Yit Stock

Okay. I think we can start. So hi, everyone, and welcome to YIT's analyst call preceding the silent period of our third quarter 2026 results release. My name is Essi Nikitin, and I'm heading the Investor Relations at YIT. Together with me today, I have our CFO, Heikki -- CFO, Erkka Repo; and CEO Heikki Vuorenmaa on the line.

We will start with the recap to recent developments in the company presented by Erkka. And after that, the participants will have an opportunity to ask questions from Erkka and Heikki. As a reminder, this call will be recorded, and the recording will be published on our website after the call.

At this point, I will hand over to Erkka. Erkka, please go ahead.

Good morning to everyone. Let's start with a short update on our businesses, starting with our contracting businesses and the very topical data center market. As you all know, we held a Capital Markets Update event regarding the data center market last Thursday. Many of you attended the event, but in case you missed it, the recording of the event and presentation materials are available on our website.

The data center market in Finland is experiencing strong growth as Finland is emerging as one of the most attractive locations for data center investments in Europe. YIT has systematically invested in its capabilities in this growing sector, built extensive expertise and references in delivering demanding data center projects and established a position as Finland's leading data center builder.

As we discussed in the event, this super cycle is just about to start in Finland and will accelerate during our strategy period. In 2025, we had a little less than 400 megawatts operating capacity deployed in Finland. According to data from the Confederation of Finnish Industries, announced capacity extensions of data centers would reach over 5 gigawatts by end of 2029. This number is well aligned with another data point, Fingrid connection agreements of 5 gigawatts announced in August 2026.

The announced and potential data center pipeline represents a significant growth opportunity for the Finnish construction industry in the coming years. Our estimate is as communicated in the capital markets update, that it will bring up to EUR 15 billion additional opportunity for construction companies in Finland by the year 2029. As discussed in the event, we have translated the potential market development paths into 3 illustrative revenue scenarios for YIT in 2029. In all of the 3 different scenarios, the business grows strongly. The difference is primarily in how quickly investments move from plans into construction.

In the base case, power availability develops as expected, customer investment activity continues and projects move forward under normal delivery conditions. Today, as our base case, we see a credible path to revenue of about EUR 1 billion in 2029. As a result, we announced that we increased the group financial target for revenue growth to be reached by the end of 2029 to at least 10% with the compound annual growth rate based on year 2024. Previously, the company's target was to achieve net sales growth of at least 5%.

The other group financial targets of adjusted operating profit margin of at least 7% and return on capital employed of at least 15% by the end of 2029 remain unchanged. The data center growth is expected to support us on reaching the profitability targets as well. In conjunction, we also increased, for the second time this year, the segment-specific revenue growth targets for the Building Construction and Infrastructure segments for the strategic period. The new target for the Building Construction segment is to achieve annual growth of at least 6% and for the Infrastructure segment to achieve annual growth of at least 15% by 2029 with the compound annual growth rate based on year 2024.

We have also had success in many other fronts in the contracting business during the third quarter. In addition to 3 new data center projects announced during the quarter, 2 for atNorth and 1 for XTX, we also announced several other new projects for the contracting segments.

For Building Construction, we announced 2 new agreements for constructing production facilities in Vilnius and Kaunas in Lithuania. We also announced the start of implementation phase of Jätkäsaari Swimming and Sports Center in Helsinki. For Infrastructure, we announced that YIT had been chosen to carry out passenger rail yard project in Oulu, Finland. All in all, the order books for both of the contracting segments are strong and the segments are well positioned to pursue growth and further enhance operational efficiencies.

Then moving over to our residential segments. As a recap, our Residential CEE segment continued to perform well in the second quarter of the year with apartment sales increasing by over 30% from the comparison period. The segment has been a clear profit driver for the group this year. The market conditions continue to be favorable, giving us more opportunities to continue to reach our strategic targets.

As we announced yesterday, during the third quarter, we have started 148 new apartments, altogether worth EUR 23 million in the Residential CEE segment. The number of starts is lower than in previous quarters, but has no impact on the underlying trend of profitable growth. We continue to allocate further capital and focus on the CEE residential markets to secure future projects to our pipeline. We will continue to start projects during the year, given the market remains favorable to support our growth and strategic ambitions.

Then moving over to Finland. We introduced 2 new project concepts in Residential Finland, during the third quarter, Olo and Fiksu. Our third concept, Formia, was already introduced earlier in the summer. Olo Home is high functioning and clearly structured space that stands the test of time and meets the needs of an active life. Homes based on the concept are designed for construction in the regional centers of large cities and the downtown areas of medium-sized cities.

Fiksu concept responds to the changing market conditions and provides more people with the opportunity to own a new home. Buyers get a new high-quality apartment with predictable living costs for the price comparable to the apartments in the secondary market. Estimated target price per square meter for YIT Fiksu homes built on leased land is approximately EUR 3,500. The homes are designed for customer groups such as single-person households, couples, growing families and real estate investors.

Formia concept, introduced already in May, offers homes where high construction quality meets Finnish design. At the heart of the product concept are airiness and sense of space, harmonious design and high-quality materials. The uniform and durable design language extends from the front door of the building and common areas to the smallest details of the home. Formia homes offer functional floor plans and large windows that bring in plenty of natural light and high quality characterizes every detail of the home equipment.

We continue to adapt our operations to prevailing market conditions in Residential Finland and launch self-developed consumer projects based on demand. During the third quarter, we launched 2 new self-developed residential projects in Finland: Joensuun Sahan Piha in Joensuu, Finland, representing the Olo concept, and Heikas in Lauttasaari, Helsinki, representing the Formia concept. In addition to the self-developed starts, we also started one student apartment housing project in Vaasa, Finland during the quarter.

As a conclusion, the growth of the data center market in Finland is significantly accelerating our growth opportunities from 2027 onwards. YIT has the capabilities, market position and customer relationships needed to capture long-term growth in the market. Beyond data centers, we also see additional growth opportunities across our contracting businesses driven by long-term megatrends such as energy transition and increasing infrastructure and defense investments.

We also see continued growth from our residential business, especially in Residential CEE. It is worth noting that the new growth target for the group presented last week does not require a meaningful recovery in the Finnish residential market, which could provide us additional upside.

So this was the recap to third quarter main events. We are now ready for questions.

Thank you, Erkka. So yes, we're ready for questions. [Operator Instructions] First question we have from Atte Jortikka.

This is Atte Jortikka from Inderes. Firstly, on the Residential CEE, so what was the cause on the starts dropping to 148 on Q3? And what is the pipeline for starts for Q4?

Thank you, Atte. I think kind of like Erkka pointed out there. So the market remains favorable and the conditions there. It's a timing question more than anything else, the timing of the readiness of the projects in terms of having everything ready for starts. That's been the case for now. If you look at the comparison period and kind of strong acceleration there. So it's fair to say that there was a quieter -- some 3 years ago, so there was a quieter time in the ramp-up of starts. And then as we were entering to more favorable market, so we had an opportunity to launch multiple projects that were ready for launching at the same time there.

And now we are -- like there's no changes in terms of the market and growth ambition or underlying trend what we are seeing, but it's just the case that we had a less of starts in the Q3 than last year. But we remain confident that we are on the right path. We have the right projects. We have right plots. We have capabilities there to launch those projects and continue the strategic direction what we have been setting ourselves.

Yes. And continuing on that, given some 1000-unit completions for Q4, should we still expect that the growth in units under construction continues also going forward?

Let's come back to that then what is the actual numbers on Q4. What we see there is that obviously now like Erkka pointed out, so we've seen some 30% growth year-on-year. Our ambition is the 15% on annual pace throughout the strategic period. So that's what we are really committed to deliver. And we are working hard there also to ensure that we have the right projects in the right cities that we are starting.

Yes. Then on Residential Finland, so you presented and also commented here today that you are not expecting meaningful contribution from Residential Finland top line-wise during the strategy period. So is that your own base case? Or is that -- do you think that's a conservative estimate?

Well, it's been -- how should I frame this? If we look from '22 until today, so there has been quite many type of scenarios about the residential market in Finland, how that will be in kind of coming. What we're trying to say is that at the moment, it's for us kind of something that we were not counting in or like option there in terms of what you said the revenue contribution. But generally speaking, what I would like to point out that we operate in several other European countries. And what we have typically seen on the residential market is that the residential market is a little bit like a post-cyclical thing.

So first, you see that the economy is doing good. You're -- there is a growth the jobs and there is, let's say, view in the economy, which is positive. And then after that, also the residential market has been kind of turning into the more positive trend. And if you look at the Finland case, so maybe in a historical terms, residential market has been recovering earlier than the whole economy. But I think the kind of more typical way is that the residential market recovers as the economy first has been recovering, and that is turning to the consumer confidence and also well-functioning residential market then.

And maybe what we wanted to communicate is that we do not want to speculate when the market turn would happen. But when that would happen, it would provide us a significant upside compared to the numbers that we have shown.

Thank you, Erkka.

Yes. And then final for me before stepping back in line. So for contracting, the outlook for data center construction is obviously strong, but what about the tender pipeline outside data centers, for example, in public infrastructure?

So last quarter, we upgraded actually our view on a little bit improving in Finland. And as pointed out, so there has been quite a few project announcements also during the quarter. We feel that kind of the market conditions hasn't changed since the Q2 and that the kind of positive economical activity and the environment what we are seeing in Finland is actually -- it's not just on one sector, what is the data centers, but it's a more broader in the whole economy, you can say. But also in the Baltics where we are operating. So that is the same there.

Thanks, Atte. Next question from Svante.

Coming back to the data center theme, thank you for the very good event that you had. First one on the EUR 13 billion to EUR 15 billion market opportunity that you see for '26 to '29. How should we think about the timing of that whole into the 4 years or 3 years that we have left? Is it kind of steadily increasing like 10%, 20%, 30%, 40% for the 4 years? Or do you have an own view of that timing effect?

Well, also -- I think the timing is also quite much influenced that how quickly and how many of the projects will be launched towards the end of the year or beginning of the next year because then when you add the construction lead time on top of that, so that impacts. What we've seen is that there has been quite many already project announcements during 2026 that would imply that kind of the market is not completely back end kind of loaded towards the '29. But what we can, of course, see is that I would say that there is more and more new announcements for the new potential opportunities. So you could actually see somehow kind of a growing trend there to be -- but I think, Erkka, you pointed out already there in the event last week that it is not something that we need to wait until '28 or '29, but we see that it's already taking a massive step forward in the next year.

Okay. That's helpful. And then still on the same theme, could you give some details on how you have calculated the 28% market share that you have on the ongoing data center projects? Is there a monetary element in there? Or is it only based on megawatts?

It's based on the capacity and the megawatts.

And of the players, what's your own view of how many foreign operators are involved in the market and what is their share of the market currently? I guess it's defined as the company that is managing the project.

Yes. Well, we wanted to make kind of statement on how do we see ourselves and then leave room for other companies to position them their own view on the market and how they are there.

Okay. And then perhaps on the EBIT guidance for this year, obviously, the EUR 70 million to EUR 100 million guidance. Obviously, Residential CEE will be in a meaningful role there. But what are the main drivers for you ending at the low end or high end? Is it much related to the timing of the CEE projects being completed as it has been in previous years also?

It's a one factor, but the Finland residential market is something that we have pointed out there to be one of the major factors. And then the -- obviously, I think in kind of the timing and how quickly the execution of certain -- the contracting projects are also done. So that is one element on the contracting segments. But it has been quite largely driven by the uncertainty of the Finnish residential market and how the full year outlook has been as we were setting the guidance at the beginning of the year.

Okay. And last question, I mean, you have very little -- Residential Finland, very little investor projects ongoing. Is there any light at the end of that tunnel? Or is it still completely dead?

I think there are positive news in terms of the kind of amount of vacant rental apartments since those kind of are declining. So the kind of occupancy rates, if that's the right term, are increasing in the rental portfolios. Cities continues to grow. There is very little amount of completions, if any, on that sector. So I think the market recovery is moving forward. Then there's still something which I think we or other players hasn't really observed, it would be the kind of a steep rent level increases that would support the business cases for investors. So that hasn't yet been materializing.

Next question we have from Anssi Raussi.

Yes. Anssi from SEB. One question on Infra segment and pricing there. If we think about expected cost inflation in that segment due to this huge demand in data centers, like how price sensitive do you see that these other Infra segments, excluding data centers are right now? Of course, we have defense, but maybe public side, for example, can you comment anything on that?

Just to get -- do you mean price sensitive in terms of the material cost prices or price sensitive in terms of our customers' capability to pay for services or from what angle you were approaching this, just to get there?

Yes. I mean if we have huge demand in data centers and we have probably some cost inflation as well, so that will push prices up in other infra subsegments as well. So do you see that these kind of customers in these other subsegments are price sensitive that if prices go up, they postpone projects maybe for a few years? Or how do you see these other infra business areas?

Extremely difficult to assess on that question. What I would emphasize on kind of -- to the first question, how do we prepare for -- how do we ensure that we are managing our own costs accordingly. Obviously, we have been going through a significant transformation in terms of our procurement capabilities, introducing the category management as well as then how do we ensure that we have a price visibility and cost-based visibility on the future prediction of the cost basis. So that's something that we nowadays have in use. And I think we have been discussing this earlier, but I just want to remind and emphasize that, that has really changed the company position since, let's say, '21, '22 when there was a massive inflation and the changes in the market. So I would dare to say that we are better prepared there.

But of course, then there is another element is that our kind of pre-assessment of different kind of contracts that we are operating under. So how the indices or risk and opportunities in terms of cost and price changes in the subcontracting is shared or not shared with the customer. But it's fairly difficult to assess for the first question there. I would say that when we look at the overall infra demand and the market, so it is favorable for all infra companies, including us.

Do we have more questions? Yes, Atte, please go ahead.

Yes. Still continuing on the Finland Residential. So it's one of the key factors on where you land in the guidance. So you speak mainly of how well are you able to manage the unsold inventory in Finland, right?

Yes. We have also completions towards the end of the year. So that is one driving factor. And how do we balance the kind of the new portfolio when we look, for example, Heikas or the Sahan Piha. So those has been fairly well received in the market with a positive note. So how we are, at the same time, ensuring that we have the right projects in the right cities and managing the completions. So that's the kind of -- that's something that the team is currently working on in terms of the Finland Residential team side.

Thanks, Atte. And a follow-up from Anssi, please go ahead.

Yes. One more question from me about cash flows. So I think your number of unsold completed apartments has come down at least in Finland, the current number compared to the number at the end of Q2. And then we have this huge data center project. So how should we think about Q3 cash flows, operating cash flows, some positive drivers at least, I think.

We will, Anssi, come back, obviously, with a more detailed number, but the observation that one could make from the available apartments on the Internet page where we are disclosing all of the apartments that are available, one could make the conclusion that you just made. So that's obviously one driving factor. But let us come back to the actual numbers just in a few weeks' time.

Thanks, Anssi. It seems that there are no more questions. So thanks all for participating, and we will publish our third quarter results on Friday, 30th of October. Until then, thank you.

Thank you.

Thank you.

Good morning, ladies and gentlemen. My name is Essi Nikitin, and I'm heading the Investor Relations here at YIT. It's my great pleasure to welcome you all, both here in Sanomatalo and people following the webcast to YIT's Capital Markets Update regarding the data center market.

Let's take a look at today's agenda. Our President and CEO, Heikki Vuorenmaa, will start the presentations and talk about the execution of our strategy announced 2 years ago and the opportunity the rapidly growing data center investments will bring to our country. After Heikki, Head of Infrastructure segment, Aleksi Laine, will talk about YIT's role and capabilities in the data center industry. And finally, our CFO, Erkka Repo, will conclude with the financial impacts for YIT.

After the presentations, you will have the possibility to present questions to Heikki, Aleksi, and Erkka, both here at Sanomatalo and the audience attending remotely via teleconference line. We launched our strategy for 2025 to 2029, 2 years ago in November 2024. During the past 2 years, we have executed now the strategic priorities set for the period. Today, we give an update on the progress of delivering our strategy and dive deeper into the growth opportunity that data center construction offers. The data center market in Finland is experiencing strong growth as Finland is emerging as one of the most attractive locations for data centers in Europe.

YIT has systematically invested in its capabilities in this growing sector, built extensive expertise and references in delivering demanding data center projects and established a position as Finland's leading data center builder. In today's presentations, we will discuss the market outlook and key growth drivers, dive deeper into the data center construction projects and elaborate on how YIT is positioned to benefit from the continued expansion of the data center market. So we have a really interesting morning ahead of us. But now let's introduce our speakers of the day, starting from our President and CEO, Heikki Vuorenmaa. Heikki, welcome to the stage.

Yes. Thank you very much, Essi, and let me actually take this opportunity to introduce colleagues and other speakers. So starting with Aleksi Laine. And Aleksi is our Head of our Infrastructure segment, being with the company approximately 20 years. And within the Aleksi's organization, we have the Digital Infrastructure division, and Aleksi is going to present what we actually are capable to do as YIT today. Then Erkka Repo. Erkka is our CFO, recently joined to YIT. He has extensive career in several finance positions, and Erkka is going to tell more about how this is actually impacting YIT financials going forward.

And like Essi said, so my name is Heikki Vuorenmaa, President and CEO, the ones that I haven't met before. It's actually great to see very -- many familiar faces today. And be in the position to share more about what this data center industry growth actually is in Finland and how that is going to impact YIT's future in the coming years. But let's start with what YIT is today. So YIT is the largest construction company in Finland. Our revenue is at EUR 1.8 billion, which over 60% comes from our contracting businesses. We have a strong balance sheet. We have assets worth more than EUR 1.5 billion, and that is giving us a comfort to operate in this industry. Our profitability continues on an increasing trend. We employed today over 4,000 YIT professionals and actually continue to recruit more.

In total, our sites today work more than 20,000 employees here in Finland. So that tells a bit about the scale we operate. Our position is really strong. We are operating across the whole country with our own workforce to ensure that all of the projects that we are doing are delivered on time and on budget. So we discuss data centers. And in some cases, we refer that as a new long-lasting economical start in Finland, but we actually have seen a couple of those prior, because YIT is not a start-up company. We have been on this business more than 100 years. We've been building the foundations of the Finnish society to modern era. We have been supporting the transition of industrialization, developing through urbanization and now leading to focus on sustainable and digital human-centric environments that we all like to live in.

Our transformation -- the offering as a company has also transformed over these times. It has kept ourselves relevant to serve our customers and deliver to the promise tomorrow well built. And I guess we introduced actually the strategy that we announced '24 on the Capital Markets. We have been delivering that with decisive steps. At the '24, we set out 3 strategic priorities. Since then, we have scaled our Residential CEE business and doubled the production volumes. We have delivered already 6 consecutive quarters of growth in our Infrastructure segment. We have continued to improve the profitability of our Building Construction segment and improved our work safety across all the operation and all operation countries.

There are several project examples that we have delivered ahead of schedule and on budget, most recently here in Helsinki, a healthcare center here nearby in Kamppi, which was more than 400 days ahead of schedule. And it was due to the fact that we actually find opportunities during the project execution to deliver the work more efficiently. The project deviations are under control. And what is most important over these years and the times is that the employee engagement is in steady increase, and we receive continuous positive feedback from our customers. So this execution track is giving us the confidence as we are now turning to the next major growth opportunity.

We have been preparing for this growth opportunity for more than 2 years already. In the '24, we were setting our -- outlining 4 megatrends that were driving our industry in -- during our strategy period. All of these megatrends continues to be valid. We've seen the urbanization to continue. We have seen the increasing requirements for security and resilience and evolution of the green transition across all operating countries. But today, we are focusing on the digital transformation and its global needs. The new economy of data and digital solution needs are record-level global investments to AI infrastructure.

And even though this has impact to -- on all of our operating countries, we are still today discussing opportunities in Finland. And what makes Finland so attractive in this macro picture? Finland is actually capturing massive share of the data center investments in Europe. If you look on a global level, the demand is growing 10% to 20% annually according to aggregated data from the several sources. This demand and the strong demand comes from AI, cloud, and digitalization needs. So the need for us to use our phone and the digital tools we have in everyday use.

Finland has about 2.9 gigawatts of planned capacity for deployments. And if we compare that today, it's actually by [ farthest ] in European -- kind of largest by far in European countries. And the constraints that are on this industry in relative terms, actually, Finland has a fewer of those constraints compared to many other countries. And it's also creating the wonderful opportunity for us as the largest construction company.

Let's double-click more on Finland, those positive elements what we have here. And how we're seeing is that we have 4 -- several structural advantages to become a leading destination for those larger-scale data center investments. I think, firstly, Finland has already had a long period of time, a vision that the renewable energy is the right selection for the future societies to build on. Majority of the electricity in the grid is CO2-free and availability of the current electricity as well as the future pipeline for investments to additional energy is strong. So Finland has enough power to power the upcoming investments.

Secondly, when we look at the electricity transmission infrastructure, that is simply a world-class. Fingrid has done excellent work over the years to build a strong and resilient network that is needed for this new economic era. And the decision that Finland has taken over several years to build cities that rely on district heating solutions and energy efficiency buildings is actually now paying off. This added to the unique climate that we Finnish are not always so proud of, meaning that we have available of cold air quite often here is actually making this investment environment really attractive.

And finally, something which is really important in today's world is that Finland is secure and predictable society. It is making Finland attractive for the large-scale data center investments. And we see that the investments are just about to start. Because when we look the installed capacity, what we have at the end of 2025 and compared to what are the future plans ahead, we see that this is just a fraction that has been implemented. So currently, we have a little less than 400 megawatts of operating capacity deployed in Finland as of 2025. Then when we take the data from the Confederation of the Finnish industries, the announced capacity expansion of the data centers would reach over 5 gigawatts by end of 2029.

Then we need to take another data point just to assess this opportunity. And let's use the Fingrid connection agreements that they announced in 2026 August, that reaches 5 gigawatts. By the way, this data set doesn't yet include the Google's EUR 13 billion investment announced earlier this month. So this tells about the magnitude of industry. This is a unique opportunity to Finland. And the cycle is just starting and it presents unforeseen opportunity for the construction industry.

But what is the opportunity? When we assess this opportunity, we are looking up to EUR 15 billion addressable market for the construction industry companies through 2029. This would be more than annual 10% on top of the current industry volumes, what we have here. Direct employment impact, data center construction up to 25,000 employees. And as all operational creates approximately 7,000 permanent jobs. So we talk about massive impact. And when we look amount of employment, this would actually directly compensate or the same amount of loss of employment that the residential sector left as the volumes declined starting on '22.

There is work, obviously, to ensure that all the competencies are in place, but we as a YIT feel that we are in the best position to secure the skilled labor for our sites. There are additional regional benefits that are often provided to cities outside of the capital area. So on top of the increasing employment comes, obviously, the green district heating solution, tax revenues and potential funding for them, the public services. So I keep repeating myself, but we are looking here a massive opportunity, the society level. We haven't seen a similar growth in construction industry in several decades.

The question is that how do we can secure that this opportunity actually will materialize. If we look Finland as a whole, and we talk about the unique elements that Finland has to attract these type of investments, we can also say that the Finland is a really well-functioning society where there is a public and private cooperation to handle this growth. How do we do that? The grid investment activity obviously needs to support the pace of scaling the industry development needs, the power and infrastructure to grow hand-in-hand to maintain the good power availability for all the sectors as well as private consumers. Economical and political investment environment should -- we believe that it will maintain favorable. And critical also is that there is security and availability of land for this type of investments. Our local presence is supporting global investors to navigate around these factors because it quite often requires the local knowledge and delivery capabilities.

