YIT Oyj — Yhtiöanalyysi 2025

Company Overview and Business Model

YIT 2025 Annual Report Analysis

Financial Performance and Market Position

In 2025, YIT reported a slight decline in revenue to EUR 1,757 million from EUR 1,820 million in 2024, reflecting a 3.4% decrease. Despite this, the company achieved a significant improvement in adjusted operating profit, which increased by 69% to EUR 54 million, lifting the adjusted operating margin to 3.1% from 1.7% the previous year. The reported operating profit swung to a positive EUR 45 million from a loss of EUR 55 million in 2024, supported by a reduction in net debt by EUR 120 million to EUR 560 million and a strengthened balance sheet with an equity ratio rising to 38% from 34%. These results indicate a successful turnaround in profitability and financial stability, although top-line growth remains challenged by market conditions, especially in Finland 13 14.

Segment Performance and Strategic Focus

YIT operates through four segments: Housing Finland, Housing Central and Eastern Europe (CEE), Construction, and Infrastructure. The Housing Finland segment faced headwinds, with revenue declining to EUR 317 million from EUR 427 million and an adjusted operating loss narrowing to EUR -8 million from EUR -20 million. Consumer sales in Finland decreased by 17% to 490 units, although new housing starts increased substantially to 477 units from 160, reflecting a strategic response to market demand. The Housing CEE segment showed resilience with revenue stable at EUR 306 million and a slight decline in adjusted operating profit to EUR 30 million from EUR 37 million, impacted by upfront investments and regional expansion. Notably, sales volumes increased by 27% to 1,246 consumer units, supported by strong demand in the Baltics and Central Europe, particularly in the Czech Republic and Poland. This segment has become the primary growth driver for YIT’s housing development 16 6.

The Construction segment improved profitability markedly, with adjusted operating profit rising to EUR 16 million from EUR 3 million despite a revenue decline to EUR 649 million from EUR 734 million. This reflects operational efficiencies and successful project wins in both public and private sectors. The Infrastructure segment demonstrated robust growth, with revenue increasing 32% to EUR 517 million and adjusted operating profit growing to EUR 22 million from EUR 17 million, driven by energy, industrial, rail infrastructure, and defense sector projects in Finland. The segment operates with a negative committed capital, reflecting efficient capital use 16 6 27.

Strategic Execution and Outlook

YIT’s 2025–2029 strategy emphasizes achieving industry-leading productivity and financial performance, targeted growth and resilience, and enhanced customer and employee experience. The company has made progress in shortening project lead times, adopting industrial construction methods, and implementing category-based procurement models, which have contributed to improved operational metrics. Investments in digitalization and AI tools have supported productivity gains and process improvements. YIT’s capacity supports the construction of 15,000 new homes, primarily focusing on the CEE markets where demand remains strong.

The Finnish housing market remains weak due to prolonged low consumer confidence and subdued investor activity, with no expected recovery in new housing sales volumes in 2026. YIT is adjusting its operations accordingly, launching consumer-driven projects selectively. Conversely, the CEE housing market is favorable, with price increases and strong demand underpinning growth. Infrastructure and construction segments are expected to maintain or improve operational performance in 2026, supported by ongoing industrial investments and digital infrastructure projects. YIT’s guidance for 2026 anticipates adjusted operating profit between EUR 70–100 million, reflecting confidence in continued profitability improvement despite market uncertainties 27 6.

Sustainability and Risk Management

Sustainability is deeply integrated into YIT’s strategy and operations. The company has committed to Science Based Targets Initiative (SBTi) goals to reduce Scope 1 and 2 CO₂ emissions by 90% and Scope 3 emissions by 30% by 2030, aligning with the Paris Agreement. YIT actively manages climate-related risks and opportunities through comprehensive assessments, including scenario analyses covering physical and transition risks. The company emphasizes energy-efficient building designs, circular economy principles, and biodiversity preservation in its projects.

YIT’s risk management framework addresses strategic, operational, project, financial, and event risks, with a particular focus on project portfolio risk and safety. Despite efforts, safety metrics indicate that the combined lost time injury frequency (cLTIF) remains elevated at 9.6 in 2025, with a strategic goal to halve this by 2029. YIT is expanding safety initiatives across its entire supply chain to achieve zero accidents on its sites. The company’s governance structure supports sustainability oversight, with the board and committees actively monitoring risks, compliance, and performance. Ethical conduct, anti-corruption measures, and supply chain responsibility are enforced through codes of conduct and audit programs 20 60.

Capital Structure and Shareholder Returns

YIT’s net debt reduction and improved leverage ratios are positive signs of financial discipline. The net debt to adjusted EBITDA ratio improved to 7.8 from 13.4, and gearing decreased to 71% from 88%. The company holds a substantial order backlog of EUR 2.9 billion, with 76% sold at year-end 2025. The board proposes no dividend distribution for 2025, reflecting prudent capital management amid market uncertainties. The share price appreciated approximately 25% during 2025, closing at EUR 3.12, with market capitalization reaching EUR 720 million [a427520b19

Investment Profile

YIT 2025 Annual Report Analysis

Financial Performance and Market Positioning

In 2025, YIT reported a slight decline in revenue to EUR 1,757 million from EUR 1,820 million in 2024, reflecting a 3.4% decrease. However, the company achieved a significant improvement in profitability, with adjusted operating profit rising by 69% to EUR 54 million, lifting the adjusted operating margin to 3.1% from 1.7% the previous year. The net result, while still negative at EUR -24 million, improved substantially from a loss of EUR -112 million in 2024. This turnaround was supported by a EUR 51 million capital return from Tripla Mall Ky following successful refinancing, which also contributed to a reduction in net debt by EUR 120 million to EUR 560 million and an improved gearing ratio of 71% from 88% 13 14.

