Lemminkäinen and YIT will complete the merger
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- Stock Exchange Releases
- 8/5/2010
Lemminkäinen's Interim Financial Review 1 January to 30 June, 2010: Order book continued to gain strength, stable outlook for remainder of the year.
LEMMINKÄINEN OYJ INTERIM FINANCIAL REVIEW 5.8.2010, AT 9:00 LEMMINKÄINEN'S INTERIM FINANCIAL REVIEW 1 January to 30 June, 2010: Order book continued to gain strength, stable outlook for remainder of the year. - The order book at the end of June was EUR 1,430.2 million (1,249.5), up 14% from a year earlier and 10% since the end of March. - The second-quarter operating profit was EUR 20.0 million (27.8). The first-half
LEMMINKÄINEN OYJ INTERIM FINANCIAL REVIEW 5.8.2010, AT 9:00
LEMMINKÄINEN'S INTERIM FINANCIAL REVIEW 1 January to 30 June, 2010:
Order book continued to gain strength, stable outlook for remainder of the year.
- The order book at the end of June was EUR 1,430.2 million (1,249.5), up 14%
from a year earlier and 10% since the end of March.
- The second-quarter operating profit was EUR 20.0 million (27.8). The
first-half operating profit was EUR -8.5 million (21.0).
- Net sales were EUR 478.8 million (528.3) in the second quarter and EUR 763.2
million (871.8) in the first half of the year. First-half net sales were down
12% compared with the same period last year.
--------------------------------------------------------------------------------
| Key figures, EUR | 4-6/2010 | 4-6/2009 | 1-6/2010 | 1-6/2009 | 1-12/2009 |
| million*) | | | | | |
--------------------------------------------------------------------------------
| Net sales | 478.8 | 528.3 | 763.2 | 871.8 | 1,965.5 |
--------------------------------------------------------------------------------
| of which | 154.1 | 146.4 | 218.1 | 218.1 | 527.6 |
| operations | | | | | |
| outside Finland | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 20.0 | 27.8 | -8.5 | 21.0 | 23.2 |
--------------------------------------------------------------------------------
| Operating | 4.2 | 5.3 | -1.1 | 2.4 | 1.2 |
| margin, % | | | | | |
--------------------------------------------------------------------------------
| Profit before | 15.0 | 18.6 | -19.0 | 1.9 | -10.2 |
| taxes | | | | | |
--------------------------------------------------------------------------------
| Profit for | 9.8 | 13.0 | -16.6 | -0.3 | -23.8 |
| accounting | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | 0.60 | 0.72 | -0.92 | -0.09 | -1.54 |
| share | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | -47.0 | 14.8 | -96.9 | -70.6 | 64.2 |
| operating | | | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Key figures, EUR million*) | 30.6.2010 | 30.6.2009 | 31.12.2009 |
--------------------------------------------------------------------------------
| Order book | 1,430.2 | 1,249.5 | 1,064.5 |
--------------------------------------------------------------------------------
| - of which unsold | 149.6 | 114.2 | 103.2 |
--------------------------------------------------------------------------------
| - of which operations outside Finland | 338.6 | 374.1 | 224.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio, % | 30.2 | 26.0 | 31.0 |
--------------------------------------------------------------------------------
| Gearing, % | 128.3 | 140.9 | 110.2 |
--------------------------------------------------------------------------------
| Liquid funds | 39.0 | 111.0 | 74.4 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 448.5 | 556.2 | 399.1 |
--------------------------------------------------------------------------------
*) From 1 January 2010 Lemminkäinen observes the interpretation IFRIC 15 -
Agreements for the Construction of Real Estate in its reporting. The comparative
figures for 2009 have also been calculated in accordance with the
interpretation.
Lemminkäinen's President & CEO Timo Kohtamäki estimates that the outlook for the
remainder of the year is stable: ”The summer began extremely well, especially in
the infrastructure construction sector, but much of the good order book will not
be translated into recognised income until the second half of the year. Sales of
our own housing production in both Finland and Russia picked up considerably on
the comparison period.
During the recession we started very few housing developments. For this reason,
several of our own projects will be completed and thus recognized as revenue and
operating profit only in the second half of the year” Kohtamäki explains. ”The
harsh winter also partly explains the result of the first six months of the
year, as the construction season did not get properly started until May. The
competitive situation in all of our business sectors continues to be
challenging. This is especially evident in technical building services, where
the slowdown in activity lags behind building construction. However, we estimate
that the construction market is gradually normalising, with other industries
acting as the driving force.”
Kohtamäki says that Lemminkäinen has initiated a number of measures aimed at
improving the efficiency and competitiveness of the company's operations. ”We
have streamlined our group structure by merging a number of our subsidiaries. We
are also boosting the operational efficiency of our business and creating one
united Lemminkäinen by centralising our support functions. We are paying
particular attention to profitability-enhancing measures in areas such as
procurements and site efficiency. We are also intensifying our efforts in
housing production sales and marketing in both Finland and Russia in order to
increase the turnover rate of housing units. The results of these actions and
decisions will show up mainly from 2011 onwards.”
Lemminkäinen is also seeking growth beyond the borders of Finland in selected
strategic market areas. ”In Norway we made two acquisitions that will increase
our share of that country's rock engineering and paving markets. In Russia our
Kaluga industrial park project is underway with a factory investment by Rani
Plast. In St. Petersburg we have acquired plots of land for housing development
of over 700 units,” says Kohtamäki.
OUTLOOK FOR 2010
According to economic forecasts, Finland's gross domestic production is expected
to return to growth in 2010. The total volume of construction will either remain
at the 2009 level or grow slightly (Source: VTT, Technical Research Centre of
Finland).
The number of new building construction starts will be up on last year, and
housing production in particular is expected to grow as housing sales pick up.
Non-residential construction is likely to remain more subdued than last year.
Especially in Helsinki Metropolitan Area the office building occupancy rate is
exceptionally low, and the number of new office building starts is expected to
remain minimal.
Renovation construction and demand for technical building services is expected
to remain stable. In Russia the pick-up in the housing market continued in the
first half of the year, and the volume of construction is forecast to grow
during 2010.
Most of the new major transport infrastructure projects are scheduled for 2011
and 2012, but projects already in progress are providing work for infrastructure
builders. The recovery of building construction will also improve the employment
of infra builders. In Finland the government intends to make further cuts in its
investments in basic highway maintenance and it is estimated that the
constrained finances of the municipalities may reduce the volume of
infrastructure construction this year.
In the other Nordic countries investments in infrastructure development will
keep these markets at a favourable level in the years ahead. The situation in
the Baltic states will continue to be challenging.
Demand for building materials follows the building construction cycle, and
demand is estimated to pick up with the recovery of residential construction in
2010.
Lemminkäinen estimates that net sales and the result before taxes for the 2010
accounting period will be at the 2009 level, the infringement fine imposed by
the SAC being excluded from the 2009 comparative figures.
Briefing
A Finnish-language briefing for analysts and the media will be held at 10:00
a.m. on Thursday, 5 August at Lemminkäinen's head office. The street address is
Salmisaarenaukio 2, Helsinki, Finland. The interim financial review will be
presented by President & CEO Timo Kohtamäki. English-language presentation
material concerning the result for the review period will be made available on
the Company's website at www.lemminkainen.com after the briefing.
LEMMINKÄINEN CORPORATION
Corporate Communications
Additional information:
Timo Kohtamäki, President & CEO, tel. +358 2071 53263
Robert Öhman, CFO, tel. +358 2071 53515
Merja Paulamäki, Investor Relations, tel. +358 2071 53367
APPENDICES
Interim Financial Review 1 January to 30 June 2010
Tabulated Section of the Interim Financial Review
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
www.lemminkainen.com
INTERIM FINANCIAL REVIEW 1 January to 30 June 2010
OPERATING ENVIRONMENT
Markets in Finland
Housing construction continued to be brisk, but non-residential building
construction remained at a low level. Demand for housing was increased by the
low level of interest rates and continuing urban migration. The number of new
commercial and office building starts remained low. In particular, there is
plenty of vacant office space available.
The infrastructure construction season started exceptionally late due to the
long winter and late arrival of spring. A reasonable number of infrastructure
construction projects were in progress.
The slowdown in construction shows up in technical building services later than
in other parts of the sector because technical building service works take place
in the final phase of construction projects. The competitive situation in the
technical building services continued to be challenging.
In building products, demand for prefabricated concrete elements in particular
increased with the pick-up in residential construction. Demand for urban
environment products was good, too.
Markets outside Finland
In Norway and Denmark demand for paving work was brisk, but competition among
paving contractors intensified. In Sweden especially the significant tunnel
contracts in the Stockholm area provided work for infrastructure builders.
In the Baltic states the construction market continued to be challenging.
Despite the difficult market situation, Baltic infrastructure construction is
showing slight signs of recovery.
In Russia, housing sales continued to be brisker than in 2009. The Russian
economy is expected to recover in step with the rest of the world. The growth
forecast for this year is about 6%, and the country's economy is likely to grow
in 2011 and 2012 as well.
NET SALES
--------------------------------------------------------------------------------
| Net sales by | 4-6/2010 | 4-6/2009 | 1-6/2010 | 1-6/2009 | 1-12/2009 |
| business sector, | | | | | |
| EUR million | | | | | |
--------------------------------------------------------------------------------
| Building | 169.2 | 217.0 | 337.9 | 422.3 | 868.7 |
| Construction*) | | | | | |
--------------------------------------------------------------------------------
| Infrastructure | 226.0 | 222.1 | 277.2 | 290.1 | 768.0 |
| Construction**) | | | | | |
--------------------------------------------------------------------------------
| Technical Building | 55.8 | 60.6 | 110.0 | 115.9 | 233.8 |
| Services | | | | | |
--------------------------------------------------------------------------------
| Building | 44.7 | 44.0 | 65.0 | 66.6 | 154.2 |
| Products**) | | | | | |
--------------------------------------------------------------------------------
| Other operations | -12.9 | -12.0 | -22.3 | -19.1 | -42.2 |
| and Group | | | | | |
| eliminations | | | | | |
--------------------------------------------------------------------------------
| Business sectors, | 482.6 | 531.7 | 767.8 | 875.7 | 1,982.6 |
| total | | | | | |
--------------------------------------------------------------------------------
| Unallocated Items | -3.8 | -3.4 | -4.6 | -4.0 | -17.1 |
--------------------------------------------------------------------------------
| Group total (IFRS) | 478.8 | 528.3 | 763.2 | 871.8 | 1,965.5 |
--------------------------------------------------------------------------------
| of which | 154.1 | 146.4 | 218.1 | 218.1 | 527.6 |
| operations outside | | | | | |
| Finland | | | | | |
--------------------------------------------------------------------------------
*) From 1 January 2010 Lemminkäinen observes the interpretation IFRIC 15 -
Agreements for the Construction of Real Estate in its reporting. The comparative
figures for 2009 have also been calculated in accordance with the
interpretation.