So I would say before handing over to Aleksi to share how we are actually executing this project as a YIT, let me recap the key messages from the start. The data center investments wave is here, and we are actually building it already. Investments to the AI and cloud services are increasing on the global level. Finland is an attractive environment for the new economy. This will represent a significant opportunity for the construction industry up to EUR 15 billion until '29, but it will also continue several years beyond that point. Additionally, this will catalyze further supporting investments to energy production, recovery, storage, transmission and more.

And as the largest construction company and the leading data center builder in Finland, we are in a good position to capture a large share of these future investments. As we are also the market leader, we need to carry the responsibility on ensuring that these investments are actually delivered on schedule and to budget. Our strategy has been to create long-term partnerships with balanced commercial terms that is focusing to support the industry growth, but also the growth of the society.

Thank you very much for your attention, and I will let Aleksi now to deep dive into the YIT capabilities and tell much more about what this data center investment actually look like. Welcome, Aleksi.

Okay. Thank you very much, Heikki. So as Heikki presented, my name is Aleksi Laine, and I work as a Head of segment for YIT Infrastructure. I've had the privilege of working with the company for 19 years, serving our great customers with my dear colleagues. I'm super excited to be here today to share with you what YIT as a company can provide in the data center market. As Heikki has shown, the data center market is a hugely attractive opportunity. I'm going to show you now how YIT can capitalize on this opportunity and present from our perspective, how our great experts in YIT can harness our wide capabilities to generate value for the data center customers. How we can strengthen our position as leading service provider and also eventually how we can further capture the growth opportunity, manage the risks and build a sustainable growing business.

But let me start by explaining what the data centers are actually all about. So large data center projects are actually systemic integration projects rather than traditional construction contracts. They require expertise that we as YIT have had for decades as the biggest construction company in Finland. As data centers are becoming significantly larger and more complex and at the same time, speed to market has become critical as every month of delay impacts our customers' ability to generate value from their investments. As the illustration here shows, a modern data center relies on multiple interdependent systems and is much more than a building. It combines civil works, electrical infrastructure, cooling system, automation control, security systems, and customer-provided technology into one operating environment.

The challenge is rarely in any of the single work packages. The challenge is making all these systems work together on schedule and ready for commissioning starting from day 1. Ultimately, the customers are not buying a building. They are buying a reliable delivery of a fully performing facility. As a result, customers increasingly value partners that can manage complexity, integrate multiple scopes and provide delivery certainty. This raises the barrier of entry and favors companies with broad integrated delivery capabilities like YIT with proven experience in managing complex interfaces.

And importantly, these capabilities matter because the market is increasingly concentrated around a relatively small number of strategic customers who place significant value on trusted delivery partners. A data center construction market, it's not a fragmented market. A relatively small amount of strategic customers account for a significant share of future investments. And winning a trusted position with these customers provides access to substantial long-term growth. The market is increasingly driven by a relatively small number of hyperscalers, AI owners, co-cloud operators and Neo-clouds. These customers are responsible of the some of the largest current and future investments, both in Finland and across Europe.

Importantly, these customers do not select partners project by project only based on price. They build preferred supplier relationships and increasingly seek trusted partners capable of successful delivery of multiple projects, phases and locations. Once a contractor gains customers' trust, the opportunity often expands beyond a single project into repeat assignments, broader scopes and future campuses. As a result, the market access depends less on the number of customers and more on the quality of the customer relationship. YIT already serves all of these customer groups today and winning and retaining key strategic customers can provide access to a significant share of the long-term recurring business. Importantly, these customers rarely build one facility alone. They typically develop entire campuses over multiple phases that creates the recurring growth dynamic that I will explain next.

Large data center campuses are often developed through repeatable phases, creating the potential for recurring construction demand over extended period of time. Many of today's data center investments campuses develops rather than stand-alone facilities. Individual campuses can ultimately consist of multiple buildings and supporting infrastructure delivered over several years. Campus developments are frequently structured in the phases, allowing capacity to be added progressively as the demand develops and investment decisions are made.

Experience gained from earlier phases can support improved efficiency, smoother execution and continuous optimization in the subsequent phases as well as into new projects, benefiting both the customers and YIT. Each completed phase creates valuable project-specific knowledge that can be leveraged to improve efficiency, support value engineering and strengthen execution in the future development phases. So winning the first phase often positions a contractor to participate in the future phases, making the initial project potentially far more valuable than a single contract award. The campus development model can create long-term revenue visibility through recurring opportunities, making customer relationship and project delivery performance increasingly important.

So far, I've discussed why data center projects are becoming more complex and why many investments are delivered as a long-term campus programs rather than individual projects. The next question is, how much of this value is YIT actually able to capture? The answer is that YIT can participate across a broad share of the delivery chain from early site development and infrastructure works all the way through to building delivery and commissioning.

YIT's integrated delivery model allows us to support customers on a broad share of the data center life cycle, creating customer value through faster delivery and more efficient execution. Unlike many other contractors that focus on a single discipline, YIT combines the project development, infrastructure, civil works, building construction, MEP and commissioning capabilities within one organization. These capabilities gives us clear advantages and allow YIT to support customers from early site development and enabling infrastructure through the building delivery and commissioning.

The ability to coordinate multiple scopes helps reduce interface risk, improve project execution and support faster project delivery. For the customer, the benefits are quite simple, fewer interfaces, fewer handovers, faster delivery and ultimately lower total project costs. Because data centers are system integration projects, customers increasingly value partners that can take responsibility across the multiple parts of the delivery chain. As a result, YIT can participate in the larger share of the project and value than contractors focused on single scope alone, creating attractive growth opportunities as the market expands. Of course, broad capabilities only matter if they match what the data center customers actually need. Let me explain that next.

YIT's core capabilities are truly aligned with the requirements of the modern data center delivery. This matters because they create a strong foundation for winning and enable successful delivery of complex data center projects for the most demanding customers in space. Large-scale data centers require coordination of multiple contractors, technical systems and stakeholders. YIT's experience in integrated infrastructure, building construction, MEP and technical scope is directly relevant to this challenge. Data center campuses are delivered at the significant scale and over of the multiple phases. YIT brings experience from large industrial infrastructure and complex construction projects requiring disciplined execution over extended periods.

Schedule certainty is also critical as delays affect customers' broader investment programs, making project management and delivery reliability increasingly important. In addition, success is ultimately measured through commissioning and operational readiness rather than construction completion alone. Our experience from technically demanding projects support this type of delivery model.

Finally, successful delivery also requires strong local capabilities, as Heikki mentioned. Our understanding of local stakeholders, supply chains, market conditions helps support efficient project execution. As a result, many of the capabilities that have traditionally differentiated YIT in infrastructure and in industrial construction are increasingly relevant in the data center market as well. YIT has established a leading position in Finland's active data center markets, with an approximately 30% market share. That position provides us a foundation to benefit from the continued market expansion and future campuses.

We have successfully delivered and are currently delivering projects for leading data center customers operating in Finland. We are currently working with 3 different campuses with 5 projects under construction, and we are scaling our capacity. The company has developed experience across multiple delivery models, project phases, customer types within the sector. Existing reference projects have strengthened our understanding of customer requirements, technical delivery and project execution in the data center environment. The growing project portfolio provides a strong foundation for further expansion.

So YIT has already translated its capabilities into market share, customer relationships, project experience, creating a strong platform for future growth. A successful first project can create a platform for long-term customer relationships spanning over multiple phases, broader scopes and future campuses. This allows YIT to utilize its capabilities both for the benefit of the current customers and in serving future customers. The relationship starts with a successful delivery. The first project gives us the opportunity to demonstrate execution capability, delivery reliability, and an understanding of the customer requirements.

A successful delivery creates opportunity for further assignments. These include, for example, additional phases at the same site and new projects while developing our overall capability within YIT. Experience from earlier phases will support the continuous improvement. Project-specific knowledge, established working practices and value engineering will contribute to more efficient delivery in subsequent phases and other projects as well. The scope of the relationship will expand over time. Depending on the customers' needs, our role may grow from an individual contract construction package to a broader responsibility across infrastructure, building, MEP, and commissioning.

Capabilities and experience developed on one campus are also relevant for future sites. This creates the potential to replicate this delivery model with the same customer in new locations while strengthening our overall capabilities as YIT. A data center project represents more than a value of a single contract, successful delivery creates recurring opportunities and increases the long-term value of the customer relationship.

Let me now bring you to live, a current example of this type of a project. Our track record with XTX demonstrates that [ successfully ] delivery leads to repeat assignments, broader responsibilities and long-term collaboration with the customer. Our experience shows that successful project delivery can create opportunities for future cooperation beyond the initial contract. In the case of XTX, relationship has progressed through multiple project phases, demonstrating confidence in our delivery capabilities and project execution. Each phase has strengthened our understanding of the customer requirements, project environment and delivery expectations. The XTX example demonstrates how a single project can evolve into a broader and long-term cooperation model with the customer. So our proven track record shows that successful delivery can create repeat business, broader scopes and long-term customer relationships, increasing the value beyond the initial project award.

So let me wrap up. You have seen from my section that our position is built on execution. YIT has the capabilities, market position and customer relationships needed to capture long-term growth in the data center market. We already worked with many of the leading customers and have built a market-leading position. Market growth is concentrated around a manageable number of strategic customers and long-term campus developments. We have shown that our data center projects are becoming larger and more complex, increasing the importance of integrated delivery capabilities.

Our capabilities are strongly aligned with the requirements of a modern data center delivery, and we continue to scale our capacity as the demand grows. Taken together, we see a market with strong long-term growth drivers. Customers investing through multiphase campuses and attractive opportunities to deepen customer relationships. We, as YIT, we are not preparing for the opportunity. We are already participating in it and scaling with it. Combined with our strong capabilities and market position, this gives us confidence that data centers will be an increasingly important contributor to YIT's future growth.

Thank you. And let me now hand over to Erkka to discuss what this means financially for YIT.

Thank you, Aleksi. So my name is Erkka Repo, and I'm the CFO of YIT Group. As Heikki mentioned, I have recently joined the company, and I have to say that with a magnificent time to join YIT when the market growth looks very interesting. As my background, I have had several senior finance roles in UPM and have been CFO both in the listed and non-listed companies. In my presentation, I'm going to go through first that the data centers are already a proven business for YIT. Secondly, that we are expecting the data centers to grow very significantly for us over the next coming years. And thirdly, that the data center growth is a significant driver for us in doubling the YIT Group growth target to 10% that we announced today.

You have now heard why the market is attractive and why YIT is well positioned to capture the opportunity. So what does this mean for YIT financially? First, it is important to establish where we stand today. Data centers have already generated more than EUR 200 million of revenue for YIT over the past 12 months. We are showing the data center revenue in both of our contracting businesses, 50% in Building Construction segment and 50% in Infrastructure segment. We have been active in the sector for more than 10 years, starting with our first project in Mäntsälä in 2014. Today, we are working across 5 active data center sites and are in a credible starting position for the next phases as we continue to scale in this fast-growing market.

On the next slide, I will put this growth into the context of our broader contracting businesses and show why data centers are becoming increasingly important for us. The strong growth we have just discussed is already changing the composition of our contracting businesses. Data centers have grown in 1.5 years by EUR 200 million to represent about 17% of the combined revenue of our Infrastructure and Building Construction segments. Furthermore, our data center business is performing above the strategic profitability target of more than 6% EBIT margin for the contracting segments. In addition, this is done with a negative capital employed that is typical for our contracting operations. For us, the attraction of the data center market is the combination of growth and solid good profitability.

Going forward, we see substantial opportunities to continue scaling up. Our current data center order book is already more than twice the revenue generated over the past 12 months, and we see the sizable growth starting next year. And from that base, our ambition is to grow the data center revenue to about EUR 1 billion by 2029. We expect to double the business again compared to the current order book level. So not only are the data centers growing quickly, but they are becoming a structural part of YIT's contracting businesses and paving a credible path to materially higher revenue and as importantly, to reaching the EBIT margin target of our 6% in our contracting business.

Of course, increasing the scale of this business also requires a disciplined execution. The next question is how we manage that growth and deliver predictable outcomes. As we scale this business, it is important to recognize that large data center projects are different from traditional construction projects. They involve international customers, international contract frameworks, highly scheduled critical delivery and large contract values. That means execution matters. Success is not only about building the facility, but ensuring it is commissioned and ready for the customer to deploy capacity on schedule. This is where our strong governance comes in.

We are selective in the long-term partnerships that we want to create in this industry. We work with different type of projects, but we prefer partnering with our customers and subcontractors in large multiphase campuses. We have deep expertise in FIDIC and other international contract frameworks to enable fast delivery of the projects and the scale-up of the industry, it is important to have a balanced sharing of risks and rewards between the parties. We have also demonstrated our capability by successfully commissioning one of Finland's first large-scale data center.

And over the past years, we have successfully reduced our project margin deviations and are now consistently delivering the planned project profitability. And finally, these projects also benefit from the negative working capital profiles we typically have in the contracting businesses. Overall, we believe that YIT has the capabilities, governance and financial discipline required to deliver predictable outcomes in this market.

Let's now turn to the potential scale of the opportunity. We have translated the potential market development paths into 3 illustrative revenue scenarios for YIT in 2029. However, I want to emphasize that in all of the 3 different scenarios, the business grows very strongly. The difference is primarily in how quickly data center investments can move from plans into construction. In the low case, power availability and grid expansion progressed more slowly than currently planned. Customer investments take longer than planned to reach execution and delivery constraints limit the pace of development.

Even in that low case environment, we see the data center revenue reaching about EUR 700 million in 2029. In the base case, power availability develops as expected, customer investment activity continues and projects move forward under normal delivery conditions. Today, our base case, we see a credible path to about EUR 1 billion of revenue in 2029. The high case illustrates the upside if infrastructure is built out faster, customer investment remains strong and more sites become construction ready within the period. In that environment, data center revenue could be about EUR 1.3 billion in 2029. Reaching that level would naturally require further scaling of the delivery resources.

And as Aleksi explained earlier, YIT is well positioned for this type of scaling. While the exact pace will depend largely on external conditions, the direction is clear. Data centers offer YIT a material, profitable and scalable growth platform. Given the scale of the data center opportunity and the momentum we are already seeing in the market, we have today announced an increase in our growth ambitions. The most significant change in our Group growth target, which is doubled to at least 10% annual growth rate from our base year of 2024 through 2029.

In Building Construction and Infrastructure, we are raising our growth targets to at least 6% and at least 15%, respectively. All other targets will remain as is. We are confident that the data center growth will also support us reaching our group profitability target of over 7% EBIT margin as well as the EBIT margin targets of over 6% in Building Construction and Infrastructure segments.

Let's now bring these elements together and illustrate what the data center opportunity and our updated ambition could mean for YIT's revenue profile through 2029. Let me bring the story together. We start from about EUR 1.8 billion of revenue in 2024. Looking ahead, we see continued growth from our existing portfolio, especially in Residential CEE. It is also worth noting that this illustration does not require a meaningful recovery in the Finnish residential market, which could provide us additional upside. The largest new growth contributor is the data centers. In our base case, the data centers are expected to contribute about EUR 1 billion of additional revenue by 2029.

And beyond data centers, we also see additional growth opportunities across our contracting businesses driven by the long-term megatrends such as the energy transition and increasing infrastructure and defense investments. Taken together, these drivers provide YIT a credible path to more than EUR 3 billion of revenue by 2029. The key message is simple. Data centers are already a proven business for YIT and a major driver of our next phase of growth, both in revenue and profits. Thank you.

Thank you very much, Erkka, and thank you, Aleksi and Essi. And actually, let me invite you all back to the stage as we are approaching the end of the presentation. I don't know if we are getting more tables here as well if there's a -- thank you. And like Essi promised in the start, so there will be an opportunity for Q&A. But before I let you ask all the great questions, let me just recap and summarize what we were sharing to you this morning. So the growth of the data center industry is really here, and it's built already today.

When we talk about the opportunity, we see it's a massive opportunity for construction industry addressable market up to EUR 15 billion through '29. Our market share in data centers today that is built, approximately 30%, as Aleksi shared and YIT being the largest construction company here in Finland is also the largest construction company in its field there. We continue to scale up 3 campuses. We have a capacity already to deliver 6 campuses. So obviously working on there with the customers, but also beyond. So we continue the recruitment and ensuring that we have the right team and capabilities. But not just in-house. I think it's good to say that we are taking a responsibility to also ensure that the supply chain capabilities are there so that we have enough team and enough capabilities as we are executing this and delivering the promise that we often making to our customers. The market is long term. It's really concrete. And for us, it's providing significant growth opportunities.

But hey, here, we are all set, and I think time for questions.

It is indeed time for questions. We'll take questions both from the audience here at Sanomatalo and from the teleconference line.

Let's take first questions from the audience here. [Operator Instructions]

Joona Harjama from OP Markets. I have a few questions. Starting about the competition. How much you compete with foreign companies in these projects? I mean, how much do, for example, hyperscalers bring their own international trusted partners to projects? Or is the competition mainly local? How do you see it?

Yes, indeed, we see a local and global competition here. In the case of, let's say, global competition, many of them still require local actually execution capabilities to make that happen. In that situation, the global company can be more as a general contractor, so let's say, project management layer and then, kind of, looking for local execution capabilities. We -- of course, our preferred position and capabilities we have is to be provider or the general contractor for the companies and support not just on delivering kind of local boots on the ground, but actually ensuring the execution of the whole project.

Great. Then another one on the operational side on sites, how much do you use subcontractors in data center projects? If compared to kind of traditional projects in infra and building construction.

That's -- of course, I'll let Aleksi to answer soon, but of course, differs quite a bit from site to site, but...

Yes. Yes. Great question. It kind of depends on the scope. But I would say, in general, it's roughly around 65% to 75% the subcontracting share of the works.

Okay. And finally from me about the split between infra and building construction. Can you discuss a bit more on how you allocate revenues between infra and building construction in these projects?

Very good. And yes, so we discussed -- we show that what's the revenue accumulation has and like Erkka pointed out, so we are now dividing 50-50 to these 2 segments.

This is Atte Jortikka from Inderes. I would firstly ask that why are you so shy with the profitability target? You're moving towards higher profitability in your contracting. So why no change in the profitability for the group.

Thank you for the great question. If you still look 4 of our businesses we have, we talk about these 4 cylinders. Today, we are in a very nice position that 3 of the 4 cylinders are actually operating in a favorable market conditions, and we have a proven track record of delivering and the track record -- track is there. There's still kind of a question about the timing of recovery of residential Finland business, which is then obviously something that on a group level of this is also impacting on our financials.

Yes. And then on the data center market, so what kind of hockey sticks are we looking at? Will the market spike, for example, next year and then taper off or how do you see it between the years?

Well, if you look a year ago, and we would be discussing a year ago about the same opportunity. And what we look at today, I think it's almost doubled easily the market outlook. I think what Erkka pointed out is that the growth and the opportunities what we see here already in '27 is quite substantial, what has been announced across all the different players. Whether there is an opportunity to announce more and build it such a way that power availability and grid availability and projects are in a seamless execution, there might be even further upsides there. But at the moment, we see that already '27 is a quite substantial year for the data center construction in Finland.

Okay. Then 30% market share now, is there possibilities to gain over that -- over the coming years?

We start from the perspective that we -- when we look our customer to eyes and say that we are doing this in the partnership and we are committing to deliver, we need to know that we have all those capabilities in place. And whether then we have more of the customers to choosing us to do the work that might lead or that is actually then impacting the market share.

Then finally from me, continuing on what Joona asked. You showed the competitors #2 and #3 there. What kind of competitors are these other full scope contractors? Are they someone who haven't been in the market, let's say, 10 years ago? Or are these sort of new players?

I think broadly speaking, like mentioned there, so we've seen not just the local companies, but also the foreign companies kind of competing with us here and especially the one that has kind of more experience in the data center industry can actually provide the fuller scope that are foreign companies. But anything Aleksi, you would like to add there?

Yes. It's pretty much as you stated, Heikki. So probably you can know what the landscape is about from a Finnish perspective. And as Heikki stated also, there are, to some extent, foreign players, but we also believe that, as Heikki stated, that actually also the foreign investors, they actually have an urge to also work with local partners, and we are continuing that work.

[indiscernible] from DNB Carnegie. Maybe a quick question on the already asked one, just to elaborate, like regarding your updated targets and the margins within them, you mentioned that I think previously that the data centers generally are slightly higher-margin business than your legacy businesses. Does that imply that your view has changed within, for example, the Finnish construction market here to the worse compared to the previous update? Or could you provide some color on that?

I wouldn't change -- I wouldn't state that our view has changed on the contracting segments per se. If I go back in the time on '24 and what was the expectation of the Finnish residential market's recovery at that point in time, I believe that many players, including us, were expecting the market's recovery to actually take place a bit earlier. We are still kind of approaching at the year-end of '26 and Finland seems to be the only country in Europe that yet hasn't recovered from almost kind of a whole European residential kind of a downturn that there has been.

That being said, obviously, we will see that, that is just a matter of time. But we haven't kind of -- that hasn't really changed our view. If you look at our track record, we have been improving our profitability. I think Infra has been doing already a solid profitability over several kind of quarters now and the building construction profitability has been on the continuous improvement track there that is supporting also on our view. And like Erkka pointed out there, so the target is above 6%. So that's where we are heading.

And then another, within the different growth cases you highlighted from data centers, you mentioned delivery constraints as one of the variables affecting the growth. Could you provide -- could you open it up a bit? Is it a delivery constraint on your part? Or what does it depend on?

Yes. So we had 3 of those and the last one would be some limitation of that would impact on the industry. We believe that we are actually in a very good position to mitigate that part of the risk. So we see that the material risks are more on grid availability and power availability and the last one playing a smallest role in that 3 of those elements that we were highlighting.

Fair enough. And last question, how do you view the employee markets? You mentioned that it probably currently is quite good given the more difficult situation here in Finland within the construction market. But could you view it as becoming a bottleneck going forward within the next 5 years, for example?

Well, it's a great question, and it's not like one labor market as such. So there are differences. For example, we are by far the largest construction company in the northern part of Finland. We have been employing a long time already a lot of our own employees and our strategy actually to employ our own blue collars has been paying off in order to kind of ensure that we have skilled and available team members on those projects.

So it's not just about the numbers, but this is also a race for talent and as well as the right competencies in the right area because these are -- if you look on the residential business, typically, that is built in the larger cities. And now we are talking about areas that are outside of, let's say, the 3 growing main cities. So that's the kind of I would say, the puzzle that we are playing. But what plays on our hand is that how we are positioned across the Finland, we are still according to the kind of recent studies. So we are the #1 attractive employer for the university students. And of course, we continue to recruit and build on top of the 4,000 employees YIT that we already have today.

Yes. Anssi Raussi from SEB. A few questions left from me. First about this from EUR 13 billion to EUR 15 billion potential in the coming years. So was it based on 2.9 gigawatts?

