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SRV
Investor PresentationMarch 2018
2
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Presenters
3
Ilkka PitkänenCFO
Juha Pekka OjalaCEO
Agenda
1) SRV in brief
2) Market overview and positioning
3) Financials
4) SRV going forward
5) Contemplated transaction
Appendices
4
SRV in brief
Business premises
construction66 %
Housing construction
34 %
6
Finnish construction company, founded in 1987, publicly listed since 2007 Both builder and increasingly a real estate developer (more capital intensive) Mostly family/founder-owned, over 50% Employs about 1,100 people, of which about 1/3 are shareholders SRV is responsible for the implementation of approximately 70 construction
projects and near future development projects in Finland, order backlog in total over EUR 1.5 billion (31.12.2017)
Operates in the Helsinki Metropolitan Area as well as in other attractive growth centres in Finland
Over 30 years history in operations in Russia and Estonia
1) Operative Operating profit is determined by deducting the calculated exchange difference included in financial items in Russian operations and their potential hedging impacts from operating profit.
2) The number corresponds to the last available day of the period3) Equity ratio = (total equity / (total assets – advances received)) x 100%
Selected key figures (EUR million)
2017 2016
Revenues 1,116.1 884.1
EBITDA 22.8 34.3
Operative Operating profit 1) 28.7 26.3
Operating profit 17.1 27.7
Order backlog 2) 1,547.9 1,758.5
Equity ratio % 3) 35.5 38.3
Net debt 297.6 246.3
Balance sheet total 888.5 882.5
Revenue split 2017
SRV has nothad a loss-
making yearduring its 30-year history
SRV at a glance
Operations in Finland
Tallinn
Moscow
St Petersburg
JoensuuJyväskylä
VyborgTampere
Oulu
TurkuHelsinki
Estonia
• Development of own plots; business premises, housing
Russia: Moscow and St. Petersburg
• Development of shopping centres
• Management of facilities
Finland: Selected growth centresHelsinki Metropolitan area, Turku, Tampere, Jyväskylä, Joensuu, Oulu
• Business premises
• Housing
• Infrastructure
Operating Regions
Finland98 %
International2 %
Other0 %
Finland69 %
International30 %
Other1 %
Revenue split by region, 2017
Total assets split by region, 2017
Revenue EUR 1,116.1 m
Assets EUR 888,5 m
7
8
Operations in Finland98% share of Group revenue
InternationalOperations
2% Share of Group revenueBusiness premises64% share of Group revenue
Housing31% share of Group revenue
• Offices and retail facilities• Hotels and logistics facilities• Public buildings• Hospitals and other
specialised facilities• Underground facilities and
infrastructure construction
• Owner-occupied flats• Rental housing• Investor sales• Area development projects
• Development and management of shopping centres• Pearl Plaza, St. Petersburg (08/2013)• Okhta Mall, St. Petersburg (08/2016)• 4Daily, Moscow (04/2017)
• Partial and temporary ownership of shopping centres
Housing34% share of Group revenue
Three pillars of business operations FY 2017
9
SRV Competitive advantages• Innovative real estate and project
development• Operating model; end to end• Able to be temporary owner
and/or manager of properties• Knowhow and expertise in
complicated projects• Customer oriented
implementation• Flexible overlapping of different
project phases• Large and skilled implementation
partner network
The SRV Approach – tool for successful, customer oriented construction projects (end to end)
Full service Cost efficiency Fast project implementation Realisation of customer needs
10
Focus of operations to increase profitability
SRV is currently working on numerous projects in which we are also in the role of an owner, which ties up our capital
Our large shopping centre projects in Finland and Russia as well as the land plots ties up the most capital
We have also committed capital into building a huge number of developer-contracted housing units in growth centres
Segment reporting is considered to be changed from the beginning of 2019
SRV would report on construction and property development segments separately compared to the existing geographic segmentation
Would provide investors with a better picture of how different types of business produce results and where the capital is committed
11
EUR million
Return on investment, %
Invested capital 604.5 3.4
Invested capital, construction
276.6 8.1
Invested capital, property development
327.9 -4.8
Not just a construction company, but also a real estate investor and developer
12
Market overview and positioning
Megatrends in our operating environment affecting also our clients
13
URBANISATION
Changes in consumer behaviour and ways of working
Global shift in economic and business power
Ageing populations
Rise of communality, ecological thinking and well-being
Digitalisation and use of technology in everyday life
Increase in prosperity and service culture as well as polarisation of society
14
Economy grows and urbanization continues in SRV`s main business areas
The Finnish economy is continuing to see broad-scale growth. GDP is expected to grow by
+2.5%* in 2018
(3.1% in 2017)
Construction volume projected to grow by
+2 %** in Finland in 2018
(4% in 2017)
Urbanisation and population shift will continue to be the general drivers of construction growth – Helsinki’s new master plan enables population to grow to 860,000 inhabitants by 2050 (growth almost 35 per cent)
In 2017, history was made in the number of housing start-ups, around 43,000 housing units – The Confederation of Finnish Construction Industries forecasts start-ups for around 40,000 housing units this year
On the whole, new business construction start-ups increased in 2017, but are expected to decline slightly in 2018. The growth rate in renovation is forecast to remain at last year’s level of about 1.5 per cent. Civil engineering investments are expected to grow by about one per cent.