Segment Dynamics and Growth Drivers

YIT operates through four segments: Asuminen Suomi (Housing Finland), Asuminen CEE (Housing Central and Eastern Europe), Rakennus (Construction), and Infra (Infrastructure). The Housing Finland segment experienced a revenue decline to EUR 317 million (from EUR 427 million) and reported an adjusted operating loss of EUR -8 million, improving from a EUR -20 million loss in 2024. This segment faced a challenging domestic housing market with consumer demand subdued, particularly in the second half of the year, and a 17% drop in consumer sales to 490 units. However, new housing starts for consumers increased markedly to 477 units from 160, reflecting a strategic response to market conditions. The inventory of unsold completed homes decreased by 25% to 524 units, indicating improved stock management 16 4.

Conversely, the Asuminen CEE segment showed resilience with revenue stable at EUR 306 million and a slight decrease in adjusted operating profit to EUR 30 million from EUR 37 million, impacted by upfront investments in capabilities and regional expansion. Notably, consumer sales grew by 26% to 1,246 units, and new housing starts for consumers doubled to 1,555 units, driven by strong demand in the Czech Republic and Poland amid urbanization trends and structural housing needs. The segment’s unsold inventory also declined by 22% to 220 units, reinforcing its position as a key growth driver for YIT 16 5.

The Construction segment saw revenue decline to EUR 649 million from EUR 734 million, but adjusted operating profit surged to EUR 16 million from EUR 3 million, reflecting improved operational efficiency and a one-off positive impact from Tripla Mall Ky’s capital return. The segment focuses on commercial and public sector projects in Finland and CEE, including industrial and data center construction, with a strategic emphasis on growing in industrial investments and strengthening building technology capabilities 16.

The Infra segment delivered robust growth with revenue increasing 32% to EUR 517 million, driven by industrial construction and infrastructure projects, particularly in energy transition and digital infrastructure. Adjusted operating profit rose to EUR 22 million, maintaining a stable margin of 4.3%. The segment benefits from a strong pipeline of public and private sector projects, including rail infrastructure, road maintenance, and defense sector investments 16 5.

Strategic Execution and Outlook

YIT’s 2025–2029 strategy focuses on achieving industry-leading productivity and financial performance, targeted growth, and enhanced customer and employee experience. The company has made progress in shortening project lead times, implementing industrialized construction methods, and adopting category-based procurement models across segments. Investments in digitalization and AI tools have improved operational efficiency and decision-making. YIT also prioritizes capital efficiency, aiming to reduce non-strategic capital, exemplified by the Tripla Mall Ky transaction 10 8.

The company’s outlook for 2026 anticipates adjusted operating profit between EUR 70–100 million, supported by continued strong performance in the CEE housing segment and stable infrastructure operations. The Finnish housing market is expected to remain subdued with no increase in new home sales volumes, limiting the Housing Finland segment’s earnings potential. Operational improvements are expected in the Construction segment, while Infra is projected to maintain steady performance. Macroeconomic and geopolitical uncertainties remain risks to demand and asset valuations 27 6.

Sustainability and Risk Management

YIT integrates sustainability deeply into its strategy, with commitments to Science Based Targets initiative (SBTi) goals to reduce Scope 1 and 2 emissions by 90% and Scope 3 by 30% by 2030 relative to 2019 levels. The company actively manages climate-related risks and opportunities through scenario analyses covering physical and transition risks, including regulatory changes, material costs, and technological shifts. YIT’s resilience assessment confirms strong preparedness to adopt low-carbon materials and renewable energy technologies, while recognizing the need to enhance capabilities in biodiversity risk management and circular economy practices 50–62.

The company maintains rigorous governance with a board composed of independent members and three committees overseeing personnel, audit, and investment matters. YIT’s Code of Conduct and sustainability policies extend to its supply chain, emphasizing human rights, anti-corruption, and environmental

Strategy

YIT 2025 Annual Report Analysis

Financial Performance and Market Positioning

In 2025, YIT reported a slight decline in consolidated revenue to EUR 1,757 million from EUR 1,820 million in 2024, reflecting a 3.4% decrease. Despite this, the company achieved a significant improvement in profitability, with adjusted operating profit rising by 69% to EUR 54 million, and the adjusted operating margin increasing to 3.1% from 1.7% the previous year. The reported operating profit swung to a positive EUR 45 million from a loss of EUR 55 million in 2024, supported by lower restructuring costs and the cessation of non-core operations. Net loss narrowed substantially to EUR 24 million from EUR 112 million. The company’s net debt decreased by EUR 120 million to EUR 560 million, improving the gearing ratio to 71% from 88% and the equity ratio to 38% from 34%, reflecting stronger financial stability 3 13 14.

The order book remained robust at EUR 2.915 billion, slightly down from EUR 2.941 billion in 2024, with 76% of the order book sold at year-end, indicating a solid backlog supporting near-term revenue 14 15.

Segment Performance and Strategic Focus

YIT operates four business segments: Housing Finland, Housing CEE (Central and Eastern Europe), Construction, and Infra. The Housing Finland segment faced challenging market conditions with revenue declining 26% to EUR 317 million and an adjusted operating loss narrowing to EUR -8 million from EUR -20 million in 2024. Consumer sales decreased by 17% to 490 units, although new housing starts increased substantially to 477 units from 160, reflecting a strategic response to demand. The inventory of unsold completed homes decreased by 25% to 524 units, indicating improved sales efficiency 16.