Approximately there. And we look it from -- I think that there was one excellent analysis on what would be the potential market. And in that analysis, it was said like a EUR 30 billion would be roughly the market. But when we look at the addressable market for construction companies, so like Aleksi pointed out in the data center. So there is also the power generators, there's the transmissions, there's kind of electrical components that typically are not included in the construction company scope. It might be included, but typically, those are not included. And that we kind of try to exclude as an addressable market to make it, let's say, more viable that what actually us or any other construction company player in this industry can see as a construction addressable market size. So that's how we model it out.

That's clear. And then about your margins, if I continue on that. And if we look at the contracting segment total, and I think your last 12-month revenue from data centers has been a bit less than 20% of these segments. And if adjusted EBIT margins are around 3% to 4%, have you seen some kind of maybe learning curve in these first data center projects? Or is it due to these other infra and building projects?

Definitely, a learning curve has been there, and it's good that we have had that learning curve already for a couple of years now.

That's clear. And finally, maybe about the timing of these projects in terms of P&L impact and cash flows, like what's the timing? And what kind of advanced payments you have? And if you could talk about that?

Yes. Varies contract by contract. But like Erkka pointed out there, so this is a typical contracting contracts that are -- we are operating under the negative net working capital. And then if you go to Aleksi's part of the presentation, and we start how the accumulation of the costs actually happens throughout the project. You can see that in the early part, site works and infra works are generating a smaller part of the pie when actually the MEP work starts. So -- and the MEP work starts only when you have kind of frames and structures up and running. And that is also quite illustrative how the projects are developing during the construction phase and also how the costs or the revenues and cash flows are then generated.

And one more question continuing on that. So are we talking about maybe in a ballpark of 10% advanced payments because these are such a huge project.

Varies by contract by contract. But let me, kind of, use another data point. If you look today, we are disclosing on every single quarter how much we have a negative capital employed per segment. And roughly speaking, it has been about 10% or so, give or take on both of the segments now.

Do we have more questions from the audience? Yes, there.

Yes. Ari Järvinen, MK & A Advisory. A couple of questions related to the EUR 15 billion CapEx opportunity by '29. So it's related to access to power mainly. So could you elaborate a little bit like what kind of assumptions do you have there related to the availability of the electricity grid because I see the Fingrid as the gatekeeper. So do they make some selection already on who is getting access to the grid? And do you foresee some changes from maybe politicians kind of like change this process? We have elections coming next spring, and I think it's going to be a hotly debated issue, availability of electricity. So what kind of thoughts do you have on that side of things?

Of course, what comes to Fingrid is in the best position, obviously, to talk about that. But when we know what has been shared how the grid investments are progressing and what is the existing plan. So that is something that we can use as a basis how the market will look like. We do recognize that there are -- there's obviously -- and I think it's acute that there is a lot of discussion and conversation around this new investment wave. And what we see and what we believe is that, firstly as this is executed in a good tandem with the investments, as the grid investments and as well as the power investments, this is supporting greatly the Finnish economy going forward.

And I would say that the public discussion is still ongoing, but this is a point that this comes more across that we see that we actually, as a functioning society that has all those capabilities in place to manage this growth and build the additional investments as well as additional industries that this will, for sure, generate.

Svante Krokfors from Nordea. A couple of questions. The first one regarding the risks which are out of your control, so to say. How would you look at the biggest there, I guess, politics is quite important there, but also, I mean, labor availability, where will you get all the blue collar workers and also -- I mean, under politics comes probably also power generation and grid investments. But how would you rank kind of the risks from -- which are outside of your control?

Yes. On the labor availability, I would say that there we have actually quite a lot something that we can control because there, we are -- our philosophy is that we actually -- we assess all of this before we start the work so that we know that we have our own capabilities. But on top of that, we have committed subcontractors and the partners that what we are doing there on site. And like Aleksi, kind of, illustrated there, so the best way is actually to execute with the same team, a repeatable project because it actually shortens the faster time to market and provides kind of the lowest cost also for our customers.

Then those risks that are definitely outside of our control are the political, grid investments or geopolitical risks. And those we need to mitigate from our perspective, and it might accelerate or slow down the kind of the market. But we need to ensure that all the projects we take are solid and something that we can deliver.

And the second one regarding the contract structures on data center projects. Can you highlight the biggest differences when it comes to other contracting contracts and I guess, especially the downside risks when it comes to -- we understand that the margin assumption is higher, but I guess the risks are also especially relating to possible delays.

Yes, there are several types of contracts, obviously. I think we have -- like Aleksi pointed out, so we are executing different type of contracts and every contract then has different type of upsides and downsides. I think for us, it's important that those are balanced.

But anything, Aleksi, you would like to point out from your perspective, you have the most experience on this one.

Regardless whether if it's kind of like, for example, an international contract framework, the framework itself isn't a risk. As Heikki pointed out, usually, the risks are related to tight schedules, and that's something that we mitigate with prudent, very detailed preplanning of the project. Then there's additional topics like the partners and subcontractors and so forth.

Do we have more questions? Yes.

Yes, Anssi from SEB again. Just continuing on Svante's question about this project risks, like are you able to hedge yourselves against that kind of risks, which are not maybe related to you? For example, if there's not enough of substations available or whatever? And also, do you have like positive risks if you can execute ahead of schedule? Or does it matter because the next step is in time anyways? Or how do you see that?

Of course, we can't take risks about substations or something that is not on our hands. So kind of in a starting point, it's something that we need to have a good dialogue with our customers that that's the case. And of course, we say that it needs to be balanced and the customers are valuing time to market, and that is -- that is something that is also -- when we make our customers successful, we are also successful. And the success comes fastest time to market.

Atte Jortikka from Inderes. Last one from me. When you win the first phase of a contract, how good of a visibility you have for the start of the second or the third phase of the whole data center project?

Do you want to take this one?

Yes. Thank you for the question. The straightforward answer is obviously that it depends on customer by customer, but we are in, I would say, constant dialogue with the customers to understand their needs and development plans when it comes to kind of like building their campuses or locations.

And maybe building on what Aleksi said is that, of course, the same questions about delivery constraints, what comes with the skilled team, talented labor. Our customers are also recognizing those. So it's kind of increasingly important to also have the dialogue and discussion that how is secured that those multiphases projects are actually delivered over the several years. So that is something that is present all the time.

And investment decisions are done phase by phase, right?

Typically so.

There's a question.

It's Ari again. One more from me. So I could be a little bit ahead of the time here. But if the life cycle of NVIDIA AI chip could be like 3 or 4 years, let's say, something like that. So when they are going to be replaced by the end of this decade, is it going to be so that some foreigner comes and just changes the chips? Or do you expect to have some technical, like, maintenance and service work related to those kind of, like, updates because they are, like, very expensive probably in the future as well.

It's a great question, and we consider that as a future upside that we are still not yet today discussing because we are just about to start this investment cycle. Is it 3 years, 5 years, but obviously, the technology goes forward. So there might be some upgrade needs. There might be something to be maintained. And it's no stranger business for us. We actually do a quite a lot of facility maintenance businesses, upgrades in building construction segment. As of now already, we have that in a part of our business portfolio. But of course, today, it's more about launching new projects and getting the sites up and running, but further upside there in the future.

Thank you. It looks like we don't have any more questions. And actually, we don't have any additional questions from the teleconference line either. So we thank you all for participating and wish you a great rest of the day.

Thank you very much...

Thank you very much.

Hi, everyone. Welcome to YIT's Half Year 2026 Results Webcast. My name is Essi Nikitin, and I'm heading the Investor Relations at YIT.

Together with me here are our CEO, Heikki Vuorenmaa and Interim CFO, Markus Pietikainen. We will first hear Heikki to go through the second quarter developments in the company. Following that, Markus will walk you through the latest financial development. Last but not least, Heikki will wrap up the presentation with a short update on our strategy progress. After the presentation, the participants will have an opportunity to ask questions from Heikki and Markus.

But now, without further ado, I will hand over the floor to Heikki.

Thank you very much, Essi, and welcome to this second quarter '26 webcast also from my behalf. And let's start the webcast with some key highlights from the quarter. We made positive progress during the second quarter as our revenue and profitability continued to improve. Residential operation in CEE continued strong. Revenue increased by over 30%, and the project pipeline improved as we launched a new project worth of EUR 160 million during the quarter. .

Infrastructure revenue increased by over 20% compared to last year, and the market continues favorable. Additionally, our focus to continuous improvement and efficiency gains progressed well. We recorded a total of EUR 15 million worth of annual cost saving actions by end of Q2. And as we have discussed earlier, our target is to achieve EUR 18 million total cost efficiency savings.

When we look at our group level numbers, the revenue grew by 3.5% and stood at EUR 472 million during the quarter. Our adjusted operating profit increased to EUR 19 million and was 3.9% of the revenue. Majority of the operating profit improvement came from the Residential CEE segment, reporting adjusted operating profit of EUR 14 million compared to the muted Q2 last year. And as the revenue grew to EUR 87 million, adjusted operating profit margin was at 16.5% for a single quarter. That is exceeding the strategic target of 15% that we have set for this specific segment.

Building Construction revenue stood flat at EUR 186 million, and the adjusted operating profit increased to EUR 7 million, with 3.5% operating profit margin. The improvement is supported by good project execution and improved internal efficiencies. Infrastructure segment recorded EUR 154 million in revenue, which is over 20% increase to previous year, as I mentioned in the start. Adjusted operating profit increased to EUR 6 million, which is a 4.2% of the revenue on the single quarter.

The challenging market continued in Residential Finland. It recorded only EUR 52 million in revenue, which declined 40% compared to last year. And the losses were EUR 6 million for the quarter. Investor volumes for the quarter were almost nonexistent and the poor sales mix impacted the overall performance of the segment. But let's get more into the segment level details, and we are starting from the Residential Finland. As I mentioned, behind revenue decline in the Finnish residential business was declining investor sales volume during the quarter. We do not expect the investor demand to pick up in numbers during 2026 due to the weak rent level development, especially in the capital area.

Our operations continue to adjust for the declining revenue. However, the losses during the first half of the year are still reflecting the segment cost base prior to the latest efficiency improvement program. We continue to seek internal efficiencies and adjust the operations with the prevailing market conditions.

Apartment sales were 90 units during the quarter, which is reflecting the market conditions. Market conditions have not improved during the quarter and some indicators reflecting even softening secondary market during the first half of the year. We sold apartments mostly from the old inventory and our unsold inventory continued to decline and is now below 400 units, which is actually 60% lower than the highest peak level observed in a few years ago.

Selling from the inventory is actually reflecting the consumer decision making as many are postponing the decision to purchase a new home closer to the completion. Our starts continued below the sales, which broadly speaking, gives a good picture how things overall market is. So there is less of a still supply to the market compared to the demand. And by this way, Finland is heading gradually towards a structural deficit of housing, similar to what we are observing in many other European countries as well.

For singles, you can already observe by lack of student housing in some university cities. There were also no completions or starts during the quarter, as mentioned. So the apartments under construction remained at 602 units. Sales rate increased modestly to 31%, reflecting the beforementioned behavior of postponing purchase decision closer to the completion. But let's move on to our main residential business, which takes place in the Baltics, Poland, Czechia and Slovakia, and we are calling that Residential CEE. The rolling 12 months revenue is now at EUR 382 million, which is up by 20% from the comparison period. On a rolling basis, profitability is now at 13.5%, approaching gradually the strategic target of 15% we've set for the segment.

Despite the growth and the boost and the new product launches that we have been communicating, the operating capital remains almost flat, approximately EUR 300 million. Pipeline of the apartments increased to 15,000 new homes and we continue to build the pipeline such a way that we can secure also the future growth of the business. Apartment sales for the quarter was 511 units. It's a 30% higher than in the comparison period. So what we can say now is that the Middle East crisis and war in Iran had no negative impact on the market conditions or sales during the second quarter. We continue to launch new projects while maintaining the prudent risk management on our start decisions.

Apartments under construction in the Residential CEE increased to 3,700 units. The volume has now increased by over 70% since we announced our strategy to double the volume in the Residential CEE by 2029. Sales rate continued stable, 47%. It's reflecting the good market conditions across the operating countries. But now we leave our residential segments, and we move into the contracting side, starting from the Building Construction.

On a rolling 12 months basis, our revenue has remained stable, about EUR 662 million. However, the content of the revenue has shifted from offices and self-developed projects to design and build and collaborative contracts with our customers. In addition, we see the data center demand across all operating countries, especially in Finland to start in meaningful terms.

Improved project management and internal efficiencies are supporting the profitability development of this segment. On the rolling basis, it is now at 2.5%. And for the single quarter of Q2 '26, we recorded 3.5%. We are continuing to work with internal efficiencies, lead times to support our -- to get above our strategic target of 6% for the segment.

Order book is strong. It's above EUR 1 billion. A few highlights from the quarter. So we recorded the Campus in Tikkurila worth of EUR 77 million and also in Lithuania commencing several road construction projects, approximately worth of EUR 30 million. So good progress in the Building Construction and same we can say also about Infra segment.

The second quarter of '26 was now the sixth consecutive quarter of growth for our Infra. Now the rolling 12 months revenue is at EUR 548 million, which is a 20% increase from the comparison period. Operating profit margin has remained good over 4% on the rolling 12-month basis. Obviously, we are working on with the internal efficiencies in order to exceed the 6% target what we have set for ourselves. But I can say that, again, very strong performance from our Infra team during the second quarter.

Order book also increased 20% compared to the comparison period last year and remained above EUR 900 million. In Q2, we recorded first orders from the Helsinki Light Rail project, EUR 62 million in value and additionally communicated that we -- our collaboration continues in Kajaani, where we are building a third data center for XTX Markets.

Then let's look on the market environment. There's one change on this picture. We're actually upgrading our view on the building construction market in Finland. While the traditional office construction market is muted, we see the data center activity and overall industry construction potential to compensate and boost the market in the next 12 months window. Same opportunity could be also in the renovation market.

There has been soft recovery over the past 6 months, and we do see that there is an opportunity for that to continue also going forward. Currently, the cities and municipalities are investing on the normal level when it comes to the social infrastructure buildings across Finland.

So there are no other changes on our view in our market environment. Infra market continues good in Finland. On the other side of the spectrum is still the residential market, which remains weak for now. The residential market conditions in CEE are good, and we expect that to remain same. But now it's my time actually to hand over Markus to you and to cover the key finances for the quarter.

Thank you, Heikki. Let's start with a summary of our Q2 financial development. Operating cash flow after investments was EUR 12 million negative for the second quarter, which is though an improvement of EUR 15 million year-on-year. Gearing increased and was at 91% at the end of the quarter.

Net debt was at EUR 618 million, decreasing by EUR 52 million from Q2 2025. Return on capital employed improved and was at 6.1% at the end of the quarter, up from 5.4% a year ago.

Next, let's look at our capital efficiency. Our operating capital employed amounted to EUR 981 million at the end of the quarter, which is EUR 53 million less than a year ago. On a segment level, there were no significant changes during the quarter. Operating capital employed in Residential CEE has remained stable despite a significant increase in production and both contracting segments continue to operate with negative operating capital employed.

Consequently, return on capital employed improved and was at 6.1% at the end of Q2. It is good to note that these figures are excluding our nonstrategic items, which we intend to dispose of during the strategy period ending in 2029. Nonstrategic items now amounted to EUR 298 million at the end of the period.

Operating cash flow after investment was at EUR 12 million negative for the quarter, which is typical considering the cyclicality of our cash flow profile. However, it is good to note that this cash flow increased by some EUR 15 million from the comparison period. And during the past 12 months, we have generated close to EUR 120 million of positive operating cash flow. We'll continue our work to further improve cash generation across our businesses.

Gearing increased by 7 percentage points year-on-year and was 91% at the end of the quarter. Gearing has been impacted by the redemption of our outstanding 2021 issued hybrid bond of EUR 46 million during Q1, which had a 12 percentage point effect on the gearing ratio. Net interest-bearing debt was at EUR 618 million, which is a decrease of EUR 52 million from a year ago.

The net interest-bearing debt included IFRS 16 lease liabilities of EUR 256 million as well as housing company loans of EUR 123 million.

Next, our balance sheet. We have EUR 709 million worth of plots, enabling a pipeline of some 30,000 apartments across our operating countries. Our production increased by almost EUR 80 million from the previous quarter as we continue to scale up our production in the favorable residential markets of the CEE countries.

During the quarter, we successfully issued a new green bond of EUR 150 million maturing in 2030 and redeemed our green bond of EUR 100 million, which was due in 2027. The excess EUR 50 million capital will be allocated to support the growth in Residential CEE. This transaction is a final step of the multistep refinancing program that we initiated in 2024. The price of the redeemed green bond was based on the 2024 position of the company and the improved pricing of the new green bond reflects the current more normalized market conditions.

After this transaction, we have now only limited loan repayment schedule for this and next year. Our average maturity for interest-bearing debt was 3 years at end of the quarter. Guidance remains unchanged. We expect the group adjusted operating profit for continuing operations to be between EUR 70 million and EUR 100 million in 2026. Thank you. And next, back to you, Heikki.

Thank you, Markus. It's very clear when we're looking at our financial position, how it has been improving over the past years. And like you said, so after the successful transaction during the last quarter. So the debt maturity is really balanced. It was quite a multistep program, like you said, that we launched in early 2024. And now the full focus on execution and capability to allocate capital on the right level to support our growth is there in place. And I think it's excellent, excellent work. So thank you for that.

But let's move then to the look at how our strategy execution is doing like Essi pointed out in the start already, and we start from the highlight of the quarter. When we are looking at our numbers, so we're actually gradually now turning into the modest growth, if you look at our rolling 12 months figures.

The rolling 12 months revenue [ signalized ] 3% growth compared to the same period last year and actually, when we look at group finances, so we have had some 5, 6 years of consecutive revenue decline. So this is quite a change on the historical years, what we've seen. Profitability turned to the right direction in this quarter, yet it requires still a lot of work. We have set ourselves a target -- financial target to be above 7%, and that's the target we are working against. So the work continues to reach those strategic targets by end of 2029.

The return on capital employed is also improving. Obviously, as a consequence of capital employed declined and the profitability improving on the rolling 12 months basis and is now at 6.1%, as Markus pointed out. But the major strategy highlight is actually coming from data center market in Finland. If you look at the global picture and investments to the data center and AI solutions, those are increasing in exceptional pace at the moment.

Finland as a country has a unique position to attract investors and generate growth, wealth and jobs for the society and also quite a lot for construction industry. If you could follow closely the Finnish news, so just recently, we have had opportunity to read about several billions of investments to Finland. And those are clearly news that are underwriting this in concrete terms.

What does it then mean to YIT? On our strategy that we launched, 2024, we identified already this as one of the main global trends during the strategy period. For a few years from now, we have invested to our data center team. We have recruited over 100 people and lately created our own specific units with their own separate targets to focus on this specific category of work.

So consequently, now we have created capabilities to deliver and prove that we can actually work from the site clearance to the commissioning. Something that we have done actually for the first data centers that are already completed. Earlier this week, we announced that we are building a data center for atNorth in Kouvola. Contract is valued approximately EUR 300 million and will be then recorded in the third quarter order book. However, we believe that this is just a start.

We continue to invest more to our own internal capabilities, expand our value chain in the construction field and ensure that the successful long-term partnerships are created with our customers. We observe and see plenty of opportunities in all operating countries. Even though Finland is clearly large in terms of scale in the European level. That is all from my side for now. And operator, we are ready to take questions from the audience, if any.

[Operator Instructions] Anssi Raussi from SEB.

It's Anssi Raussi from SEB. A couple of questions from me. First one, if you could discuss a bit more about the cash flow in Q2. So operating cash flow was minus EUR 12 million, but I think your number of apartments under construction, for example, in Finland remained unchanged quarter-over-quarter. So what was driving this cash flow development?

Thank you, Anssi. And if you look then at the same time, so we increased our apartments production in CEE close to 3,700 units, which was one of, of course, the decisions during the Q2. But there is a combination of the payment terms, the maturity as well as then what is the amount of investor works in the process, what comes to if you look just the Finland residential segment capital employed, so that is the Finland specific question.

I think like Markus pointed out there, we do have a seasonality in the cash flow. We had a positive cash flow in the Q1. Now it was mildly negative, but compared to last year, clearly an improvement. We have been generating more than EUR 100 million cash for past 2 years on an annual basis. And so from that perspective, we believe that we are well -- or kind of cash flow is well under control.

Okay. And the next one about data center projects, like you won this huge project a couple of days ago. So how are these cash flows tied in these kind of data center projects like are they front-loaded, backloaded or hand-in-hand with costs? Can you disclose that?

So typically, what I can typically say, not to comment on any specific contracts. But what I can typically say, if you look at the contracting industry as well as if you look at our 2 contracting segments, so we operate there with a negative capital employed.

Yes. Got it. That's what I thought. And maybe a final question from me is about the non-strategic items. I think it was close like -- close to EUR 300 million. So any time line when we could hear something about these items.

We will communicate obviously, as we are closing the deal as quickly as we can. Markus pointed out that this is an area where we are kind of putting ourselves a clear milestone of disposing this during the strategy period. But the exact timing is obviously related to the success of the deal. And at this point, there's no more news to be shared.

The next question comes from Atte Jortikka from Inderes.

Atte Jortikka from Inderes. Just one quick one from me. Could you still elaborate a bit on the drivers behind the capital efficiency in Residential CEE despite the growth in units under construction?

Absolutely. It's a great question. So there are different elements. Obviously, one is that depending on the country, so there is a different type of payment terms that the customers or the kind of standard payment terms that you could observe in the market where you could say that, for example, in Poland, it's based on milestones to the escrow account. So there is less, if any, capital tied in during the construction period. We have also introduced some of our own payment terms in those countries such a way that we can do capital efficient construction.

We see that as a really important topic since as we are targeting for the growth, we need to ensure that we are also capable to maintain the net working capital under control and deliver the cash flow at the same time so that the growth is not consuming all the cash during the construction period, but we can allocate that into the plot purchases and procurements. So partially, it is the country specifics already, partially what we have own introduced kind of mechanisms and tools to minimize the capital tied in during the construction period.

The next question comes from Svante Krokfors from Nordea.

A couple of questions. First one regarding Residential CEE. Could you comment a bit about the apartment price development in the area? And how much has the profitability got support from increasing prices?

Thank you, Svante, for that question. And compared to Finnish residential market, we actually see that there is -- the price development is favorable on operating countries, what we are having, for example, in Poland and Czechia. And as we have the dynamic pricing in place, so we do update the price list during the production period as well. And that is giving us the confidence and support to reach the set targets for the projects what we have had in the start of the project.

Obviously, you could argue that there is also cost inflation on the countries and the work for us is to ensure that we mitigate the impact of the potential raw material price increases on the procurement side as well as then on the dynamic pricing, optimize the prices for the apartments on individual markets. But it clearly supports the development at the moment.

That's helpful. And then on the data centers, a couple of questions. First one, how about -- I mean you have -- I think you mentioned that you have 100 people that are involved. But what about -- I mean, you have an 18 month on the latest EUR 300 million contract from atNorth, you have 18 months time to complete. So how much do you use subcontracting there? And what's the availability of workforce in this quite short and large projects.