**) Forssan Betoni Oy, which formerly belonged to Lemminkäinen's Infrastructure
Construction business sector, was transferred on 1 January 2010 to the Building
Products business sector. The comparative figures for 2009 have also been
prepared in accordance with the new organisation.
At EUR 763.2 million (871.8) Lemminkäinen's net sales in the first half of 2010
were 12% lower than in the corresponding period a year earlier. Net sales fell
in all of Lemminkäinen's business sectors and most strongly in building
construction. In 2009 Lemminkäinen made an exceptionally low number of new
housing starts, and consequently the number of units in its own housing
development completed and recognised as income in the first half of 2010 was
considerably lower than in the same period last year. In the second half of
2010, a clearly larger number of starts made after summer 2009 will be
recognised as income than was recognised in the first half of this year. The
first-half net sales of the Infrastructure Construction business sector were on
the same level as a year earlier, even though the season began exceptionally
late due to the long winter. Lemminkäinen generated 71% (75) of its net sales in
Finland, 20% (15) in other Nordic countries, 2% (3) in Russia and 7% (7) in
other countries.
OPERATING PROFIT
--------------------------------------------------------------------------------
| Operating profit by | 4-6/2010 | 4-6/2009 | 1-6/2010 | 1-6/2009 | 1-12/2009 |
| business sector, EUR | | | | | |
| million | | | | | |
--------------------------------------------------------------------------------
| Building | 6.7 | 9.1 | 7.9 | 20.5 | 36.4 |
| Construction*) | | | | | |
--------------------------------------------------------------------------------
| Infrastructure | 13.5 | 12.8 | -10.8 | -5.5 | 22.0 |
| Construction**) | | | | | |
--------------------------------------------------------------------------------
| Technical Building | 0.4 | 2.6 | 1.5 | 5.1 | 12.2 |
| Services | | | | | |
--------------------------------------------------------------------------------
| Building Products**) | 3.4 | 4.6 | -0.3 | 2.5 | 10.4 |
--------------------------------------------------------------------------------
| Other operations | -3.7 | -2.1 | -7.1 | -2.3 | -61.7 |
--------------------------------------------------------------------------------
| Business sectors, | 20.3 | 26.9 | -8.8 | 20.4 | 19.4 |
| total | | | | | |
--------------------------------------------------------------------------------
| Unallocated Items | -0.3 | 0.9 | 0.3 | 0.6 | 3.8 |
--------------------------------------------------------------------------------
| Group total (IFRS) | 20.0 | 27.8 | -8.5 | 21.0 | 23.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating margin by | 4-6/2010 | 4-6/2009 | 1-6/2010 | 1-6/2009 | 1-12/2009 |
| business sector, % | | | | | |
--------------------------------------------------------------------------------
| Building | 4.0 | 4.2 | 2.3 | 4.9 | 4.2 |
| Construction*) | | | | | |
--------------------------------------------------------------------------------
| Infrastructure | 6.0 | 5.7 | -3.9 | -1.9 | 2.9 |
| Construction**) | | | | | |
--------------------------------------------------------------------------------
| Technical Building | 0.7 | 4.3 | 1.4 | 4.4 | 5.2 |
| Services | | | | | |
--------------------------------------------------------------------------------
| Building Products**) | 7.6 | 10.4 | -0.5 | 3.8 | 6.8 |
--------------------------------------------------------------------------------
| Group total (IFRS) | 4.2 | 5.3 | -1.1 | 2.4 | 1.2 |
--------------------------------------------------------------------------------
*) From 1 January 2010 Lemminkäinen observes the interpretation IFRIC 15 -
Agreements for the Construction of Real Estate in its reporting. The comparative
figures for 2009 have also been calculated in accordance with the
interpretation.
**) Forssan Betoni Oy, which formerly belonged to Lemminkäinen's Infrastructure
Construction business sector, was transferred on 1 January 2010 to the Building
Products business sector. The comparative figures for 2009 have also been
prepared in accordance with the new organisation.
Lemminkäinen's first-half operating profit was EUR -8.5 million (21.0). The
primary reasons for the decline in profitability were the recognition of income
from Lemminkäinen's own housing production being skewed towards the second half
of the year and the exceptionally long winter, which increased costs especially
in the Infrastructure Construction business sector. Moreover, intensified
competition weakened margins in the Technical Building Services and Building
Construction business sectors. The profitability of the Building Construction
and Technical Building Services business sectors was also impaired by the
recognition of non-recurring items stemming from restructuring and business
adjustment measures.
ORDER BOOK
--------------------------------------------------------------------------------
| Order book by business sector, | 30.6.2010 | 30.6.2009 | 31.12.2009 |
| EUR million | | | |
--------------------------------------------------------------------------------
| Building Construction*) | 727.1 | 626.7 | 601.7 |
--------------------------------------------------------------------------------
| - of which unsold | 149.6 | 114.2 | 103.2 |
--------------------------------------------------------------------------------
| Infrastructure Construction**) | 543.9 | 490.0 | 319.2 |
--------------------------------------------------------------------------------
| Technical Building Services | 118.0 | 84.0 | 106.8 |
--------------------------------------------------------------------------------
| Building Products**) | 41.2 | 48.9 | 36.8 |
--------------------------------------------------------------------------------
| Group, total | 1,430.2 | 1,249.5 | 1,064.5 |
--------------------------------------------------------------------------------
| - of which international orders | 338.6 | 374.1 | 224.4 |
--------------------------------------------------------------------------------
*) From 1 January 2010 Lemminkäinen observes the interpretation IFRIC 15 -
Agreements for the Construction of Real Estate in its reporting. The comparative
figures for 2009 have also been calculated in accordance with the
interpretation.
**) Forssan Betoni Oy, which formerly belonged to Lemminkäinen's Infrastructure
Construction business sector, was transferred on 1 January 2010 to the Building
Products business sector. The comparative figures for 2009 have also been
prepared in accordance with the new organisation.
Lemminkäinen's order book grew 14% year on year and 34% during the first six
months of 2010. At the end of June the order book was 1,430.2 million (1,249.5).
International business accounted for 24% (30) of the order book.
The order book also includes the unrecognised share of the completed housing
stock.
BALANCE SHEET, CASH FLOW AND FINANCING
One of Lemminkäinen's strategic goals is strengthening of the Company's
financial position. Under an authorisation granted by the Extraordinary General
Meeting of Lemminkäinen Corporation held on 12 November 2009, the Board of
Directors decided on 17 March 2010 on two separate share issues. The Company
offered 1,700,000 new shares in the Company for subscription by institutional
investors approved by the Board of Directors. The Board of Directors also
decided on a share issue in which the Company offered 923,514 new shares in the
Company for subscription against receipt of consideration in the form of shares
by the minority shareholders of Lemminkäinen Corporation's subsidiaries
Lemminkäinen Talotekniikka Oy and Lemminkäinen Talo Oy. The subscription price
of the shares was EUR 23.25.
The consideration received from the issuance of shares to institutional
investors totalled EUR 39.5 million, which was booked to the Company's invested
unrestricted equity reserve. The funds raised from the issue were used during
the review period for the amortisation of short-term loans.
The consolidated balance sheet total at 30 August 2010 was EUR 1,186.6 million
(1,364.4). The return on investment was 0.4% (3.6) and the equity ratio 30.2%
(26.0). Gearing was 128.3% (140.9).
According to the cash flow statement, the cash flow from operating activities
was EUR -96.9 million (-70.6), the cash flow from investing activities EUR -14.6
million (-16.3) and the cash flow from financing activities EUR 77.3 million
(-50.3). The cash flow for the review period includes the payment of dividends
totalling EUR 2.0 million (17.9). The 2009 dividends include only dividends paid
to the minority interests of subsidiaries. In the April-June period the cash
flow from operating activities was EUR -47.0 million (Q2/09: 14.8), the cash
flow from investing activities EUR -7.0 million (Q2/09: -5.2) and the cash flow
from financing activities EUR 53.5 million (Q2/09: -53.3).
Working capital declined 13% to EUR 824.7 million (951.7) and net working
capital fell 11% to EUR 427.2 million (480.5).
Liquid funds at the end of the review period were EUR 39.0 million (111.0).
The amount of interest-bearing debt at the end of the review period was EUR
448.5 million (556.2), of which EUR 274.1 million (288.4) was short-term debt
and EUR 174.3 million (267.8) long-term debt. Interest-bearing net debt was EUR
409.5 million (445.2). Net financing expenses were EUR 10.5 million (19.1),
representing 1.4% (2.2) of net sales.
Lemminkäinen's interest-bearing debt comprised loans from financial institutions
33% (50), commercial paper 21% (14), project loans related to own housing
production and non-residential construction 7% (14), TyEL (employee pensions
premium) loans 23% (9), finance leasing liabilities 13% (10) and other
liabilities 3% (3). At the end of the review period Lemminkäinen had an unused
EUR 130 million line of credit.
BUSINESS SECTORS
BUILDING CONSTRUCTION
--------------------------------------------------------------------------------
| Key figures, EUR | 4-6/2010 | 4-6/2009 | 1-6/2010 | 1-6/2009 | 1-12/2009 |
| million*) | | | | | |
--------------------------------------------------------------------------------
| Net sales | 169.2 | 217.0 | 337.9 | 422.3 | 868.7 |
--------------------------------------------------------------------------------
| Operating | 6.7 | 9.1 | 7.9 | 20.5 | 36.4 |
| profit**) | | | | | |
--------------------------------------------------------------------------------
| Operating margin, | 4.0 | 4.2 | 2.3 | 4.9 | 4.2 |
| % | | | | | |
--------------------------------------------------------------------------------
| Order book at end | | | 727.1 | 626.7 | 601.7 |
| of period | | | | | |
--------------------------------------------------------------------------------
| - of which unsold | | | 149.6 | 114.2 | 103.2 |
--------------------------------------------------------------------------------
*) From 1 January 2010 Lemminkäinen observes the interpretation IFRIC 15 -
Agreements for the Construction of Real Estate in its reporting. The comparative
figures for 2009 have also been calculated in accordance with the
interpretation.
**) From 1 January 2010 financial items are no longer reported
sector-specifically in segment reports delivered to management. For this reason
sector-specific comparative figures are presented only up until the operating
profit line.
The January-June net sales of the Building Construction business sector were EUR
337.9 million (422.3), a 20% decline from the comparison period. The business
sector generated 75% (83) of its net sales in Finland, 13% (5) in other Nordic
countries, 2% (6) in Russia and 10% (6) in other countries. The business
sector's first-half operating profit was EUR 7.9 million (20.5). Housing sales
continued to be brisker than in the same period last year, but considerably
fewer Lemminkäinen's own housing developments were completed and, because of the
new income recognition principles, recognised in the second quarter than in the
comparison period. Non-residential construction remained subdued, and there were
no sales of Lemminkäinen's own real estate developments in the second quarter.
The business sector's net sales and profitability in the first half of the year
were also weakened by non-recurring items stemming from restructuring and
business adjustments measures.
The net sales and operating profit of the Building Construction business sector
will be skewed towards the second half of the year, when construction starts
made in the second half of 2009 will be completed.