In contrast, the Housing CEE segment maintained stable revenue at EUR 306 million with a slight decline in adjusted operating profit to EUR 30 million from EUR 37 million, impacted by upfront investments in capabilities and regional expansion. Consumer sales grew 26% to 1,246 units, and new housing starts doubled to 1,555 units, underscoring the segment’s role as the primary growth driver for YIT. The unsold completed homes inventory fell by 22% to 220 units, reflecting strong market demand particularly in Poland and the Czech Republic 16.

The Construction segment saw revenue decline by 12% to EUR 649 million but delivered a marked profitability improvement with adjusted operating profit increasing to EUR 16 million from EUR 3 million, supported by operational efficiencies and a positive fair value adjustment of EUR 6 million related to equity investments. The order book decreased slightly to EUR 978 million 16.

Infra segment revenue grew by 32% to EUR 517 million, driven by strong industrial construction activity, especially in digital infrastructure projects. Adjusted operating profit increased to EUR 22 million, maintaining a stable margin of 4.3%. The segment’s order book remained stable at EUR 875 million 16.

Strategic Execution and Market Outlook

YIT’s 2025–2029 strategy emphasizes achieving industry-leading productivity and financial performance, targeted growth with resilience, and enhanced customer and employee experience. The company is focusing capital allocation on markets with strong competitive advantages, notably the CEE housing markets and Infra segment, where demand is supported by urbanization, structural housing needs, and the energy transition. YIT’s capacity supports the construction of approximately 15,000 new homes in these growth markets 6 9 10.

The Finnish housing market remains subdued, with consumer uncertainty and a cautious investor market limiting new housing sales and starts. YIT expects this market to remain weak in 2026, with no significant volume recovery anticipated. The company is adapting by initiating consumer-driven projects aligned with demand and managing geographic imbalances in its housing inventory 6 26.

The Infra and Construction segments benefit from accelerated industrial investments, particularly in data center construction, clean energy, and defense sector projects. YIT has strengthened its capabilities in these areas, becoming Finland’s leading data center builder, and has increased its growth targets for these segments to 10% and 4% CAGR respectively through 2029 10 25.

Operational Improvements and Sustainability

YIT has advanced operational efficiency by shortening project lead times, implementing industrialized construction methods, and adopting category-based procurement models. The company is leveraging digitalization and AI tools to enhance productivity and decision-making across procurement, pricing, documentation, and risk management. Research and development expenses were EUR 13 million (0.7% of revenue), reflecting continued investment in innovation and sustainability 17.

Sustainability is integral to YIT’s strategy, with commitments to Science Based Targets Initiative (SBTi) approved in 2023 to reduce Scope 1 and 2 emissions by 90% and Scope 3 by 30% by 2030

Industry and Competition

YIT 2025 Annual Report Analysis

Operational and Financial Overview: Navigating Mixed Market Conditions with Strategic Focus

In 2025, YIT reported a slight decline in revenue to EUR 1.757 billion from EUR 1.82 billion in 2024, reflecting a 3.4% decrease primarily due to weaker performance in the Finnish residential market. However, the company achieved a significant improvement in profitability, with adjusted operating profit rising by 69% to EUR 54 million, lifting the adjusted operating margin to 3.1% from 1.7% the previous year. This improvement was driven by strong results in the Infra and Rakennus (Construction) segments and supported by operational efficiencies and a successful capital structure optimization that reduced net debt by EUR 120 million to EUR 560 million, improving the gearing ratio to 71% from 88% 3 13 14.

Segment Performance and Market Dynamics: Divergent Trends Across Regions and Business Lines

YIT operates through four segments: Asuminen Suomi (Housing Finland), Asuminen CEE (Housing Central and Eastern Europe), Rakennus (Construction), and Infra (Infrastructure). The Finnish housing segment experienced a revenue decline from EUR 427 million to EUR 317 million and an adjusted operating loss reduction from EUR -20 million to EUR -8 million, reflecting ongoing market challenges with consumer demand subdued and investor activity cautious. Despite a 17% drop in consumer housing sales to 490 units, new housing starts increased significantly to 477 units, indicating a strategic response to market conditions 16.

Conversely, the Asuminen CEE segment showed resilience with revenue stable at EUR 306 million and a slight decline in adjusted operating profit to EUR 30 million from EUR 37 million. This region remains the company’s growth engine, supported by a 30% increase in housing sales to 1,246 units and a doubling of new housing starts to 1,555 units. The segment targets a 15% annual growth rate and aims for a 15% adjusted operating margin and 25% return on capital employed by 2029, underscoring its strategic importance 6 16 9.

The Rakennus segment improved its adjusted operating profit markedly to EUR 16 million from EUR 3 million despite a revenue decline to EUR 649 million. This reflects enhanced operational performance and successful capital release initiatives, including a EUR 51 million capital return from Tripla Mall Ky, which also supports the company’s focus on divesting non-core assets. The Infra segment demonstrated robust growth with revenue increasing by 32% to EUR 517 million and adjusted operating profit rising to EUR 22 million, maintaining a stable margin of 4.3%. Infra’s growth is driven by accelerating investments in clean energy, industrial projects, rail infrastructure, and defense sector contracts in Finland 6 16 27.

Strategic Execution and Sustainability: Building Resilience and Competitive Advantage

YIT’s 2025–2029 strategy emphasizes achieving industry-leading productivity and financial performance, targeted growth with capital efficiency, and enhanced customer and employee experience. The company is advancing digitalization, data-driven project management, and dynamic pricing models to improve operational efficiency. Notably, YIT has increased its growth targets for the Rakennus and Infra segments to 4% and 10% CAGR, respectively, reflecting confidence in the expanding industrial and infrastructure markets, particularly data center construction 10 25.