Sources: SRV management´s estimation based on available information, *Bank of Finland global economic forecast **Confederation of Finnish Construction Industries RT (Fin: Rakennusteollisuus) *** The Bank of Finland Institute for Economies in Transition, BOFIT, Weekly Outlook Russia
The Russian economy has turned into slow growth.GDP is expected to grow by
+1.5%*** or slightly
higher in 2018 (about 1.5% in 2017)
The Russian real estate market and the share of foreign investors has increased significantly last year.
SRV has a key role as a developer of the Helsinki-area rail hub
16
KALASATAMA
KEILANIEMI
OTANIEMI
TAPIOLA
NIITTYKUMPU
ESPOONLAHTI
KIVENLAHTI
SÄTERINPORTTI PERKKAA
KEIMOLANMÄKI KIVISTÖ
VANTAANKOSKI
PASILA
KOIVUSAARI
JÄTKÄSAARI
TIKKURILA
METROLINE
RING RAIL LINE
RAIDEJOKERI, TRAM LINE
SRV PROJECTS
Financials
Year 2017 – Strengthsand challenges
18
STRENGTHS
• Revenue grew and exceeded EUR 1 billion level• Operative operating profit was improved by revenue
growth in Operations in Finland and by a near doubling the number of apartments recognised as income
• Order backlog is still good, over EUR 1.5 billion, and new orders, entered in early part of the year and in practice certain – known several for this year
• Visitor numbers and sales volumes at the shopping centres in Russia are still rising
• Russian strategy proceeding – after the review period it was announced that the possible sale of Pearl Plaza shopping centre in St. Petersburg being explored
CHALLENGES
• Level of operative operating profit still weak –operating profit weakened by increased costs and extended delivery times due to market situation, by a lower than anticipated margin of certain projects under construction as well as by the cost impact of one project already completed
• The exposure of operations in Russia to changes in the rouble exchange rate is reflected in the consolidated Group result – total impact of change in rouble exchange rate was EUR -11.7 million. Exchange rate risk will fall significantly after planned
conversions of loans in 2019
19
Revenue +26.2%
EUR 1,116.1 million (884.1)
Operations in FinlandEUR 1,097.8 million (832.2)
Order backlog -12.0% 2)
EUR 1,547.9 million (1,758.5)
Operations in FinlandEUR 1,526.7 million (1,726.1)
New contracts -23.9%
EUR 771.4 million (1,013.1)
Result before taxes
EUR 4.6 million (16.4)
Equity ratio
35.5% (38.3%)
Gearing
105.0%(83.4%)
Operating profit -38.3%
EUR 17.1 million (27.7)
Operations in FinlandEUR 40.3 million (38.3)
Financial highlights 2017
International OperationsEUR 18.0 million (52.4)
International OperationsEUR 21.2 million (32.4)
2) At the end of period.International OperationsEUR -18.4 million (-4.2)
1) Operative Operating profit is determined by deducting the calculated exchange difference included in financial items in Russian operations and their potential hedging impacts from operating profits.