Yes, we do use subcontracting to kind of big parts of the projects. And I think from -- when we look at our risk management processes in place, so we do recognize that this size of a project or any data center project is something that where the customer needs are quite unique compared to kind of other types of projects. Therefore, we need to be prudent and ensure that before we enter into the -- or give the promise to our customers to deliver, we need to be ensure that we have the resources and capabilities on the value chain already in place and identified.

But that is quite a lot. If you look, we have been -- I think we have been communicating on some of the sites what we are currently operating is that we have plenty of actually local suppliers. We have local teams what we are capable to use and that is consequently then providing growth and wealth and jobs for those locations as well at the same time.

And the last one, is there anything you can comment on the profitability on data center projects in general? Is it above or below what you target long term for the 2 contracting segments?

Well, overall, if you look at our decision-making criteria, whether it's a residential business or contracting business, so the decisions that us or Board, what we have in place, is we always target to reach the strategic target. So that's kind of given on our operating model. Not to comment specifically on this type of kind of agreements or individual cluster. But what I can say is that we see that there's plenty of growth still available in the data center industry in the market, and we are keen on to look at that as well going forward.

The next question comes from Tomi Railo from DNB Carnegie.

It's Tomi from DNB Carnegie. A couple of questions also about the data center, mainly about this announced large order. Can you just specify how many megawatts is this EUR 300 million for? And maybe the content what you are delivering a little bit more in detail? And then I have a couple of follow-ups as well.

To my memory, we didn't disclose the megawatts. So therefore, unfortunately, I can't comment on that. We do say that it's a design and build. So it's a quite comprehensive project what we are executing to our customer.

Still kind of I'm assuming that this is not for the full 430 or there was Phase 1 60 megawatts. I'm just wondering if this is only for a certain 100 megawatts or 150 megawatts or even less because the time scale to deliver is quite short, to the end of '27. Is that a fair assumption?

Still kind of restating that we are not commenting on individual sizes or megawatts, so that -- what you can typically see, and I'm not talking about this contract or specifically the area, but if we look on kind of what our history, for example, with the XTX Markets is that there has been multiple phases of construction in those kind of sites.

Okay. And then if you can just maybe guide us a little bit on the revenue phasing into the end of next year. And then any comments on the profitability.

On the -- typically, these type of contracts, obviously, when you start, so it is accelerating towards the end in terms of content and work, what comes to the kind of project in terms of phasing. And like pointing out to my previous answers, so no specific comments on any individual project or cluster profitability.

The next question comes from Anssi Raussi from SEB.

One follow-up on Svante's previous question on data centers. Like how should we think about your capacity like, are you able to move resources from other divisions? Or does this business require something really specific skills or something like that, but how should we think about that?

That's a super good question and answer is partially yes, in terms of moving internal capabilities. But we have and continue to recruit new type of capabilities and talent to the team. As we look on building a residential home or project is quite different compared to building a data center. So there is some elements that can be transferred. But in terms of project management, the profiles that we have are individuals that have been doing 20-plus years major projects across continents, demanding industry projects. So that's the kind of -- it's quite a different type of capability.

When it comes to the capacity, I'm very pleased with the fact that we have been capable to recruit talent, we have been capable to increase the team and we continuously are kind of -- we are continuing on that. So we are doing a good progress, which indicates that we do have a good capability to answer the demand of this market.

That being said, we need to be also very prudent on any projects that we are engaging with such a way that we are the right partner for our customers as well as that we are delivering to the promise because our customers in this field, so they have high expectations. They also have kind of demanding projects. And as we know that the market is demanding those solutions. So we need to ensure that we are delivering to the promise. And that we can do when we have capabilities in place prior to engaging any of contracts.

Okay. Because it seems that you are able to execute this kind of order with a really quick pace. So you can take another project still for 2027 if there's demand.

Let's come back to always individual project announcements, but I think it's fair to say that this was now our fifth project that we have announced. So we do have -- we are having, like I said, so we started already 2 years ago. We have learned a lot. We have capabilities in place, and we feel that we are really well positioned at the moment on this market.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

If there are no more questions, we thank you all for participating and wish you all a great rest of the day. Thanks.

Thank you all.

Thank you.

Okay. I think we can start. So hi, everyone, and welcome to YIT's analyst call preceding the silent period of our half year 2026 results release.

My name is Essi Nikitin, and I'm heading the Investor Relations at YIT. Together with me today, I have our Interim CFO, Markus Pietikainen; and our CEO, Heikki Vuorenmaa on the line. As usual, we will start with a recap to recent developments in the company presented by Markus. And after that, the participants will have an opportunity to ask questions from Markus and Heikki.

As a reminder, this call will be recorded, and the recording will be published on our website after the call. At this point, I hand over to Markus. Please go ahead.

Thank you, Essi, and good afternoon, everyone. Let's proceed with the silent call for the second quarter '26. First, a short update on our businesses, starting with residential CEE business. As a recap, our residential CEE segment continued to perform well in the first quarter of the year with a steady growth in both revenue and profit, and this segment has become a clear profit driver for the group. The year began with healthy margins, showing the quality of the new projects we launched in 2025.

Project margins have remained at targeted levels and the market conditions continue to be favorable, giving us more opportunities to continue to reach our strategic targets. As you all know, we started reporting on our residential self-developed business using the percentage of completion method from the beginning of the year. This evens out the revenue and profit variation between the segments. It is, however, good to note that as we have very similar completions profile this year in comparison to last year, revenue and profit generation is still, to some extent, tilted towards the end of the year as both completion rate and sales rate are typically not linear, but rather accelerated towards the completion of the project.

We continue to allocate further capital and focus on the CEE residential markets to secure future projects to our pipeline. We will continue to start projects during the year, given the market remains favorable to support our growth and strategic ambitions. On a rolling 12-month basis, our apartment sales were at a strong level of approximately 2,000 units in Q1.

The Finnish residential market is likely to remain highly consumer-driven in 2026 as investor demand for residential projects remains muted. According to the Ministry -- the Finnish Ministry of Finance new Economic outlook published 2 days ago, the residential market has slowed again. Residential prices are still declining and purchase intentions remain low. It is estimated that residential construction will continue to contract slightly this year with a turn to growth postponed to 2027.

We continue to adapt our operations to prevailing market conditions and launch self-developed consumer projects on demand. No self-developed consumer projects were launched during the Q2. Our inventory of unsold completed apartments has decreased and is approaching normal levels, also in the Helsinki metropolitan area. YIT's operating model in Finland has undergone a significant transformation, which has reshaped our organization during the quarter and resulted in a reduction of 95 positions.

The renewed operating model strengthens our ability to serve customers and is expected to support our 2026 adjusted operating profit by EUR 7 million, providing us total annual inflation adjusted cost savings of EUR 18 million by the end of 2027. During Q2, we announced one agreement in the construction of student apartments with long-term interest rate subsidies in Lappeenranta. The total value of the contract for YIT is approximately EUR 20 million, and the construction of the project is estimated to start during the second half of the year.

In the beginning of the first quarter, we are happy to announce the appointment of Mari Puoskari as EVP of Residential Finland segment and a member of YIT's leadership team. Mari started in her position in the beginning of May. We wish her warmly welcome to YIT.

Let's then move on to our contracting segments, Infrastructure and Building Construction. The Infrastructure segment has demonstrated strong momentum since 2025 with all key performance indicators developing positively. This reflects the successful execution of our strategic initiatives. YIT is participating in the implementation of the infrastructure program of Helsinki West Light Rail project and the construction started in late May. We have strong expertise in demanding urban infrastructure projects, and we bring our capabilities in light rail construction, municipal engineering and urban environment development to the project in close collaboration with our alliance partners.

The project will be delivered through separate stages. The entirety of the order now is valued at approximately EUR 12 million for YIT and the remaining stages are to be commissioned later during 2026 and 2027. The contract will be included in YIT's second quarter order book. The total value of the project for YIT is approximately EUR 62 million. Yesterday, we announced that we have signed an agreement to construct the shell and core or third data center for XTX markets in Kajaani. We will serve as the main contractor for the project. We are pleased to continue our collaboration with XTX markets. This long-term partnership reflects strong trust in our capabilities as well as excellent collaboration with the customers and our partners.

The fast development of industrial construction and particularly data center construction is benefiting both the infrastructure and building construction segments. The data center market remains attractive in Finland and our capabilities, track record and references are compelling to our customers, bringing us opportunities to increase our revenue and profits in the future.

All in all, the order book for the Infrastructure segment is strong, and the segment is well positioned to pursue growth and further enhance operational efficiencies. Building construction volumes were up by 12% in the first quarter of the year, setting a solid foundation for the rest of the year. We announced that YIT and VTK Kiinteistöt Oy has signed a contract for the implementation phase of the educational building of Tikkurila Competence Campus and begun the project's construction work.

During the development phase, the amount for the collaborative project management contract was revised to EUR 77 million. The contract will be entered in YIT's order book for the second quarter of 2026. In early May, we announced the issue of a new EUR 150 million senior secured green floating rate note maturing in May 2030. The notes carry a margin of 4.35% per annum. This was a successful transaction as part of our regular refinancing and extending the average debt maturity in a turbulent capital market.

Subsequently to the new issue, we tendered the senior secured green floating rate notes maturing in 2027 with a nominal amount of EUR 100 million in full. As a conclusion, our strategy of building a geographically and operationally resilient business model is providing us with a solid foundation on which to build the future business. We are redeploying capital released from strategic items to businesses and regions with stronger return potential and driving growth where market conditions are most supportive. This is the recap of the second quarter main events. We're now happy to take your questions.

[Operator Instructions]

And we have a first question from Atte Jortikka.

This is Atte Jortikka from Inderes. Firstly, on the residential CEE. So in Q1, you started roughly 300 apartments there. Have you been able to ramp up the production in Q2?

Thank you Atte. This is Heikki here. Thank you for the question. And indeed, so we had a start in Q1. There's still some time left also before we actually completely finalizing the Q2 and then sharing the kind of full quarter starts. What I can say is what Markus was already pointing out on the market and the market overall view remains favorable. And obviously, we have a strong plot portfolio, strong project pipeline. And according to our strategy, we have a growth ambition on exceeding 15% annual growth. So that's what the environment we are executing, but let us come back to the actual numbers then after Q2 is fully closed.

Understood. Then on residential Finland, did you already see the effect of the cost-cutting measures made during Q2?

Obviously, now the organization started 1st of May. And as we communicated that the majority of the cost saving activities or the cost saving impact will be actually fully materializing in '27 with some of that impact on '26 as well. But you could -- I would say, I think, broadly speaking, is that typically, we would expect those to be more tilted towards the second half of the year in kind of -- if you project this compared to our earlier similar type of situations.

Yes. Then you didn't launch any self-developed projects in Q2. What was your level of ambition there for Q2 at the start of the year?

We approach it in a bit -- in a way, we are kind of observing all the time what is the market situation so that we are keeping the starts and the volume in balance, but also what type of products and what kind of locations we have. And there were no projects now in Q2, but there's still a few days to go right in the Q2. But so far in Q2, there hasn't been projects that would have been meeting our requirements in terms of the pre-reservation rates.

So therefore, we haven't kind of ended up on starting the projects. Kind of generally speaking, of course, we have been redesigning projects. We have a good set of products and portfolio available for the starts, but we need to have a market also favorable for -- before making a start decisions.

Yes. Continuing on that, you commented that the market remains consumer-driven, but are there any signs of recovery in investor demand? I mean, at least some of your competitors have managed to start investor projects during the first half?

Yes, we've seen some -- like you mentioned, so we've seen some starts there. I think still the kind of mathematical calculation that would require interest rates as well as then the rental rates as well as construction cost to find the right balance and availability of rented apartments in the market. We haven't seen kind of material development on those elements in the first part of this year.

So meaning is that, I would say, broadly speaking, the situation on the investor market has remained the same. Even we've seen some of the starts there indeed. And of course, closing some of the portfolios between the investors, so some activity. But broadly speaking, kind of situation has really remained the same as it has been.

Understood. And then lastly from me, I mean, before we spoke in Q1, you didn't see any effects of the geopolitical tensions or affecting demand or the cost side. Has that materialized in any way during Q2?

Yes, we have -- our view hasn't really changed since we discussed this on Q1. And of course, now we are in -- again, in a quite an interesting point in time exactly right now, seeing that to which direction these tensions are now developing. Obviously, I think we discussed also last time that you will see rather quick impact on the kind of petrol prices and that impact. However, we have been monitoring the situation and ensuring that we have a proper contract and negotiation position in place there. What comes to the market dynamics and all that, so our view hasn't changed since Q1.

Okay. Just making sure that, for example, in residential CEE, you haven't seen any impact from this in the markets?

Yes. I think Markus was saying is that the market remaining favorable there. So that covers also the element of the geopolitical turbulence question.

Yes, we have the next question from Svante Krokfors.

A couple of questions. First one on your most recent data center announcement with XTX on shell and the core. I know you don't want to disclose anything regarding the euro terms values or basically anything else. But I mean, we have one reference point, which is the first contract with XTX where you mentioned it was worth EUR 100 million. But I guess, is it fair to assume that was substantially bigger because that also included other elements than the actual data center?

Yes, Svante. Exactly correct on that we are not unfortunately capable to share the kind of details in terms of actual euros there. One could work it that way. If you look at the -- also the kind of how the site has been progressing. If you look what we are really pleased is that our cooperation has been extremely good. We have been working now with our customer client, therefore, successfully already quite some time. And this is showing the kind of their trust on our capabilities to deliver this starting of the third project, which you typically start from the core and shell part before advancing.

And could you give some color also on the data center construction cycle from your perspective? Are we talking about 6 to 12 months? Or is there a big difference between the different projects?

There are differences between the projects. Obviously, the kind of the pure size of the project, but also the layout designs and complexities there but still, I would say, kind of if I'm referring to the -- not specifically on this customer, but if I look to some other projects, process that what we have been communicating. For example, we communicated in Kouvola, we were communicating the start of the project in November '25. And then the rooftoping party took place somewhere in late Q1, early Q2 time frame. So that gives you a bit of the kind of a color on the -- how quickly those projects advance.

But like I said, so those are the -- unfortunately, this is an area where we are very limited to share project-specific information. So I need to rely on the kind of publicly available information there. Just even kind of continuing a bit on the data center and Markus already kind of a bit color on how the market is there. What we've seen is that we believe that this is -- it is a big opportunity for whole construction industry in Finland. And we've been clearly communicating also that from our perspective, we believe that this is now taking the first steps and has -- it might be a longer-term opportunity for the whole construction industry.

Okay. And the last question, residential Finland. Could you elaborate a bit on the sales rate development and what could be expected? I mean, we were quite low in Q1 compared to the 27% versus the 41% in Q4. So has there been any changes to how you operate here?

We will get the full picture as the Q2 numbers are published. But kind of referring to what Markus already pointed out earlier, for example, what the Finnish Ministry of Finance published just 2 days ago that there has been kind of the residential market even slowing down again. Of course, the residential market as a concept in Finland is relatively broad. But maybe that is one external data point pointing out that in what is the operating environment that our residential Finland segment is currently operating in.

Good news, of course, is that if you look at our residential construction, so already in Q2, more than 80% of the construction for us is about CEE, and that's the area where we are. We are growing and has been selecting that as our strategic growth area already at the late '24.

And we have the next question from [indiscernible].

I was also going to kind of question or ask a little bit about the data center, but is it fair to assume a couple of tens of millions or for the announced order in terms of the shelf and core?

Yes, I need to -- thank you, [indiscernible], for the question. I need to be extremely boring here and repeat my earlier messages that unfortunately can't disclose or give any pointers on the value of the contract. What we can only say is that we are very, very pleased with how things are progressing.

Fair. Can you share any light kind of what kind of discussions are you having at the moment? Are there several possible projects which you are negotiating? What could be the time line of decision-making? What is kind of the active discussion out there in the market?

I'm keeping my same line with the previous answer. So we can come back with when there's actually something to be -- that we can communicate from that situation. So unfortunately, we need to still hold our horses here for a while.

All right. And then I read somewhere in the media that Oma Säästöpankki is filing for a bankruptcy of FinCap. I think it was earlier called FinCap Oy, but they have changed the name. And if I'm understanding correct, you owned at least, if not own any -- still 49% of the company. They have some receivables from the company. Is there any risk from this potential bankruptcy?

There's an unfortunate case of namesakes, not as such being the same company there. So it's a different type of -- different company that is in question.

Okay. And next question comes from A.

Maybe one question from me, and it's on your guidance. So you're guiding, of course, adjusted EBIT, but could you maybe disclose your estimate like how much adjustment we could expect for the full year '26? And how much of these adjustments would be cash flow impact items?

We haven't -- thank you Anssi. We haven't had a practice on that to give their guidance. And if you historically look our adjustments, let's say, past 4 years, kind of taking that kind of view, typically, those has been elements where there has been -- I would say, broadly speaking, those has been something that has been providing cash flow for the company. But still overall, we do not provide such a guidance on our outlook.

Yes. Okay. I understand. And actually, one more for me on cash flows in general, like, of course, residential CEE is increasing its share of your business, but is there anything we should take into account when thinking about your quarterly cash flow going forward like in 2026? And are there any special elements to say in these residential CEE projects going forward as the structure is a bit of different compared to Finland?

Thank you, Anssi. I would actually come to a couple of points there, which we have been really working on in the past 2, 3 years. And if you look at our capital employed in that segment, at the same time, volume, what we have been accelerating in terms of production volume as well as the top line growth we haven't that much allocated new capital investment. I think actually, the capital employed in the segment is broadly the same or even on the declining trend. I don't have the exact number in my head, but it's been really an element what we have been focusing on how do we operate and execute the growth the way that we have capital employed under control.

And yes, Markus is actually pointing out here, just Q1 '26, we had a capital -- operating capital employed 316 a year ago at the same time, 323 and then if you look at how much more we had actually on production at the same time. So I think it gives a good flavor on the work that the team has been putting in, in order to find the capital-efficient ways to execute the business. That's one.

When we look at our quarterly -- Q1 was a good quarter if you look at our cash flow, typically, you kind of get to used to the seasonality of the cash flow, especially at beginning of the year. So I think we had a very solid start for the year. And then even looking a few years back, so we have been now '24 and '25 generating approximately EUR 100 million cash on both of those.

And Markus can provide a bit more color on that. Even we do not kind of guide the cash flow, we do not provide a quarterly forecast to the cash flows and all that, but looking maybe the historical performance of the group. So that's a few thoughts from my head. And Markus, if you want to comment.

Yes. Just -- thank you, the one thing to note is that obviously, the percentage completion is earnings, a different way of putting the earnings and sales in terms of the reporting. But the cash flows obviously are based on different metrics. I think that the dynamic in terms of starts and then completions have very much been tilted to the end of the year. And under IFRS, obviously has been a question of which year a particular revenue and earnings can be recognized.

But now with the percentage completion, that also as a new tool of leaving the business that potentially then gives then more evenly distributed projects through the year, which then going forward, potentially would then offer also cash flows more evenly than it has been in the past. So that perhaps just good to note that the percentage of completion is obviously earnings and sales and liquidity and the cash flow would then move with completions and sales.

Okay. That's clear. And yes, do you have any pre-agreed commitments on plots, for example, that you have to or you want to fulfill during this year, which you always report this purchase commitment?

I think we are disclosing that on our reporting. But like in earlier times, we have been quite -- we have been saying quite consistently is that we have always those exit most of -- broadly speaking, most of the cases, you have the exit clauses and opportunities in place as well.

If I may, just to note that there is no extraordinary or so in terms of commitments, which we have upcoming. So according to notes, it's quite business as normal.

Do we have any more questions from anyone? No. It seems that there are no more questions. So thank you all for participating. We will publish our half year 2026 results on Friday, 24th of July. But before that, I wish you all a sunny and relaxing mid-summer.

Thank you all.

Thank you.

Thanks.

Hi, everyone. Welcome to YIT's First Quarter of 2026 Results Webcast. My name is Essi Nikitin, and I'm heading the Investor Relations at YIT. The results will be presented to you by our CEO, Heikki Vuorenmaa; and Interim CFO, Markus Pietikainen.

Without further ado, I will hand over to Heikki to go through the latest developments in the company. Please go ahead, Heikki.

Yes. Thank you very much, Essi, and welcome to our quarterly webcast, also from my behalf. The year started well according to our expectations, and we have many positive news today from the first quarter across the businesses and operating countries to share with you. Despite the ongoing global uncertainty, we continue to take those actions that is ensuring to reach our targeted profitability for the full year. But let's start and get to the main highlights.

We are very happy to share that our Residential CEE segment continues to perform well with a steady growth in both profit and revenue. The year began with the healthy margins, showing the quality of the new projects we launched in 2025. The market remains favorable, giving us more opportunities to continue to reach our strategic targets. Both of our contracting segments started the year with a positive trend with a higher revenue and bigger order books for the first quarter. Overall, we are pleased with the situation and outlook for our contracting businesses. In Finland, the Residential business sales to consumers are steady, and the number of unsold apartments declined 20% during the quarter.

But let's look numbers more in detail. Like I said, the market situation in Residential Finland has stayed similar as last year, and the segment continues to be impacted by the low market volumes. That is also reflected on the segment financial performance, which remains negative.

The revenue increased in the Residential CEE segment with nearly 14% profit margin. The segment has become a clear profit driver for the group.

Building construction volumes are up by 12% for the first quarter and profit margins are trending positively, setting a solid foundation for the year ahead.

Infra continues to deliver revenue growth with healthy margins. And the segment continues on the strong track as planned.

On the group level, we had a little bit more one-offs compared to the last year, which impacted the full first quarter profits. However, key drivers in 3 out of 4 segments are trending to the right direction, and we are on track with our full year plan.

We also had a progress with our nonstrategic balance sheet items with some impact on operating profit as well. Firstly, we held a minority interest in OP Vuokrakoti Ky, which sold its residential apartment portfolio during the first quarter. This transaction with some 600 apartments demonstrates encouraging activity within investor towards the residential assets here in Finland. The sale released approximately EUR 10 million in cash but had a negative impact of EUR 9 million on our adjusting items.

Secondly, we made a negative fair value adjustment of EUR 16 million to our Tripla Mall investment. This is a result of our decision to dissolve the profit-sharing agreement by the end of the year with the Tripla's other shareholders. Additionally, we carried out minor transactions to release the capital from these nonstrategic items. And during the first quarter, the value of these assets decreased from EUR 343 million to EUR 306 million.

Finally, including the one-off costs from our operating model change, a total of EUR 4 million, all adjustments for the quarter amounted to EUR 30 million.

Positive gains, we expect for this year from the operating model is EUR 7 million and total of EUR 18 million then by end of '27, clearly exceeding the one-off costs that we took on this quarter.

And now we go to the segment-specific overviews, and we start with the Residential Finland. The quarterly revenue was burdened by the lower investment volumes and connected to the market conditions during the past year. Sales are driven by the consumer demand. And as it remains still low level in Finland, segment overall revenue is impacted accordingly. The capital employed is mostly in plots, which then supports the future growth as the market recovery starts.

In total, we sold 131 consumer apartments and our inventory of unsold apartments declined by over 20% during the quarter. We keep on initiating new starts in the growing cities while controlling our inventory and overall risk level. One thing to note as our inventories are returning to the normal levels among all industry players. We have observed clearly less campaigns in the markets now compared to the past few years.