Sustainability is integral to YIT’s operations and strategy. The company maintains Science Based Targets Initiative (SBTi)-approved climate goals to reduce Scope 1 and 2 emissions by 90% and Scope 3 emissions by 30% by 2030 relative to 2019 levels. YIT actively manages environmental and social risks, including biodiversity impacts, resource efficiency, circular economy practices, and human rights in its supply chain. The company has set a target to halve the combined lost time injury frequency (cLTIF) by 2029, reflecting a strong commitment to improving occupational health and safety across its operations and subcontractor network 9 34 51.

Risk Management and Governance: Robust Framework Supporting Strategic Objectives

YIT’s risk management framework is embedded in its governance and operational processes, covering strategic, operational, project, financial, and event risks. Key risks include market volatility, geopolitical tensions, supply chain disruptions, regulatory changes related to climate and sustainability, and project execution challenges. The company employs systematic project risk assessments, monthly reporting, and corrective action plans to mitigate these risks. Governance structures include a board with diverse expertise, three permanent committees (personnel, audit, investment and project), and a comprehensive Code of Conduct that governs ethical business practices and anti-corruption measures. YIT also operates an anonymous ethics channel to report violations, underscoring its commitment to integrity 20 40.

Financial Position and Capital Allocation: Strengthened Balance Sheet and Focused Investments

YIT’s financial position improved in 2025 with increased equity to EUR 792 million and reduced net debt to EUR 560 million. The company’s net debt to adjusted EBITDA ratio improved to 7.8 from 13.4, and interest coverage ratio increased to 1.3, indicating enhanced financial flexibility. Capital expenditure was moderate at EUR 16 million, representing 1% of revenue, with land investments at EUR 28 million. The order backlog remained stable at approximately EUR 2.9 billion, providing revenue visibility. YIT continues to prioritize capital efficiency through divestments of non-core assets and selective investments aligned with its strategic focus on growth markets and segments 14 15.

Outlook and Guidance: Cautious Optimism Amid Market Uncertainty

For 2026, YIT expects adjusted operating profit from continuing operations to be in the range of EUR 70–100 million. The company anticipates continued strong performance in the CEE housing segment supported by favorable market conditions, while the Finnish housing market is expected to remain subdued with no significant increase in new housing sales volumes. Operational performance in the Rakennus segment is forecasted to improve, and Infra segment performance is expected to remain stable. YIT acknowledges macroeconomic and geopolitical uncertainties that could impact demand and asset valuations 27[722df34e9f191a

Financial Position

YIT’s 2025 full-year report and 2024 annual report, complemented by the 2025 Q4 interim report, provide a comprehensive view of the company’s strategic direction, financial performance, operational segments, and sustainability commitments. The analysis below integrates these data points into a coherent narrative for institutional investors.

Strategic Focus and Market Positioning: Building Resilience Amid Varied Market Dynamics

YIT, Finland’s largest construction company and a growing European player, operates with a clear vision to be the most competent partner in developing sustainable homes, spaces, and cities for better living. The 2025–2029 strategy, launched in November 2024, emphasizes achieving industry-leading productivity and financial performance, targeted growth with resilience, and enhanced customer and employee experience. This strategic focus is well-aligned with global megatrends such as urbanization, climate change, digitalization, and heightened security concerns 9.

The company has segmented its operations into four business areas from 2025 onwards: Housing Finland, Housing Central and Eastern Europe (CEE), Construction, and Infrastructure. Each segment has distinct growth and profitability targets by 2029, reflecting YIT’s focus on geographic diversification and capital efficiency. For example, Housing CEE targets at least 15% annual growth and a 15% adjusted EBIT margin, while Infrastructure aims for 10% annual growth and a 6% margin, operating with a negative committed capital base 10.

The strategic pivot towards CEE markets is driven by favorable demand dynamics, with housing sales growing over 30% in 2025 in Baltic and CEE countries, particularly in the Czech Republic and Poland, where urbanization and structural housing needs underpin sustained activity. Conversely, the Finnish housing market remained subdued throughout 2025, impacted by prolonged weak demand and geographic imbalances in YIT’s housing inventory. The company expects the Finnish new housing sales volumes to remain flat in 2026, reflecting ongoing consumer uncertainty and cautious investor sentiment 6 12 5.

Infrastructure and industrial construction, especially data center projects, have been a bright spot, with the Infrastructure segment’s revenue growing over 30% in 2025 and all key performance indicators improving. YIT has strengthened its position as Finland’s leading data center builder through strategic projects with major clients such as XTX Markets and Hyperco Fin HoldCo 1 Oy 4 7.

Financial Performance: Profitability Gains and Balance Sheet Strengthening

YIT’s consolidated revenue declined modestly by 3.4% to EUR 1,757 million in 2025 from EUR 1,820 million in 2024, reflecting segmental divergences: growth in Infrastructure and Housing CEE offset by declines in Housing Finland and Construction 13.

Despite revenue pressure, adjusted EBIT improved significantly by 69% to EUR 54 million (1.7% margin) from EUR 32 million (1.7%) in 2024, driven by operational improvements and favorable segmental mix. The reported EBIT swung to a positive EUR 45 million from a loss of EUR 55 million, with 2024 including substantial restructuring and divestment costs 13.

The net result improved but remained negative at EUR -24 million versus EUR -112 million in 2024, reflecting still challenging market conditions and legacy costs. Earnings per share improved to -0.14 EUR from -0.51 EUR 13 4.