Operative operating profit 1) +9.1%
EUR 28.7 million (26.3)
Operations in FinlandEUR 40.3 million (38.3)
International OperationsEUR -6.7 million (-5.5)
Revenue grew due to the business and housing construction
138 143209 194 173 165 155
227
144
219 193
329
224285 268
339
0
50
100
150
200
250
300
350
400REVENUE
0,1
4,16,7
15,4
2,7 2,8
9,0
14,2
0
2
4
6
8
10
12
14
16
18OPERATIVE OPERATING PROFIT
659 623 662 684 719 740 686 719 690 744 782884 964 1 030 1 106 1 116
0
200
400
600
800
1 000
1 200
REVENUE, LAST 12M
21,724,9
27,6 26,329,0 27,7 30,0 28,7
0
5
10
15
20
25
30
35
OPERATIVE OPERATING PROFIT, LAST 12M
Operating profit was weakened by the decline in the operating profit of International Operations
21
29,6
20,8 19,924,9 23,0
19,0 17,1
24,421,9
25,228,4 27,7
34,9
21,5 21,917,1
0
5
10
15
20
25
30
35
40
OPERATING PROFIT, LAST 12M
4,4 4,9 6,09,6
2,50,8
4,1
17,0
0,04,1
7,3
16,2
7,3
-9,3
7,711,4
-10
-5
0
5
10
15
20
OPERATING PROFIT
22
2014 2015 2016 2017
EBITDA
2014 2015 2016 2017
Net Gearing
2014 2015 2016 2017
Net Debt / EBITDA Net Debt /EBITDA (ex housing loans)
NET DEBT/ EBITDA
2014 2015 2016 2017
EBITDA Interest coverage ratio
2014 2015 2016 2017
Equity ratio
When analyzing SRV please recallcapital intensive property development
Key FinancialsEBITDA (EUR million) & EBITDA MARGIN (%) GEARING RATIO (%)
EBITDA INTEREST COVERAGE RATIO EQUITY RATIO (%)
27,0 27,9
34,3 9183
83
22,8
105
7,68,3
7,25,9 6,2 5,9
13,1
10,6
6,1
11,0
4,1
2,4
43 43
3835
3,93%3,88% 3,88%
2,04%
International Operations
Operations in Finland; Housing construction
Operations in Finland; Business premises construction
23
• Several new agreements valued at a total of nearly EUR 770 million were signed in 2017
• In the early part of the 2018, new agreements valued over EUR 370 million were signed (SiltasairaalaHospital, Central Deck and Arena)
• Tampere Central Deck and Arena project confirmed in January 2018 –increases order backlog in 2017-2018 by a total of EUR 340 million
255 272362 439 393 450
952 973
14271294
11641058
950851 920
202303
349336
253273
554 539
546
557
563634
621663
606
32
20
10053
180137
77 60
49
37
32 31
2422 21
489
595
811 828 826 860
1 583 1 572
2 022
1 888
1 758 1 722
1 5951 536 1 548
0
400
800
1 200
1 600
2 000
2 400
12/2009 12/2010 12/2011 12/2012 12/2013 12/2014 12/2015 3/2016 6/2016 9/2016 12/2016 3/2017 6/2017 9/2017 12/2017
EUR million New projects valued
at EUR 770 million
Order backlog still good – a number of new projects recognised
24
Debt portfolio
Non-current – EUR million 2017
Loans from financial institutions 15.3
Bonds 99.5
Housing corporation loans 56.0
Total non-current liabilities 170.8
Current and non-current interest bearing liabilities
Current – EUR million 2017
Loans from financial institutions 6.7
Bonds 75.0
Commercial papers 68.5
Housing corporation loans 0.1
Total current liabilities 150.3
Debt Maturity profile overview end of 2017 EUR million 1)
1) Based on the contractual value as of 31.12.2017
SRV´s debt portfolio - overview
Bonds54 %
Commercial paper21 %
Housing loans18 %
Bank loans7 %
Total interest bearing debt:
EUR 321 million
Net interest-bearing debt 297.6 MEUR
• The EUR 75 million bond due in Dec 2018 will be partially refinanced with the contemplated bond issue depending on tendered amount
• Current weighted average loan maturity 5.8 years• SRV also has an outstanding EUR 45 m hybrid bond with first
call in 03/2020 (included in equity in the balance sheet)0
20
40
60
80
100
120
140
160
2018 2019 2020 2021 2022 later
Bonds
Commercial papers
Housing loans
Bank loans
Contemplated new bond
25
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Pearl Plaza 1(50% ownership)
Okhta Mall(45% ownership)
4Daily(20% ownership)
REDI shopping mall (40 % ownership)
Construction and leasing Leasing stabilization (appr. 2-4 years) Exit
Debt maturity structure of main associated companies
Project Project completion Debt maturity Capital employed
Pearl Plaza 1 (Saint Petersburg) 2013 2020 MEUR 30
Okhta Mall (Saint Petersburg) 2016 2024 MEUR 98
Daily (Moscow) 2016 2020 MEUR 10
REDI shopping mall & parking premises(Helsinki)
2018 2019 MEUR 115
Estimated implementation of on-going shopping centre projects
• SRV is investigating the possible sale of the Pearl Plaza shopping centre and has discussed the matter with the other owner of the shopping centre
• SRV intends to sell its holdings once stable rental income has been achieved. Stable rental income is usually reached 3–4 years after opening.
