at EUR 288 million (336).
- Net interest-bearing debt decreased to record-low EUR 303 million (628), gearing at 30% (68).
- Dividend proposal of EUR 0.16 per share (0.14), to be paid in two equal instalments.
- Development business continued profitably with a positive impact of over EUR 60 million in 2021, including the sale of Lestijärvi wind park with a positive impact of EUR 48 million in the fourth quarter.
- As a part of the finalised project portfolio analysis, YIT booked margin reductions and inventory write-downs related to certain legacy and non-strategic projects, which had a negative impact of EUR 66 million in the fourth quarter and approx. EUR 100 million in total in 2021.
- Strong order book of EUR 4,042 million (3,528).
- Strong residential sales continued throughout the year. Number of unsold completed apartments at a low level.
- Plot reserve stood at EUR 748 million (812) at the end of the year enabling building of 29,000 new homes.
- Combined lost time injury frequency decreased to 8.9 (9.6).
- Tuomas Mäkipeska started as Chief Financial Officer on 1 November 2021
|Operating profit margin, %
|Adjusted operating profit
|Adjusted operating profit margin, %
|Result before taxes
|Result for the period, continuing operations
|Result for the period, including discontinued operations
|Earnings per share, EUR
|Operating cash flow after investments
|Net interest-bearing debt
|Gearing ratio, %
|Equity ratio, %
|Return on capital employed, % (ROCE, rolling 12 months)
|Combined lost time injury frequency (LTIF, rolling 12 months)*
|Customer satisfaction rate (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.
* YIT has widened its scope of calculating combined lost time injury frequency (LTIF) as of 1 January 2022. YIT has adjusted corresponding figures accordingly.
Markku Moilanen, President and CEO
“When I started as the President and CEO of YIT at the beginning of April, my mission for the year was clear: we had to become much more resilient in our operations, eliminate deviations in project performance and secure stable profitability development. Consequently, 2021 was a year of change and renewal for YIT as we took decisive actions in various areas to stabilise our performance and lay the foundation for sustainable success. For example, we established new strict and clear processes and practices in project tendering and management. We also renewed our entire operating model. Most important of all, we launched a new strategy to leverage our strengths, making it possible for us to strengthen our position as the number one development and construction company in Finland.
When looking back, I can say I am satisfied with the outcomes. Our Group adjusted operating profit increased to EUR 114 million (EUR 85 million) in 2021, with all segments being profitable. I am particularly proud of the excellent performance of our housing segments. Solid results reflect improved margins, a more favourable sales mix and better overall efficiency, and we have done great work in leveraging the current strong housing markets in all regions. Our customer satisfaction has remained at a very high level, which is further testimony to the correctness of our actions in this business. We are now ready to grow in selected regions to strengthen our position even further. We are reviewing the strategic options regarding our operations in Russia, and the potential capital release from that business would primarily be used to pursue growth in housing in growing cities in Finland, Poland, the Czech Republic and Slovakia. The market outlook remains positive in those regions, which supports our growth ambitions.
The biggest turnaround during the year was achieved by Business Premises. The rigorous work to improve project management is bearing fruit. Significant losses in 2020 turned into positive adjusted operating profit in 2021, and the business is solidly on its way to achieving best-in-class financial performance. In Infrastructure, we started a similar transformation journey in 2021. We went through our entire project portfolio and made the necessary adjustments. While a handful of low-margin legacy projects will continue to have a negative drag on the segment’s earnings over the next couple of years, the underlying project portfolio is healthy, which allows us to generate improving profits in the coming years.
Partnership Properties went through major restructuring in 2021. Projects, services, and the balance sheet in this segment were reassessed, and the business model was reshuffled to a new Property Development segment starting at the beginning of 2022. Despite all this, Partnership Properties posted a positive adjusted operating profit for the year. Looking ahead, our development project pipeline is attractive. Realisations of the Lestijärvi wind park sale and the property transaction relating to Keilalampi and Keilaniemenranta in 2021 show that the development business provides us with significant earnings potential also in the coming years.
In terms of sustainability, we took giant leaps in 2021. We decided to commit to the Science Based Targets initiative, as the first Finnish construction company to do so. With this commitment, we are strengthening our previous climate work and updating our climate targets to be more comprehensive. I am also delighted about the issuance of our first green bonds under our Green Finance Framework, which supports our efforts in reaching our sustainability targets.