YIT’s balance sheet showed marked improvement: net interest-bearing debt declined by EUR 120 million to EUR 560 million, and gearing ratio improved to 71% from 88%. Equity rose to EUR 792 million, lifting the equity ratio to 38%. Operating cash flow after investments was positive EUR 65 million, supported by a EUR 51 million capital return from Tripla Mall Ky following its refinancing 14.

The order book remained stable at EUR 2.915 billion, with 76% already sold, providing revenue visibility 15.

Segmental Developments: Divergent Trends Reflect Market Realities

Housing Finland: Revenue declined 26% to EUR 317 million, with adjusted EBIT loss narrowing to EUR -8 million (-2.5% margin). Consumer sales fell to 490 units from 589, though new housing starts for consumers increased to 477 units from 160. Unsold inventory declined to 524 units from 700, reflecting active inventory management 16.

Housing CEE: Revenue was stable at EUR 306 million, with adjusted EBIT decreasing to EUR 30 million (9.9% margin) from EUR 37 million. Consumer sales rose 26% to 1,246 units, and new housing starts nearly doubled to 1,555 units, confirming strong demand. Unsold inventory fell to 220 units from 281 16.

Construction: Revenue declined 11.5% to EUR 649 million, but adjusted EBIT improved to EUR 16 million (2.5% margin) from EUR 3 million, supported by operational efficiencies and a EUR 6 million positive fair value adjustment related to Tripla Mall Ky investments. Order backlog decreased slightly to EUR 978 million 16.

Infrastructure: Revenue grew 32% to EUR 517 million, driven by industrial construction and data centers. Adjusted EBIT rose to EUR 22 million (4.3% margin), with committed capital remaining negative EUR -85 million, reflecting capital-light operations. The order book was stable at EUR 875 million 16.

Sustainability and Risk Management: Embedding Responsibility in Strategy and Operations

YIT’s sustainability efforts are deeply integrated into its strategy, governance, and operations. The company maintains Science Based Targets Initiative (SBTi)-approved emission reduction goals: 90% reduction in Scope 1 and 2 emissions and 30% in Scope 3 by 2030 versus 2019 levels. These targets underpin YIT’s climate strategy and are embedded in long-term incentive plans, with environmental metrics carrying 10% weight in executive compensation 9 44.

YIT’s comprehensive risk management framework encompasses strategic, operational, project, financial, and event risks, with governance oversight by the Board and its committees. The company actively manages project risks through a gate model and monthly monitoring, emphasizing safety, quality, and environmental compliance [a427520b19d8b4204dd903718e479c4f_20-22].

Key sustainability risks include climate change (both physical and transition risks), biodiversity loss, resource efficiency challenges, labor practices in the supply chain, and anti-corruption. YIT conducts double materiality assessments to identify and prioritize these issues, ensuring alignment with ESRS standards and stakeholder expectations [a427520b19d8b4204dd903718e479c4f_50-62].

YIT’s sustainability governance includes a dedicated ethics channel for anonymous reporting, robust supplier code of conduct, and systematic audits to mitigate risks such as labor exploitation and environmental harm in its extended supply chain. The company also focuses on enhancing employee well-being, safety, and diversity, with a target to halve the combined lost-time injury frequency rate (cLTIF) by 2029 from 9.6 in 2025 6 5.

Outlook and Valuation Considerations

YIT’s guidance for 2026 anticipates adjusted EBIT of EUR 70–100 million, reflecting expected continued strength in CEE housing and infrastructure segments, offset by ongoing challenges in Finnish housing. The company expects stable or improving operational performance in Construction and Infrastructure, while Finnish housing sales volumes are not expected to increase in 2026 27 6.

The company’s strategic focus on capital efficiency, productivity, and sustainability positions it well to navigate market cyclicality and regulatory pressures. However, risks remain from macroeconomic uncertainties, especially in Finland’s housing market, and from project execution and supply chain complexities.

YIT’s improving profitability, deleveraging, and strong order book provide a foundation for value creation, though the negative net income and ongoing market headwinds temper near-term earnings visibility. The company’s commitment to sustainability and digitalization may enhance competitive positioning and long-term resilience.

Summary Table

Corporate Transactions and M&A Assessment

YIT 2025 Annual Report Analysis

Financial Performance and Strategic Progress

YIT, Finland’s largest and a growing European construction company, reported a revenue of EUR 1.757 billion in 2025, down 3.4% from EUR 1.820 billion in 2024. Despite the slight revenue decline, the company significantly improved profitability, with adjusted operating profit rising by 68.8% to EUR 54 million (2024: EUR 32 million), lifting the adjusted operating margin to 3.1% from 1.7%. The net result improved substantially, though still negative at EUR -24 million compared to EUR -112 million in 2024, reflecting ongoing restructuring costs and legacy issues 13 4.

This profitability improvement was driven by operational progress in the Finnish housing segment, construction, and infrastructure businesses, while the Central and Eastern Europe (CEE) housing segment saw a decline in adjusted operating profit to EUR 30 million from EUR 37 million in 2024. The Infra segment’s revenue grew impressively by over 30%, supported by strong industrial construction demand, particularly in digital infrastructure and clean energy projects in Finland 6 5.

YIT’s order book remained stable at EUR 2.915 billion at year-end 2025, with 76% of the order book sold, indicating a solid backlog despite market headwinds 15 10. The company’s net debt decreased by EUR 120 million to EUR 560 million, improving the gearing ratio to 71% from 88%, supported by positive cash flow and a successful capital return of EUR 51 million from Tripla Mall Ky 14 4.

