Helsinki, Finland, 2014-09-12 07:30 CEST (GLOBE NEWSWIRE) --
YIT CORPORATION STOCK EXCHANGE RELEASE SEPTEMBER 12, 2014 AT 8:30 A.M.
YIT’s strategic focus areas unchanged – new competitiveness programme to support achieving the financial targets
YIT’s Board of Directors has decided to keep the company’s strategic focus areas unchanged. The weakened macroeconomic outlook in Russia and Finland underlines the importance of sufficient financial operating space. The implementation of the strategy and reaching the financial targets are supported by launching a Group-wide competitiveness programme, under which short-term targets have been defined for 2015 and 2016. The long-term financial targets remain unchanged.
Growth from self-developed and co-operation projects, the role of financial operating space is emphasised
In the Housing segment, YIT pursues growth through self-developed projects. The development of the operating environment guides the volume and geographical focus of residential start-ups. In housing construction, success depends on having an attractive and reasonably priced product paired with excellent customer experience.
In the Business Premises and Infrastructure segment, the aim is to increase the share of projects where the added value produced by YIT for the customer is high. Concepts, co-operation projects and special expertise play a key role in this regard. When launched, the Tripla project in the Central Pasila district of Helsinki, Finland, will contribute substantially to revenue from 2016 onwards.
In order to even out cyclicality, the weighting of Central Eastern Europe will be increased as the third geographic pillar in parallel with Finland and Russia.
The significance of financial operating space is emphasised in a changing operating environment. The actions to improve capital efficiency continue according to the ongoing capital release program. Of the cash flow obtained through increasing capital efficiency, approximately EUR 250 million will be used to reduce debt. In Russia, capital turnover will be further improved, which will result in a reduction in the amount of invested capital.
Group-wide competitiveness programme to support the strategy
The implementation of the strategy and reaching of financial targets will be supported by a Group-wide competitiveness programme. The programme’s goals are higher project profitability, streamlining operating methods and strong cash flow.
New short-term targets
In the short term, the focus of operations will be on improving capital efficiency and cost-effectiveness rather than growth. YIT’s Board of Directors has set short-term targets for the Group to achieve by the end of 2016:
- Revenue growth 0–5% annually (segment reporting)
- Return on investment 15% (segment reporting)
- Net debt under EUR 600 million (IFRS)
The setting of the short-term targets takes into account the weakened macroeconomic outlook. The development of business functions will continue according to the long-term targets.
Long-term financial targets unchanged
YIT’s Board of Directors has kept the Group’s long-term financial targets unchanged:
- Revenue growth 5–10% annually on average
- Return on investment 20%
- Sufficient operating cash flow after investments for dividend payout and the reduction of debt
- Equity ratio 40%
- Dividend payout 40–60% of net profit for the period
The target levels are based on figures reported by the company based on percentage of completion (segment reporting).
YIT’s strategy and financial targets will be described in more detail at YIT’s Capital Markets Day, which will be arranged on September 25, 2014, in Helsinki, Finland. For additional information, please visit YIT’s Investors site at http://www.yitgroup.com/investors.
For additional information, please contact:
Kari Kauniskangas, President and CEO, YIT Corporation, tel. +358 40 570 1313, kari.kauniskangas@yit.fi
Sanna Kaje, Vice President, Investor Relations, YIT Corporation, tel. +358 50 390 6750, sanna.kaje@yit.fi
YIT CORPORATION
Sanna Kaje
Vice President, Investor Relations
Distribution: NASDAQ OMX, principal media, www.yitgroup.com
YIT is a construction industry leader. We create better living environments in Finland, Russia, the Baltic countries, the Czech Republic and Slovakia. Over 100 years of experience have secured for us a strong market position: We are the largest housing developer and one of the largest business premises and infrastructure developers in Finland, and the most significant foreign housing and area developer in Russia. Our vision is to stay one step ahead – while caring for our customers, partners and personnel. We have more than 6,000 employees in seven countries. In 2013, our revenue amounted to nearly EUR 1.9 billion. Our share is listed on Nasdaq OMX Helsinki. www.yitgroup.com