The business sector's order book developed favourably during the review period
and at the end of June was EUR 727.1 million (626.7), i.e. 16% higher than a
year earlier. The share of international business in the order book remained
unchanged from a year earlier at EUR 142.5 million (142.5).
Operations in Finland
--------------------------------------------------------------------------------
| Lemminkäinen's private-sector | 1-6/2010 | 1-6/2009 | 1-12/2009 |
| housing production, Finland | | | |
--------------------------------------------------------------------------------
| Housing starts | 323 | 15 | 351 |
--------------------------------------------------------------------------------
| Housing units sold | 397 | 294 | 771 |
--------------------------------------------------------------------------------
| Completed | 85 | 306 | 533 |
--------------------------------------------------------------------------------
| Under construction at end of | 643 | 296 | 405 |
| period | | | |
--------------------------------------------------------------------------------
| - of which unsold | 203 | 138 | 193 |
--------------------------------------------------------------------------------
| Unsold completed units at end of | 179 | 459 | 263 |
| period | | | |
--------------------------------------------------------------------------------
In addition, Lemminkäinen made 422 (420) contracted housing starts during the
first half of the year. Altogether, the company made 745 new housing starts in
Finland during the review period.
At the end of the review period Lemminkäinen owned a total of 852,000 m2
(974,000) of unused building rights in Finland, of which approx. 390,000 m2
(473,000) were residential building rights. The Company also had binding or
conditional co-operation and zoning agreements for about 795,000 m² (717,000),
of which about 294,000 m² (340,000) were residential building rights. The
balance sheet value of the building plots was EUR 94.0 million (93.0).
Demand for non-residential building construction remained minimal during the
review period. However, commercial and logistics construction bucked the trend
and continued at a reasonable level. One of the most notable new orders
announced during the review period was an eco-efficient office and residential
building to be built in Töölönlahti in downtown Helsinki. The client and owner
of the building is Etera Mutual Pension Insurance Company and the principal
tenant will be Alma Media Corporation, a Finnish media company. Construction
work will begin in spring 2011 and the building will be completed in 2012.
Lemminkäinen won a number of public building contracts during the review period.
These included renovation and basic repair contracts for schools and day-care
centres in Oulu, Joensuu, Vähäkyrö and Laihia. The renovation construction
market remained stable during the review period. Renovation construction
accounted for about 22% (17) of Lemminkäinen's building construction business in
the review period.
Operations outside Finland
--------------------------------------------------------------------------------
| Lemminkäinen's private-sector | 1-6/2010 | 1-6/2009 | 1-12/2009 |
| housing production, Russia | | | |
--------------------------------------------------------------------------------
| Housing starts | 200 | 0 | 0 |
--------------------------------------------------------------------------------
| Housing units sold | 129 | 50 | 133 |
--------------------------------------------------------------------------------
| Completed | 0 | 0 | 104 |
--------------------------------------------------------------------------------
| Under construction at end of | 698 | 323 | 479 |
| period | | | |
--------------------------------------------------------------------------------
| - of which unsold | 469 | 212 | 367 |
--------------------------------------------------------------------------------
| Unsold completed units at end of | 0 | 0 | 22 |
| period | | | |
--------------------------------------------------------------------------------
In Russia housing sales were brisker than in the same period last year. The
pick-up in sales was caused by the general recovery of the Russian economy as
well as Lemminkäinen's own active marketing efforts.
During the review period Lemminkäinen acquired a building plot in St. Petersburg
on which it will start to construct a new apartment building. The 540-unit
building is expected to be completed in autumn 2013. Lemminkäinen has also
acquired a residential development already under construction in Ozerki, a
district in the north of St Petersburg. The site comprises some 200 apartments
as well as commercial premises. The construction work will be completed in
autumn 2011, and sales of apartments will commence in the autumn of this year.
Lemminkäinen is building a plastic film extrusion plant for Ab Rani Plast Oy at
Kaluga industrial park in Russia. Rani Plast is the first client in
Lemminkäinen's Kaluga industrial park, which covers approx. 135 hectares and has
room for twenty or so industrial plants and logistics centres.
The value of Lemminkäinen's assets tied up in Russia were EUR 65.0 million
(39.2) at the end of the review period.
In addition to Russia, the other important markets outside Finland for the
Building Construction business sector are Sweden, China, India and Poland.
INFRASTRUCTURE CONSTRUCTION
--------------------------------------------------------------------------------
| Key figures, EUR | 4-6/2010 | 4-6/2009 | 1-6/2010 | 1-6/2009 | 1-12/2009 |
| million*) | | | | | |
--------------------------------------------------------------------------------
| Net sales | 226.0 | 222.1 | 277.2 | 290.1 | 768.0 |
--------------------------------------------------------------------------------
| Operating | 13.5 | 12.8 | -10.8 | -5.5 | 22.0 |
| profit**) | | | | | |
--------------------------------------------------------------------------------
| Operating margin, | 6.0 | 5.7 | -3.9 | -1.9 | 2.9 |
| % | | | | | |
--------------------------------------------------------------------------------
| Order book at end | | | 543.9 | 490.0 | 319.2 |
| of period | | | | | |
--------------------------------------------------------------------------------
*) Forssan Betoni Oy, which formerly belonged to Lemminkäinen's Infrastructure
Construction business sector, was transferred on 1 January 2010 to the Building
Products business sector. The comparative figures for 2009 have also been
prepared in accordance with the new organisation.
**) From 1 January 2010 financial items are no longer reported
sector-specifically in segment reports delivered to management. For this reason
sector-specific comparative figures are presented only up until the operating
profit line.
The net sales of the Infrastructure Construction business sector remained at
comparison period's level, at EUR 277.2 million (290.1). The business sector
generated 52% (52) of its net sales in Finland, 38% (36) in the other Nordic
countries, 6% (10) in the Baltic states, and 4% (2) in other countries. The
business sector's operating result was EUR -10.8 million (-5.5). The
exceptionally long winter delayed the beginning of the work season, but in June
for example the paving operations in Finland and Denmark were brisker than at
the same time last year.
In spite of intensified competition, the Infrastructure Construction business
sector's order book at the end of the review period was 11% higher than a year
earlier at EUR 543.9 million (490.0).
Operations in Finland
In spite of constrained municipal finances, demand for paving works especially
in large municipalities was good during the review period. However, the total
volume of paving works was down on the previous year, which resulted in tougher
competition for contracts.
In rock engineering the review period was brisk thanks to both projects started
in the first quarter and won during the review period. Also, new mine projects
are starting up. Demand for geotechnical engineering works was good in the
review period, and Lemminkäinen won a number of stabilisation and foundation
reinforcement contracts. Demand for transport infrastructure construction
continued to be reasonable during the review period but competition was tough.
In mineral aggregates and crushing contracting the winter was quiet, but demand
picked up towards the end of the review period as building construction
increased.
Operations outside Finland
Harsh winter conditions in the early part of the review period exceptionally
halted paving works in Norway and Denmark. The commencement of works was delayed
by the long winter, but May and June were good months, especially in Denmark.
The competitive situation worsened in Denmark and Norway.
In Norway Lemminkäinen acquired a 75% majority stake in Asfalt Remix AS, a
Norwegian company specialising in the cold milling of asphalt pavement, which
generated net sales of EUR 8 million in 2009. Lemminkäinen also acquired a 90.1%
stake in Risa Rock AS, a tunnel excavation company operating throughout Norway,
which generated net sales of EUR 16 million in 2009.
In Sweden Lemminkäinen was primarily occupied with tunnel and geotechnical
engineering works as well as the excavation of the Kiruna iron ore mine.
In the Baltic states the harsh winter exceptionally halted paving works and
delayed the start of the season. The weak state of public finances resulted in
tougher competition, which was also reflected in the profitability of business
operations.
TECHNICAL BUILDING SERVICES
--------------------------------------------------------------------------------
| Key figures, EUR | 4-6/2010 | 4-6/2009 | 1-6/201 | 1-6/2009 | 1-12/2009 |
| million | | | 0 | | |
--------------------------------------------------------------------------------
| Net sales | 55.8 | 60.6 | 110.0 | 115.9 | 233.8 |
--------------------------------------------------------------------------------
| Operating profit*) | 0.4 | 2.6 | 1.5 | 5.1 | 12.2 |
--------------------------------------------------------------------------------
| Operating margin, % | 0.7 | 4.3 | 1.4 | 4.4 | 5.2 |
--------------------------------------------------------------------------------
| Order book at end | | | 118.0 | 84.0 | 106.8 |
| of period | | | | | |
--------------------------------------------------------------------------------
*) From 1 January 2010 financial items are no longer reported
sector-specifically in segment reports delivered to management. For this reason
sector-specific comparative figures are presented only up until the operating
profit line.
The first-half net sales of the Technical Building Services business sector
remained at the level of year earlier at EUR 110.0 million (115.9). The
operating profit was EUR 1.5 million (5.1). Profitability was impaired by
intensified competition as well as non-recurring items stemming from
restructuring and business adjustment measures.
In new construction technical building service works take place in the final
phase of construction projects and increased building construction activity
shows up in the demand of technical building services with a lag. Demand for the
business sector's industrial services remained minimal during the review period.
The emphasis in technical building services is increasingly shifting towards
renovation construction and servicing and maintenance work, which nowadays
already account for a half of the business sector's net sales.
The order book at the end of the review period was up 40% on the previous year's
level at EUR 118.0 million (84.0)
BUILDING PRODUCTS
--------------------------------------------------------------------------------
| Key figures. EUR | 4-6/2010 | 4-6/2009 | 1-6/2010 | 1-6/2009 | 1-12/2009 |
| million*) | | | | | |
--------------------------------------------------------------------------------
| Net sales | 44.7 | 44.0 | 65.0 | 66.6 | 154.2 |
--------------------------------------------------------------------------------
| Operating profit**) | 3.4 | 4.6 | -0.3 | 2.5 | 10.4 |
--------------------------------------------------------------------------------
| Operating margin, % | 7.6 | 10.4 | -0.5 | 3.8 | 6.8 |
--------------------------------------------------------------------------------
| Order book at end | | | 41.2 | 48.9 | 36.8 |
| of period | | | | | |
--------------------------------------------------------------------------------
*) Forssan Betoni Oy, which formerly belonged to Lemminkäinen's Infrastructure
Construction business sector, was transferred on 1 January 2010 to the Building
Products business sector. The comparative figures for 2009 have also been
prepared in accordance with the new organisation.
**) From 1 January 2010 financial items are no longer reported
sector-specifically in segment reports delivered to management. For this reason
sector-specific comparative figures are presented only up until the operating
profit line.
The net sales of the Building Products business sector were EUR 65.0 million
(66.6) and the operating profit EUR -0.3 million (2.5).
The exceptionally long winter delayed the start of the contracting season. The
sales season for yard paving stones and roofing products was also delayed, but
sales picked up towards the end of the review period and reached the level of
the previous year. Demand for pre-cast concrete staircase and façade elements
continued to be brisk thanks to the recovery of housing construction. Stiffening
competition weakened profitability. Efficiency-boosting measures aimed at
lowering costs have been initiated in the business sector.