Segment Dynamics and Market Environment

The Finnish housing market remained weak in 2025, with consumer uncertainty and subdued investor activity limiting sales volumes. YIT’s consumer sales in Finland declined to 490 units from 589 in 2024, although new housing starts for consumers increased to 477 units from 160, reflecting a strategic adjustment to market conditions. The company expects the Finnish new housing market sales volumes to remain flat in 2026, constrained by low new completions and cautious investor sentiment 6 7.

Conversely, the CEE housing market was robust, with YIT’s housing sales growing over 30% year-on-year in the Baltics and CEE countries, supported by urbanization trends and structural housing demand. Sales reached 2,169 units in 2025 (2024: 1,644), with new housing starts for consumers rising to 1,555 units from 783. Despite a slight decline in adjusted operating profit, the segment remains a key growth driver with a target of at least 15% annual growth and 15% adjusted operating margin by 2029 6 5.

The Construction segment, renamed from Toimitilat, focused on industrial, data center, logistics, commercial, and public buildings, including schools and healthcare facilities. It improved adjusted operating profit to EUR 16 million from EUR 3 million in 2024, despite a revenue decline to EUR 649 million (2024: EUR 734 million). The segment benefits from strong project wins and operational efficiencies, with a strategy to grow at a minimum 4% CAGR and maintain a 6% adjusted operating margin by 2029 16 9.

The Infra segment showed strong growth with revenue increasing to EUR 517 million (2024: EUR 393 million) and stable adjusted operating margin of 4.3%. Growth drivers include clean energy projects, rail infrastructure, and defense sector investments. The segment targets 10% annual growth and a 6% adjusted operating margin by 2029, operating with negative committed capital, reflecting efficient capital use 16[722df34e9

Forecasts

YIT's 2025 full-year report and interim Q4 2025 update reveal a company navigating a challenging yet strategically focused environment, with clear progress in profitability, capital structure, and sustainability commitments amid mixed market conditions.

Financial Performance and Market Dynamics

In 2025, YIT reported a slight decline in revenue to EUR 1.757 billion from EUR 1.820 billion in 2024, reflecting a 3.4% decrease. However, profitability improved markedly: adjusted operating profit rose by 69% to EUR 54 million (from EUR 32 million), lifting the adjusted operating margin to 3.1% from 1.7%. The IFRS operating profit swung to a positive EUR 45 million from a loss of EUR 55 million in 2024, aided by lower restructuring costs and the absence of impairment charges that weighed on the prior year. Net loss narrowed to EUR 24 million from EUR 112 million, and earnings per share improved from -0.51 to -0.14 euros 13 4.

The company’s net debt decreased significantly by EUR 120 million to EUR 560 million, with the gearing ratio improving to 71% from 88%. Liquidity remains robust, supported by EUR 116 million in cash and undrawn credit facilities totaling EUR 213 million. Operating cash flow after investments was EUR 65 million, down from EUR 110 million in 2024, partly due to lower proceeds from asset disposals 14.

Market-wise, YIT faces a bifurcated environment. The Finnish residential market remained weak throughout 2025, with consumer uncertainty and subdued investor demand limiting sales volumes. Consumer sales in Finland declined to 490 units from 589 in 2024, though new housing starts increased to 477 units from 160, reflecting a cautious ramp-up of supply. The Finnish market is expected to remain subdued in 2026, with no anticipated increase in new home sales volumes 6 7.

Conversely, the Central and Eastern European (CEE) and Baltic markets exhibited strong demand and growth momentum. Residential sales in these regions grew over 30%, with 2,169 units sold in 2025 versus 1,644 in 2024. New housing starts more than doubled to 1,555 units from 783. Despite a slight decline in adjusted operating profit to EUR 30 million from EUR 37 million, the CEE segment remains a key growth driver for YIT, supported by structural housing needs and urbanization trends in countries like the Czech Republic and Poland 6 5.

The Construction segment (formerly Toimitilat) improved its adjusted operating profit to EUR 16 million from EUR 3 million, despite a revenue decline to EUR 649 million from EUR 734 million. This improvement reflects better operational execution and a positive contribution from the Tripla Mall Ky investment, which returned EUR 51 million in capital and dividends in Q4 2025. The Infra segment showed strong growth, with revenue rising 31.6% to EUR 517 million and adjusted operating profit increasing to EUR 22 million from EUR 17 million. The segment benefits from increased industrial investments, digital infrastructure projects, and public sector stability 16 5.

Strategic Focus and Operational Execution

YIT’s strategy for 2025–2029, launched in late 2024, emphasizes achieving industry-leading productivity and financial performance, targeted growth and resilience, and enhanced customer and employee experience. The company aims for an adjusted operating margin of at least 7%, a return on capital employed (ROCE) of 15%, and revenue CAGR of 5% by 2029. These targets assume a recovery in the Finnish housing market to historical levels during the strategy period 9 10.

To support these goals, YIT restructured its reporting segments at the start of 2025 into four: Asuminen Suomi (Housing Finland), Asuminen CEE, Rakennus (Construction), and Infra. Each segment has tailored growth and profitability targets, with the CEE housing segment targeting 15% annual growth and a 15% adjusted operating margin, while Infra aims for 10% annual growth and 6% margin 10.

Operationally, YIT made significant strides in shortening project lead times and adopting industrialized construction methods across segments. The company is investing in digitalization and AI to enhance procurement, project management, and pricing models, which should underpin improved productivity and cost control. The launch of a new leadership development program and focus on employee engagement contributed to an improved employee Net Promoter Score (eNPS) of 37 in 2025, up from 30 in 2024, although still below the strategic target of 50 10 6.