SRV going forward
*The old target means the following: SRV’s strategy and all of its operations were guided by the 2017–2020 strategic financial objectives that were approved in February 2017. Therefore the old target implied the company will seek to outpace industry growth using large-scale projects. The new financial objectives were approved in February 2018.**Proposed dividend
Strategic financial objectives 2018-2022
Return on equity (%)
Faster than industry growth (old target)
1 116.1*
8 per cent 2.6
At least 15 per cent 2.0
At least 12 per cent 3.4
Above 35 per cent 35.5
Revenue (EUR million)
Operative operating profit margin (%)
Return on investment (%)
Equity ratio (%)
Status 12/2017
Status
Dividend of 30–50 per cent of the annual result 0.06** Dividend (EUR)
Target
Better project mix
28
Shopping centre projects Operational efficiency
• Limited participation in low margin construction tenders
• Increased focus on developer-contracting projects
• Participation in special, complex and less competition projects with better profitability
• Increased profit from associated companies (when the shopping centre projects are completed)
• Capital gains and release of eliminated construction margin when a shopping centre is sold
• Utilization of shopping centre management functions
• Must Win Battle: Improve profitability and project efficiency
• Tight capital and cost controlling
• Relative fixed cost increase lower than revenue growth
SRV’s goal is to improve its long-term profitability
Targeted operative operating profit margin (8%)*
Initiatives
How to reach the long-term profitability targets
* The strategic profitability target will not be achieved until the end of 2022. Of this objective, 6 percentage points will arise from construction margin and 2 percentage points from shopping centre rental income as part of associated company holdings.
290
200
400
600
MEU
R
Balance sheet
3
4
New products?
New services?
5 New areas?
0
200
400
600
800
1000
1200
MEU
R
Revenue
Revenue
2 + 2 + 5 years
1
2 Business construction
Housing construction
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Asunnot,PU,varmat Asunnot,NU+muut,varmat Asunnot,PU,arvio Asunnot,NU+muut,arvio
Toimitilat,NU+muut,varmat Toimitilat,PU,varmat Toimitilat,NU+muut,arvio Toimitilat,PU,arvio
Exit from the shopping centres
SRV in the future
Fewer developer-contracted housing units will be completed in 2018 than in the comparison period. It is estimated that a total of 526 housing units will be completed in 2018 (782 in 2017). Although housing will be completed on a steadier schedule in 2018 than in the previous year, a significant part of the operating profit will still be made in the second half of the year.
In addition, earnings in 2018 will be impacted by the lower-than-expected margins of certain ongoing projects.
Full-year consolidated revenue for 2018 is expected to decline compared with 2017 (revenue EUR 1,116.1 million). Operative operating profit is expected to be lower than in 2017 (operative operating profit EUR 28.7 million.)
After 2018, an atypical year, the company anticipates that it will achieve its strategic earnings level by the end of 2022.
30
Outlook for 2018
31
• Strong experience and know-how at project management
• Customer and service-oriented work culture
• Entrepreneurial attitude• Light organisational structure• Broad partner network
Efficient, qualified and flexible organisation
Highly competitiveoperating model
Strong brand andexcellent references
Experienced key management team
Good financial track recordand strong order backlog
Megatrends support the business
SRVApproach
Customer network
Partner network
Customerneeds
Mega-trends
Use of property
Highly competitiveoperating model
Strong brand andexcellent references
Good financial track recordand strong order backlog
Megatrends support the business
SRV Key investment highlights
• Megatrends, such as Urbanisation, supports SRV’s business
• SRV has completed significant and complicated projects, both for the public and private sector
• SRV has not had a single loss-making year during its 30-year history
• Strong order backlog of over EUR 1.5 billion providing healthy future prospects
• SRV’s end to end operating model, and ability to be a temporary owner provides a competitive advantage
• SRV has a highly efficient organisation with broad based know-how and excellent references
• The management team has extensive experience from the construction sector and real estate development
Contemplatedtransaction
33
SRV is considering issuing 4 year notes
Issuer SRV Group Plc
Rating Unrated
Amount Up to EUR [75] million
Status Senior, unsecured
Use of proceeds Redemption of existing EUR 75m bond due 12/2018, and general corporate purposes
Tenor 4 years
Coupon Fixed rate coupon, paid annually in arrears, ACT/ACT
Call structure March 2020 @par +[50] % of coupon; March 2021 @par +[25] % of coupon
Investor put event Change of control @101 %; Demerger @100 %
Financial covenantsEquity ratio > 26% (maintenance)ICR ≥ 2.0x (incurrence)
Other terms and covenants Negative pledge, Cross acceleration (>EUR2m), Disposals (>EUR30m / 12 months), Mergers
Redemption Bullet, at maturity
Documentation Standalone, Finnish law
Min. subscription / Denominations
EUR 100,000 / EUR 1,000
Listing Nasdaq Helsinki, Open Market of the Frankfurt Stock Exchange
Noteholders Agent Nordic Trustee
Lead Managers OP Corporate Bank (Coordinator) and Swedbank
Co-manager Bankhaus Scheich
• SRV is considering a new bondissue to finance the tender offerfor the existing EUR 75 milliondue 2018 bond and to lengthenits maturity profile
• SRV is meeting investors aheadof a potential issue of new 4year notes
34
Tender offer for SRV’s due 2018 outstanding bond
Target security SRV Group Plc 5.000% senior notes (ISIN: FI4000076617)
Maturity date 18 Dec 2018
Status Senior, unsecured
Amount outstanding EUR 75 million
Purchase price Fixed cash price, 103.773%
Offer amount Any and all
Conditions New issue condition
Accrued interest To be paid in cash until the settlement date
Tender offer period begins 7 Mar 2018
Tender offer period closes 16 Mar 2018 at 4:00pm EET
Settlement Expected 1 business day prior to the new issue settlement. No later than 3 April.