The order book at the end of the review period was EUR 41.2 million (48.9).
SHARES AND SHARE CAPITAL
The listed price of Lemminkäinen Corporation's share was EUR 24.20 (13.05) at
the beginning of the review period and EUR 23.80 (19.02) at the end of the
review period. The market capitalisation at the end of the review period was EUR
467.5 million (323.7). Altogether 2,450,521 shares (884,329) were traded during
the review period. The total value of the turnover was EUR 60.6 million (15.4).
At the end of the review period the Company had 5,076 (4,790) shareholders.
The Extraordinary General Meeting of Lemminkäinen Corporation, held on 12
November 2009, decided in accordance with the proposal of the Board of
Directors, to authorise the Board of Directors to resolve on a share issue
and/or an issue of special rights entitling to shares referred to in Chapter 10,
Section 1 of the Finnish Limited Liability Companies Act, in one or several
instalments, either against payment or without payment. The General Meeting also
authorised the Board of Directors to resolve on the acquisition of the Company's
own shares.
On 17 March 2010 the Board of Directors decided on two separate share issues.
The Company offered 1,700,000 new shares in the Company for subscription by
private and institutional investors approved by the Board of Directors. The
Board of Directors also decided on a share issue in which the Company offered
923,514 new shares in the Company for subscription against receipt of
consideration in the form of shares by the minority shareholders of Lemminkäinen
Corporation's subsidiaries Lemminkäinen Talotekniikka Oy and Lemminkäinen Talo
Oy. The subscription price of the shares was EUR 23.25. The new shares were
recorded in the Trade Registry and listed on NASDAQ OMX Helsinki Ltd on 23 March
2010.
After the share issues the Board of Directors was still authorised to issue
1,576,486 shares and/or special rights entitling to shares. The authorisation
will remain in force for five (5) years from the date on which it was granted.
Moreover, the authority granted to the Board of Directors by the Extraordinary
General Meeting on 12 November 2009 to acquire the Company's own shares has not
been used, and it will remain in force for 18 months from the date of the
General Meeting's decision.
Lemminkäinen's share capital is EUR 34,042,500. The Company has one share series
and after the share issue the total number of issued shares is 19,644,764.
INVESTMENTS
Gross investments made during the review period amounted to EUR 33.8 million
(19.4). The investments were mainly replacement investments for infrastructure
construction, but also included two business acquisitions made in the review
period.
PERSONNEL
--------------------------------------------------------------------------------
| Personnel, average | 1-6/2010 | 1-6/2009 | 1-12/2009 |
--------------------------------------------------------------------------------
| Hourly paid employees | 5,057 | 5,374 | 5,559 |
--------------------------------------------------------------------------------
| Salaried staff | 2,909 | 3,169 | 3,067 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel, total | 7,966 | 8,543 | 8,626 |
--------------------------------------------------------------------------------
| of whom working outside Finland | 2,304 | 2,655 | 2,607 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel at the end of the | 9,302 | 9,589 | 7,759 |
| review period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel by business sector, | 1-6/2010 | 1-6/2009 | 1-12/2009 |
| average | | | |
--------------------------------------------------------------------------------
| Building Construction | 2,217 | 2,480 | 2,356 |
--------------------------------------------------------------------------------
| Infrastructure Construction*) | 2,940 | 3,204 | 3,395 |
--------------------------------------------------------------------------------
| Technical Building Services | 1,885 | 1,955 | 1,941 |
--------------------------------------------------------------------------------
| Building Products*) | 808 | 791 | 820 |
--------------------------------------------------------------------------------
| Parent company | 116 | 113 | 114 |
--------------------------------------------------------------------------------
| Total | 7,966 | 8,543 | 8,626 |
--------------------------------------------------------------------------------
*) Forssan Betoni Oy, which formerly belonged to Lemminkäinen's Infrastructure
Construction business sector, was transferred on 1 January 2010 to the Building
Products business sector. The comparative figures for 2009 have also been
prepared in accordance with the new organisation.
The average number of employees in the Group during the review period was 7,966
(8,543), down 7% on the comparison period. 71% (69) of the personnel worked in
Finland, 12% (12) in other Nordic countries, 11% (11) in the Baltic states and
6% (8) in other countries.
The number of personnel has been adjusted to the prevailing market situation.
ORGANISATIONAL CHANGES
A goal in the strategy is to move towards one united Lemminkäinen. This
involves, among other things, streamlining the organisation of the Group. About
20 of the Group's subsidiaries in Finland will be merged during 2010. The
changes are biggest in the Building Construction and Technical Building Services
business sectors.
Lemminkäinen's support functions - human resources, finance, IT and
communications and marketing - are also being developed and centralised. The
development of cost-effective, high-quality and professionally delivered
services targets to offer common services that effectively support business
goals, enhance competitive advantages and support growth.
ANNUAL GENERAL MEETING DECISIONS AND GOVERNANCE
On 16 April 2010 Lemminkäinen Corporation's Annual General Meeting approved the
Company's final accounts and consolidated financial statements for 2009 and
granted the members of the Board of Directors and the President & CEO discharge
from liability. The Annual General Meeting decided in accordance with the Board
of Directors' proposal that no dividend would be paid for the 2009 accounting
period.
The following persons were re-elected to serve on the Board of Directors: Berndt
Brunow, Juhani Mäkinen, Mikael Mäkinen, Kristina Pentti-von Walzel, Heikki Räty
and Teppo Taberman. PricewaterhouseCoopers Oy, a firm of authorised public
accountants, was re-elected to serve as the Company's auditors, with Jan
Holmberg, APA, acting as chief auditor.
Lemminkäinen Corporation's Board of Directors held an organising meeting on 16
April 2010. Berndt Brunow continues as the Chairman of the Board of Directors,
and Juhani Mäkinen as the Vice Chairman.
LEGAL PROCEEDINGS
In 2009 the Supreme Administrative Court (SAC) fined a number of Finnish asphalt
industry companies for violations of the Act on Competition Restrictions.
At present, 29 municipalities and the Finnish Road Administration have brought
actions for the recovery of damages from Lemminkäinen and other asphalt
companies in the District Court of Helsinki. The claimants contend that
restrictions of competition have caused them damages. The capital amount of the
claims presented against Lemminkäinen is at present about EUR 73 million. The
claims presented in the statements of claim differ from each other as regards
their amounts and grounds.
The decision rendered by the SAC in 2009 as it stands does not mean that
Lemminkäinen or the other asphalt industry companies actually caused the parties
ordering asphalt works any damages. The SAC's decision does not concern the
individual contracts that the claimants are citing in support of their claims.
Neither does the decision concern the pricing of individual contracts, nor has
the SAC considered the claim that pricing deviating from the market price had
been used in the contracts.
Lemminkäinen's initial position is that the claims are without foundation
The claims will be brought separately before the District Court of Helsinki and
heard in the order determined by the court. It is likely that district court
proceedings will continue into 2011.
No provision for future expense has been made in respect of the statements of
claims submitted so far to the district court by the municipalities and the
Finnish Road Administration.
Lemminkäinen will provide further updates on the matter in connection with
interim financial reviews or, if necessary, as separate releases.
RISKS AND UNCERTAINTIES
Lemminkäinen's business risks are divided into six categories: market risks,
project risks, financing risks, credit loss risks, environmental risks, and
accidents and damage. The measures necessary to manage the most significant
identified risks have been specified.
In the near future, market risk poses the most significant threat to
Lemminkäinen. The international economic downturn is creating uncertainty in key
sectors of Lemminkäinen's operating environment and making it more difficult to
foresee future changes. As a consequence of this, Lemminkäinen adjusted its
business operations to the new market demand at the end of 2008 and in 2009.
Although housing sales have developed favourably, the general economic situation
is still unstable. For this reason new housing starts are being made only if a
sufficiently high percentage of the units are reserved by buyers in advance.
Another risk are the aforementioned statements of claim submitted to the
District Court of Helsinki by certain municipalities and the Finnish Road
Administration.
Operating in a number of business sectors with differing cyclical behaviours is
a cornerstone of Lemminkäinen's strategy. Fluctuating demand for new
construction in Finland is counterbalanced by infrastructure construction. The
building repair and maintenance businesses account for a third of the Group's
business.
The Company's Annual Report and website provide more information on
Lemminkäinen's risk management.
OUTLOOK FOR 2010
According to economic forecasts, Finland's gross domestic production is expected
to return to growth in 2010. The total volume of construction will either remain
at the 2009 level or grow slightly (Source: VTT, Technical Research Centre of
Finland).
The number of new building construction starts will be up on last year, and
housing production in particular is expected to grow as housing sales pick up.
Non-residential construction is likely to remain more subdued than last year.
Especially in Helsinki Metropolitan Area the office building occupancy rate is
exceptionally low, and the number of new office building starts is expected to
remain minimal.
Renovation construction and demand for technical building services is expected
to remain stable. In Russia the pick-up in the housing market continued in the
first half of the year, and the volume of construction is forecast to grow
during 2010.
Most of the new major transport infrastructure projects are scheduled for 2011
and 2012, but projects already in progress are providing work for infrastructure
builders. The recovery of building construction will also improve the employment
of infra builders. In Finland the government intends to make further cuts in its
investments in basic highway maintenance and it is estimated that the
constrained finances of the municipalities may reduce the volume of
infrastructure construction this year.
In the other Nordic countries investments in infrastructure development will
keep these markets at a favourable level in the years ahead. The situation in
the Baltic states will continue to be challenging.
Demand for building materials follows the building construction cycle, and
demand is estimated to pick up with the recovery of residential construction in
2010.
Lemminkäinen estimates that net sales and the result before taxes for the 2010
accounting period will be at the 2009 level, the infringement fine imposed by
the SAC being excluded from the 2009 comparative figures.
EVENTS AFTER THE REVIEW PERIOD
In July 2010 Lemminkäinen won two earthworks and concrete construction contracts
from Kevitsa Mining AB for its Kevitsa Nickel/Copper concentrator in Sodankylä,
Northern Finland. The customer is a subsidiary of the Canadian mining company
First Quantum Minerals Ltd. The total value of the construction works is approx.
EUR 10 million, and they are expected to be completed in spring 2011.
In the same month Lemminkäinen signed a contract to continue co-operation in the
full renovation of the Kluuvi shopping centre in downtown Helsinki. The project
management contract is worth approx. EUR 17 million and the works will be
completed by autumn 2011.
Lemminkäinen is to build a cable tunnel in Mörby, a northern suburb of
Stockholm. The contract is worth approx. EUR 10 million and it will be completed
in summer 2013.
Helsinki, 5 August 2010
LEMMINKÄINEN CORPORATION
Board of Directors
TABULATED SECTION OF THE INTERIM FINANCIAL REVIEW
ACCOUNTING PRINCIPLES
This interim financial review has been prepared in accordance with the
recognition and measurement principles of the IFRS standards and it complies
with the IAS 34 Interim Financial Reporting Standard. The same IFRS recognition
and measurement principles as those used in the annual financial statements for
2009 have been applied in the interim financial review with the below-mentioned
changes.