The apartment production is now at 602 units in Finland, primarily serving the consumer needs. The sales rate of our project stands at 27%. And in addition to substantially decreased amount of investor projects, it is reflecting the emerging trends on the buyer behavior. The tendency is now to delay the purchases decision until the closer of the project completion. Our project portfolio has undergone a substantial renewal and the new developments are competitive in terms of design and market pricing as well.

Then we move to Residential CEE. During the first quarter, our financial metrics were trending to the right direction. Revenue increased to EUR 90 million for the quarter, adjusted operating profit to EUR 13 million and the operating profit margin close to 14%. The results are driven by healthy project portfolio and successful sales result. Operating capital is under control, slightly below the last year level. We will continue to launch new projects to exceed our annual growth target of 15% during our strategy period.

As we then look at our apartment sales and starts, we continue to see the positive sales volume in most of the operating countries. Actually, during the quarter, the March was the strongest sales month. We have not observed drastic changes in consumer confidence or consumer behavior or sales volumes that could be linked to geopolitical turbulence. And we will continue to start increasing number of projects during the year, given the market remains favorable to support our growth and strategic ambitions. On a rolling 12-month basis, our sales is approximately 2,000 units, which has now increased over 70% in past two years.

Apartments under construction are above 3,000 units, which is a 40% increase from the comparison period. Production in CEE countries accounts for over 80% of group residential construction volumes and the trend continues strong. Our sales rate of the apartments under construction increased to 47% and as we disclosed in the previous page, amount of unsold inventory remains under control. So the segment is on a good track, and we expect further acceleration according to plans.

From our contracting segments, we start first from the Building Construction. Our revenue during the first quarter increased 12% compared to previous year, driven by the increased order book during 2025. Adjusted operating profit increased and was EUR 3 million for Q1. Profitability also increased. And on a 12-month basis, that is trending to the right direction as well. We still have further opportunities, obviously to improve and reach our strategic target of exceeding the 6% and mostly those are coming from our internal efficiencies as well as the project execution as the market remains tight.

Our order book improved from the previous quarter and exceeds again now EUR 1 billion in value and corresponds to approximately 18 months of work. We're also now returning right track with the order book development as well as the content of the orders that we are receiving.

Moving on to Infra. Growth continues. Revenue increased to EUR 114 million during the first quarter. Our adjusted operating profit margin has remained solid at over 4% level on the rolling 12-month basis. Infra will also benefit further from our internal group efficiencies and project execution capabilities as it targets to achieve the 6% strategic target for our margin levels.

Order book in Infra increased, and we recorded significant new orders to our order book during Q1. The successful tendering in the Espoo Area Contract 4, a value of EUR 73 million was recorded to the order book. We're also very pleased that our customer, XTX Markets continues to trust on our capabilities to deliver and awarded MEP phase for the data center in Kajaani for us. Data center market remains highly lucrative in Finland and our capabilities, track record and references are compelling to our customers. Overall order book is at EUR 900 million for Infra.

But to close the first part and handing over to Markus soon, let's also cover the market situation that we are operating in. Residential market remains normal or good in the Baltic and Central Eastern European countries. Building construction operates in a normal market in all operating countries and Infra continues to benefit from a good market in Finland. Our view of residential Finland market remains intact as we see that the primary apartment sales volumes are not expected to increase in 2026.

So these were the highlights from our operations. And now over to you, Markus.

Thank you, Heikki. I'll walk you through the financials. First, a summary of our Q1 financial development. Operating cash flow after investments was strong and at EUR 19 million for the first quarter. This improved by almost EUR 30 million versus Q1 2025. Gearing decreased year-on-year and was at 83%. Net debt was down by EUR 100 million from Q1 2025. Return on capital employed was at 5.6% at the end of the quarter, up from 4.8% a year ago.

This is the first quarter when we are reporting operating capital employed, which is excluding roughly EUR 300 million of items, which we have defined as nonstrategic and which we intend to dispose of during the strategy period ending in 2029. In addition to the group figures, the change impacts the Residential Finland and Building Construction segments and provides a more transparent view of the underlying business.

Building Construction reached a negative operating capital employed of EUR 78 million and the Infra segment a negative of EUR 77 million. On a group level, our operating capital employed has decreased by over EUR 60 million during the past 12 months. We will continue to drive profits and capital turnover to reach our financial target of at least 15% by end of 2029.

Operating cash flow after investments increased and was EUR 19 million positive. Considering the cyclicality of our cash flow profile, this is a very solid cash flow for the first quarter of the year. The company has been cash flow positive since 2024. And during the past 12 months, we have generated over EUR 100 million of positive operating cash flow. We will continue our work to further improve cash generation.

Gearing decreased by 8 percentage points year-on-year and was 83% at the end of the quarter. Gearing was impacted by the redemption of the 2021 issued hybrid bond of EUR 46 million during the quarter, which had an 11 percentage points effect on gearing. Net interest-bearing debt was at EUR 588 million, which is a decrease of roughly EUR 100 million from a year ago. On top of the IFRS 16 lease liabilities of EUR 253 million, the net interest-bearing debt also included housing company loans of EUR 122 million. The value of unsold residential projects in Finland amounted to roughly EUR 300 million at the end of Q1.

Our balance sheet remains assets rich and main assets amounted to over 2x the gross debt. We have EUR 711 million worth of plots, enabling a pipeline of some 30,000 apartments across our operating countries. The book value of the completed inventory is down EUR 110 million from a year ago as we have successfully reduced the number of unsold completed apartments in Finland.

On the other hand, production volume has increased by over EUR 110 million year-on-year as we have accelerated our production, especially in the favorable residential markets in the CEE countries.

The book value of Tripla is now EUR 119 million, reflecting the EUR 16 million fair value change during the quarter as discussed earlier in the presentation. The adjusted net debt, which excludes the operational IFRS 16 lease liabilities and housing company loans was at EUR 213 million. And the maturity structure remains in balance.

Then finally, to the guidance, which remains unchanged. We expect the group adjusted operating profit for continuing operations to be between EUR 70 million to EUR 100 million in 2026. Thank you and now back over to you, Heikki.

Yes. Thank you, Markus, and time to also review the progress against our strategic targets before we then open the lines for questions. A single quarter didn't materially change the picture. The revenue is on the modest growth and return on the capital employed was at 5.6%, as Markus mentioned. Our profitability is trending in the right direction, yet it requires further progress across all the segments.

So what are these measures then that what we have been now taking to accelerate the performance of our business. I will walk you through those. I think we have several actually changes during the Q1. We established a new division focused on the data centers and energy and industrial construction. That is to ensure our capabilities are steered from a single point and serving to our customer needs in the best way. We actually -- like mentioned, so one agreement was already announced during the quarter and with several active discussions ongoing.

We want to be prudent on our projects we commit to as delivering to ahead of schedule on budget with the high work safety is important for us. New operating model, which reduces the layers, starts now on 1st of May. And in total, we continue to find improvements in the ways of working and reduce total EUR 18 million from our operating expenses, which EUR 7 million is expected to realize already in 2026. The new reporting method is now in use. And as you can observe, it provides a greater visibility to our true operating performance, as timing of the revenues and costs are now on the same quarter in the Residential segment.

Thank you all for your attention. And operator, it is now time for questions.

[Operator Instructions] The next question comes from Svante Krokfors from Nordea.

Yes. Svante from Nordea. A question regarding the Mall of Tripla. You mentioned that you have dissolved the profit-sharing agreement. Could you elaborate a bit more on that, how that impacts the valuation? And should this be seen as something that -- should we expect that the possible divestment of Mall of Tripla is closer now?

Thank you, Svante. Great question. So we have been disclosing on our annual reports this position and this kind of profit-sharing agreement with other investors, we have been entering into that over 10 years ago. And we have now took active decision to finalize that and close the open position with other shareholders. And then in the preparation of that, so we have been analyzing what will be the outcome and took the changes on the fair value during Q1.

Not commenting on the progress, but overall, specifically on the market, what we have observed now in a European level is that the market activity is picking up in terms of this type of transactions. We've seen actually similar size of transactions to take place in Europe, which is, of course, encouraging us on the kind of -- also with our ownership of Mall of Tripla.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers.

As there are no more questions, we thank you all for participating and wish you all a great rest of the day.

Thank you.

Thank you.

Preceding the silent period of our first quarter 2026 results release. My name is Essi Nikitin, I'm heading the Investor Relations at YIT. Together with me today, I have our Interim CFO, Markus Pietikainen; and our CEO, Heikki Vuorenmaa, on the line.

We will start with a recap to recent developments in the company presented by Markus. And after that, the participants will have an opportunity to ask questions from Markus and Heikki. As a reminder, this call will be recorded, and the recording will be published on our website after the call.

At this point, I will hand over to Markus. Please go ahead.

Thank you, Essi. Good morning, everyone.

As usual, let's start with a short update on our businesses and markets, and let's start with residential CEE business. As a recap, in 2025, our apartment sales increased by more than 30% in the Baltic and CEE countries. These regions have become the principal market for our residential development and construction. Demand remained healthy, particularly in Czech and Polish markets where structural residential needs and urbanization trends continue to support activity.

Project margins have remained at targeted levels and the market conditions continue to be favorable. We continue to allocate further capital and focus on these markets to secure future projects to our pipeline. Furthermore, despite increased investments in the new project starts and plots in 2025, capital employed remains well managed and under control.

This morning, we announced our new project starts during the first quarter of the year in the residential CEE segment. We started two projects in Riga and one project in Prague, Kaunas and Vilnius during the first quarter, supporting our strategy. Then a short recap on residential Finland. Apartment sales in Finland did not develop as expected in 2025, particularly in the second half of the year. This was partially driven by geographical imbalance in our own inventory. However, the main driver was the prolonged weak market conditions. Consumer uncertainty continued to slow down demand and investor activity remained muted.

In 2026, the Finnish residential market remains highly consumer-driven as investors remain cautious about launching new projects. As we communicated in accordance with the Q2 -- Q4 results, sales volumes in the primary residential market are not expected to increase in 2026. Our view of the market is in line with the latest economic outlook by the Confederation of Finnish Construction Industries, which was published last week. The market environment hasn't changed since Q4. Consumer confidence remains low and mortgage withdrawals do not show increase. We continue to adapt our operations to prevailing market conditions and launch self-developed consumer projects based on demand.

In the first quarter of 2026, we announced new self-developed project starts in Oulu, Tampere and Kaarina. In February, in accordance with our full year results release, we announced a plan to renew the operating model, both in Residential Finland and Building Construction segment with the aim to respond more effectively to changing customer demand. We are moving from a geographically operating regional organization to a function-based structure in which responsibilities and activities are clearly defined around core functions. With the new operating model, we plan to align our cost structure with current market conditions, streamline the organizational structure and enhance operational efficiency. In the beginning of the third quarter, we are happy to announce the appointment of Mari Puoskari as EVP, Residential Finland segment and a member of YIT's leadership team. She will start in her new position in early July at the latest.

Let's then move on to our contracting segments, Infrastructure and Building Construction. The Infrastructure segment demonstrated strong momentum throughout the year 2025 with revenue increasing by more than 30% and all key performance indicators developing positively. This reflects the successful execution of our strategic initiatives. The industry investment pipeline began to materialize in Finland in 2025 with numerous projects still in the feasibility study phase. Development of the industrial construction and particular data center construction has progressed faster than anticipated and as a result, which we announced that we will double the strategic growth target for the segment to 10% for the strategy period.

In line with our strategy, we seek to growth in rail infrastructure projects in Finland. To strengthen the railway construction expertise, we announced in January the acquisition of Electric Power Finland, Hawaii's railway service business. This acquisition is a strategic investment for us in railway construction and maintenance expertise. We have collaborated with the Electric Power Finland team on several projects, and now we are joining forces to offer our customers comprehensive solutions that leverage the best expertise in the industry.

Later during the first quarter, we announced that the Finnish Transport Infrastructure Agency had selected YIT to carry out area contract for of the Espoo Urban Railway project. Espoo Urban Railway project is one of the most significant infrastructure projects in the Helsinki Metropolitan area. Our strategic investments in the development of rail construction strengthens YIT's ability to deliver comprehensive rail infrastructure solutions for even the most demanding projects. We are proud to take part in building this important connection for the future. All in all, the order book for the Infrastructure segment is strong, and the segment is well positioned to pursue growth and further enhance operational efficiencies.

In 2025, we made determined progress in the Building Construction segment, securing several contracts across both public and private sectors that reinforce our competencies and expertise. During Q1, we published three new projects. In January, we announced that YIT and Atria had signed an agreement on the construction of the convenience food production plant in Nurmo, Finland. In February, we announced that YIT and Helsinki City Housing Company had signed a comprehensive agreement on the renovation of the rental housing company located in Helsinki, continuing our long-term cooperation with Helsinki City Housing Company.

In March, we announced that YIT and XTX Markets has signed an agreement for the interior finishing phase building services, engineering and commissioning of the second data center building in Kajaani. The agreement follows the successful completion of the structure and envelope works for the facility. The fast development of the industrial construction and particularly data center construction is benefiting both the Infrastructure and Building Construction segments. And as a result of which we have announced that we will double the strategic growth target also for the Building Construction segment to 4% for the strategy period. The previous growth target was 2%.

During the first quarter, we have announced two significant changes to our external reporting that are worth mentioning here. In accordance with our full year results release in February, we announced that YIT had defined nonstrategic items, namely assets that are not part of the company's strategic core operations according to the strategy for the years 2025 to 2029, and which we intend to dispose of during the strategy period. The book value of these nonstrategic items at the end of 2025 was approximately EUR 340 million.

Starting from Q1 2026, we will change the definition of operating profit adjusting items so that going forward, the profit impacts related to nonstrategic items will be included in the operating profit adjusting items. Capital employed of the businesses will be presented as operative capital employed, which includes items aligned with the company's strategy. Return on capital employed will be calculated based on the operative capital employed. As a result of the change, the reporting adjusting operating profit and operating capital employed will be more clearly reflect the profitability, capital usage and capital efficiency of the company's strategic business operations. As communicated, the change will impact Building Construction and Residential Finland.

In early March, we announced that YIT had completed the plans related to the previously discussed change in the operating model and as part of the new operating model will adopt percentage completion revenue recognition method for self-developed projects in its internal management and reporting. The change will be reflected also in the external segment reporting. Starting also from the first quarter of 2026, YIT report all operating -- all operations using the percentage of completion revenue recognition method in segment reporting. Adopting the percentage of completion revenue recognition method impacts the timing of the revenue recognition in segment reporting. Going forward, YIT publishes adjusted operating profit only in accordance with the segment reporting, which will also serve as basis for the guidance for 2026.

We published comparison financial information for 2025 to reflect the announced change on the revenue recognition method in segment reporting, including also the change in the definition of operating profit adjusting items for the market participants to use as a basis for the estimates of the company's development from Q1 2026 onwards. In this call and also afterwards, we are more than happy to answer your questions regarding the report and changes that are effective from Q1 2026 onwards.

We announced the 25th of February 2026 that we will redeem the remaining hybrid of the 31st of March 2021 hybrid. There is EUR 46 million outstanding, and this will naturally also have an impact on our end of Q1 gearing numbers. Last 2 weeks ago, we announced that the appointment of Erkka Repo as Chief Financial Officer and a member of the group leadership team. Erkka will start in this role by September 2026 at the latest. We're happy to welcome Erkka as part of the YIT team. So this is a recap of first quarter main events.

Happy to take any questions you may have.

[Operator Instructions] And we have the first question from Atte Jortikka from Inderes.

This is Atte Jortikka from Inderes. First question on the current geopolitical instability. Have any of the projects that are in feasibility study phase, particularly in your contracting segments been postponed or canceled due to the instability?

Thank you, Atte, for the question, of course. Maybe a couple of words on the geopolitical instability and how we have been actually reacting to that. So already like 3.5 weeks ago, we decided to start to analyze the implication that what it would have in terms of our overall industry. And as you know, that the supply chains on the construction industry are also quite global and the material is traveling.

So we started to analyze through that on our whole procurement capabilities in the supply chain, what would be the implications if the kind of situation would continue for the longer period of time. And same goes to our sales contracts and already the contracts that are existing with our customers. We haven't seen kind of immediate reaction from our customers like contracting side customers on -- kind of due to the crisis yet. But of course, we are monitoring that situation. If you think about an element on the global scale, what we've seen, especially on the digital infrastructure investment market.

So there has been quite a lot of focus also to invest the top of kind of data centers to the Middle East. And of course, I think the whole industry is carefully monitoring that will this now situation shift some of the capital allocation on the global scale and more towards perhaps Europe.

Okay. Then continuing on that. So what kind of cost effects you expect to have from this? And is there any differences between your segments?

At the moment, too early to conclude. And of course, where the material is more produced locally, there is less of a risk if there would be increases on the transportation costs and when there is the material then traveling for the longer distances, so that could be -- that could have a higher implication. But like I said, so we've been on this case. We are looking, we are monitoring, understanding it, but it's too early still to conclude the kind of full impact, if any.

Okay. Then going to the residential CEE segment. So there was roughly 300 apartment starts or consumer apartment starts in Q1. What is the volume target for the segment for the whole year?

We do not specifically set or communicate the volume targets for the full year for the segment. And like you rightly said, so it was approximately 300 units that we started during the Q1. If we take a -- kind of look our previous quarters, what we have been selling on that segment. So I think the 300 units is actually slightly below the kind of historical sales to keep in mind that we are looking for 15% growth in that segment, which is kind of in terms of revenue and that strategical target is still valid for us.

Okay. And then finally, what kind of seasonality will you have in the residential starts in CEE this year? Can you comment on that?

We will make -- I think the starts are very much dependent on the consumer demand on the specific countries as well as the perfect conditions to start in terms of the construction cycle and the availability of the kind of the timing of the construction kind of permits in case. So that is the situation in CEE also for this year.

At -- do we have more questions? Yes, [ Juha ], please go ahead.

[ Juha Tevli ] from Evli. About the residential Finland, one question about the volume. So was the loss because of the low volume? Or was it also because of the selling like old inventory to make it smaller? Can you comment on that topic?

And I kind of -- is my hypothesis right that you are talking about the loss in Q4?

The whole year.

For the whole year. Okay. So if we look at 2025 full year numbers, so then I could argue that, of course, when we have been having a case where the overall production volume as well as the sales volume have been declining about 80% to 90% on the whole industry. Of course, the overall structure and the operations that has been in place are -- or have been kind of created to larger volumes. I think that's the one element.

And then, of course, as you are relying a lot on your, let's say, completed inventory, so then it's a question that are you capable to achieve that the best or the predicted project margins as such on those when we look at the 2025 performance. So those two combinations are, of course, then the element that are impacting the profitability for residential Finland business on a historical basis.

Do we have more questions from anyone? Yes, Svante, please go ahead.

Perhaps a question about the interest rate spike that we have seen now. How do you think about the direct and indirect implications around that?

Yes. Thank you, Svante. It's a great question. And I would say that there's still goes to the category of too early to conclude. We do know that the Finnish residential business on a historical basis has been quite sensitive for the interest rates fluctuation, what we saw in the years during '22, '23 and before the -- and what was the implication to residential business at that time. Good to keep in mind that it wasn't the only factor.

There were several elements that were impacting the overall, I would say, the demand-supply picture, which was completely imbalanced for a couple of years on our industry. Now when we then look what -- if we kind of rely on the data from the Federational Industry of Finland, the [ Arte ]. So what we can see from the latest outlook is that there is a less of completions now than there was in 1950. So the kind of -- from that picture, the supply side is drastically declined on to the market. But there is still -- obviously, when we look the kind of homebuyers' perspective, so there is on that equation, there is the need, the structural need that we see definitely there is on the market.

Then there is a question about the confidence and the affordability and affordability is the kind of -- I think the interest rate is one part of that equation, obviously, on the affordability side. But we are -- we do not yet have a full view or I think it's still too early to conclude that what will be the kind of even the midterm implications on this one.

Thank you, Heikki. And then perhaps a question on data centers. Do you think you have gotten your fair share of the projects? Or do you think you will be able to further increase your win rate there?

I'm very pleased where we are. And there are -- obviously, in -- as we have communicated, there are a lot of opportunities for the whole industry. And I'm very pleased that where we are with that respect.

Do we have more questions? Okay. It seems that there are no further questions. So thank you all for participating, and we will publish our first quarter of 2026 results on Tuesday, 28th of April. Have a great rest of the day.

Thank you.

Thank you. Bye-bye. Thank you. Bye.

Okay. I think we can start. So hi, everyone, and welcome to our analyst call regarding the news we published this morning related to the change to a new revenue recognition method in segment reporting. My name is Essi Nikitin, and I'm heading the Investor Relations at YIT. Together with me today, I have our CEO, Heikki Vuorenmaa; Interim CFO, Markus Pietikainen on the line. We will start with a short presentation on the topic by Heikki and Markus. And after that, you have an opportunity to ask questions. As a reminder, this call will be recorded, and the recording will be published on our website after the call.

Without further ado, at this point, I will hand over to Heikki. Please go ahead.

Yes. Thank you, Essi, and welcome also to this call from my behalf. Thank you also for taking it with such short notice. And like Essi already mentioned, so we provided some news earlier today, and we'll try to provide you the context and the background information and then really happy to take your questions at the end of this call.

But let's start with what we are actually doing in terms of our new operating model, what we are implementing here, the Finnish residential business. And as we already mentioned in the Q4 report announcement, so this is quite a shift from, let's say, traditional line organization towards a function-based organization going forward, and that will be divided into 3 different important areas internally. And the reason that I'm walking this true is, of course, this has an impact on our -- how do we manage and steer our performance also in this segment going forward. But first time, we will concentrate our internal product development efforts, all the R&D activities as well as the layer designs to one internal organizational element, which then will be clearly divided to distinctively different product categories, reflecting the customer demand.

So if you would be kind of buying a home, which is targeted for upper middle class or you would be on a suburbs. So the product will, going forward, also be different and will be suited for the different needs. And there, the primary focus is, of course, to maintain and drive the gross margin for our projects that way that we are we are meeting our targets. Then we are building a single centralized production entity that will oversee both of the quality control as well as the manufacturing process development. And as we have discussed earlier, so we made significant progress already in terms of our lead time shortenings and we'll continue on that path. And the team will be then taking care of so-called supply chain end-to-end and ensure that the continuous improvement is also reflected on our capabilities same way across the operating country here in Finland. And the primary focus there is also to maintain the production efficiency, quality and costing under control.

And then third element, which is obviously the big impact also for our performance is that how are we engaging with the customer, customer insights, marketing and ensuring that the apartment sales is meeting our expectation. And there, we are having a third part of this functional-based organization where we then are also working across the organization. And as we move from the previous historical kind of line organization, regional approach to this different type of function-based organization, it also will be reflected on how do we steer the business and those primary focus and KPIs are here highlighted under and that connected then to our -- also the segment reporting is then the change behind that what we are going to reflect.

And Markus, over to you if you want to walk through a bit more details that what does it mean for us.

Yes. Thank you, Heikki. I think mentioned on the previous slide that we completed the plans now to the previously announced change in the operating model, and we will adopt the percentage of completion revenue recognition for the self-developed projects. And starting from Q1 2026, we report all operations using the percentage of completion in segment reporting. And this is in the contrast of previously using the method where we recognize both the revenue and profit only when the control was transferred to the customer.