Safety remains a critical concern. Despite efforts, the combined lost-time injury frequency (cLTIF) remained high at 9.6 in 2025, unchanged from 2024, underscoring the challenge of improving safety across all sites and subcontractors. The company has set a strategic target to halve this rate by 2029, reflecting a commitment to zero accidents on its sites 6 5.

Sustainability and ESG Integration

YIT continues to embed sustainability deeply into its strategy and operations. It remains the first Finnish construction company committed to Science Based Targets initiative (SBTi), with approved targets to reduce Scope 1 and 2 CO₂ emissions by 90% and Scope 3 by 30% by 2030 compared to 2019. The company actively monitors and reports its greenhouse gas emissions and has integrated climate risk assessment into its strategic planning and investment decisions 50 10.

YIT’s sustainability report details a comprehensive double materiality assessment, identifying key environmental, social, and governance (ESG) impacts, risks, and opportunities. Material topics include climate change mitigation and adaptation, biodiversity loss, resource use and circular economy, employee well-being and safety, supply chain labor practices including child and forced labor risks, and anti-corruption measures. The company has established governance structures with clear responsibilities for sustainability oversight at board, committee, and management levels 60 38.

YIT’s approach to supply chain responsibility includes requiring suppliers to adhere to its Code of Conduct and sustainability principles, conducting audits, and actively managing risks related to labor rights and environmental compliance. The company also promotes circular economy principles in its projects, with increasing use of recycled materials and waste reduction measures, such as in the Aleksanterinkatu 13 renovation project in Helsinki, where over 80% of demolition materials were recycled or reused 4 54.

Governance and Capital Allocation

Governance is robust, with a board composed entirely of independent members, supported by three committees overseeing personnel, audit, and investment matters. The company maintains a comprehensive risk management framework integrated with strategic and operational planning, covering market, operational, project, financial, and event risks. YIT also operates a whistleblower channel and enforces strict anti-corruption policies 40 17.

Capital allocation priorities include focusing on core markets and businesses, with a clear intention to divest non-strategic assets (approximately EUR 340 million in non-core assets identified at end-2025). The company’s capacity supports construction of up to 15,000 new homes, primarily in CEE markets. The Tripla Mall Ky capital return of EUR 51 million in Q4 2025 exemplifies YIT’s active capital recycling efforts 10 14.

Outlook and Risks

For 2026, YIT guides for adjusted operating profit of EUR 70–100 million, expecting continued strength in the CEE housing markets and stable performance in Infra and Construction segments. The Finnish housing market is expected to remain weak, limiting the Asuminen Suomi segment’s profitability. The company remains cautious about macroeconomic and geopolitical uncertainties that could impact demand and asset valuations [a427520b19d8b4204

Valuation and Recommendation

YIT's 2025 annual report and 2024 annual report, supplemented by the 2025 full-year interim report, provide a comprehensive view of the company's strategic positioning, financial performance, operational highlights, sustainability efforts, and risk management. The analysis below synthesizes these data points into a cohesive investment analysis.

Strategic Focus and Market Positioning: Resilience and Targeted Growth

YIT, Finland's largest and a growing European construction company, reported a strategic pivot with its 2025–2029 strategy emphasizing three core priorities: achieving industry-leading productivity and financial performance, fostering targeted growth and resilience, and enhancing customer and employee experience. The strategy builds on a foundation of strong project and cost management, shortening project lead times, dynamic pricing models, and evolving into a data-, technology-, and process-driven organization. This strategic clarity is critical in a sector characterized by cyclical demand and regulatory complexity 9 8.

The company’s vision to be the most competent partner in sustainable homes, spaces, and urban development aligns with megatrends such as urbanization, climate change, energy transition, digitalization, and global security concerns. YIT’s emphasis on sustainability is reflected in its commitment to Science Based Targets Initiative (SBTi) goals, aiming for a 90% reduction in Scope 1 and 2 emissions and 30% in Scope 3 by 2030, positioning it as a frontrunner in responsible construction 9 10.

Financial Performance: Profitability Improvement Amid Revenue Pressure

In 2025, YIT’s consolidated revenue declined 3.4% to EUR 1,757 million from EUR 1,820 million in 2024, reflecting softness in the Finnish housing market and segmental shifts. However, the adjusted operating profit surged 68.8% to EUR 54 million (2024: EUR 32 million), lifting the adjusted operating margin to 3.1% from 1.7%. This improvement was driven by operational efficiencies, cost control, and growth in higher-margin segments such as Infra and CEE housing 13 4.

Segmental profitability shows a mixed picture: Asuminen Suomi (Housing Finland) remained loss-making with an adjusted operating loss of EUR 8 million, though improved from EUR 20 million loss in 2024, amid a 25.7% revenue decline to EUR 317 million. Conversely, Asuminen CEE (Housing Central and Eastern Europe) maintained strong momentum with stable revenue of EUR 306 million and a healthy adjusted operating profit of EUR 30 million, despite a slight margin contraction to 9.9% (2024: 12.1%). The Infra segment demonstrated robust growth, with revenue up 31.6% to EUR 517 million and adjusted operating profit rising 29.4% to EUR 22 million, maintaining a steady margin of 4.3%. The Rakennus (Construction) segment saw revenue decline 11.6% to EUR 649 million but improved adjusted operating profit to EUR 16 million, lifting margin to 2.5% from 0.4% 16 12.

The company’s net result improved significantly but remained negative at EUR -24 million (2024: -112 million), reflecting ongoing restructuring costs and legacy impairments. Net financial expenses decreased to EUR 55 million from EUR 64 million, supported by debt reduction and refinancing 13 4.