The information contained in the interim financial review has not been audited.
The interpretation IFRIC 15 - Agreements for the Construction of Real Estate was
adopted from the beginning of 2010. The comparative figures starting from
1.1.2009 have also been calculated in accordance with the provisions of the new
interpretation. IFRIC 15 affected not only the figures of Lemminkäinen Group but
also those of the Building Construction business sector. Furthermore, Forssan
Betoni Oy, which formerly belonged to the Infrastructure Construction business
sector, was transferred at the beginning of January 2010 to the Building
Products business sector. The Group and business sector-specific figures given
in this bulletin are pro forma figures.
Standards and interpretations adopted from the beginning of 2010
- IFRIC 15. Agreements for the Construction of Real Estate. The interpretation
clarifies whether an agreement for the construction of real estate falls within
the scope of IAS 11 Construction Contracts or IAS 18 Revenue, and when income
from such construction projects can be recognised on the basis of percentage of
completion. In Lemminkäinen Group the new interpretation affects especially the
income recognition practice for own housing production, the basis of which
changed on 1 January 2010 from percentage-of-completion to full completion and
delivery.
- IFRIC 12 Service Concession Arrangements. The interpretation applies to
contractual arrangements whereby a private-sector operator participates in the
development, financing, operation of public services or the maintenance of
infrastructure.
- IFRS 3 (Revised), Business combinations. The revised standard continues to
apply the acquisition method to business combinations, with some significant
changes. For example, all costs directly associated with the transaction are to
be expensed as incurred. Contingent consideration is to be recorded at fair
value even if its realisation may be presumed unlikely at the transaction date.
Subsequent changes in contingent liabilities are recorded at fair value through
income, and not as an adjustment to goodwill, as was the practice before the
adoption of the interpretation. In a step acquisition, previously acquired
equity interests are recorded at fair value at the acquisition date. Goodwill
may be calculated based on the parent company's share of net assets or it may
include goodwill related to the non-controlling interest.
- IAS 27 (Revised), Consolidated and separate financial statements. The revised
standard requires the effects of all transactions with non-controlling interests
to be recorded in equity if there is no change in control. Thus, transactions
with non-controlling interests will no longer result in goodwill or the
recognition of gains or losses through profit or loss. The standard also
specifies the accounting when control is lost. Any remaining interest in the
entity is remeasured to fair value and a gain or loss is recognised through
profit or loss.
- IAS 17 (Revised), Leases. The revised standard requires the classification of
land areas as finance leasing or some other leasing agreements in accordance
with the general classification criteria of IAS 17. The revision does not have
any essential bearing on the figures presented in the Interim Financial Review.
An assessment indicates that the following interpretations and standards have no
essential bearing on Lemminkäinen Group's Interim Financial Review: IAS 1
(Revised), IAS 18 (Revised), IAS 38 (Revised), IAS 39 (Revised), IFRS 2
(Revised), IFRS 5 (Revised), IFRS 8 (Revised), IFRIC 9, IFRIC 16, IFRIC 17 and
IFRIC 18.
Effects of new interpretations of IFRS standards in the future
The standards and interpretations published by IASB and listed below will come
into force in 2011 or thereafter. The Group has decided against their early
adoption and will apply them in future accounting periods.
An assessment indicates that the following interpretations and standards have no
essential bearing on Lemminkäinen Group's financial statements: IAS 24
(Revised), IFRIC 14, IFRIC 19.
FINANCIAL STATEMENTS AND OTHER TABULATED INFORMATION
1) Consolidated income statement
2) Consolidated statement of comprehensive income
3) Consolidated statement of financial position
4) Consolidated cash flow statement
5) Consolidated statement of changes in equity
6) Consolidated income statement, quarterly
7) Segment information
8) Economic trends and financial indicators
9) Share-specific indicators
10) Tangible assets
11) Acquired and divested businesses
12) Related-party transactions
13) Guarantees and contingent liabilities
14) Legal proceedings
1) CONSOLIDATED INCOME STATEMENT
--------------------------------------------------------------------------------
| | 4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ |
--------------------------------------------------------------------------------
| EUR mill. | 2010 | 2009 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 478.8 | 528.3 | 763.2 | 871.8 | 1,965.5 |
--------------------------------------------------------------------------------
| Operating income and expenses | -449. | -491.3 | -756.9 | -836.7 | -1,909. |
| | 0 | | | | 6 |
--------------------------------------------------------------------------------
| Depreciation | 9.6 | 9.5 | 14.3 | 14.2 | 34.3 |
--------------------------------------------------------------------------------
| Share of the results of | -0.2 | 0.3 | -0.4 | 0.0 | 1.5 |
| affiliated companies | | | | | |
--------------------------------------------------------------------------------
| Operating profit/loss | 20.0 | 27.8 | -8.5 | 21.0 | 23.2 |
--------------------------------------------------------------------------------
| Financial expenses | 10.0 | 10.4 | 22.1 | 30.5 | 54.1 |
--------------------------------------------------------------------------------
| Financial income | 5.0 | 1.2 | 11.7 | 11.4 | 20.7 |
--------------------------------------------------------------------------------
| Profit/loss before taxes | 15.0 | 18.6 | -19.0 | 1.9 | -10.2 |
--------------------------------------------------------------------------------
| Income taxes | -5.2 | -5.6 | 2.4 | -2.2 | -13.6 |
--------------------------------------------------------------------------------
| Profit/loss for the | 9.8 | 13.0 | -16.6 | -0.3 | -23.8 |
| accounting period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution of the profit/loss for | | | | |
| the accounting period | | | | |
--------------------------------------------------------------------------------
| To shareholders of the parent | 9.5 | 12.3 | -17.1 | -1.5 | -26.2 |
| company | | | | | |
--------------------------------------------------------------------------------
| To minority interests | 0.3 | 0.7 | 0.6 | 1.2 | 2.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EPS calculated from profit/loss attributable to parent | | |
| company shareholders | | |
--------------------------------------------------------------------------------
| Earnings per share, diluted | 0.60 | 0.72 | -0.92 | -0.09 | -1.54 |
| and undiluted, EUR | | | | | |
--------------------------------------------------------------------------------
2) CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
| | 4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ |
--------------------------------------------------------------------------------
| EUR mill. | 2010 | 2009 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit/loss for the | 9.8 | 13.0 | -16.6 | -0.3 | -23.8 |
| accounting period | | | | | |
--------------------------------------------------------------------------------
| Translation difference | 1.9 | -1.1 | 3.9 | 0.5 | 3.4 |
--------------------------------------------------------------------------------
| Hedging of net investment | | | | | |
--------------------------------------------------------------------------------
| in foreign subsidiary | | 0.5 | | -0.5 | -0.4 |
--------------------------------------------------------------------------------
| Cash flow hedge | 0.1 | 0.2 | -0.1 | -0.4 | -0.2 |
--------------------------------------------------------------------------------
| Change in fair value | 0.0 | | 0.1 | | |
--------------------------------------------------------------------------------
| Other comprehensive income, | 2.0 | -0.4 | 3.9 | -0.5 | 2.8 |
| total | | | | | |
--------------------------------------------------------------------------------
| Comprehensive income for the | 11.8 | 12.6 | -12.7 | -0.8 | -21.0 |
| accounting period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution of comprehensive income for the | | | |
| accounting period | | | |
--------------------------------------------------------------------------------
| To shareholders of the | 11.5 | 12.0 | -13.3 | -2.0 | -23.4 |
| parent company | | | | | |
--------------------------------------------------------------------------------
| To minority interests | 0.3 | 0.7 | 0.6 | 1.2 | 2.4 |
--------------------------------------------------------------------------------
3) CONSOLIDATED STATEMENT OF FINANCIAL POSITION
--------------------------------------------------------------------------------
| EUR mill. | 6/2010 | 6/2009 | 12/2009 |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Tangible assets | 189.5 | 188.4 | 184.6 |
--------------------------------------------------------------------------------
| Goodwill | 86.6 | 76.8 | 78.3 |
--------------------------------------------------------------------------------
| Other intangible assets | 5.6 | 2.4 | 2.7 |
--------------------------------------------------------------------------------
| Investments | 12.5 | 11.1 | 12.8 |
--------------------------------------------------------------------------------
| Deferred tax asset | 21.4 | 16.4 | 14.3 |
--------------------------------------------------------------------------------
| Other non-current receivables | 7.3 | 6.6 | 7.5 |
--------------------------------------------------------------------------------
| Total | 322.9 | 301.7 | 300.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 427.5 | 447.4 | 374.7 |
--------------------------------------------------------------------------------
| Trade and other receivables | 397.2 | 504.3 | 305.1 |
--------------------------------------------------------------------------------
| Cash funds | 39.0 | 111.0 | 74.4 |
--------------------------------------------------------------------------------
| Total | 863.7 | 1,062.7 | 754.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets, total | 1,186.6 | 1,364.4 | 1,054.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity and liabilities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity attributable to shareholders of the parent | | |
| company | | |
--------------------------------------------------------------------------------
| Share capital | 34.0 | 34.0 | 34.0 |
--------------------------------------------------------------------------------
| Share premium account | 5.8 | 5.8 | 5.8 |
--------------------------------------------------------------------------------
| Hedging reserve | -2.0 | -2.2 | -2.0 |
--------------------------------------------------------------------------------
| Fair value reserve | 0.1 | | |
--------------------------------------------------------------------------------
| Invested unrestricted equity reserve | 63.1 | | |
--------------------------------------------------------------------------------
| Translation differences | 2.2 | -4.8 | -1.7 |
--------------------------------------------------------------------------------
| Retained earnings | 225.5 | 261.6 | 261.6 |
--------------------------------------------------------------------------------
| Profit/loss for the period | -17.1 | -1.5 | -26.2 |
--------------------------------------------------------------------------------
| Shareholders' equity before minority | 311.5 | 292.9 | 271.5 |
| interest | | | |
--------------------------------------------------------------------------------
| Minority interest | 7.7 | 23.0 | 23.2 |
--------------------------------------------------------------------------------
| Shareholders' equity, total | 319.2 | 315.9 | 294.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 15.9 | 16.5 | 19.0 |
--------------------------------------------------------------------------------
| Pension liabilities | 0.5 | 0.2 | 0.7 |
--------------------------------------------------------------------------------
| Provisions | 2.9 | 2.0 | 1.8 |
--------------------------------------------------------------------------------
| Financial liabilities | 174.3 | 267.8 | 290.7 |
--------------------------------------------------------------------------------
| Other liabilities | 2.1 | 2.4 | 2.4 |
--------------------------------------------------------------------------------
| Total | 195.7 | 288.8 | 314.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Accounts payable and other liabilities | 390.6 | 463.7 | 328.4 |
--------------------------------------------------------------------------------
| Provisions | 6.9 | 7.5 | 8.3 |
--------------------------------------------------------------------------------
| Financial liabilities | 274.1 | 288.4 | 108.4 |
--------------------------------------------------------------------------------
| Total | 671.6 | 759.6 | 445.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity and liabilities, | 1,186.6 | 1,364.4 | 1,054.4 |
| total | | | |
--------------------------------------------------------------------------------
4) CONSOLIDATED CASH FLOW STATEMENT
--------------------------------------------------------------------------------
| | 1-6/ | 1-6/ | 1-12/ |
--------------------------------------------------------------------------------
| EUR mill. | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit/loss before taxes | -19.0 | 1.9 | -10.2 |
--------------------------------------------------------------------------------
| Depreciation | 14.3 | 14.2 | 34.3 |
--------------------------------------------------------------------------------
| Other adjustments | 6.8 | 16.9 | 33.9 |