So going forward, we will present the financial information both according to the IFRS accounting standards and also the percentage completion. And reconciliations between the 2 reporting methods will also be provided. The essential completion method impacts the timing of the revenue and in the segment reporting, but it has no impact on the financial targets set for the strategy period 2025 to '29 or the adjusted operating profit guidance given for the year 2026.

Very good. Thank you, Markus. And let's come back to what is the big difference or the real difference there and that starting from what is not a difference between the IFRS and calculating based on the POC methodology is that the actual profitability for the project is the same. It is just recognized the revenue during the construction period. And you can see here an illustrative example on this page how the POC revenue is recognized already during the construction and whereas the IFRS is then only highlighting the revenue at the point in completion. So this is the major difference.

Also, how do we calculate that revenue is that it is based on the completion rate multiplied by the sales rate on the project, and that gives us then the total estimated revenue. Good to note on here is that the completion rate is based on accumulated on-site costs. So it's not based on any internal assessment, but it's based on how much of a cost has been accumulated on that construction side, which is giving then us the completion rate of the project. If we then have a couple of additional examples what is then the implications. So we see that the book will reduce quarterly variance caused by the completion schedules of the developed projects. And you can see here a few type of an example. So there is an example when the project is fully sold during the construction period. This is illustrative example, obviously, but it shows that how the sales rate completion rate and how the revenue is then recognized in the POC mode, whereas on the IFRS, it would have been done just during the quarter.

There is also an example on a project if the sales would continue after the construction period, so i.e., there would be some of the unsold inventories. And of course, after the completion, the difference between the IFRS revenue and the POC revenue isn't there anymore, therefore, because actually the handing over the single apartment happens after the construction is completed. So those are a couple of illustrative examples still further to explain how the methodology work.

If we then talk about the completion rate, I already mentioned that it will follow the on-site cost accumulation. This is not exact accurate picture, but let's say that it is a good illustrative reflection how the completion typically happens. So when we start the project on the self-developed residential side. So there is earthworks and the groundworks, which typically maybe takes a bit more time than accruing costs when you can then go to hoist the frame as well as completing the internal works, the fit-outs and the bathrooms and kitchens. So you tend to accumulate more cost in the shorter period of time and then finalizing the yards and the clean area is again, of course, time consuming, but the less of cost accruing and quite close to finalizing the project. So it's -- typically, the project is not linear, but it may be more follows the S curve type when we are then measuring it based on the accrued costs on-site.

Then back to Markus to you. So what are the implications to our financials for '25?

Very good. Here we have the bit of the numbers. First, starting with residential Finland financials for 2025. And here, we have the new comparison financial information. We have the segment reporting in blue and IFRS in a darker color. And we can see that there is a slight -- only slight change when it comes to the revenue, slightly lower segment reporting revenue. But then on -- if you look at also the -- on the operating profit side, we can see that there is no impact between the IFRS and the segment reporting.

Here, it's good to note that we reported minus EUR 8 million adjusted EBIT for 2025, but this also includes a EUR 1 million adjustment from the nonstrategic adjustment, nonstrategic items, which we announced previously this year. So that's the reconciliation to the reported EUR 8 million.

Then if we move on to the CEE financials and the comparison numbers. Here, we can see that there is a greater impact on the numbers. We have both an increased sales for 2025, but also an increased adjusted EBIT for 2025. Here, we can perhaps see that the -- there is a better balance on the profit between the quarters. However, the volatility still remains, and this is obviously driven by the completion rate and the sales rates and the combination of the 2. Here is to note that there is no impact from the previously announced nonstrategic item adjustment. So this EUR 9 million here is the timing difference driven from the percentage of completion.

Then we have finally, the group numbers. Here, we have also the contracting segments included here. We have a EUR 46 million increase in sales for the full year. And we have also then an increase of EUR 8 million on the adjusted operating profit for 2025. So the reconciliation goes that we adjusted -- we announced the EUR 54 million adjusted EBIT for 2025. Then there is an impact of EUR 4 million from the nonstrategic items. And then there's EUR 8 million positive due to the percentage of completion, the timing. And this ends up then to EUR 58 million. Perhaps additional note, which we provided also in the release is that the change in the capital employed, there's an increase of EUR 17 million at the end of 2025 due to the percentage completion method.

Very good. Thank you, Markus. And before opening the lines for the questions, so just a couple of key takeaways from this call is that, firstly -- so as we adapted the new reporting method in the segment reporting, we do not see that there would be impact on the group full year guidance, where we see that this new segment reporting methods, it reduces the dependence on the timing of the completions, but it will also provide more timely information as the profit generation reacts then faster to the market dynamics than the IFRS or what we historically had in the segment reporting. And then this new segment reporting will be applied from the Q1 '26 onwards and the comparison figures are available now for 2025.

That's all from our side, and I think we are happy to take questions if there are any.

Thank you, Heikki and Markus. We are now ready for questions. [Operator Instructions] Please, Atte, go ahead, you have the first question.

Good day from my side. This is Atte Jortikka from Inderes. Just a very quick question from me. Given the current volumes and timing of expected completions and the sales rates, what kind of impact from the change in reporting you expect for the current year in terms of net sales and adjusted EBIT?

So as we mentioned, so we do not see that the change would impact the adjusted EBIT guidance of EUR 70 million to EUR 100 million for 2026, even using the new method.

Next question we have from Lars Norrby.

It's Lars here. So when you say that it has no impact on targets or guidance, so basically, does it mean that the guidance for '26 and your financial targets are still based on the IFRS adjusted EBIT or that the targets are the same, but based on the segment's EBIT?

So the latter one. So the targets are the same based on the segment reporting -- new segment reporting EBIT.

All right. Very clear. Then maybe a second one on the sort of -- when looking at the sales patterns between Finland and the CEE countries, could you remind that how the timing of sales of apartments during the project differs between these 2 regions? And maybe also on how the actual cash flows -- the timing of the cash flows differs between the regions?

Yes, of course. And that being said, so there's also significant differences in the CEE region on the country level, but I provide you that overall view. So typically, we make the early part of the sales at the starting of the construction where there are the ones that are reserving and interested on the apartment. And then there are the customers -- consumers that are then making decision closer to the completion. And that's the, I would say, the pattern that you could see on the kind of quite a normalized market condition. Where we have been now seeing the Finland pattern on the recent years is that consumers are making a decision quite close to the completion, quite close to the completion of the apartments. And that has been a bit more Finland specific for now for 2, 3 years -- 2, 3 years. So that is kind of deferring.

Then on the kind of how the payment terms for the consumers, so varies. So in certain countries, the payment terms are following the construction milestones, which is then, I would say, typically in Europe. So for example, Poland is one of those countries. And then, for example, in Finland. So it is based on the -- that you pay certain percentages at the sales transaction and then as the whole product is completed, so then you pay the final amount. And then there is anything in between that 2 in the 7 countries that we operate in.

And next question from Anssi.

Yes. Anssi from SEB. Just to double check that, are you planning to provide segment-specific numbers with both methods? Or do we have to make some group level adjustments here or reconciliations? How do you plan to report segment-specific numbers?

Thank you for the question. We will only provide the percentage completion numbers for the segments. So the IFRS numbers will be available for the group.

So it means that we have to figure out like where the difference is coming from. How do we make these assumptions?

Well, I guess the question is that do you need to forecast the IFRS numbers? Or would you then only do the segment-based percentage completion numbers as still is the -- there's no change in the business. It's just a timing difference. So in the end, the numbers will be the same over time.

And next question from Jerker.

I was wondering a bit about -- you said that -- or understanding the kind of operating profit will balance out more in the previous model, but maybe it's more a question about Finland. But given the kind of weather seasons we have here, do you kind of expect to see that some quarters will be stronger than others, just considering the cost accumulation?

Thank you for the question. I think that the kind of cost accrual is more related to the project timing and when those have been started compared to the prevailing weather. I would say that today, we are -- the weather is giving us less of a kind of factor on the residential construction side than other construction methods because we are capable to hoist the frame and get the heats up relatively quickly and going to the internal kind of -- then the weather is not playing there anymore a role. So I would say that there is -- the variance on that is more based on the -- when the projects have been started than the prevailing weather.

Understood. And maybe could you kind of give some light on kind of the sales or your expectations on projects and sales? How much -- or could you give some light on how much you expect to -- or what kind of rate you expect to see that has been sold by completion? And how much remains unsold? What is kind of norm nowadays?

Perhaps one observation. Thank you for the good question that as the capital employed has increased by 17% in this comparison numbers for 2025, that indicates that all the projects ongoing, EUR 17 million has been on the percentage completion method already been recognized in '25. We don't comment on the full number, but this provides an insight on how that reporting works. So effectively, when a percentage completion booking is done, the capital employed will increase accordingly. And when at completion or whenever everything is sold, then that's been released. And then on the IFRS side, you would see the full numbers being recognized only then. So that's the bridge.

Yes. And if you think about -- if you think about it, of course, optimum in terms of how many percentages are sold at completion, I think the optimum is that we are selling -- we are not in a business to build an inventory. Realistically speaking, if we look at the inventory, for example, what we have had in CEE at the time when the market is good. So we are carrying about 2, 3 months of inventory there in a normal market. In Finland, obviously, now the situation has been quite different in terms of market conditions. So that is maybe not a good comparison to what we are internally targeting to have as a percentage of sold at the point in completion. But for sure, we are pushing for the maximum result there.

Do we have any more questions? Yes, Anssi.

Yes. Just to come back on this timing difference per segment per quarter. So I think at least you provided it in the comparison figures here, but it would be maybe helpful to provide that as well in the future because, of course, your balance sheet, I have understood, remains the same and unchanged. So it's, to be honest, quite important element in forecasting YIT's numbers. So we have -- yes.

Thank you, Anssi, for the feedback, and we will take that and definitely look at it how can we -- we are on much favoring on providing as much as relevant information as we can for the analysis purposes. So we will take a look at that. And just like you mentioned, so it's good to know that all the balance sheet items and elements that we are very keen on also on management side, as we have been vocal about it and communicating will be IFRS based. So this is -- this change in the segment reporting doesn't bring you that type of kind of new elements that much on the balance sheet. But let's take a look at that, how we can accommodate that best way to our numbers.

Because yes, I guess all the analysts are -- their estimates are based on segment figures. And of course, then we have to also estimate the IFRS numbers, so it would be helpful.

Thanks, Anssi. Do we have more questions? Okay. It seems that there are no more questions. So thank you all for a good discussion, and thanks for participating and wish you all a great rest of the day.

Thank you all.

Thank you.

Thank you.

Hi, everyone. Welcome to YIT's Financial Statements Bulletin 2025 Webcast. My name is Essi Nikitin, and I'm heading the Investor Relations at YIT. The results will be presented to you by our CEO, Heikki Vuorenmaa; and Interim CFO, Markus Pietikainen.

Without further ado, I will hand over to Heikki to go through the latest developments in the company. Please go ahead, Heikki.

Thank you very much, Essi, and welcome, everyone, to today's webcast. Today, we will have a comprehensive agenda ahead of us. First, we review our full year '25 performance. Then we will take the deep dive into the fourth quarter and following up on providing some additional details regarding the news related to earlier today.

But let's begin with the overview of the full year. So the first year of our strategy that we introduced 2024 is now behind. We made progress across the several targets, areas, including our adjusted operating profit margin, return on capital employed, gearing and the customer and employee NPS levels.

Our financial position continued to strengthen. It was supported by improved financing terms and EUR 120 million reduction in the net debt. The business segments delivered different types of performance throughout the year.

In the Residential Finland, the inventory of unsold completed apartments declined, and we initiated new consumer projects in response to market demand. However, the activity in the primary market remained limited.

Within the Residential CEE, our apartment sales grew by over 30% as the market conditions strengthened. We launched a record level of new project starts. Both of these will further establish this region as our principal residential market within the company. The Infrastructure segment achieved robust results. Revenue increased by more than 30% and the positive trend across all the key performance indicators continued throughout the year.

In the Building Construction, we secured multiple new contracts with both public and private sectors and continue to focus on capital release from non-strategic assets.

For the full year of '25, our revenue decreased, while the adjusted operating profit increased. Full year revenue amounted at close to EUR 1.8 billion, and adjusted operating profit increased to EUR 54 million, representing 3.1% of the total revenue. The profitability continues to improve. However, as our strategic objective is to exceed 7%, further progress and actions are required.

Our full year operating profit improved to EUR 45 million. That is approximately EUR 100 million more than in 2024. This improvement was primarily driven by improved operational performance and significantly reduced adjusting items compared to the previous year.

Adjusting items in 2025 amounted to EUR 9 million, which were associated, for example, to our operations in Sweden. In contrast, transformation-related adjusting items in '24 were substantially higher at EUR 86 million, even including the gains from selling of our equipment at the beginning of 2024.

But let's close the full year results now and move to the Q4 '25 overview. And we start with some key highlights from the quarter. Revenue and adjusted operating profit both increased. The net debt and gearing continued to decline, and it's reflecting the good progress in the capital efficiency initiatives as well as the strong operational cash flow during the quarter.

Our order books increased in both contracting segments, supported by a robust industrial construction activity. Residential CEE delivered a solid quarter with a higher revenue and profits. Market conditions remains favorable for us.

The revenue growth for the quarter was driven by the Residential CEE and Infrastructure segments, while the revenue from Building Construction and Residential Finland declined year-over-year. This was actually a first quarter since second quarter 2023 in which the group's revenue increased.

Adjusted operating profit increased from EUR 13 million to EUR 25 million during the period, resulting in adjusted operating profit margin of 4.5%. Overall, quarterly performance aligned with our internal expectations.

But now it's the time to double-click on the segment performance, and we start from the Residential Finland. Market conditions continue to influence the performance of this segment. And that is, of course, reflected across all the key performance indicators. Also, there has been improvements in the segment performance during '25, it is evident that the additional measures are necessary given the financial results relative to our established strategic targets.

I will discuss some of these actions in more detail later. During the quarter, our unsold completed apartments inventory continued to decline in the Helsinki Metropolitan Area. Several projects reached the full occupancy. However, overall inventory in the capital region remains higher than we prefer.

We achieved a total of 211 completions during the quarter, primarily outside of the capital area. While the inventory levels in those regions have increased slightly, they continue to be within normal or low ranges.

On the full year comparison, our unsold apartment inventory declined approximately 25%. It is again important to note that there are no scheduled completions in the Residential Finland business over the next 6 months.

And when we look at our starts, sales and the inventory levels, we have now achieved balance between those three different elements. We have been reducing approximately 50% of the unsold inventory what we observed in 2024 from those levels. Initiation of a new project is guided by the consumer demand and the current product portfolio has also experienced a significant transformation in the past year.

We remain to commit to launch new developments in accordance with the evolving market requirements. Completions in '26 will be again back-end loaded, mostly focused on fourth quarter. Overall, there is a moderate increase in projected completions from 2025. However, it is important to highlight that the 450 units that we are expected to complete during 2026 still falls significantly below the typical levels what we have had in this business on historical terms.

But leaving the Residential Finland behind and moving to our business here at the Central Eastern European countries. We achieved a significant number of project completions in the fourth quarter, and that resulted increase in revenue and profit compared to the same period last year. The profitability margin for the full year was temporarily affected by the upfront investments and our ongoing regional expansion, which are part of our strategic initiatives.

Project gross margins have remained at targeted level and the market conditions continue to be favorable. And also despite increased investments in the new project starts and plots in '25, capital employed remains well managed and under control.

In the fourth quarter, we sold a total of 873 homes within the Residential CEE market. Out of these, 286 were sold directly to consumers, while the remainder were sold to investors or cooperative housing companies.

The sales performance remained strong across all operating countries. So following of that, there has been a significant acceleration in the project starts last year, and we started construction on a total of 1,600 apartments in '25. Our current plot inventory is sufficient to support the development of approximately 15,000 additional homes. However, in selected cities, we are seeking opportunities to accelerate growth and further invest in the plot reserves to secure our future development pipeline.

For the 2026, we are anticipating an approximately 50% increase in completion compared to 2025. The business continues to demonstrate significant seasonality, as you can observe from the slides. The residential completions are expected primarily in the fourth quarter. And as our financial reporting adheres to IFRS standards, both revenue and profits are recognized exclusively upon completion.

Sales from our joint venture projects are also progressing well. During the quarter, we sold a total of 220 YIT homes and are particularly pleased with the launch of sales in our new KALEVALA project in Czech. This year, the completion targets with the joint venture business model is set to increase to 650 units, which then will bring additional 40% volume next to our stand-alone project.

We will continue to utilize these SPV structures for selected projects in the residential CEE region. It provides us a flexibility on the project starts and minimizes our own equity investment requirements for those selected projects. And as always, all equity commitments are fully disclosed in our annual reports.

But leaving the Residential segments now behind and moving to Infrastructure. Our Infrastructure segment delivered a revenue increase of over 30% in 2025, exceeding EUR 500 million for the full year. The growth was primarily driven by the successful tendering across the various Infrastructure Construction segments and higher volumes within the industrial construction.

The profitability remained consistently above the 4% throughout the year, and the team continues to seek further internal efficiencies to achieve the strategic targets established for the segment. The improvement in the capital employed during the fourth quarter was largely connected to our operations in Sweden, where several projects were successfully completed at the year-end.

Our order book also is strong and has grown compared to the previous quarter. It is on a robust level of 20 months work and level is nearly EUR 900 million. When we look at the infra market here in Finland, so the market remains dynamic, both in private as well as in the public sector. In early 2026, we announced strategic investments to acquire rail construction capabilities, further strengthening our position within the Finnish Infrastructure market.

Notable highlights from Q4 include the order of excavation works for the Vantaa Energy project and the data center development in Kouvola, both which are already now under production.

Moving on to the Building Construction. Then the main news from this segment during the Q4 was the capital release from Tripla Mall, totaling of EUR 51 million. It reduced the capital employed on this segment significantly. For the full year, the profitability increased despite the decline in the revenue.

The adjusted operating profit over the past 12 months stands at 2.5%, indicating that the additional efficiency improvements are necessary to achieve the segment strategic targets. The order book has increased compared to the previous quarter, with the team achieving notable success in tendering activities, particularly during the fourth quarter. The order book represents approximately 18 months of work and approaches EUR 1 billion in value.

Few highlights from the quarter include the school project in Espoon, swimming and sports hall in Helsinki, and the implementation phase of the Kupittaa project in Turku. It is important to note that the certain project value is added to the order book in full only after the development phase is completed.

Then when we look at our key operational metrics, we can say that the homes currently under the production is about 3,700 units. 80% of the production is concentrated within the Residential CEE area.

Project margin deviations remained well managed and implemented measures to enhance the productivity are evident throughout the project portfolio. The status of the overall supply chain remains robust.

Then when we look at the overall market and our assessment of the market situation, it remains unchanged. The Central Eastern Europe, residential sector continues to demonstrate favorable conditions, whereas in Finland, primary market sales volumes are not expected to increase in 2026. The Infrastructure market is performing well and Building Construction, which includes several types of construction activities, remains stable.

This concludes my remarks for now, and I will hand over to Markus to you to provide more detailed overview of our financial performance.

Thank you, Heikki. I will walk you through the financials.

This is a Q4 2025 summary slide. Return on capital employed was at 3.9% at the end of Q4, up year-on-year from 2.1%. Operating cash flow after investment was in line with Q4 2024 at EUR 111 million. Gearing at 71%, which is close to the strategic target of between 30% to 70%. Net debt, down EUR 120 million year-on-year at EUR 560 million. Guidance, EUR 70 million to EUR 100 million adjusted operating profit for continuing operations in 2026.

Let's look at each of these topics in more detail in the following slides. Capital release and capital efficiency in the business operations are top priorities for us. And during the Q4, we released almost EUR 100 million of capital. This was especially supported by the successful refinancing of Tripla, which enabled Tripla to pay us EUR 51 million as return on capital and profit distributions.

Our return on capital employed improved by 1.8 percentage points from 2024 to 3.9%. We will continue to drive profits and capital turnover to reach our financial target of at least 15% by end of 2029.

Some highlights regarding capital employed from the segments. In Residential CEE, we were able to release EUR 30 million of capital during the year, even though at the same time, our apartments under production have increased by over 60%. This is mainly thanks to our apartment sales and strong portfolio.

The Infrastructure segment continues to operate with negative capital employed, supporting the whole group's financial performance.

Let's move on to the cash flow development. The operating cash flow after investment has been positive for the last 2 years. Here, we can see strong seasonality with most of the positive cash flow being realized in Q4, just like in 2024. The seasonality reflects the timing of the residential completions. The operating cash flow after investment was EUR 65 million for 2025. We will continue the work to improve cash generation.

Gearing decreased to 71%, down by 17 percentage points year-on-year, supported by positive operating cash flow and hybrid bond issuance in Q2 2025. Net interest-bearing debt was EUR 560 million at the end of Q4. This is a decrease of EUR 120 million from the end of 2024 and EUR 235 million from the end of 2023.

The net interest-bearing debt include IFRS 16 lease liabilities of EUR 258 million as well as housing company loans of EUR 130 million. The housing company loans decreased by some EUR 50 million year-on-year.

This is an overview of the main components of assets and liabilities. YIT had EUR 712 million worth of plots, enabling a pipeline of some 15,000 apartments, both in Finland and CEE countries. This is down by EUR 81 million year-on-year. The book value of the completed inventory amounted to EUR 322 million. This is down by EUR 72 million year-on-year.

Production has increased by around EUR 60 million as we have accelerated our production, especially in the favorable residential markets of the CEE countries. The book value of Tripla is now EUR 136 million, reflecting the EUR 51 million capital return received during the quarter. The adjusted net debt was EUR 173 million, and this excludes the operational IFRS 16 lease liabilities and housing loans. The maturity structure remains also in balance.

When comparing interest-bearing debt to our key assets, we can see that our underlying asset base is 2x the gross debt number.

When we announced our strategy in November 2024 for the next 5 years, we said that our strategic focus in capital allocation is to only employ capital to our residential projects during the construction period. Today, we announced that we have defined non-strategic items that are not part of the company's strategic core operations in line with our strategy and which we intend to dispose during the strategy period. These non-strategic items are in the Residential Finland and Building Construction segments and include, for example, our investment in the Mall of Tripla, equity investments in long-term property development and completed self-developed commercial projects with sales risk.

The total value of these non-strategic items was EUR 340 million at the end of 2025, which is 2x our adjusted net debt. This also brings changes to our financial reporting. Going forward, the profit impact from non-strategic items is excluded from the adjusted operating profit. Also, capital employed will be presented as operative capital employed, which includes assets and businesses aligned with the company's strategy. Return on capital employed will be calculated based on the operative capital employed.

As a result of the change, the reported adjusted operating profit and operating capital employed will more clearly reflect the profitability, capital usage and capital efficiency of the company's strategic business operations. The changes will take place starting from the beginning of 2026. The changes do not have any impact on the company's financial targets.

Then on to the guidance. We expect the group adjusted operating profit for continuing operations to be between EUR 70 million and EUR 100 million in 2026. The guidance is aligned with the new adjusted operating profit definition, which was discussed in the previous slide. The residential market in the Baltic countries and Central Eastern Europe is expected to continue favorably, contributing positively to Residential CEE segment's capability to generate profit.

