Welcome to YIT's second quarter 2021 earnings webcast. My name is Tommi Järvenpää. I'm the Head of YIT's Investor Relations. With me here today are also our CEO, Markku Moilanen, and the CFO, Ilkka Salonen. We will first go through the presentation, followed by Q&A. At this point, I would like to hand over to our CEO, Markku. Please go ahead. Thank you, Tommi, welcome on my behalf as well to this webcast. Let's start from health and safety. That's our focus in everything that we are doing. During the last quarter, our focus has been on preventive actions on safety. We have been fighting against the COVID-19 pandemic, and we are satisfied with the successful actions that we have had. Our sites have been open, and the infections have been low. However, we have clearly now the fourth wave coming in several countries, in Finland, in Russia, to mention a few. We are continuing our vigorous actions in that area. If we are looking at our safety development, the number of accidents and the injury frequency of the LTIF, it's been stagnant for a while. For that reason, we had our safety week, our annual safety week in May, where we really had a focus on proactive and preventive actions. Actions on safety observation and management safety walks and talks as well. We will continue the focus because this is highly important for us. Looking at our results during the second quarter, as we have reported, was a satisfactory quarter. I would say that this is another solid quarter, driven by good results in housing. Our adjusted operating profit ended up to be EUR 30 million, compared to EUR 5 million during the same period last year as well. The good result is driven by good results in housing segments in all of the geographies that we are working. However, we had a loss in Infrastructure due to margin reduction in some projects. On the other hand, our Business Premises segment continued to stabilize, like it did during the last quarter as well. As a result of strong sales, our operating cash flow was solid during the quarter as well. After investment, our operating cash flow was EUR 109 million compared to EUR 247 million during the same period last year. We have to bear in mind that last year during this period, we had cash flow from the sale of our Nordic paving and mineral aggregates businesses. Operationally, clear improvement compared to last year. As a result, our balance sheet strengthened further, and our gearing improved further. We are using our strong balance sheet to answer our customer needs, especially in the housing market. We have actually accelerated our housing startups significantly during this year compared to last year. The annual growth is around 40% compared to last year. With this, we are not only answering our customer needs, but ensuring for the company a solid market for next year. Like we reported after last quarter, we have three management priorities. The first one is project management, where the work started already during autumn 2020. That progressing on a fast pace and very well. We are implementing common practices and processes and reports in our project management. For example, new project portfolio forecasting and reporting tools, new criteria for suppliers, new production reporting practices, to mention a few. This is really the backbone of our business and backbone of being able to deliver predictable results in the quarters to come as well. Secondly, our work on our operating model is progressing well, and we will give you more info during the coming months. Thirdly, we started our strategy work from our infra strategy. We were not satisfied with the performance of our Infrastructure segment, and therefore, we started the strategy work from there. The most notable finding that we already have now before doing the full Group strategy is that we see that infrastructure business will continue to have a strategic role in the YIT Group also in the future. We already see that in large urban development projects, having our own infrastructure business enables us to achieve clear synergies and synergy benefits and financial opportunities. In the future, we will be focusing on our core capabilities in infrastructure, such as rock tunneling, foundation engineering, rail and tram, and urban bridges and marine, to mention a few. However, we will also trim our offering to become more competitive and efficient, so we will be more selective in projects. As a conclusion, our future infrastructure business will be somewhat smaller than today, but clearly more predictable and profitable. We have, during the second quarter, done the analysis of our project portfolio that led to this right house, and we will have a new director for the segment to start late August. This is a good basis for Pasi Tolppanen to continue to drive infrastructure business further. Let's go to the Q2 results and the numbers through a bit more in detail. I have Ilkka Salonen, our CFO here. Please, Ilkka, the floor is yours. Thank you, Markku. Good morning, everyone. If we look at the Q2, starting from the revenue side, we had growth over there driven by the housing business. Slight decrease in Business Premises going more for the annual volatility. Also slight decline in Infrastructure net sales, partly driven by the fact that we are exiting from Norway as well as from Estonia. In order book, there we see a clear drop, about EUR 200 million. It's good to divide it into a couple of items that requires a little bit explanation. First of