--------------------------------------------------------------------------------
| Cash flow before change in working | 2.2 | 33.0 | 58.0 |
| capital | | | |
--------------------------------------------------------------------------------
| Change in working capital | -76.9 | -62.8 | 52.4 |
--------------------------------------------------------------------------------
| Financial items | -11.0 | -26.7 | -30.2 |
--------------------------------------------------------------------------------
| Direct taxes paid | -11.2 | -14.1 | -16.0 |
--------------------------------------------------------------------------------
| Cash flow from operating activities | -96.9 | -70.6 | 64.2 |
--------------------------------------------------------------------------------
| Cash flow provided by investing | 9.5 | 1.9 | 11.9 |
| activities | | | |
--------------------------------------------------------------------------------
| Cash flow used in investing activities | -24.1 | -18.2 | -30.5 |
--------------------------------------------------------------------------------
| Share issue for cash consideration | 39.5 | | |
--------------------------------------------------------------------------------
| Change in non-current receivables | 0.2 | -0.3 | 0.0 |
--------------------------------------------------------------------------------
| Drawings of loans | 160.0 | 406.7 | 562.3 |
--------------------------------------------------------------------------------
| Repayments of loans | -120.5 | -438.8 | -764.6 |
--------------------------------------------------------------------------------
| Dividends paid | -2.0 | -17.9 | -18.0 |
--------------------------------------------------------------------------------
| Cash flow from financing activities | 77.3 | -50.3 | -220.2 |
--------------------------------------------------------------------------------
| Change in cash funds | -34.3 | -137.1 | -174.6 |
--------------------------------------------------------------------------------
| Cash funds at beginning of period | 74.4 | 250.1 | 250.1 |
--------------------------------------------------------------------------------
| Translation difference of cash funds | -1.2 | -1.9 | -1.1 |
--------------------------------------------------------------------------------
| Cash funds at end of period | 39.0 | 111.0 | 74.4 |
--------------------------------------------------------------------------------
5) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
A = Share capital
B = Share premium account
C = Hedging reserve
D = Fair value reserve
E = Invested unrestricted equity reserve
F = Translation difference
G = Retained earnings
H = Minority interest
I = Shareholders' equity total
--------------------------------------------------------------------------------
| EUR | A | B | C | D | E | F | G | H | I |
| mill. | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' | | | | | | | | |
| equity | | | | | | | | |
--------------------------------------------------------------------------------
| 1.1.2009 | 34.0 | 5.8 | -1.7 | | | -4.7 | 276.9 | 27.3 | 337. |
| | | | | | | | | | 6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit/l | | | | | | | | | |
| oss for | | | | | | | | | |
| the | | | | | | | | | |
--------------------------------------------------------------------------------
| accounti | | | | | | | -1.5 | 1.2 | -0.3 |
| ng | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Translation | | | | | 0.5 | | | 0.5 |
| difference | | | | | | | | |
--------------------------------------------------------------------------------
| Hedging of net | | | | | | | | |
| investment | | | | | | | | |
--------------------------------------------------------------------------------
| in foreign | | | | | -0.5 | | | -0.5 |
| subsidiary | | | | | | | | |
--------------------------------------------------------------------------------
| Cash | | | -0.4 | | | | | | -0.4 |
| flow | | | | | | | | | |
| hedge | | | | | | | | | |
--------------------------------------------------------------------------------
| Comprehensive income, | -0.4 | | | 0.0 | -1.5 | 1.2 | -0.8 |
| total | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dividend | | | | | | -15.3 | -2.0 | -17. |
| distribution | | | | | | | | 3 |
--------------------------------------------------------------------------------
| Change | | | | | | | | | |
| in | | | | | | | | | |
--------------------------------------------------------------------------------
| minority | | | | | | | | -3.6 | -3.6 |
| interest | | | | | | | | | |
--------------------------------------------------------------------------------
| Transact | | | | | | | | | |
| ions | | | | | | | | | |
| with | | | | | | | | | |
--------------------------------------------------------------------------------
| owners, | | | | | | | -15.3 | -5.5 | -20. |
| total | | | | | | | | | 9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' | | | | | | | | |
| equity | | | | | | | | |
--------------------------------------------------------------------------------
| 30.6.200 | 34.0 | 5.8 | -2.2 | | | -4.8 | 260.1 | 23.0 | 315. |
| 9 | | | | | | | | | 9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR | A | B | C | D | E | F | G | H | I |
| mill. | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' | | | | | | | | |
| equity | | | | | | | | |
--------------------------------------------------------------------------------
| 1.1.2009 | 34.0 | 5.8 | -1.7 | | | -4.7 | 276.9 | 27.3 | 337. |
| | | | | | | | | | 6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit/l | | | | | | | | | |
| oss for | | | | | | | | | |
| the | | | | | | | | | |
--------------------------------------------------------------------------------
| accounti | | | | | | | -26.2 | 2.4 | -23. |
| ng | | | | | | | | | 8 |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Translation | | | | | 3.4 | | | 3.4 |
| difference | | | | | | | | |
--------------------------------------------------------------------------------
| Hedging of net | | | | | | | | |
| investment | | | | | | | | |
--------------------------------------------------------------------------------
| in foreign | | | | | -0.4 | | | -0.4 |
| subsidiary | | | | | | | | |
--------------------------------------------------------------------------------
| Cash | | | -0.2 | | | | | | -0.2 |
| flow | | | | | | | | | |
| hedge | | | | | | | | | |
--------------------------------------------------------------------------------
| Comprehensive income, | -0.2 | | | 3.0 | -26.2 | 2.4 | -21. |
| total | | | | | | | 0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dividend | | | | | | -15.3 | -2.0 | -17. |
| distribution | | | | | | | | 3 |
--------------------------------------------------------------------------------
| Change | | | | | | | | | |
| in | | | | | | | | | |
--------------------------------------------------------------------------------
| minority | | | | | | | | -4.5 | -4.5 |
| interest | | | | | | | | | |
--------------------------------------------------------------------------------
| Transact | | | | | | | | | |
| ions | | | | | | | | | |
| with | | | | | | | | | |
--------------------------------------------------------------------------------
| owners, | | | | | | | -15.3 | -6.5 | -21. |
| total | | | | | | | | | 8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' | | | | | | | | |
| equity | | | | | | | | |
--------------------------------------------------------------------------------
| 31.12.20 | 34.0 | 5.8 | -2.0 | | | -1.7 | 235.4 | 23.2 | 294. |
| 09 | | | | | | | | | 8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | A | B | C | D | E | F | G | H | I |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity | | | | | | | | |
--------------------------------------------------------------------------------
| 1.1.2010 | 34. | 5.8 | -2.0 | | | -1.7 | 235. | 23.2 | 294. |
| | 0 | | | | | | 4 | | 8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit/loss | | | | | | | | | |
| for the | | | | | | | | | |
--------------------------------------------------------------------------------
| accounting | | | | | | | -17. | 0.6 | -16. |
| period | | | | | | | 1 | | 6 |
--------------------------------------------------------------------------------
| Translation | | | | | 3.9 | | | 3.9 |
| difference | | | | | | | | |
--------------------------------------------------------------------------------
| Cash flow | | | -0.1 | | | | | | -0.1 |
| hedge | | | | | | | | | |
--------------------------------------------------------------------------------
| Change in fair value | | | 0.1 | | | | | 0.1 |
--------------------------------------------------------------------------------
| Comprehensive income, total | -0.1 | 0.1 | | 3.9 | -17. | 0.6 | -12. |
| | | | | | 1 | | 7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share issue to | | | | | | | | |
| investors | | | | | | | | |
--------------------------------------------------------------------------------
| for cash | | | | 39.5 | | | | 39.5 |
| consideration | | | | | | | | |
--------------------------------------------------------------------------------
| Share issue to | | | | | | | |
| non-controlling | | | | | | | |
--------------------------------------------------------------------------------
| interest for cash | | | 24.3 | | | | 24.3 |
| consideration | | | | | | | |
--------------------------------------------------------------------------------
| Transaction expenses | | | | | | | | |
--------------------------------------------------------------------------------
| of share | | | | | -0.7 | | | | -0.7 |
| issues | | | | | | | | | |
--------------------------------------------------------------------------------
| Gains on share-based | | | | | | | | |
--------------------------------------------------------------------------------
| payments | | | | | | | 0.1 | | 0.1 |
--------------------------------------------------------------------------------
| Direct | | | | | | | -10. | | -10. |
| entries, | | | | | | | 0 | | 0 |
| minority | | | | | | | | | |
| acquisition | | | | | | | | | |
--------------------------------------------------------------------------------
| Cancellation of dividend | | | | | 0.1 | | 0.1 |
| liability | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | | -1.9 | -1.9 |
| distribution | | | | | | | | |
--------------------------------------------------------------------------------
| Change in | | | | | | | | | |
--------------------------------------------------------------------------------
| minority | | | | | | | | -14. | -14. |
| interest | | | | | | | | 2 | 2 |
--------------------------------------------------------------------------------
| Transactions | | | | | | | | | |
| with | | | | | | | | | |
--------------------------------------------------------------------------------
| owners, total | | | | | 63.1 | | -9.9 | -16. | 37.2 |
| | | | | | | | | 1 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity | | | | | | | | |
--------------------------------------------------------------------------------
| 30.6.2010 | 34. | 5.8 | -2.0 | 0.1 | 63.1 | 2.2 | 208. | 7.7 | 319. |
| | 0 | | | | | | 4 | | 2 |
--------------------------------------------------------------------------------
6) CONSOLIDATED INCOME STATEMENT, QUARTERLY
--------------------------------------------------------------------------------
| | 4-6/ | 1-3/ | 10-12/ | 7-9/ | 4-6/ |
--------------------------------------------------------------------------------
| EUR mill. | 2010 | 2010 | 2009 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 478.8 | 284.4 | 525.1 | 568.6 | 528.3 |
--------------------------------------------------------------------------------
| Operating income and expenses | -449. | -308.0 | -505.9 | -567.0 | -491.3 |
| | 0 | | | | |
--------------------------------------------------------------------------------
| Depreciation | 9.6 | 4.7 | 7.6 | 12.5 | 9.5 |
--------------------------------------------------------------------------------
| Share of the results of | -0.2 | -0.2 | 0.4 | 1.1 | 0.3 |
| affiliated companies | | | | | |
--------------------------------------------------------------------------------
| Operating profit/loss | 20.0 | -28.5 | 12.0 | -9.8 | 27.8 |
--------------------------------------------------------------------------------
| Financial expenses | 10.0 | 12.1 | 13.1 | 10.5 | 10.4 |
--------------------------------------------------------------------------------
| Financial income | 5.0 | 6.7 | 5.2 | 4.1 | 1.2 |
--------------------------------------------------------------------------------
| Profit/loss before taxes | 15.0 | -33.9 | 4.0 | -16.1 | 18.6 |
--------------------------------------------------------------------------------
| Income taxes | -5.2 | 7.6 | -3.3 | -8.1 | -5.6 |
--------------------------------------------------------------------------------
| Profit/loss for the | 9.8 | -26.4 | 0.7 | -24.2 | 13.0 |
| accounting period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution of the profit/loss for | | | | |
| the accounting period | | | | |
--------------------------------------------------------------------------------
| To shareholders of the parent | 9.5 | -26.7 | -0.7 | -24.0 | 12.3 |
| company | | | | | |
--------------------------------------------------------------------------------
| To minority interests | 0.3 | 0.3 | 1.4 | -0.3 | 0.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EPS calculated from profit/loss attributable to parent | | |
| company shareholders | | |
--------------------------------------------------------------------------------
| Earnings per share, diluted | 0.60 | -1.52 | -0.05 | -1.40 | 0.72 |
| and undiluted, EUR | | | | | |
--------------------------------------------------------------------------------
7) SEGMENT INFORMATION
IFRS 8 Operating Segment Reporting requires that reported segment information be
based on internal segment reporting to management, which in Lemminkäinen Group
means the President of Lemminkäinen Corporation, who is the chief operative
decision-maker. Internal segment reporting to management covers net sales,
depreciation, operating profit, non-current assets, inventories and trade
receivables.