In Finland, the primary apartment market volumes are not expected to increase in 2026. In Residential Finland segment, low amount of completions during 2026 will limit the segment's capability to generate profit. In Building Construction, the operational performance is expected to improve. In Infrastructure, the operational performance is expected to remain stable.

Thank you very much, Markus. And there are also several important topics remaining, like I said in the beginning of the webcast that we need to address. And those are primarily regarding the news released earlier today. But before going there, so let's take a look on how did we do the progress against our strategic targets now on the full year basis.

We achieved improvements in our adjusted operating profit margin and return on the capital employed despite the ongoing revenue decline still in 2025. Each segment advanced in line with its respective plans given the prevailing market conditions and the internal performance and efficiency indicators are trending positively. This gives us a good foundation to enter second year of our strategy execution.

And as a result of the progress, we are increasing the growth targets previously communicated for our contracting segments. The Industrial Construction business pipeline has exceeded the expectations, supporting us to double the revenue growth targets for both the Infrastructure and Building Construction segments throughout the strategy period. Accordingly, we will -- we intend to reorganize our Energy and Industrial Construction operations into a new Digital Infrastructure business unit.

In external reporting, we continue to share both revenue and profits under both contracting segments for now. Over the past 12 months, we have strengthened our team by recruiting additional talent, and we will continue to do so to enhance our capability to deliver the comprehensive turnkey solutions for our customers in the Digital Infrastructure space.

But while we are witnessing a faster-than-expected progress in the Digital Infrastructure business, it remains essential to pursue additional operational efficiencies to align our operations with the current market conditions, both in Residential Finland and Building Construction segments.

We intend to transition from a regional line management structure to function-based organization. And this shift will enhance our focus on core capabilities and provide greater flexibility to scale the business in response to the market demand.

In connection to this change, we are also evaluating our internal management processes, how we are following up the performance and evaluating if we would move to percent of completion management system. This could also then impact on the external segment reporting principles as well.

Today, we have initiated change negotiations in Finland to plan for these needed changes. The estimated cost savings are projected at EUR 15 million with full realization expected by end of '27. Our forthcoming quarterly reports will include updates on the progress towards these targets.

But this is all for now. And operator, it is time for the questions.

[Operator Instructions] The next question comes from Svante Krokfors from Nordea.

A couple of questions. First one regarding the slow apartment sales in Finland. What kind of measures are you taking to continue to reduce the number of unsold apartments going forward?

Thank you, Svante. And of course, when we look at the demand picture and the activities are taken. So we have been applying different type of campaigns during the past couple of years to significantly reduce the inventory levels from, let's say, the highest level that what we had in 2024. Those have been quite effective when we look at certain cities outside of the capital area, where we see that we are actually operating in a relatively normal levels and achieving our fair share of the market. The inventory level remains elevated here in the capital region, and we need to look then project-by-project selectively what type of actions are needed in order to boost the sales there.

Okay. That's quite clear. Then a question regarding the EBIT guidance for 2026. What kind of assumptions do you have for the high end and low end of the guidance? I guess you mentioned that Residential Finland will have difficulties to generate positive results this year. So, where will the EUR 30 million to EUR 50 million -- sorry, EUR 20 million to EUR 50 million increase from the EUR 50 million baseline come from?

If you look at the overall different segments, so what is quite notable is amount of completions that will take place in our Residential CEE business this year compared to the previous year. So we expect the completions to increase by 50% compared to 2025. We also, like I said, so we expect our operative performance in the contracting -- both contracting segments to improve while we do not expect the market conditions in the Residential Finland to improve in 2026. As usual, so there is -- at this point in time, so there are uncertainties in the market picture, which is then reflecting the range of our guidance that we have given today.

Okay. And could you tell something about the timing of the EUR 50 million cost savings announced by the end of '27. Will that have an impact on '26?

So we have initiated the change negotiations or kind of communicated that we will initiate the change negotiations today. So we will come back to the further details as well as the specific outcomes then on the following quarterly results as we have made a progress against the target.

The next question comes from Anssi Raussi from SEB.

Just one question from me, and it's regarding your financing expenses. So how should we think about financing items in 2026, like, let's say, if we compare it to Q4 run rate or what kind of impacts or factors you see here?

Thank you, Anssi, for the question. We do not specifically provide a guidance on that specific element. But Markus, if you want to maybe give a bit flavor on that topic.

Sure. Thank you, Anssi, for the question. I think it will be an equation of part our capital release program, how that will progress. As you've seen, we've now announced that the EUR 340 million is non-strategic in the balance sheet. And obviously, this will be disposed by the end of the strategy period 2029. So very much that depends the financing cost based on the timing of those disposals. Otherwise, I think that that's the biggest delta, if you will, for that item.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

As there are no more questions, we thank you all for participating and wish you a great rest of the day.

Thank you.

Thank you.

Okay. I think we can start. So hi, everyone, and welcome to YIT's analyst call preceding the silent period of our financial statements 2025 bulletin.

My name is Essi Nikitin, and I'm heading the Investor Relations at YIT. Together with me today here, I have our Interim CFO, Markus Pietikainen; and our CEO, Heikki Vuorenmaa, on the line. We will start with a recap, the recent developments in the company presented by Markus. And after that, the participants will have an opportunity to ask questions from Markus and Heikki. As a reminder, this call will be recorded, and the recording will be published on our website after the call.

At this point, I will hand over to Markus. Please go ahead.

Thank you, Essi. Good morning, everyone. So let's start with an update on our business and markets, and let's start with the Residential CEE business. The strategic decision to increase resilience, diversify our geographical exposure and strengthening our residential platform in the Baltic and CEE has yielded clear benefits and is a key driver of our growth.

These regions have become the main market for our residential development and construction. We expect this to strengthen even further. As we discussed in the Q3 results release, the production volumes for the owner-occupied homes in Residential CEE segment are currently at the same level as the historical peak year of our Finnish residential business.

By the end of the third quarter, we have had launched new projects valued at nearly EUR 450 million with healthy margins, which are scheduled for completion in 2026. These projects are expected to contribute positively to our revenue and profits from 2026 onwards, supporting our growth.

Our growth plan is further supported by our strong plot portfolio, enabling construction of approximately 14,000 homes, corresponding to over EUR 3 billion of sales value. In October, we announced that YIT has signed an agreement with the Czech housing cooperative Ranta Barrandov for the sale and construction of 3 residential buildings in Prague. The value of the agreement is approximately EUR 25 million. The Barrandov project is an excellent example of how we are implementing our growth strategy in the Residential CEE segment. Through the housing cooperative model, we reached a new type of customer base, generating capital-efficient growth and offer modern living in a sought-after area.

Then moving to residential Finland. The recovery of the overall Finnish residential market has progressed gradually in line with our expectations, and we have continued to launch new self-developed residential projects in Finland. Customer expectations have changed, and the primary apartment market in Finland is currently consumer-driven. Our new product launches reflect the market change over the past 3 years as the share of studios in the newly launched projects has significantly declined and average apartment sizes have increased.

In addition, lead-time reductions and new designs enable us to price new production in a competitive market with a lower price level than before. We have continued the new self-developed project starts in the fourth quarter in locations where the demand support starts. Due to our strong plot portfolio, we have no need for significant new plot investments, which supports capital-efficient volume growth.

In October, we announced the start of self-development apartments -- apartment projects in Espoo, Tampere and Vaasa. In November, we announced the start of a self-developed apartment project in Tuusula and last week in Raisio. The projects are expected to be completed by the end of 2026. According to the Confederation of Finnish Construction Industries' autumn economic review 2025, zero economic growth and weak consumer confidence are still hindering the recovery in the primary market in Finland.

The primary apartment market is not expected to significantly recover in 2026, and production volumes are likely to remain lower than average. While macroeconomic developments are beyond our control, we are strongly committed to operating with a level of productivity that enables us to achieve our strategic targets even in a lower volume market. We continue to initiate new projects in locations where demand exists and remain focused on increasing our market share.

Let's then move to our contracting segments, Infrastructure and Building Construction. The infrastructure market in Finland is active in both the public and private sectors, driven by increased defense sector investments and positive developments in the industrial construction and the renewable energy market. Consequently, in accordance with the Q3 results release, we upgraded our view of the infrastructure market from normal to good.

We announced our third data center project in October as we were selected as the main contractor of a data center building, office premises and associated external technical areas and site works for Hyperco in Kouvola, Finland. We are happy to launch this significant data center project in close collaboration with the project company behind Hyperco's Kouvola initiative.

Our wins in the data center field leverage our extensive experience and proven expertise in executing large-scale industrial projects, further strengthening YIT's position as the leading builder of data centers in Finland. In November, we also announced that YIT had been selected to carry out the excavation contract for Vantaa Energy's heat storage facility in Vantaa, Finland. The project is valued at approximately EUR 100 million for YIT.

The exceptional project combines scale, technical complexity and overall significance. YIT has strong expertise in rock construction, and we are very proud to be part of delivering this unique project. All in all, the order book for the Infrastructure segment is strong, and the segment is well positioned to pursue growth and further enhance operational efficiencies.

The Building Construction segment continued to improve its profitability in the third quarter. Despite the highly competitive market, we have continued to win both public and private sector projects supported by our competencies and expertise. Consequently, we announced a number of new projects for the segment during the fourth quarter.

In November, we announced that YIT is selected as the main contractor for the 3 school and daycare center properties to be built in Espoo, Finland, and as producer of life cycle services for them. The value of the project to YIT is approximately EUR 90 million. In November, we also announced that the City of Helsinki had chosen YIT as the development phase partner for the Jätkäsaari Swimming and Sports Center in Helsinki, Finland. The project will begin with the development phase and will be carried out as a collaborative project management contract.

The estimated total value of the construction contract for YIT is approximately EUR 87 million. We are proud to apply our technical capabilities and sustainable construction principles to the project. In close collaboration with the City of Helsinki, we will prioritize energy efficiency, circular economy practices and the diverse needs of the center's users.

Last but not least, in December, we announced that YIT and City of Turku had signed the implementation phase contracts for the Kupittaa Core partnership project to kick off the construction phase of Taito campus and the infrastructure project in Turku, Finland. The value of the project entity for YIT is approximately EUR 150 million. The Kupittaa Core partnership project is one of the most important urban development projects in the City of Turku and an excellent example of how YIT's urban development expertise, sustainable construction and long-term cooperation are realized.

As we have communicated before, YIT is building a new facility for the City of Helsinki's Kamppi Health and Wellbeing Centre. In December, we had the pleasure of announcing that the project will be completed more than a year ahead of schedule. The building can be handed over to the City of Helsinki already at the end of September 2026, which means that the city may receive the new premises more than 400 days earlier than planned. This is a great example of successfully managing the different aspects of the project and the implementation schedule.

All in all, the segment is moving in the right direction. A few words then about our capital position. Realizing capital from the balance sheet and improving capital efficiency in business operations are top priorities in our strategy. At the group level, the capital employed has decreased significantly during the year. The latest news regarding the capital release was 2 weeks ago when we announced that YIT received an amount of EUR 51 million from Tripla Mall as return of capital and profit distributions.

These proceeds, together with the previously received returns of capital and profit distributions from Tripla Mall totaling altogether approximately EUR 57 million were used for partial prepayment of the secured bank facility of YIT and our secured revolving credit facility. We are determined to continue the execution of capital release actions according to our strategy and consequently improve the return on capital employed of the company. The released capital will be reallocated to fund residential segment's profitable growth and to reduce indebtedness of the company, which will lower the financing costs and support net profit generation.

As a conclusion, the market outlook for our businesses looks favorable on many fronts. The investment plans within our operating countries in the industrial construction, data centers and energy and defense sectors are substantial and are likely to create opportunities for both our contracting segments. The residential demand is favorable in the Residential CEE segment, and the recovery of the Finnish residential market has progressed gradually. Our plot portfolio continues to be strong, which enables us to start new residential projects and support profitable, capital-efficient growth.

Thank you, Markus. We are now ready for questions. [Operator Instructions] And the first question comes from Atte.

Atte Jortikka from Inderes. Firstly, on residential overall, did you encounter any slippage of completions in residential segments in Q4 to next year?

Thank you, Atte, for your question on that. And as we have been -- part of our outlook communicated in third quarter. So the timing of those projects may deviate from the original estimates, and it might then lead to the profit or revenue recognition shifting from one quarter to another.

Okay. Then continuing on residential, going to CEE, what are the expected completions volumes on the consumer apartment side in CEE next year? And what kind of seasonality we should expect in completions next year?

Thank you, Atte, for that question. We will need to come back to that in the future reports.

Okay. Then to residential Finland, has the number of consumer apartment launches launched in Finland this year been in line with your expectations going into the year?

So overall, what we can say is that we see that the market development like we communicated in the third quarter, broadly speaking, during this year has progressed according to our estimations and so have been the kind of the actions as well.

Okay. Then you started roughly a bit north of 200 consumer apartments in Finland in Q3. And if I calculate it correctly from your releases, you have started another 200 during Q4. Is this the rate we should also expect going forward to next year?

Of course, when we are deciding on the market launches, so we need to -- all of those are based on the market conditions on that specific city, in that micro location and the time. And -- so that is heavily then dependent on the market conditions at that point in time. And as you can see from the communicated launches, so we have done the launches on predominantly outside of the capital area this year.

Yes. Then continuing on that, I think if I understood correctly, all of the apartment projects started in Finland in Q4 have quite low reservation rates. How do you see the reservation rates needed to start projects in Finland in this market going forward at the moment?

So the reservation rate at the point of decision-making requirement hasn't changed. So we expect -- as communicated on our previous releases, so we expect to reach approximately 50% of the reservation rates. It's good to note that it will -- converting the pre-reservations into the kind of sales transactions will not happen on the first day of the starting of the project. So that typically takes some amount of time before the readiness of sales for the project is also achieved. So that's another element there.

Okay. Then last question from my side regarding the contracting segments. You communicated on reserving a plot in Kuopio to develop a data center. Is this sort of a stand-alone project? Or do you see more opportunities in proprietary data center property development going forward?

Yes, it's a great question. Thank you. And we have not communicated one project. Generally, overall, what we have communicated already in the third quarter is that we see that this market is highly active in Finland at the moment. But so far, we have communicated this one.

Are there any more questions? Yes, Jerker?

Just maybe a general question about -- you mentioned the Kamppi location that you completed ahead of time. So -- and you've been talking about lead times quite a lot. So just maybe coming back to the positive profit impact from those. Could you maybe elaborate how this could improve your profitability or if it does?

Yes. Thank you, Jerker, for the question. And we are indeed very pleased with that project. We also have earlier communicated other project completions also ahead of schedule, I think it was on the Infra segment. And that being said, so we do not kind of comment on individual project profitability there as such.

I think what -- the largest benefit, obviously, is for end users and the whole City of Helsinki, as it will be opened so much ahead of schedule, which will then help also all the traffic arrangement as well as opening the facilities earlier than planned. And what you -- what we have been communicating throughout the year already like in the third quarter as well, so the project deviations on both of the contracting segments have developed favorably over the past quarters.

Maybe a question about roughly looking into next year and kind of the order backlog and comparing to the situation were in Q4 last year. So can you shed some light on your kind of expectations for activity development in -- overall in the segments for next year?

So we have -- like Markus pointed out there, so we have been communicating new projects throughout this quarter as well, and we will come back to that on -- as we close the year and on the Q4 report.

Any other questions? Yes, Markku?

Perhaps one regarding the Tripla Mall. I mean, has there been any progress regarding the divestment of the Tripla Mall?

Thank you, Markku. First, it has to be said that we are very pleased with the progress of that asset, and the successful refinancing is one of strong proof points how well the overall asset has been developed. And that's what we can communicate about that topic.

Okay. And regarding the other capital releases, should we expect any for next year, what you currently have on the balance sheet that you could still release from the balance sheet side?

Yes. Thank you. We have -- as a part of our strategy, we have communicated that we have an opportunity to release the capital, which we are not needing in any of the segments to perform the strategy that we have selected, and we will continue to release the capital from those assets throughout our strategy.

More questions? Okay. It seems that there are no further questions. So I thank you all for the discussion, and we will publish our financial statements bulletin on 6th of February. But before that, we wish you all happy holidays and all the best for the New Year. Thank you.

Thank you.

Thank you all. Bye-bye.

Hi, everyone. Welcome to YIT's Third Quarter 2025 results webcast. My name is Essi Nikitin, and I'm heading the Investor Relations at YIT. The results will be presented to you by our CEO, Heikki Vuorenmaa; and CFO, Tuomas Makipeska.

Without further ado, I will hand over to Heikki now to go through the latest developments in the company. Please go ahead, Heikki.

Yes. Thank you very much, Essi. And welcome also from my behalf to the third quarter '25 webcast. In third quarter, we overall delivered solid performance, in line with our expectations. The contracting segment's profitability continues to improve, and they were the main profit drivers during the third quarter.

Our apartment sales and production keeps' increasing in the residential segments. And CEE has taken the role as our primary market in terms of revenue, volume and profits. Order book for the contracting segments are developing well and broader demand environment remains healthy as we move into the fourth quarter. In fact, our next year order book is stronger than in the recent years. Our recently executed employee survey indicates strong commitment from the team towards our new strategy. And supported by the good operative progress, we revised our full year guidance.

But let me share numbers and some key highlights from the quarter. The low amount of apartment completions in the residential business impacted our numbers on a group level as expected. The revenue declined to EUR 402 million, burdened by the residential segment volumes. Also, it impacted our adjusted operating profit, which was on the level of EUR 12 million. What we are really pleased is that, our contracting segments' trend is improving all the time, and the contribution to profitability is increasing.

Infra revenues continues to increase during the quarter to EUR 127 million, increasing 30% compared to last year. Adjusted operating profit reached almost 6% in Infra and 4.5% in the Building Construction segment. But as we then look our business performance over the past 12 months, we can clearly see how the 3 out of 4 segments are delivering as they operate in the favorable market.

Revenue is still primarily coming from the contracting segments, and representing altogether 65% of the rolling 12 months revenue. The residential operation in the CEE are expected to grow strongly, as you can see here. The project completion schedule for that next year, worth of EUR 450 million, would imply or indicate even almost 60% volume growth compared to the rolling 12 months figures. And of course, those starts, what we have been doing, those are done with a healthy gross margin levels. The resilience of the group is increasing and the dependency to single market or a single segment is declining. Our Contracting segment operates with a strong order book. So all-in-all, the company is heading to right direction.

Let's move then to individual segments, and we start with the Residential Finland. As I mentioned already, the revenue has been on the declining trend. And the same trend continued this quarter as we didn't have any completions during the third quarter '25. We mostly sold apartments from our inventory during the quarter and focused to launch new projects that will be then completed during '26 and '25.

Key for us is to ensure that our product designs meet the market expectations and consumer preferences. And the team here is working on with the internal efficiencies to manage the costs and identify further opportunities across the operations.

The inventory of unsold apartments is reaching a normal level. Helsinki Metropolitan Area still carries excess from the decisions done during the '22. Our focus on reducing the inventory has now yielded results, and the inventory is no longer an issue for us.

Actually, when we look outside of the capital area, we start to already have some shortages like in Oulu, Turku, Jyvaskyla to mention a few of the cities. Altogether, we started 224 new apartments during the quarter. And those were done mostly on the -- outside of the capital area. And the reason is on the previous slide, as discussed that we still carry an excess supply, and that we make those starts on the regions where we see that demand is healthy and we are convinced that those products are on a good micro locations that will be sold to consumers during the construction period.

And as I mentioned here, the story actually is quite the same as in the second quarter. So, no completions and it had the implications that we already discussed. Our revenue and profits on this segment, same is in the CEE, is based on completion, and it has been a meaningful impact on our profitability. The completions -- overall completions this year, if we look 274 units, this could be actually the lowest point in time. This is just 20% of the completions on 2023 when we are comparing to the previous years.

And here, we can see the implications where the residential business bottomed out. Now we have been starting new projects and gradually, we see that the market is improving and heading towards better times.

But then we move to the residential CEE, which is our primary residential business in the future. The segment performance is very strong, which is hard to observe from our IFRS numbers as this reports revenue only at completion. It's also good to note that this team at the moment is managing a substantial amount of new projects and the future revenues, which is not yet visible on the pages here or the figures here.

And as said, this has been now become our principal market. There is about 60 million people living on the operating countries that we are building the homes for consumers, and we see that there are future opportunities still to grow. Revenue and profits for the segment are heavily tilted towards the Q4 this year.

The sales speed continues to increase and reach new levels. Now over 1,200 units in a rolling 12-month basis. We also continued with the new starts, a bit more than 300 units during the quarter. And by now, projects valued almost EUR 450 million are in production that are estimated to be completed in 2026. And the sales of those projects are progressing well. Favorable market conditions will reinforce the segment's roles as a key driver for the growth in the future during our strategic period.

We actually had one project completion during the Q3 ahead of schedule, and that was the city in Krakow, Poland. It was one of our newest cities that we opened, and I'm very pleased that the team were able to find lead time acceleration opportunities to get the project completed already ahead of schedule. However, majority of the completions are scheduled for the final quarter this year. And total, we talk about 10% more during 2025 than what we had in 2024 in terms of completions.

But let's leave the residential segments and we move to the contracting segments, starting with our Infra operations. Infra, solid performance continues. Top line and profitability continue to grow. The rolling 12 months revenue is to reach EUR 0.5 billion level soon. Actually, during the quarter, we saw already again, a 30% growth in revenue. The business has a strong order book, tendering pipeline extremely active and the customer NPS is increasing.

And I'd like to double-click on one part of the market, what the segment is operating in. This is one of the megatrends what we have highlighted and it relates to the data centers. The data center investments may play a big role for the Finnish construction companies in the coming years. We have already publicly announced 3 data center partnerships by now. The market in Finland strongly increasing, investment plans announced reaching already EUR 12 billion. We made a decision a couple of years ago to invest in capabilities, both in our project management, in general terms, but also in the MEP, and that decision is now yielding results.

Data center market offers great potential for us. And we are happy to work with the close cooperation with customers to deliver the solutions on time under the tight schedules that the data centers typically has. Our recent wins further strengthens YIT's position as the leading data builders -- builder of data centers here in Finland. And this is supporting our strategic focus. We are capable to actually offer full EPC solutions for the data centers as well through our diverse capabilities, and as we have capabilities both in Infra as well as the Building Construction segment.

And as we combine all that, so that makes us competitive in those tendering processes. But coming back to Infra order book, and it has remained on that steady level, but the content here is a bit shifting. We actually observe increasing amount of orders from B2B customers in our order book. We still see that we have probably one of the strongest order books among the industry players, and it's approximately 19 months of work. It gives us an opportunity to develop the projects with our customers in such a way that we will find the best solutions for them, which suits for their projects.

But before moving to Building Construction, I have to say that it's yet again a solid quarter from our Infra team. We also have positive news from our Building Construction segment. The revenue growth is still ahead of us, but the profitability of the segment is taking steady steps forward. This quarter, we recorded EUR 7 million profit and on the rolling 12-month basis, we are approaching 3% level.

The balance sheet continues to have a lot of opportunities to release the capital, yet it also negatively impacts the segment's profitability. The negative impact from the capital employed, what we have, exceeds the gains from the balance sheet, which is the fair value gains that we are reporting during the quarter.