all, in the housing side, in Housing Finland and CEE, roughly about EUR 100 million lower than we had last year after Q2. It's just from the fact that we had roughly about 330 apartments less under construction. That will be fixed as we are speeding up our startups later this year. In Russia, it will be the same story on the other hand, as we are declining or closing down operations in some cities over there, that has an impact for that one as well. In Business Premises, a clear increase of about EUR 130 million. There are several projects. One of the biggest one is Tammisairaala or the hospital in Helsinki area, which we won this year. Then the major drop in Infrastructure, EUR 200 million. Actually, that's coming from different sources. One is that, yes, we are exiting from Estonia as well as from Norway. That is having impact for the order book. We have in Finland big projects in the end of their life cycle. Let's put it that way, meaning that the amount in the order book is lower than last year. What comes to the new big projects, just like the tram alliance in the Helsinki area, it is still in the design mode, so there is not too much in the order book. The third one is that, yes, we have been more selective for the new orders, new deals, and that has had an impact to the order book as well. In the profit side, our adjusted operating profit was EUR 30 million compared to last year, EUR 5 million. Clear improvement over there. Of course, in the absolute levels, what we see on the right-hand side, the Housing Finland and CEE, as well as Housing Russia, made a good result for the Q2. Business Premises stabilized. Infrastructure, EUR -12. There we are stabilizing that one at the moment. Partnership Properties pretty much like last year. The deviations segment by segment compared to the last year. There you can see the very good performance in the housing side, EUR 22 million in Housing Finland and CEE, and EUR 4 million in Housing Russia. Business Premises, even the absolute result is not satisfactory level yet, but the is clear, the stabilization over there has performed quite nicely during the last one year. Infrastructure is in the stabilizing mode at the moment. Clear negative deviation compared to last year, it is driven by the margin reductions in some projects. Cash flow EUR 109 million. That is once again, a good performance from the businesses. Last year we had EUR 247 million. It's good to remind that EUR 283 million was driven by the divestment of the Nordic paving and mineral aggregates business. The improvement and performance in the businesses themselves as being clearly from the negative side up to EUR 109 million. We have continued to invest for the plots, and we are eager to buy plots in the future as well, and especially when we are increasing our startups, it also requires new plots. Net interest-bearing debt, EUR 350 million. If we take comparing the Q2 last year, that's about EUR 350 million. In that EUR 750 million, the Paving deal is already in. In the second quarter 2020, the net debt was EUR 950 million. The cash generation has been quite nice. There is also impacting the EUR 100 million hybrid, which we took in Q1. We have made major refinancing programs during the first half-year this year. All the big items have been refinanced. Two points, one hybrid, and also the revolving credit facility has been renewed. The financial portfolio, if we look at the maturity and the diversity, it's very good and will be solid for a number of quarters forward. Yes, of course, equity ratio and gearing ratio, we are at the moment in 35 over there, but already at this stage, it's good to highlight that we are increasing our startups, which will tie capital more than we have had in especially in Housing Finland and CEE. Of course, when the cash flow is working and the profit is improving, all the other metrics are also getting to the better level. That was shortly. Now I pass back to Markku, please. Thank you, Ilkka. Let's have a look at the market outlook. The market is quite stable in the housing real estate and infrastructure. However, there are minor changes in real estate and infrastructure. Housing remains to be good, as we see during Q3 in all of our geographies. The minor changes are that in real estate market, the Baltic real estate market has turned, as we see, or will turn from yellow to green, as the investor demand is seemingly strong over there. On the other hand, in the Baltics, the infra market will turn to red. It's weakening as the government's budgets have already been running over, so we see less opportunities over there. Let's have a look at a couple of other items that impact the outlook for the next quarter. The first one is the material cost inflation. All the building material, as well as subcontracting costs, are clearly inflating in all of the geographies and in all of the markets that we are active. We have taken and will take mitigation action and widely, and I want to open you a couple of these. The first one is procurement practices. It is like indexing materials on our purchasing. As we have a majority of our business is Housing, we can buy the materials in advance when we know when we are going to do the startups. There is a bit more tools to mitigate against the cost inflation in Housing, whereas in traditional contracting, in Business Premises and Infrastructure, we don't have these mitigation tools available. We have pricing and contractual practices like dynamic pricing in