Balance Sheet and Cash Flow: Strengthened Financial Position

YIT’s financial position improved markedly in 2025. Net interest-bearing debt decreased by EUR 120 million to EUR 560 million, and the gearing ratio improved from 88% to 71%. Equity increased modestly to EUR 792 million, lifting the equity ratio to 38% from 34%. The net debt to adjusted EBITDA ratio improved to 7.8x from 13.4x, and interest coverage ratio increased to 1.3 from 0.8, reflecting better earnings and refinancing 14 4.

Operating cash flow after investments was EUR 65 million, down from EUR 110 million in 2024, partly due to lower working capital releases and increased investments. Notably, a EUR 51 million capital return from Tripla Mall Ky in Q4 2025 bolstered cash flow. Land investments increased to EUR 28 million from EUR 18 million, reflecting ongoing project development 14 4.

The order backlog remained stable at EUR 2.915 billion, with 76% already sold, indicating a solid revenue base for 2026 15 3.

Market Environment: Divergent Regional Dynamics

The Finnish housing market remained weak in 2025 due to prolonged low consumer confidence and subdued investor activity, with new housing sales declining and geographical imbalances in inventory. The company expects no significant recovery in sales volumes in 2026, with continued consumer-driven demand and cautious investor behavior. However, urbanization trends suggest long-term housing shortages in major Finnish cities 6 7.

Conversely, the Baltic and Central Eastern European (CEE) housing markets exhibited robust demand, supported by moderating inflation, declining interest rates, and structural urbanization. YIT’s CEE segment capitalized on this, with over 30% growth in housing sales and increased project starts, particularly in Poland and the Czech Republic, consolidating its position as a key growth driver 4 7.

The Infra segment benefited from strong public sector investments and accelerating private sector demand in clean energy, rail infrastructure, and data centers, particularly in Finland. The market outlook for infrastructure remains positive with long project lead times and supportive government programs 12 7.

Operational Highlights: Data Center Leadership and Urban Development

YIT strengthened its position as Finland’s leading data center builder, securing significant contracts including a second data center for XTX Markets in Kajaani and the Kouvola data center project. The company also expanded urban development projects, such as the Vallila district in Helsinki and Kupittaa in Turku, emphasizing sustainable and circular construction principles 4.

In housing, YIT adapted to changing consumer preferences by increasing average apartment sizes and focusing on functional, ecological living environments, exemplified by projects like Espoo’s Seaside and Helsinki’s Taikalyhty 4.

Despite operational progress, YIT acknowledges challenges in occupational safety, with accident rates remaining too high. The company has set a strategic goal to halve the combined lost time injury frequency rate (cLTIF) by 2029, extending safety initiatives across its entire supply chain 7.

Sustainability and Risk Management: Integrated and Forward-Looking

YIT’s sustainability efforts are deeply integrated into its strategy and operations. The company’s 2025 sustainability report follows EU CSRD and ESRS standards, with external assurance by Ernst & Young. YIT focuses on climate change mitigation, biodiversity preservation, circular economy, and social responsibility, including human rights and labor standards across its own workforce and supply chain [a427520b19d8b4204dd903718e479c4f_34–62].

The company’s risk management framework is comprehensive, covering strategic, operational, project, financial, and event risks. Key risks include market volatility, geopolitical tensions, supply chain disruptions, climate change impacts, and occupational safety. YIT actively monitors and mitigates these through structured governance, internal controls, and continuous improvement processes [a427520b19d8b4204dd903718e479c4f_20–22].

Climate-related risks are assessed via scenario analysis considering both physical risks (e.g., temperature changes, extreme weather) and transition risks (e.g., carbon pricing, regulatory changes). YIT’s resilience is supported by its green financing framework and commitment to low-carbon construction, positioning it to capitalize on emerging opportunities in energy-efficient buildings and infrastructure [a427520b19d8b4204dd903718e479c4f_61–62].

Governance and Leadership: Strong Oversight and Incentives

YIT’s governance structure includes a board of six members with a majority independent of the company and significant shareholders. The board oversees strategy, risk management, and sustainability performance, supported by three committees: personnel, audit, and investment & project committees. The company maintains a robust Code of Conduct and ethics channel to ensure compliance and transparency [a427520b19d8b4204dd903718e479c4f_18–21]17.

Executive remuneration is aligned with long-term value creation and sustainability, incorporating short- and long-term incentive plans with environmental, social, and governance (ESG) metrics such as combined lost time injury frequency and Science Based Targets. The 2025–2029 strategic incentive plan links rewards to 2029 financial targets and sustainability milestones, reinforcing management accountability [a427520b19d8b4204dd903718e479c4f_18–21][28bcb70c1ef1e50bffc637eaee7803de_44–45].

Valuation and Recommendation

YIT’s 2025 results demonstrate a company in transition, successfully improving profitability and financial stability despite challenging market conditions, particularly in Finland. The strategic focus on higher-growth CEE housing markets and infrastructure, combined with leadership in data center construction, provides a solid growth platform. The company’s commitment to sustainability and risk management further strengthens its long-term resilience.

However, risks remain, including the protracted weakness in the Finnish housing market, high occupational safety incidents, and the complexity of managing a broad European footprint amid geopolitical and macroeconomic uncertainties. The absence of dividend payments in 2025 reflects ongoing capital allocation priorities towards deleveraging and strategic investments.

Given the improved adjusted operating profit margin of 3.1% in 2025 (up from 1.7%), the company’s guidance for 2026 adjusted operating profit of EUR 70–100 million, and a strengthened balance sheet with gearing reduced to 71%, YIT appears positioned for gradual recovery and value creation. The market’s cautious stance on Finnish housing is a near-term headwind, but