The segment information reported to management is generally prepared according
to the same principles as those applied in the consolidated financial
statements. Imputed items are not considered in segment reporting. Such items
include, among others, depreciation of assets acquired by finance leasing,
interest separated from payments and warranty provisions. In segment reporting
to management, finance leasing arrangements are treated as ordinary rental
agreements, which deviate from the accounting principles of IFRS financial
statements. Affiliated companies are combined in segment reporting in proportion
to ownership share using the line-by-line method. In IFRS financial statements
affiliated companies are combined by the equity method. In segment reporting,
intersegment sales are not allocated to segments, owing to their minimal
magnitude, and are not reported to management.
The interpretation IFRIC 15 - Agreements for the Construction of Real Estate was
adopted from the beginning of 2010. The comparative figures starting from
1.1.2009 have also been calculated in accordance with the provisions of the new
interpretation. IFRIC 15 affected not only the figures of Lemminkäinen Group but
also those of the Building Construction business sector. Furthermore, Forssan
Betoni Oy, which formerly belonged to the Infrastructure Construction business
sector, was transferred at the beginning of January 2010 to the Building
Products business sector. The Group and business sector-specific figures given
in this bulletin are pro forma figures.
BLDCO = Building Construction
INFRA = Infrastructure Construction
TECBS = Technical Building Services
BLDPR = Building Products
OTHER = Other operations
ELIM = Group eliminations
SEGM = Segments total
RECON = Reconciling items
TOTAL = Group total, IRFS
--------------------------------------------------------------------------------
| EUR mill. | | | | | | | | | |
--------------------------------------------------------------------------------
| 1-6/2010 | BLDC | INFRA | TECB | BLDP | OTHE | ELIM | SEGM | RECON | TOTAL |
| | O | | S | R | R | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 337. | 277.2 | 110. | 65.0 | 5.7 | -28. | 767.8 | -4.6 | 763.2 |
| | 9 | | 0 | | | 0 | | | |
--------------------------------------------------------------------------------
| Depreciat | 1.2 | 11.5 | 0.4 | 1.7 | 0.4 | | 15.2 | -0.9 | 14.3 |
| ion | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 7.9 | -10.8 | 1.5 | -0.3 | -7.1 | | -8.8 | 0.3 | -8.5 |
| profit/lo | | | | | | | | | |
| ss | | | | | | | | | |
--------------------------------------------------------------------------------
The reconciling items for net sales comprise EUR -4.6 million from the equity
share treatment of affiliated companies and the treatment difference between
entries made to net sales and other income.
The reconciling items for operating profit comprise EUR 1.1 million in personnel
expenses, EUR 1.4 million from the IFRS treatment of finance leasing, EUR 0.2
million from the equity share treatment of affiliated companies and EUR -2.5
million in other closing entries.
--------------------------------------------------------------------------------
| EUR mill. | | | | | | | | | |
--------------------------------------------------------------------------------
| 1-6/2009 | BLDC | INFRA | TECB | BLDP | OTHE | ELIM | SEGM | RECON | TOTAL |
| | O | | S | R | R | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 422. | 290.1 | 115. | 66.6 | 5.4 | -24. | 875.7 | -4.0 | 871.8 |
| | 3 | | 9 | | | 5 | | | |
--------------------------------------------------------------------------------
| Depreciat | 1.4 | 11.8 | 0.4 | 1.7 | 0.4 | | 15.7 | -1.5 | 14.2 |
| ion | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 20.5 | -5.5 | 5.1 | 2.5 | -2.3 | | 20.4 | 0.6 | 21.0 |
| profit/lo | | | | | | | | | |
| ss | | | | | | | | | |
--------------------------------------------------------------------------------
The reconciling items for net sales comprise EUR -5.4 million from the equity
share treatment of affiliated companies and the treatment difference between
entries made to net sales and other income.
The reconciling items for operating profit comprise EUR 0.9 million in personnel
expenses, EUR 1.0 million from the IFRS treatment of finance leasing, EUR -0.4
million in capitalised equipment expenses EUR -0.1 million from the equity share
treatment of affiliated companies and EUR -0.9 million in other closing entries.
--------------------------------------------------------------------------------
| NET SALES | 1-6/ | 1-6/ | 1-12/ |
--------------------------------------------------------------------------------
| EUR mill. | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Building Construction | 337.9 | 422.3 | 868.7 |
--------------------------------------------------------------------------------
| Infrastructure Construction | 277.2 | 290.1 | 768.0 |
--------------------------------------------------------------------------------
| Technical Building Services | 110.0 | 115.9 | 233.8 |
--------------------------------------------------------------------------------
| Building Products | 65.0 | 66.6 | 154.2 |
--------------------------------------------------------------------------------
| Other operations | 5.7 | 5.4 | 10.3 |
--------------------------------------------------------------------------------
| Group eliminations | -28.0 | -24.5 | -52.5 |
--------------------------------------------------------------------------------
| Segments total | 767.8 | 875.7 | 1,982.6 |
--------------------------------------------------------------------------------
| Reconciling items | -4.6 | -4.0 | -17.1 |
--------------------------------------------------------------------------------
| Group total, IFRS | 763.2 | 871.8 | 1,965.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING PROFIT/LOSS | 1-6/ | 1-6/ | 1-12/ |
--------------------------------------------------------------------------------
| EUR mill. | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Building Construction | 7.9 | 20.5 | 36.4 |
--------------------------------------------------------------------------------
| Infrastructure Construction | -10.8 | -5.5 | 22.0 |
--------------------------------------------------------------------------------
| Technical Building Services | 1.5 | 5.1 | 12.2 |
--------------------------------------------------------------------------------
| Building Products | -0.3 | 2.5 | 10.4 |
--------------------------------------------------------------------------------
| Other operations | -7.1 | -2.3 | -61.7 |
--------------------------------------------------------------------------------
| Segments total | -8.8 | 20.4 | 19.4 |
--------------------------------------------------------------------------------
| Reconciling items | 0.3 | 0.6 | 3.8 |
--------------------------------------------------------------------------------
| Group total, IFRS | -8.5 | 21.0 | 23.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES, QUARTERLY | 4-6/ | 1-3/ | 10-12/ | 7-9/ | 4-6/ |
--------------------------------------------------------------------------------
| EUR mill. | 2010 | 2010 | 2009 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Building Construction | 169.2 | 168.7 | 266.3 | 180.1 | 217.0 |
--------------------------------------------------------------------------------
| Infrastructure Construction | 226.0 | 51.3 | 173.6 | 304.3 | 222.1 |
--------------------------------------------------------------------------------
| Technical Building Services | 55.8 | 54.2 | 65.2 | 52.6 | 60.6 |
--------------------------------------------------------------------------------
| Building Products | 44.7 | 20.3 | 38.9 | 48.8 | 44.0 |
--------------------------------------------------------------------------------
| Other operations | 2.9 | 2.8 | 2.1 | 2.9 | 2.9 |
--------------------------------------------------------------------------------
| Group eliminations | -15.8 | -12.2 | -19.2 | -8.8 | -14.9 |
--------------------------------------------------------------------------------
| Segments total | 482.6 | 285.2 | 526.9 | 579.9 | 531.7 |
--------------------------------------------------------------------------------
| Reconciling items | -3.8 | -0.8 | -1.8 | -11.3 | -3.4 |
--------------------------------------------------------------------------------
| Group total, IFRS | 478.8 | 284.4 | 525.1 | 568.6 | 528.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING PROFIT/LOSS, | 4-6/ | 1-3/ | 10-12/ | 7-9/ | 4-6/ |
| QUARTERLY | | | | | |
--------------------------------------------------------------------------------
| EUR mill. | 2010 | 2010 | 2009 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Building Construction | 6.7 | 1.2 | 14.7 | 1.2 | 9.1 |
--------------------------------------------------------------------------------
| Infrastructure Construction | 13.5 | -24.3 | -5.8 | 33.3 | 12.8 |
--------------------------------------------------------------------------------
| Technical Building Services | 0.4 | 1.1 | 3.2 | 3.8 | 2.6 |
--------------------------------------------------------------------------------
| Building Products | 3.4 | -3.7 | 1.8 | 6.1 | 4.6 |
--------------------------------------------------------------------------------
| Other operations | -3.7 | -3.4 | -3.4 | -56.0 | -2.1 |
--------------------------------------------------------------------------------
| Segments total | 20.3 | -29.1 | 10.5 | -11.5 | 26.9 |
--------------------------------------------------------------------------------
| Reconciling items | -0.3 | 0.6 | 1.5 | 1.8 | 0.9 |
--------------------------------------------------------------------------------
| Group total, IFRS | 20.0 | -28.5 | 12.0 | -9.8 | 27.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
| EUR mill. | 6/2010 | 6/2009 | 12/2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Building Construction | 400.2 | 387.3 | 357.9 |
--------------------------------------------------------------------------------
| Infrastructure Construction | 338.1 | 355.4 | 253.9 |
--------------------------------------------------------------------------------
| Technical Building Services | 28.0 | 30.1 | 30.5 |
--------------------------------------------------------------------------------
| Building Products | 64.5 | 62.5 | 55.3 |
--------------------------------------------------------------------------------
| Other operations | 42.5 | 43.2 | 43.6 |
--------------------------------------------------------------------------------
| Segments total | 873.3 | 878.5 | 741.1 |
--------------------------------------------------------------------------------
| Assets unallocated to segments | | | |
--------------------------------------------------------------------------------
| and Group eliminations, total | 313.3 | 485.9 | 313.3 |
--------------------------------------------------------------------------------
| Group total, IFRS | 1,186.6 | 1,364.4 | 1,054.4 |
--------------------------------------------------------------------------------
8) ECONOMIC TRENDS AND FINANCIAL INDICATORS
--------------------------------------------------------------------------------
| | 6/2010 | 6/2009 | 12/2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity, % | -5.4 | -0.1 | -7.5 |
--------------------------------------------------------------------------------
| Return on investment, % | 0.4 | 3.6 | 5.4 |
--------------------------------------------------------------------------------
| Operating profit, % of net sales | -1.1 | 2.4 | 1.2 |
--------------------------------------------------------------------------------
| Equity ratio, % | 30.2 | 26.0 | 31.0 |
--------------------------------------------------------------------------------
| Gearing, % | 128.3 | 140.9 | 110.2 |
--------------------------------------------------------------------------------
| Interest-bearing net debt, EUR million | 409.5 | 445.2 | 324.7 |
--------------------------------------------------------------------------------
| Gross investments, EUR million (incl. | 33.8 | 19.4 | 41.5 |
| leasing purchases) | | | |
--------------------------------------------------------------------------------
| Order book, EUR mill. | 1,430.2 | 1,249.5 | 1,064.5 |
--------------------------------------------------------------------------------
| - of which foreign orders, EUR mill. | 338.6 | 374.1 | 224.4 |