Offeror and Dealer Manager
OP Corporate Bank
• OP is undertaking, on behalf ofSRV, a tender offer for the due2018 senior unsecured notes ata tender price of 103.773%
• Tender offer is subject to thesuccessful completion of thenew issue
• The planned new issueexecution is expected shortlyafter the tender period hasclosed
• Formal priority allocation codesare available for tenderingaccounts also participating in thenew issue
35
Thank You!
Appendices
37
SRV ownership structure
Major shareholders (10 largest total) % of shares
Kolpi Investments Oy 19.0 %
Kokkila Timo Tapani 12.6 %
Kokkila Tuomas 10.7 %
Kokkila Lauri 10.7 %
Tiiviste-Group Oy 10.6 %
Nordea Life Assurance Finland Ltd. 2.0 %
The State Pension Fund 1.9 %
OP-Finland Value Fund 1.6 %
Ilmarinen Mutual Pension Insurance Company 1.6 %
SRV Yhtiöt Oyj 1.5 %
10 largest total 72.4 %
• SRV listed on the Helsinki stock exchange since 2007
• Some 7 100 shareholders
• Approximately 1/3 of SRV’s employees are shareholders
Distribution by shareholder type (% of shares)
Status as of 28 February 2018
51 %
36 %
5 %5 %2 %
1 %
Households
Corporations
Financial and insurance institutions
Public sector institutions
Nominee registered and non-Finnish holders
Non-profit institutions
38
EUR million 1-12/2017 1-12/2016 1-12/2015
Revenue 1 116.1 884.1 719.1
Other operating income 2.4 2.1 1.8
Change in inventories of finished good and work in progress 1.9 37.8 24.7
Use of materials and services -985.6 -797.8 -639.1
Employee benefit expenses -77.7 -73.0 -64.6
Share of profits of associated and joint venture companies -13.4 7.4 -0.1
Other operating expenses -21.0 -26.3 -13.8
EBITDA 22.8 34.3 27.9
Depreciation and impairments -5.7 -6.6 -3.5
Operating profit (EBIT) 17.1 27.7 24.4
Financial income 5.3 7.0 5.0
Financial expenses -17.8 -18.4 -11.8
Financial income and expenses. total -12.4 -11.3 -6.8
Profit before taxes 4.6 16.4 17.6
Income taxes 1.2 -2.0 -3.6
Net profit for the financial year 5.8 14.4 14.0
Consolidated income statement
39
EUR million 31.12.2017 % 31.12.2016 %
Non-current assets 300.2 33.8 % 306.1 34.7 %
Inventories 418.8 47.1 % 400.3 45.4 %
Other current assets 146.1 16.4 % 121.6 13.8 %
Cash and cash equivalents 23.5 2.6 % 54.6 6.2 %
Total assets 888.5 100.0 % 882.5 100.0 %
Equity 283.4 31.9 % 295.3 33.5 %
Non-current interest bearing liabilities 170.8 19.2 % 227.2 25.7 %
Other non-current liabilities 31.6 3.6 % 26.0 2.9 %
Current interest bearing liabilities 150.3 16.9 % 73.7 8.4 %
- Housing loans (current and non-current) included above 56.1 42.1
Other current liabilities 252.4 28.4 % 260.3 29.5 %
- thereof advance payments related to construction contracts
81.3 101.8
Total equity and liabilities 888.5 100.0 % 882.5 100.0 %
Net debt as of Dec 31.2017: EUR 297.6m (31/12/16: EUR 246.4m)Net debt as of Dec 31.2017, excluding housing loans : EUR 241.5m (12/31/16: EUR 204.2m)
Consolidated Balance sheet
40
EUR million 31.12.2017 31.12.2016 31.12.2015
Non-current interest bearing liabilities
Loans from financial institutions 15.3 11.0 29.5
Bonds 99.5 174.3 74.9
Housing corporation loans 56.0 41.9 58.9
Subtotal 170.8 227.2 163.2
Current interest bearing liabilities
Loans from financial institutions 6.7 22.5 16.6
Bonds 75.0 0.00 0.00
Commercial papers 68.5 51.0 86.0
Housing corporation loans 0.1 0.2 0.1
Subtotal 150.3 73.7 102.6
Total interest bearing liabilities 321.1 300.9 265.8
Cash and cash equivalents 23.5 54.6 35.0
Net debt 297.6 246.3 230.8
Total interest bearing liabilities (excl. housing loans) 265.0 258.8 206.9
Net debt (excl. housing loans) 241.5 204.2 171.9
Indebtedness in detail
41
EUR million 1-12/2017 1-12/2016
Cash receipts from customers 1 082.9 881.6
Cash receipts from other operating income 2.4 2.1
Cash paid to suppliers and employees -1 098.6 -838.9
Net cash before interests and taxes -13.2 44.8
Interests received and other financial income 0.4 0.2