Russia and CEE Housing. That enables us to mitigate against the material cost inflation. We continue to follow the development closely. We don't see a major impact for YIT Group during this year. If the inflation continues for long, it will have more impact to us and for the entire construction industry. Another item that will have an impact for our Q3 is our housing completions. As you can see from this chart, our completions are reaching a bottom during Q3. We'll have around 300 units completing compared to 874 units during the third quarter in 2020. On the other hand, we expect the fourth quarter to be back on a high level again. There's a volatility in the completions between the quarters. This will, of course, have an impact on our Q2 results. This less completions than last year is expected to have an approximately EUR 50 million impact to the segment's adjusted operating profit year on year. We expect the otherwise business Housing Russia continue in a solid way. We expect Business Premises performance continue to stabilize as well. However, we expect that our infrastructure business will have a low level of profitability due to certain low-performing projects. I want to remind of the Lestijärvi Windmill Park sale, which will have a swing effect. We are still expecting to get the sale around EUR 40 million during this year. There's a low probability that that will fall to next year as well. In Partnership Properties, our portfolio development is expected to continue. The good news is that so far, in Mall of Tripla, which has a major weight on Partnership Properties, the number of visitors has been increasing. That will, of course, have a positive impact on Partnership Properties. We need to remember the impact of the fourth wave of the pandemic as well. There could be volatility in that area as well. Finally, we have communicated a new member to our management team. We are going to continue to strengthen our management team. We have announced earlier two new segment heads. Ilkka Tomperi are now starting actually next week in Partnership Properties. Pasi Tolppanen, as announced earlier, will start later in August, heading the Infrastructure segment. Today we have announced that Tuomas Mäkipeska will be our new Chief Financial Officer. As communicated, Ilkka Salonen, who is here together with me, this is his own request. Ilkka wants to continue on board memberships and advisor roles. I want to give here big thanks to Ilkka. He has had a long career, both in Lemminkäinen and YIT, and a major important role in the integration and the businesses, and not least, strengthening our financing and balancing this year. I expect that with these three members and the existing members in management team, we have a good team to go forward in our management agenda. Our focus during the second half of this year is to continue the actions to stabilize our performance. Continue the actions in our project improvement, have a really close look at our projects, and we will implement our new operating model, which we'll communicate later during this third quarter. Secondly, we will develop our sharpened strategy. As communicated today, we have started the work from the Infrastructure segment, and now we'll do similar work in other segments and then finally look at the whole group strategy as well. Last, but definitely not least, we will have a close eye on the preventive and proactive actions in health and safety. As part of our strategy work, we will develop our sustainability roadmap as well. Thank you very much. That was our presentation. I guess, Tommi, now it's time for questions. Yes, indeed. Thank you, Markku. Operator, we are now ready for the questions. Okay, Anssi, if you try to ask your question again. Okay, I will definitely do that. Hi, guys. It's Anssi from SEB. Thanks for finally taking my questions. I have a couple of them. I will take them one by one. Kicking off with the infrastructure, margin reductions and one-offs once again in Q2. Could you indicate the scale of margin reductions? Without the one-offs, would the infra business be in positive figures, or what's the situation there? Thanks. Yeah. Thank you, Anssi. Yes, there are one-offs in certain projects, and without that, the underlying business is profitable as you are asking it. There is a number of actually old projects that we are finalizing but still continuing, so their margins were reduced, and that's the reason for the loss. Okay, can you indicate what projects are those? Unfortunately, we're not sharing that information publicly. Okay. Looking at the second half, you indicate that the margins will be diluted also in the coming quarters. What's the scale? Should we expect similar impact than in Q2, in Q3, and Q4, or what's the situation? Yeah, now talking about the infrastructure segments. Yes, we see similar level of reductions in projects in the coming quarters that we had. On the other hand, we have the operative, the underlying business, as mentioned earlier, running pretty well. We have overall in a similar scale that we are talking during the coming quarters that we had now during Q2. Okay, thanks. Your comment on focusing your infra business. There is still quite a lot of business disciplines that you have and you are focusing. Could you elaborate what are the projects, what kind of business, in what sectors? What is the business you are not keen staying in? Yeah. We are sharing all the details as part of the group strategy. Open to you that a