YIT to update its result guidance for 2019 as a result of the sale of its paving business

YIT to update its result guidance for 2019 as a result of the sale of its paving business

YIT has today announced that it has signed an agreement with Peab for the sale of YIT’s paving and mineral aggregates businesses in Finland, Sweden, Norway and Denmark for EUR 280 million. The transaction is conditional upon the approval of the competition authorities, and it is expected to be completed on January 1, 2020. YIT estimates to record a capital gain of approximately EUR 40 million from the sale, which is not part of adjusted operating profit and which will be recognised upon completion of the transaction, estimated to take place in January 2020. Goodwill and purchase price allocation, altogether EUR 100 million, associated with Lemminkäinen and YIT merger, have been included in the estimated capital gain.

In 2018, the illustrative combined revenue of the business to be sold was EUR 572 million and the combined adjusted operating profit was EUR 3.9 million. Combined figures include Lemminkäinen’s financial statements for the accounting period of January 1‒January 31, 2018. In connection with the above presented transaction, YIT will classify the operations that are part of the transaction as held-for-sale assets and will report them as discontinued operations. The company will publish its retrospectively adjusted consolidated group and segment level numbers for 2018 and 2019 before publishing its half-year report in July.

As a result of the transaction, YIT is updating its result guidance for 2019.

Updated result guidance for 2019

The Group revenue of continuing operations for 2019 is estimated to be in the range of +5% and -5% compared to the 2018 combined revenue of continuing operations (combined revenue of continuing operations 2018: approximately EUR 3,190 million).

In 2019, the adjusted operating profit of continuing operations is estimated to be EUR 150-210 million (combined adjusted operating profit of continuing operations 2018: approximately EUR 126 million).

Earlier, the company estimated the Group’s revenue for 2019 to be in the range of +5% and -5% in comparison to the 2018 revenue (pro forma 2018: EUR 3,759.3 million). The adjusted operating profit for 2019 was estimated to be EUR 170-230 million (pro forma 2018: EUR 134.5 million).

Guidance rationale

The result guidance for 2019 is based, for instance, on the completion of Mall of Tripla in the last quarter, the estimated time of completion of residential projects under construction, and the company’s solid order backlog. At the end of March, 73% of the order backlog had been sold.

Significant fluctuation is expected to take place between the quarters due to normal seasonal variation, sales of business premises projects, and the time of completion of residential projects and Mall of Tripla. As in 2018, the last quarter of the year is expected to be clearly the strongest. The company estimates that the adjusted operating profit for the second quarter of 2019 will improve slightly from the comparison period (pro forma).

For further information, please contact:

Ilkka Salonen, CFO, YIT Corporation, tel. +358 45 359 4434, ilkka.salonen@yit.fi
Hanna Jaakkola, Vice President, Investor Relations, YIT Corporation, tel. +358 40 566 6070, hanna.jaakkola@yit.fi   

YIT Corporation

Hanna Jaakkola
Vice President, Investor Relations

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

YIT is the largest Finnish and 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 and paving. Together with our customers, our nearly 10,000 professionals are creating more functional, more attractive and more sustainable cities and environments. We work in 11 countries: Finland, Russia, Scandinavia, the Baltic States, the Czech Republic, Slovakia and Poland. The new YIT was born when over 100-year-old YIT Corporation and Lemminkäinen Corporation merged on February 1, 2018. Our pro forma revenue for 2018 was approximately EUR 3.8 billion. YIT Corporation's share is listed on Nasdaq Helsinki Oy. www.yitgroup.com