Interests paid and other expenses from financial costs -22.1 -9.9
Income taxes paid 2.4 -4.0
Cash flows from operating activities -32.5 31.1
Cash flow from investing activities -8.5 -39.4
Cash flow from financing activities 10.1 27.7
Net change in cash and cash equivalents -30.9 19.5
Effect of exchange rate changes in cash and cash equivalents -0.2 0.1
Cash and cash equivalents at the beginning of financial year 54.6 35.0
Cash and cash equivalents at the end of period 23.5 54.6
Consolidated cash flow statement
42
SRV business divisions
Largest commercial premises projects under construction (estimated figures)
43 At the end of period.* The value of individual contracts has not been published.
Project, location Value of SRV contract,
MEUR
Project type Level of Completion, % Completiondate (estimated)
REDI, shopping centre and parking facility, Helsinki 390 Retail, parking 85 Q3/2018
Aleksintori, shopping centre, Kerava * Retail 45 Q4/2018
BUSINESS PREMISESS
Central Finland Hospital Nova, Jyväskylä 290 Public 20 Q3/2020
TAYS Etupiha, Tampere 170 Public 53 Q2/2019
Tapiola city centre (Phase 2), Espoo 100+ Retail 11 Q1/2020
Aalto University, Espoo 76 Public 60 Q2/2018
Ring Road I, Keilaniemi, Espoo 49 Public 68 Q4/2018
Kaitaa metro station excavation 32 Public 94 Q2/2018
Renovation of Lappeenranta University 31 Public 78 Q4/2018
HDC TeliaSonera, Helsinki * Industry 75 Q1/2018
New Children’s Hospital, Helsinki * Public 85 Q4/2017 - Q2/2018
Autokeskus Konala, Helsinki * Retail 21 Q2/2019
Jätkäsaari primary school, Helsinki 23 Public 7 Q3/2019
Hotel Marriot, Tampere * Retail 0 Q2/2019
44
Project, location Value of SRV contract,
MEUR
Completion Sold For sale
REDI Majakka, Helsinki 106 Q2/2019 254 28
Espoo Piruetti 31 Q1/2019 48 65
Espoo Kulmaniitty 22 Q1/2019 9 58
Vantaa Maalisuora 17 Q4/2018 63 33
Vantaa Tikkurilan Starlet 14 Q4/2018 6 49
Helsinki Smokki 13 Q2/2019 3 29
Kerava Aleksinkaarre 22 Q4/2019 15 65
The largest developer-contracted housing projects under construction in Finland (estimated figures)
45
Housing project, location SRV, contract value, MEUR
Completionlevel, %*
Completion date(estimated)*
Suurpelto Puistokatu, Espoo, Ilmarinen * 84 Q1/2018
Wood City, Helsinki, ATT** * 65 Q2/2018**
Vantaa Neilikkatie, Ilmarinen * 78 Q2/2018
Kerava Orno, Ilmarinen * 79 Q2/2018
Vantaa Hernetie, OP * 71 Q2/2018
Helsinki Välimerenkatu 10, Ilmarinen * 55 Q3/2018
Suurpelto Puistokatu D, TA Yhtiöt * 72 Q3/2018
HOAS Kumpula, Helsinki * 43 Q3/2018
Kerava Aleksinkulma and -puisto, Etera*** * 28 Q1/2019
Kerava Aleksinhuippu, LocalTapiola * 20 Q1/2019
Espoo Pihapuisto and Puistoniitty, LocalTapiola * 8 Q3/2019
Helsinki Punanotko, Ilmarinen * 1 Q2/2020
The largest ongoing housing projects in Finland, housing contracting (estimated figures)
*The value of individual contracts has not been published** Schedule to be defined during Q1/2018***Ilmarinen and Etera merged on 1 January 2018
Growth in housing construction continues
46
Housing constructionrevenue 1–12/2017
379.9 MEUR
change 39.3%
Housing constructionorder backlog 1–12/2017
606.4 MEUR
change 7.8%
In line with its strategy, SRV focuses on housing production in urban growth centres in locations with good transport links – focus particularly on developer-contracted housing production
For a number of years, SRV has been one of the largest housing constructors in the Helsinki metropolitan area – a total of 3,524 (2,696) housing units currently under construction, of which most are located in growth centres
In 2017, total of 782 developer-contracted housing units were completed and a record number of 825 recognised as income. A very strong year for housing sales, with 1,627 housing units sold
Housing construction 34%
Business premises construction 66 %
Housing construction 39%
Business premises construction 61%
Result impacted by housing units’ recognition as income
47
In 2017, nearly double the number of housing units were recognised as income than in the previous year, 825 (499) units