bit is that firstly, it is certain project types where we see that collaborative projects like alliances are the ones that we'll be focusing also in the future, whereas traditional project management consulting are the ones that we have not been successful and profitable. We are not keen on those in the future. We are focusing on the core capabilities that has clear synergies like rock tunneling and foundations, so synergies with the other segments as well. Opening a bit more about the ones that we are not doing is very traditional road constructions, which is not urban-related, and many other kind of non-urban related projects. We are very careful on non-urban projects as well. As an example, we have been already very selective, which has had an impact to our order book on some mining projects in Sweden, where we're not tendering at all due to the risk and the probability of low profitability. Okay, if we think about energy and that kind of industrial projects, is this also a business you don't want to take part in? I would say that we have sustainability high on our agenda, and many of these energy projects are really urban sustainability, like the one that we just won for Vantaa Energy, the big heat battery beyond the Ring III road. We see that when we can use our core competencies, we are competitive, and they are high on our agenda, like in sustainability, then energy is okay for us as well. Okay, thanks. The last question is on input cost pressure. Assuming that the input costs remain at current levels in wood products and steel and what have you, could you indicate any margin dilution impact for 2022 as you highlighted that there won't be any impacts in 2021? Well, we are closely looking at the markets, and there's some indications that this inflation would turn down at the end of Q4. We are of course looking at that, and it's premature at this stage to say what the impact would be for 2022. Let's say not only for YIT, but for the whole industry. We are looking at the trends and the development then, and of course, we'll closely report that as well during the coming quarters. Okay. That's all from me. Thank you very much. Thanks, Anssi. The next question comes from the line of Svante Krokfors from Nordea. Please go ahead. Yes, good morning, Svante from Nordea. Thanks for taking my questions. If we continue on infra side and the margin reductions, just to make it clear, you haven't made a write-down. You have reduced the margins, you expect that this kind of events could occur still in H2. It's not that you have made a one-off write-down. Could you elaborate on that? Yeah. It's about this old project where we have done the thorough project reviews, and we have some disagreements or complaints with the clients, which has resulted that the rest of the project margin will be lower than initially anticipated. That's the reason for this Q2's result turning to loss, and similar impact will continue during the coming quarters three and four as well. Okay. Thanks for clarifying that. On Business Premises, there was some old completions that burden still. Should we assume that that is now cleaned out for H2? We still have some old tails of project that we are closing during this year. Not really a major impact, but that we are doing and we are really hoping that we could close them during this year. That's our timing, so we could have a fresh start for Business Premises for next year. Okay. Could you give some indication of the financial impact on this old project in Q2? No. As I said, that's really not material impact in the whole group results as it is. Okay infra. Thank you. Mall of Tripla. Obviously, performance dependent on the pandemic, but can you say something about the shopping center market situation? Any changes in yields? That's of course driven by the number of visitors in the shopping center and the parking hall as well. As I mentioned, the number of visitors is increasing, not really to their pre-pandemic level, but month after month increasing. Of course, if that would continue, that would have an impact to the yield and finally to our result as well. As I said, the fourth wave is a kind of question mark, so therefore we are a bit closely following that situation. So far, the trend is positive. Okay. Thanks. Then on Housing Finland, has there been any change to your apartment mix lately? What you want to start up? Any increase in average square meter or something like that during the pandemic? Yeah. We actually see that the pandemic has resulted that the average size has increased. People working from home clearly would like to have another room for that purpose, and therefore we see an increase of square meters and number of rooms. Of course, we will take that into account when having the new startups of our projects. What kind of impact do you think that has on your margins in consumer? Not really margin impact. This is more kind of answering the market need. Okay. Thank you. Perhaps, do you have some comments on investor demand for apartments, both private and institutional? That continues on a high level. There's a high interest on that, which is from one side driving the good housing market. Thanks. I'm not sure I heard it all, but did you say that regarding the wind park, it's more likely that it will close this year than next year? Yes. That's our understanding and expectation based on the information that we have so far. Okay. That's all from me. Thank you very much. Okay. Thank you very much. The