We have secured a good level of new orders, and we are looking actually ahead with a quite positive outlook. We have about 17 months of work in our books, and we're enabling us here again also to focus on the long-term customer development activities. The market continues active and so does the tendering.

Then a view to our operations. Overall, our operations are running smoothly, even though we have significantly scaled up our production volume in the residential segments. The production has now increased 60% in the residential business year-on-year, above 4,000 homes in production today.

Project margin net deviations are positive in the contracting segments and supports the profitability. Our supply chain is under control. However, we start to observe workforce availability tightness in our operations, especially in Slovakia and Czechia, which needs attention from our supply chain teams going forward.

Then to overall market view before handing over to Tuomas. We have actually updated our view on infrastructure market here in Finland from normal to good. Our operations in the Central Eastern Europe benefits from the favorable market conditions and the strong demand that we are seeing, especially on the residential segment, but also there is a normal to good market in the building construction segment, depending a bit on the specific country. The residential market in Finland is improving. However, it is still on the weak level and there's still way to go before we are reaching a normal level of residential market here in Finland.

But that concludes my first part and time to hand over to you, Tuomas, to cover our financial performance for the quarter.

Yes. Thank you, Heikki. Let's go through our financial development in the third quarter and start with a summary of our key metrics there. So, our return on capital employed was at 3% and gearing at 85% at the end of the third quarter.

Our key assets amounted to well over EUR 1.6 billion, while the net debt decreased to EUR 669 million at the end of the third quarter. The cash flow for the quarter was EUR 0 million. So all-in-all, the quarter was very stable and according to the plan also from the financial perspective. And as a result of the stable performance year-to-date, actually, we revised our guidance, and we now expect the adjusted operating profit for the year to be between EUR 40 million to EUR 60 million.

But let's look at each of these topics in more detail in the following slides. Our return on capital employed improved from the comparison period but was at a lower level than in the past 2 quarters. The low amount of consumer apartment completions during the quarter, which impacted adjusted operating profit in both residential segments is visible in this metric.

We will continue to drive profits and capital turnover to reach our financial target of at least 15% by the end of 2029. But some highlights regarding capital employed from the segments. So, in Residential Finland, the capital employed has been on a downward trend supported by the efficient use of our plot portfolio and sale of completed apartments from the inventory.

In Residential CEE, we have been able to release EUR 75 million of capital over the past 12 months, even though at the same time, our apartments under production have increased by over 70%. So, this is mainly thanks to our strong plot portfolio, solid apartment sales and other capital efficiency measures.

The Infrastructure segment continues to operate with negative capital employed, supporting the whole group's financial performance. And the capital employed in Building Construction continues to include noncore assets, which burdened the segment's profitability, as Heikki mentioned before.

Let's move on to the cash flow development. Cash flow after investments for the third quarter was 0, and we can see from the graph that the cash flow in our business is cyclical and typically heavily tilted towards Q4.

When looking at the longer period, the 12 months rolling cash flow was almost EUR 70 million positive at the end of the third quarter and has now been actually positive for the last 7 quarters. Cash flow from plot investments in the third quarter was minus EUR 9 million, and the plots we invested in during the third quarter were mainly located in Poland, which supports our growth in the region in the future. So, this demonstrates our ability to operate the businesses with a positive cash flow while investing in growth where the returns are the highest.

Net interest-bearing debt decreased from the comparison period and remained stable when comparing to the previous quarter amounting to EUR 669 million at the end of Q3. Gearing was at 85% and decreased from the comparison period. In addition to the positive rolling 12 months cash flow, the decrease was supported by hybrid bond issuance, which took place during the second quarter this year.

The net interest-bearing debt included IFRS 16 lease liabilities of EUR 260 million, as well as housing company loans of EUR 138 million. And the combined amount of these items has decreased by over EUR 80 million from the comparison period. This is thanks to our decreasing inventory of unsold apartments as well as capital efficiency actions relating to leased plots.

When excluding the before mentioned lease liabilities and the loan maturity housing company loans from our net debt, the adjusted net debt amounted to some EUR 270 million. This translates to an adjusted gearing ratio of 35%.

We remain determined to reduce the indebtedness of the group and operate within the set financial framework of 30% to 70% gearing. We have an asset rich balance sheet. Our key assets amount to well over 2x the net debt. When comparing the components of our key assets to the year ago situation, the changes in the company are clearly reflected there.

Production has increased by around EUR 60 million, as we have accelerated our production, especially in the favorable markets of the CEE countries. As we have accelerated starts, our plot reserve has decreased by some EUR 100 million, but it continues to remain strong, enabling the construction of approximately 30,000 apartments across our operating countries.

Completed inventory in our balance sheet has decreased by over EUR 80 million from a year ago as we have continued to successfully sell the excess apartment stock. So all-in-all, we have effectively used our balance sheet and will continue to do so going forward.

Capital released from the balance sheet and capital efficiency in business operations continue to be top priorities in our strategy. As communicated, we identify potential to release up to EUR 500 million of capital from our current apartment inventory and through divestments of the noncore assets.

These noncore assets include real estate, plots and ownerships in associated companies that are not in the core of our current strategy. And the released capital will be reallocated to fund residential segment's profitable growth and reduce indebtedness of the company, which will consequently lower the financing cost and support the net profit generation.

In maturity structure of the interest-bearing debt having only limited amortizations scheduled for this and next year allow us to focus on profitable growth of the businesses. The amortizations maturing in 2027 and 2028 will be addressed as a part of normal refinancing planning.

Then to the guidance, which has been revised. We have narrowed the range for the adjusted operating profit guidance. We now expect group adjusted operating profit for continuing operations to be between EUR 40 million to EUR 60 million in 2025. Previously, we expected the adjusted operating profits to be between EUR 30 million to EUR 60 million. The guidance update is a result of the stable financial performance of the businesses during the first 9 months of the year. Our outlook, however, remains unchanged.

So, to summarize the Q3 financial development before handing back over to you, Heikki. The stable financial performance across our businesses seen during the first half of the year continued in the third quarter. Our plot portfolio continues to be strong, which enables us to start new residential projects and consequently support profitable and capital-efficient growth. And releasing capital is a strategic priority as we continue to allocate capital to our most profitable businesses. So based on these facts, our current financial position clearly serves as a basis for the targeted profitable growth according to the strategy. So that covers the finance part of the presentation.

So now back to you, Heikki.

Thank you, Tuomas. And I think there's also other reason to say thank you. As we have announced, you have taken the opportunity to join another great company as a CFO in a couple of months, and this is opportunity for me to say thank you for the intensive 3 years that we have time to spend together. And I think that I could not have imagined a better person on that 3 years to work with in order to successfully turn around the company and reset the new strategy and put the foundations in place for the growth of the company is or has ahead of it. So, a big thank you for all the work and the commitment that you have done for the YIT.

Thanks, Heikki, for the kind words, and thank you. It's been a pleasure. And it's been an absolute pleasure working with you and working for YIT for these roughly 4 years. And I think we have accomplished a lot together, and we have really transformed the company during the last couple of years. So, I think it's been quite a ride together. And I think it also makes me sad a bit to leave the company, but I will be following you. And I think YIT has the right strategy, the skilled management and absolute professional employees throughout the segment.

So, I think these are the ingredients for the future success of the company under your management. So, I'm really confident that you will keep up the good work and be successful in the future. So that's what I think from the future perspective as well. So, thank you.

Thank you very much. And I think now it's -- as we have introduced the third musketeer along the team that Markus Pietikainen, and you haven't been so visible in this stage, but of course, you have been on a close cooperation that what we have been working with you already for 2 years, given the financing and in terms of the whole group but also project financing. And we have a strong leadership bench and it's my privilege, and I'm really excited also to announce you as our interim CFO. And as you maybe introduce a bit about your personal background. So next, we're also covering the strategic progress. So you've been now with kind of seeing the first full year of the strategy. So how do you are looking forward, the implementation and execution of that as well.

So please, Markus.

Thank you, Heikki, and thank you for the opportunity. So, a few words on my background. I'm a finance major from Helsinki. I worked 12 years with Wartsila in different positions. I worked in Group Controlling, Corporate Development. I ran the Treasury, Group Treasury, and also ran a Business Unit out of Houston. So that's my Wartsila background. I also worked for JPMorgan for 5-years in different investment banking positions in London, and then also as Chief Investment Officer for Finnfund.

So, this is, in brief, my background. And to your question on the strategy, I think that the first year into the 5 year strategy, we are clearly now seeing results of the strategy working out. We have a very strong outlook in the CEE countries on the residential side. This is a good margin business with tremendous growth opportunities.

If you look at the 2 contracting segments, which we have, both have very robust order books, clearly, headwinds from -- and a good support from data centers, and also the defense sector. So, we see good trends supporting these 2 contracting businesses.

And then fourth, the Residential Finland. I think that there clearly the trough is behind us. We've, I think, announced today the tenth self-developed project. So clearly, we are past the difficult times. And obviously, there is opportunities there going forward. So, this is a great opportunity for me to join the leadership team and really excited about this opportunity and looking forward to working with you all.

Very good, and welcome, Markus, to our team. Same time sadness but also joy and excitement, it's the today's feeling that I'm having. But now it's the time for us to go into the section that has been already promised, so how we are executing our strategy during the third quarter.

First, high-level look on our revenue and profitability as well as return on capital employed. We covered this already on the early part of the presentation. The revenue is still yet to start to show the growth trends due to the low amount of completions, what we are having this year. Same thing is impacting our adjusted operating profit margin on a rolling 12-months basis during this quarter. And the return on capital employed, while it has been trending in the right direction, took a bit step back during the quarter. And it requires, of course, the profit to come, but also capital release actions that we have in the pipeline to be executed. But the highlights from our strategy during the Q3 comes from actually our strategic focus to elevate the customer and employee experience to next level.

When we look on our customer feedback and NPS, it has been continued on a very high level already for the several quarters. We have also made changes in terms of how are we serving our customers that has maybe liability repairs in the Residential Finland. And the lead-times on that side has been decreasing already 60% compared to '23. And this is then, of course, reflecting as a better customer feedback, as well as when the issues that has been identified are closed on a faster pace.

Also, we have been working a lot with our apartment designs, not just one apartment but also the floor layouts in order to introduce new designs in this type of a market, and it has been also what our efficiencies we have been taking. So, it has provided us opportunity to price those with a lower price than before into that market when we have been launching the new starts.

And investing to our own capabilities and teams. So, we have been becoming the leading pillar of the data centers in Finland, as mentioned that we have already announced the 3 projects. But the key big highlights from this quarter is our -- the commitment of our employees towards our new strategy.

We're measuring our employee satisfaction on an annual basis, and the Net Promoter Score from our employees increased from level of 30 to level of 37, and that is a significant increase compared to a year ago. The main drivers was how our teams are understanding the strategy but also how they are seeing the future of the company to develop. 98% of trainees would like to continue working at YIT after we are -- after the summer or the period of time that they have been working with us, and we continue to invest in our people.

And most recently, all of our leaders are going through the leadership training, which is then building more competencies and capabilities to their toolbox in order to lead the construction side, the projects, but also the teams on desired manner. So good progress also on this during the quarter.

And operator, I think now it's already time to open up and start to have the questions

[Operator Instructions] The next question comes from Anssi Raussi from SEB.

A couple of questions from me. So, first about these so-called noncore assets you are targeting to divest in the future. So, can you give us any ballpark like how much these assets are currently generating earnings?

I can start and continue, if you wish then. So actually as you, Heikki, mentioned, so altogether, if you look at the noncore assets, noncore assets on our balance sheet and the costs that they actually create and comparing that one to the benefits of having a kind of fair value gains there. So, these costs are offsetting the gains and are exceeding the gains. So that is what we have publicly communicated. We are not disclosing any numbers regarding the noncore assets piece-by-piece, or the operational costs related to them. But in a big picture, so as we say that, they continue to burden our profitability, so that effectively means that the costs exceed the benefits.

Yes.

Okay. Got it. And maybe then about your cash flow. So, as you mentioned that the Q4 is typically the strongest quarter in terms of seasonality. So, could you give us any estimate like, should we look at, 2024 Q4 or 2023 or something like we have seen in the previous years?

I'll take this one. We're not guiding quarterly cash flows or even yearly cash flow for this year. But as we have -- throughout our presentation, we have explained that our growth in CEE countries is not tying more capital or be cash negative largely. Then also the increase in -- or growth in the contracting segments are actually supporting the positive cash flow generation, and we are confident that we have a strong cash flow for the Q4. So that we can say. But anyway, so we're not giving any ballpark on a number basis.

Okay. That's clear. And by the way, thank you, Tuomas for now. So happy to continue our cooperation in the future as well.

Likewise, Anssi.

[Operator Instructions] There are no more questions at this time. So, I hand the conference back to the speakers for any closing comments.

I would actually -- before we close, so I would actually like to thank also the cooperation with the analysts throughout these years. So, it's been also a pleasure working a very smooth cooperation with you during this phase. And most of or part of you will, of course, meet in the next roles as well. So, thank you very much for the cooperation on my behalf.

Okay. Thank you. As there are no more questions, we thank you all for participation and wish you a great rest of the day.

Thank you very much.

Thank you.

Okay. I think we can start. So hi, everyone, and welcome to YIT's analyst call preceding the silent period of our third quarter of 2025 results release. My name is Essi Nikitin, and I'm heading the Investor Relations at YIT. Together with me here, I have our CFO, Tuomas Makipeska, on the line. We will start with a short recap to recent developments in the company. And after that, we have time for your questions. As a reminder, this call will be recorded, and the recording will be published on our website after the call. At this point, I will hand over to Tuomas. Please go ahead, Tuomas.

All right. Thank you, Essi, and good morning, everybody. We will cover the short market update of each of the segments and the financial position of the company. And as usual, let's start with an update on our businesses and markets, starting with the residential CEE business. The demand has been favorable in the residential CEE segment during the year with consumer apartment sales increasing by over 40% from the previous year in the first half of 2025. As a consequence, we upgraded our market view for the segment in accordance with the half year results release. We are heavily focused on new project launches in the segment. As we communicated earlier in July, by the end of June, we had launched new projects valued at nearly EUR 400 million with healthy margins, which are scheduled to be completed in 2026.

Our strong portfolio of plots with existing building rights supports the growth in Central Eastern Europe, and we are prepared to start new projects. Demand and supply have remained balanced and the inventory is at the desired level. As communicated before, this year, the completions in the segment will be strongly concentrated into the fourth quarter of the year. Recognizing revenue at completion will thus make the profit generation back-end loaded in the segment in 2025. Driving growth in the residential CEE segment has been a clear strategic decision for the company. It strongly supports the company's short-term performance and in the longer term, enables YIT to be more European-based company and to reduce our historical dependency on one single residential market.

Then moving to residential Finland. The recovery of the overall Finnish residential market has progressed gradually in line with our expectations. There is clear evidence that the secondary market is picking up. According to Finland's Bank statistics, mortgage drawdowns increased by 19% in January, July this year compared to the same period in 2024. According to the Federation of Real Estate Agency, the number of apartments sold in the secondary market is also clearly on the rise after several difficult years, increasing by 19% in January, August compared to the previous year. However, as stated by the Confederation of Finnish Construction Industries in its business cycle review published last week, 0 economic growth and weak consumer confidence are still hindering the recovery in the primary market.

We anticipate that primary apartment market sales volumes will slightly increase during 2025. We have continued the new self-developed project starts in the third quarter in the locations where the demand supports the starts and plan to continue with project starts as the year progresses. Due to our strong plot portfolio, we have no need for significant new plot investments, which supports capital-efficient volume growth.

In July, we announced a new self-developed project start in Hermanni, Helsinki and in August, new starts in Kerava and Vantaa. Our capabilities in terms of plot portfolio and our internal competencies are in place to scale up production according to the market demand. Our stock of apartments continues to decline. This is due to successful work with the customers to help them identify a suitable YIT home as their next new home. Our stock of completed apartments has already reached normal levels outside the capital area and the stock in the capital region is gradually decreasing.

Over the past 2 years, we have taken actions to improve our operational efficiency and supply chain capabilities across the segment and to better understand our customers' needs. As we are now ramping up new production, we already utilized the improved capabilities. We are still far away from our strategic targets for the residential Finland business, but the segment is moving in the right direction.

Let's then move on to our contracting segments, Infrastructure and Building Construction. The infrastructure market in Finland is active in both the public and private sectors, driven by increased defense sector investments and positive developments in industrial construction and the renewable energy market. As stated in the study published by the Confederation of Finnish Industries in mid-September, business related to data centers offers Finland EUR 1 billion opportunities this decade in the form of investments, tax revenues and high-skilled jobs.

According to the study, there are publicly announced investment plans by data center operators in Finland totaling EUR 12 billion with the overall potential exceeding EUR 30 billion, making the sector one of the largest private sector investment targets in the coming years. At YIT, we have been building our capabilities for these types of projects during the past few years and are highly competitive in this market.

We have had several wins for new projects during the third quarter. In the beginning of the third quarter, we announced that YIT had been selected by Port of Helsinki Ltd to carry out the field extension at the southern tip of West Harbour, a key initiative within the city of Helsinki's long-term port renewable program. In August, we announced an agreement to begin construction of a second data center for XTX Markets in Kajaani, Finland. We are very pleased to continue our collaboration with XTX Markets. The first data center project has progressed smoothly, showcasing our strong project management capabilities and technical expertise.

In August, we also announced the agreement to construct a new railway bridge and track section in Kitee, Finland. The bridge is an example of how careful work planning, cooperation between different parties and extensive expertise enable safe construction in demanding environment. All in all, the order book for the Infrastructure segment is strong, and the segment is well positioned to pursue growth and further enhance operational efficiencies. As we communicated in accordance with the previous results release, the market outlook is favorable for the segment, especially in defense, industrial investments and data centers in which we actively work with the potential customers.

The Building Construction segment continued to improve its profitability in the second quarter. Despite the highly competitive market, we have continued to win both public and private sector projects supported by our core competencies and expertise. Activity in data centers and industrial projects is increasing in line with our strategic focus. As said, our ability to successfully execute these complex projects gives us a competitive advantage in the market.

Consequently, we have announced a bunch of new projects for the segment during the third quarter. In August, we announced both an agreement to construct the Kulttuuriparkki parking facility in Turku, Finland and an agreement on the construction of an expansion to Helsinki Expo and Convention Center with an alliance model in Helsinki, Finland. We also announced a contract for construction of a warehouse complex in Kaunas, Lithuania and a collaboration agreement for the development phase of the educational block of the Tikkurila Competence Campus area in Vantaa, Finland. Last but not least, in September, we announced that YIT with its partners have agreed with the city of Helsinki on construction of Hermanninranta School, daycare center and youth center in Helsinki, Finland. These recent wins demonstrate our competitiveness in the current attractive market.

Then a few words about our capital position. Releasing capital from the balance sheet and improving capital efficiency in business operations are one of the top priorities in our strategy. At the group level, the capital employed has decreased significantly during the past year. We are determined to continue the execution of capital release actions according to our strategy and consequently improve the return on capital employed of the company. Accelerating production in the residential CEE segment has not required a significant amount of new capital attributed to our strong existing plot portfolio, solid apartment sales and other capital efficiency measures in the segment. When comparing the interest-bearing debt to our key assets, we can see that our underlying asset base continues to be very strong and amounts to well over 2x the net debt.

Our total plot portfolio is very strong and amounted to some EUR 720 million at the end of June. This portfolio enables us to construct approximately 16,000 new homes in Finland and 13,000 new homes in CEE countries. This is a critical platform for future profitable and capital-efficient growth in both of our residential segments. As we communicated in accordance with the Q2 results, on a group level, we identified potential to release approximately EUR 200 million of capital from our current apartment inventory. In addition, we identified potential to release up to EUR 300 million through divestments of noncore assets in line with our current strategy.

The noncore assets include real estate plots and ownerships in associated companies that are not at the core of our current strategy. The released capital will be reallocated to fund residential segment's profitable growth and to reduce indebtedness of the company, which will consequently lower the financing costs and support the net profit generation.

So as a conclusion, the market outlook for our businesses looks favorable on many fronts. The investment plans within our operating countries in the industrial construction, energy and defense sectors are substantial and likely to create opportunities for both of our contracting segments. The residential demand is favorable in the residential CEE segment and the recovery of the Finnish residential market has progressed gradually. The absence of apartment completions across both of our residential segments impacted revenue and profit generation in the second quarter of the year. As we have communicated already before, the revenue and profit generation in the third quarter is expected to reflect similar limitations related to completions. On the other hand, we are launching new residential projects with good reservation and sales rates. These project starts will support our financial performance in 2026.

Thank you, Tuomas. We are now ready for questions. [Operator Instructions] We have a question from Anssi.

Anssi Raussi from SEB. A few questions from me and the first one about data centers and defense sectors. So how should we think about margin impact and for example, comparing to divisional margin levels currently?

Thanks, Anssi. A great question. We have already earlier actually communicated that both of these segments, I mean, defense and data centers are typically representing healthy margins when comparing our average margins in the other segments. So we can say that healthy margins are available in these sectors.

Okay. That's good to hear. And maybe the next one about your Q3 cash flow. So you, of course, mentioned and we understand that revenue is still towards Q4 this year, but how about cash flow? So you mentioned that you don't have any significant requirements or anything like that, but anything to highlight?

Well, probably nothing special to highlight. As you know, so our cash flow profile is very seasonal as we have communicated, and that was the case also in Q2. What we can say is that really the completions and handovers of the apartments are really concentrated in the Q4. So that has an effect on the cash flow as well.

Got it. And maybe finally about the possible divestments. So you mentioned quite significant amounts here, but any time line or assumption estimate here when we could hear or see something?

Yes. So we announced the full potential actually in accordance of the Q2 results and part of that is, of course, related to the inventory of completed apartments. And we are expecting to normalize the inventory level in the capital region by the end of this year, as stated already before. The inventory levels outside of the capital area are actually on the normalized level already. So that is kind of giving a picture of the time line related to that one.

Then related to the divestments, this is what is always the case in this kind of a situation. You need to have a buyer and you need to have a healthy market for these kind of divestments to be realized. We are not in the situation where we should go for kind of not optimized commercial terms. So we are looking for the right window of executing these kind of a deal. So that's all we can comment, and we cannot comment on any specific divestment time lines.

Do we have any other questions? Yes, Jerker, please go ahead.

Can you hear me?

Yes, we can hear you.

Just maybe a more curiosity, but you mentioned the study now made by RT this autumn. One could argue that the market outlook for construction of new apartments is maybe a bit lackluster. Would you care to comment on your views on kind of the forward-looking outlook?

Thanks, Jerker. We are, of course, we looked at the report carefully. And of course, that's -- we -- they are the readers and we are not. So we, of course, follow that kind of a view as well. But in the sense that we have actually as YIT, so we have already started 9 self-developed projects looking back from -- at the end of 2024 and during this year. So we are -- and our strategic target is to increase our market share. So in a sense, we are looking our own play and starting new projects where the demand is there. And that's more on a kind of a micro location perspective on ramping up the volumes, not too much on a macro level. But of course, this is the -- what RT published is kind of a general view on the market. That's all we can comment here.

Any other questions? Okay. It seems that there are no more questions. So thank you all, and we will publish our third quarter results on 30th of October. Wish you all a great rest of the day.