A total of 188 new RS housing units start-up decisions was made by the end of December
The lower number of start-ups in 2016 will reflect in the 2018 result –the situation will be rebalanced in the early part of 2019
374
750
883
802 791
563
371
454
681
849
10451018
31 4816
228
2658
26
389
76
174213
362
0
100
200
300
400
500
600
700
800
900
1000
1100
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17
Developer-contracted housing start-ups and recognitions as income (units)
Aloitukset (kpl/12 kk) Tuloutuneet kvartaaleittain
48
HUSLAB, 2015 Jorvi, Espoo, 2015
Central Finland Hospital Nova, Jyväskylä
Women´s hospital, Helsinki, 2016
Tays Central Hospital, Tampere
Kalasatama Health and wellbeing centre, Helsinki
SRV has a major role in healthcare and hospital projects in Finland
New Children´sHospital, Helsinki
48
49
Siltasairaala Hospital
EUR 243 million
Period 2018-2020
Tampere Deck and Arena
EUR 550 million
Period 2017-2025
Nova Hospital in Central Finland
EUR 290 million
Period 2016-2020
0
20
40
60
80
100
120
140
2017 2018 2019 2020 2021 2022 2023 2024 2025
Breakdown of revenue for large projectsover 2017-2025
NOVA Siltasairaala Kansi ja Areena
Breakdown of revenue for large projects over the coming years (estimate)
REDI residential towers progressing at a good paceHybrid project, Helsinki
50
• Advance marketing of Loisto, the next residential tower, begins in April 2018
• A total of 249 apartments on 32 floors – higher room height and conservatories as special features
• Selection from one-room to five-room apartments with spectacular views
• Construction will likely begin in summer 2018
• Only just under 30 apartmentsunsold in Majakka tower – ready to move into in spring 2019
LOISTO
MAJAKKA
• The implementation of the SRV-developed Central Deck and Arena in Tampere city centre was confirmed in January 2018 –construction work in the heart of Tampere on top of the railway station is in full swing
• Several cooperation agreements have already been signed – Restamax for restaurant services and Lappland Hotels for a hotel, also Veikkaus’ second casino and agreements with Tappara and Ilves ice hockey teams,
• The total value of the project is approximately EUR 550 million – the final parts of the complex are due to be completed in 2024
• The value of the investment agreement for Phase 1 of the project, approximately EUR 340 million – will be entered into SRV’s order backlog in 2017 and 2018
Central Deck and ArenaHybrid project, Tampere
JANUARY 2018IMPLEMENTATION
CONFIRMED
2024WHOLE
PROJECTCOMPLETED
KALASATAMA
Total value over EUR 500 million
Over 13,000 capacity multi-
purpose arena
5 tower buildings, around 1,000 apartments
Partners: OP, LocalTapiola, City of Tampere and SRV
2021AREENA COMPLETED
PressiVantaankoski, Vantaa
FEBRUARY 2018CONSTRUCTION WORK STARTED
2019-2020COMPLETION OF
B- AND A-BUILDINGS
KALASATAMA3 office buildings
5 metres high connecting
ground floor
18,000 gross square metres
of reconfigurable space• To be built in the developing Vantaankoski area, at the
intersection of the Ring Rail Line, Ring Road III and the Hämeenlinnanväylä highway
• The design of the new kind of multifunctional office sets as a priority the modularity, energy efficiency and environmental criteria of the premises
• The premises are designed from the beginning in accordance with the customer’s needs – nearly half of the premises already leased
• Construction work started in February 2018 – the first
building will be ready in late 2018
12/2018C-BUILDINGCOMPLETED
SiltasairaalaHospitalMeilahti, Helsinki
2017DEVELOPMENT
PHASEAGREEMENT
2018CONSTRUCTION
LAUNCHED
2023NEW HOSPITAL
IN USE
KALASATAMA
71,500 gross square
metres
8+1 floors
243 MEUR • The new Siltasairaala Hospital to be built in the Meilahti hospital campus is the biggest construction project in the history of HUS