next question comes from the line of Olli Koponen from Inderes. Please go ahead. Yeah. Hello, it's Olli from Inderes. Thank you for taking my question. I have one question left after these questions, it's about your outlook and just that I understand it correctly, what you say there. You said that in Housing Finland and CEE, you expect the adjusted operating profit to be EUR 50 million lower than in Q3 2020. Is that correct? Yeah. That's the volatility between the quarters. We're talking about just the Q3 results will be compared to last year, around EUR 50 million low. Yeah. If I read that correctly. Yeah that would mean almost zero result for the segment in Q3. Is that right? Yeah. If you look at the deviation, that EUR 50 million is driven by the fact that we get so much lower level in the commissions. Of course, there are other items, just when it comes to the completed sold apartments, which means that they have been already completed but not sold. Those have an impact. Also, of course, we have the investor sales, which is going on all the time. That gives just about the magnitude that what's the impact on the difference between the completions this year, Q3, and last year. Okay. Is there any other explanations or do you have any kind of margin pressures there on certain projects, or is this just because of the completions? No. That's why we wanted to lift this and highlight this because this is a kind of quarterly volatility regarding the completions in housing. We wanted to lift it up. There's nothing else expected in Q3. Okay. That clarifies. That's all for me. Thank you. Thank you. Thanks, Olli. We have one more question from the line of Matias Seitamäki from Nordea Bank. Please go ahead. Yes, good morning. I have still a couple of questions left, and I'm trying to understand the very high revenue in Housing Finland and CEE. You obviously had the higher completions and the ready inventory came down. How about the investor sales again, and the investor business? Is the revenue higher this year compared to last year? Yes, it is. The investor sales is higher this year compared to last year. That contributes positively to the revenue level. Okay. How about the average selling prices? You know that, and we have seen that the apartment prices have increased, but can you elaborate on what is your average selling price level in Finnish consumer houses and in CEE? Could you elaborate that? We are not sharing that information publicly. I'm sorry. Okay. Could you comment something about the year-over-year change in prices? On what level- Well, I can comment the overall price levels in the markets. Especially in the metropolitan areas, the prices are in the market increasing. That is what is happening in the market now. Of course, we are a major player in the market, so you can draw some conclusions from there. Okay. Is there other factors like mix, geographical mix, or in the apartment mix that is driving prices that are you over-performing the overage market level, or how would you describe that? I would say that we are still very competitive in all of our geographies when it comes to housing. That's driven by high quality and consequently high customer satisfaction that we are measuring very closely. Of course, that brings us a competitive advantage in that market. Okay, thanks. Question on margins in this Housing Finland and CEE segment. Do you expect to improve your margins also next year, or do you see this year's margin as extraordinary high as the new starts will obviously have significantly higher costs? How do you see this? Well, if we talk the margin, of course, the absolute margin is driven by the volumes. We are this year increasing our volumes, and that's one part. I would say that then, on the other hand, we have the material inflation, which has an impact to the pricing. I would say that the Overall margin level when it comes to margin%, we are in a very good level or good level at the moment. We are not expecting next year any material changes on that one. It's more driven by the volume. Okay. Very good. Thanks. Question relating with the consumer startups in Finland. They have been quite low level before this quarter, given that the demand has been very strong. Why it was so? We actually increased already during Q2 the startups, and we'll further do it now during Q3. The annual growth is 40% 2021 compared to 2022, so it's really now peaking. Already we started to increase during Q2 and continue that. We'll have the peak of startups in Q3. We are really listening to the markets and listening to the customer demand. Okay. Are you happy with your land bank and building rights? Do you have enough building rights that allows you to respond demand quickly enough? Are you happy with the situation? We are so far happy with the situation. The competition on plots is tightening, especially on the major cities and the price level are increasing, which puts a pressure for us to acquire the plots and to our margins as well. We are having a really close look at that moving forward. That is something that is impacting on our plot reserve, which we of course need and will have for the future. Okay. Very well. That was all from my side. Thank you very much. Thank you. Thanks. As there are no further questions, I'll hand it back to the speakers. Thank you very much, operator, and thank you everyone for the questions. YIT third quarter results will be published on October 29th. Until then, thank you and have a great day.