Overall, I am proud of our stabilised and improved performance in 2021. However, this also required some tough decisions. For instance, as a part of strategy work and our renewed focus on project management, we executed a thorough analysis of our entire project portfolio to evaluate the financial performance of the projects and, simultaneously, their roles in our new strategy. As a result of this work, we booked margin reductions and inventory write-downs of over EUR 100 million in total during 2021, out of which EUR 66 million hit our fourth quarter adjusted operating profit. The hit was enormous, but this action was needed.
We have put completely new management systems, processes and controls in place to make absolutely sure that such margin reductions and write-downs will not occur in the future. We have a strong grip on our current projects and new projects are being rigorously evaluated. At the same time, our net debt has decreased to levels which have not been seen at YIT for over 15 years. This gives us room for manoeuvre and enables growth in our Housing business. Finally, we have a new operating model led by a strong, new management team pointing the way to more efficient, competitive and customer-oriented ways of working.
The foundation is set, and it is time to execute. While we understand the work is only beginning, our confidence is very high. With our clear and focused strategy, we are set to deliver predictable, market-leading results.”
At the end of the fourth quarter 2021, YIT’s order book amounted to EUR 4,042 million (30 Sep 2021: 4,099). Compared to the third quarter, the order book increased in Infrastructure and was relatively stable in Business Premises and Partnership Properties. In both Housing Finland and CEE and Housing Russia segments, the order book remained stable. At the end of the quarter, 80% of the order book was sold (30 Sep 2021: 80).
YIT’s revenue was EUR 929 million (975). Revenue increased in the Business Premises and Partnership Properties segments, remained stable in Infrastructure, and decreased in both housing segments.
YIT’s adjusted operating profit amounted to EUR 45 million (56) and the adjusted operating profit margin was 4.8% (5.7). Adjusted operating profit was negatively impacted by margin reductions and inventory write-downs of EUR 66 million related to certain legacy and non-strategic projects across the segments, but this impact was partially offset by EUR 48 million sale of Lestijärvi wind park in the Infrastructure segment.
YIT’s operating profit was EUR 20 million (55). The adjusting items amounted to EUR 25 million (1), including operating profit from operations to be closed.
YIT’s revenue was EUR 2,856 million (3,069). Revenue was flat in Housing Finland and CEE, increased in Partnership Properties, but decreased in Housing Russia, Business Premises, and Infrastructure.
YIT’s adjusted operating profit increased to EUR 114 million (85) and the adjusted operating profit margin to 4.0% (2.8). Improved profitability reflects successful turnaround in Business Premises and solid performance in both Housing Finland and CEE and Housing Russia segments. The Infrastructure and Partnership Properties segment’s adjusted operating profits decreased slightly.
YIT’s operating profit was EUR 65 million (35). The adjusting items amounted to EUR 49 million (50) including, among others, operating profit from operations to be closed in Infrastructure and Housing Russia segments. The result for the period amounted to EUR 4 million (27) and earnings per share EUR 0.00 (0.13).
Guidance for 2022
In Housing Finland and CEE, completions of consumer apartments are expected to decrease compared to 2021. Housing Russia segment’s solid underlying performance is estimated to continue but earnings are expected to be impacted by the lower number of ongoing projects. In Business Premises, operational performance will continue to improve. Infrastructure will gradually improve, while still impacted by certain legacy low-margin projects. In Property Development, the project pipeline is healthy and attractive.
YIT expects its Group adjusted operating profit to be higher than in 2021 (2021: EUR 114 million).
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.
YIT aims to transfer increased construction material costs into contracting and housing prices. As a consequence, YIT expects this to have only minor impact on its earnings during the year.
Supported by a strong balance sheet, YIT has increased its apartment start-ups in Finland and Central Eastern Europe. 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, 4 February 2022 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 Tuomas Mäkipeska. 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 on 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.
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: 64221145#.
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 40 576 0288, email@example.com
Vice President, Investor Relations
Distribution: Nasdaq Helsinki, major media, www.yitgroup.com
YIT is the largest Finnish and a significant North European development and construction company with a strong customer focus and clear mission to create better living environments. We develop and build functional homes for sustainable living, future-proof public and commercial buildings and infrastructure for smoother flow of people, businesses and society. We employ 7,400 professionals in ten countries: Finland, Russia, Sweden, Norway, Estonia, Latvia, Lithuania, the Czech Republic, Slovakia and Poland. Our revenue in 2020 was EUR 3.1 billion. YIT Corporation's share is listed on Nasdaq Helsinki Oy. www.yitgroup.com