• It will replace the Töölö Hospital and some of the functions of the present Department of Oncology
• It will provide high quality care in an attractive, safe, accessible and environmentally friendly setting• for example, 215 beds in four long-stay wards, 58 intensive
care beds, 69 day-hospital beds and 16 operating theatres• Construction work began in January 2018 and hospital will be
completed in 2022
Leasing of REDI shopping centre proceeding at a good pace
54
• construction work is progressing on schedule – the doors will open in autumn 2018
• leasing of premises is proceeding according to plan – more than 70 per cent of the just over 200 retail premises have already been leased and negotiations on the rest are under way
• The shopping and experience centre is expected to attract over 12 million visitors in its first full year of operation
55
Over 70 per cent of business premises at REDI shopping centre have been leased
56
Largest projects in Russia
Health and wellbeing centre sold to a special fund managed by Deka Immobilien. City of Helsinki will be the main user. Under construction, will be completed in 2018.
Kalasatama health and wellbeing centre 18,200 sqm
Sale of shopping centre to OP Group and apartments to housing investment company SATO. Opening in spring 2017, tenants eg. HOK Elanto and Ruokakesko.
NiittykumpuMetro Centre5,400 sqm280 apartments
Joint investment with Ilmarinen, OP Group, and Local Tapiola. Under construction, opening in 2018.
REDI Shopping Centre in Central Helsinki(Kalasatama) 480 MEUR
Sale of office buildings to Niam. Users include Siemens and SRV headquarters. Construction completed in 2013.
Derby Business Park 20,000 sqm
A framework agreement with Ilmarinen in 2016 for the construction of nearly 500 housing units in the Helsinki Metropolitan Area.
Housing Portfolio of 500 aparments100 MEUR
Sale of a logistics building to Ilmarinen. User department store Stockmann. Construction completed in 2015.
Stockmann Distribution Centre 29,000 sqm
57
Recently completed transactions
Wood CityHybrid project, Helsinki
2010PLANNING
BEGAN
2012ARCHITECTURALCOMPETITION
2020WOOD CITYCOMPLETED
KALASATAMA
8-storey office building
2 apartment buildings
1 hotel
1 parking facility
MEUR 100, project‘s total value
• On 6 October 2017, SRV and Supercell signed a conditional agreement on the purchase of the office building and parking facility belonging to Wood City
• Construction work on HelsinginAsuntotuotantotoimisto (ATT) apartment buildings is under way
• Construction work on the office building and parking facility is due to begin in spring 2018
LapinmäentieHybrid project, Helsinki
2016CITY PLANADOPTED
2017DEMOLITION
WORK
2018CONSTRUCTION OFFIRST APARTMENTS
KALASATAMA
7 apartment buildings
Construction of 200 apartments
will start in summer 2018
Tower A is being planned, with
retail premises, for example
• The Lapinmäentie project, located in Munkkivuori, Helsinki, proceeds – demolition work started on October
• Work to develop the Lapinmäentie area continues in accordance with the city plan adopted in August 2016
• Seven apartment blocks, in addition to the maintained Tower A, will be implemented in the area
Includedmanually
NiittykumpucentreHybrid project, Espoo
2015THE SHOPPING
CENTREWAS SOLD TO OP
INVESTMENT FUND
2017NIITTY SHOPPING
CENTREOPENED ITS DOORS
2017ALL THE APARTMENTS
ARE COMPLETED (above the shopping
centre)
KALASATAMA
The shopping centre Niittyopened summer 2017
Above the shopping centre rose
2 residential towers, one of them
– Niittyhuippu – being the highest in the city of Espoo
Substitute to the old shopping
centre will be built 3 more
residential buildings
• Niitty is in many ways a different kind of shopping centre. It has been built on the Western Metro line and the centre therefore offers direct access to the metro
• Two SRV-built residential towers, a total of 300 apartments, rose above the shopping centre.