--------------------------------------------------------------------------------
| Average number of employees | 7,966 | 8,543 | 8,626 |
--------------------------------------------------------------------------------
| Employees at end of period | 9,302 | 9,589 | 7,759 |
--------------------------------------------------------------------------------
| Net sales, EUR mill. | 763.2 | 871.8 | 1,965.5 |
--------------------------------------------------------------------------------
| - of which operations outside Finland, EUR | 218.1 | 218.1 | 527.6 |
| mill. | | | |
--------------------------------------------------------------------------------
| % of net sales | 28.6 | 25.0 | 26.8 |
--------------------------------------------------------------------------------
9) SHARE-SPECIFIC INDICATORS
--------------------------------------------------------------------------------
| | 6/2010 | 6/2009 | 12/2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, EUR | -0.92 | -0.09 | -1.54 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 15.86 | 17.21 | 15.95 |
--------------------------------------------------------------------------------
| Market capitalisation, EUR mill. | 467.5 | 323.7 | 411.9 |
--------------------------------------------------------------------------------
| Share price at end of period, EUR | 23.80 | 19.02 | 24.20 |
--------------------------------------------------------------------------------
| Trading volume during period, 1000 shares | 2,451 | 884 | 1,918 |
--------------------------------------------------------------------------------
| Number of issued shares, 1000 shares | 19,645 | 17,021 | 17,021 |
--------------------------------------------------------------------------------
| Weighted average number of shares over the | 18,588 | 17,021 | 17,021 |
| period, 1000 shares | | | |
--------------------------------------------------------------------------------
10) TANGIBLE ASSETS
--------------------------------------------------------------------------------
| EUR mill. | 6/2010 | 6/2009 | 12/2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisition cost at the beginning of the | 458.3 | 444.8 | 444.8 |
| accounting period | | | |
--------------------------------------------------------------------------------
| Translation difference | 2.6 | 2.1 | 5.1 |
--------------------------------------------------------------------------------
| Increases | 18.1 | 17.5 | 35.5 |
--------------------------------------------------------------------------------
| Increases from acquired businesses | 4.5 | 0.0 | 3.9 |
--------------------------------------------------------------------------------
| Decreases | -14.7 | -19.9 | -30.8 |
--------------------------------------------------------------------------------
| Transfers between items | | | -0.1 |
--------------------------------------------------------------------------------
| Accumulated depreciation | -279.2 | -256.1 | -273.7 |
--------------------------------------------------------------------------------
| Carrying value at the end of accounting | 189.5 | 188.4 | 184.6 |
| period | | | |
--------------------------------------------------------------------------------
11) ACQUIRED AND DIVESTED BUSINESSES
Description of acquired companies, businesses and shareholdings
On 21.4.2010 Lemminkäinen acquired a 75% stake in Asfalt Remix AS. The company
specialises in the cold milling of asphalt pavement.
On 9.6.2010 Lemminkäinen acquired a 90.1% stake in Risa Rock AS. The company
specialises in tunnel excavation.
Aggregated figures for the acquired businesses
--------------------------------------------------------------------------------
| | | Carryin | | | Fair |
| | | g | | | values |
| | | amounts | | | recognis |
| | | | | | ed |
--------------------------------------------------------------------------------
| | before | | after |
| | consolidation | | consolidation |
--------------------------------------------------------------------------------
| EUR mill. | | 30.6.20 | | 30.6.2010 |
| | | 10 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Tangible and intangible assets | | | | |
--------------------------------------------------------------------------------
| Inventories | | 0.2 | | | 0.2 |
--------------------------------------------------------------------------------
| Trade and other | | 2.0 | | | 2.0 |
| receivables | | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | 5.1 | | | 5.1 |
--------------------------------------------------------------------------------
| Assets | | 11.7 | | | 11.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred tax liabilities | | 0.2 | | | 0.2 |
--------------------------------------------------------------------------------
| Interest-bearing | | 4.1 | | | 4.1 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Other liabilities | | 4.5 | | | 4.5 |
--------------------------------------------------------------------------------
| Liabilities total | | 8.8 | | | 8.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets | | 2.9 | | | 3.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Minority interest | | | | | 2.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisition cost, total | | 8.8 | | | 8.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Goodwill, total | | | | | 7.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transaction price paid in cash | | | | 3.7 |
--------------------------------------------------------------------------------
| Cash funds of acquired subsidiary | | | | 5.1 |
--------------------------------------------------------------------------------
| Cash flow effect | | | | | 1.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Expensed acquisition costs | | | | | 0.2 |
--------------------------------------------------------------------------------
The full (fair value) goodwill method is applied to the acquired companies.
The full-year net sales of the acquired companies were approx. EUR 24 million in
2009. The effect of these acquisitions on the Group's operating profit for the
review period is approx. EUR 0.2 million.
Divested businesses
At the end of the accounting period the Group did not have any businesses
classified as being held-for-sale under IFRS 5. There were no discontinued
operations in the Group during the accounting period.
12) RELATED-PARTY TRANSACTIONS
--------------------------------------------------------------------------------
| EUR mill. | 6/2010 | 6/2009 | 12/2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales to affiliates | 1.6 | 1.0 | 0.5 |
--------------------------------------------------------------------------------
| Purchases from affiliates | 0.0 | 0.0 | 6.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Trade receivables from affiliates | 0.0 | 1.0 | 0.0 |
--------------------------------------------------------------------------------
| Accounts payable to affiliates | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Loan receivables from affiliates | 0.1 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
13) GUARANTEES AND CONTINGENT LIABILITIES
--------------------------------------------------------------------------------
| EUR mill. | 6/2010 | 6/2009 | 12/2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Securities for own commitments | | | |
--------------------------------------------------------------------------------
| Property mortgages | 80.0 | 80.0 | 80.0 |
--------------------------------------------------------------------------------
| Business mortgages | 1,218.8 | 1,218.8 | 1,221.3 |
--------------------------------------------------------------------------------
| Bonds pledged as security | 0.4 | 0.3 | 0.6 |
--------------------------------------------------------------------------------
| Deposits | 0.1 | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Total | 1,299.3 | 1,299.3 | 1,302.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Guarantees | | | |
--------------------------------------------------------------------------------
| On behalf of affiliated companies | 0.0 | 18.8 | 0.0 |
--------------------------------------------------------------------------------
| On behalf of others | 15.1 | 26.1 | 34.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Minimum lease payments of irrevocable lease agreements | |
--------------------------------------------------------------------------------
| One year or less | 14.3 | 10.4 | 11.1 |
--------------------------------------------------------------------------------
| Over one year but no more than five | 28.6 | 22.4 | 24.9 |
| years | | | |
--------------------------------------------------------------------------------
| Over five years | 18.6 | 20.9 | 20.7 |
--------------------------------------------------------------------------------
| Total | 61.5 | 53.7 | 56.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Purchase commitments of investments | 13.0 | 13.4 | 11.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Derivative contracts | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Forward foreign exchange contracts | | | |
--------------------------------------------------------------------------------
| Nominal value | 52.9 | 56.7 | 36.6 |
--------------------------------------------------------------------------------
| Fair value | -0.6 | 3.8 | -1.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Currency options, calls purchased | | | |
--------------------------------------------------------------------------------
| Nominal value | 0.0 | 25.3 | 0.0 |
--------------------------------------------------------------------------------
| Fair value | 0.0 | 0.4 | 0.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Currency options, puts written | | | |
--------------------------------------------------------------------------------
| Nominal value | 0.0 | 14.8 | 0.0 |
--------------------------------------------------------------------------------
| Fair value | 0.0 | -0.2 | 0.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest rate options, calls purchased | | | |
--------------------------------------------------------------------------------
| Nominal value | 0.0 | 0.8 | 0.0 |
--------------------------------------------------------------------------------
| Fair value | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest rate options, puts written | | | |
--------------------------------------------------------------------------------
| Nominal value | 0.0 | 0.8 | 0.0 |
--------------------------------------------------------------------------------
| Fair value | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest rate swap contracts | | | |
--------------------------------------------------------------------------------
| Nominal value | 53.8 | 66.1 | 59.6 |
--------------------------------------------------------------------------------
| Fair value | -3.2 | -3.6 | -3.2 |
--------------------------------------------------------------------------------
The fair value of contracts is the gain or loss arising from closure of the
contract based on the market price on the accounting date.
11) LEGAL PROCEEDINGS
In 2009 the Supreme Administrative Court (SAC) fined a number of Finnish asphalt
industry companies for violations of the Act on Competition Restrictions.
At present, 29 municipalities and the Finnish Road Administration have brought
actions for the recovery of damages from Lemminkäinen and other asphalt
companies in the District Court of Helsinki. The claimants contend that
restrictions of competition have caused them damages. The capital amount of the
claims presented against Lemminkäinen is at present about EUR 73 million. The
claims presented in the statements of claim differ from each other as regards
their amounts and grounds.
The decision rendered by the SAC in 2009 as it stands does not mean that
Lemminkäinen or the other asphalt industry companies actually caused the parties
ordering asphalt works any damages. The SAC's decision does not concern the
individual contracts that the claimants are citing in support of their claims.
Neither does the decision concern the pricing of individual contracts, nor has
the SAC considered the claim that pricing deviating from the market price had
been used in the contracts.
Lemminkäinen's initial position is that the claims are without foundation
The claims will be brought separately before the District Court of Helsinki and
heard in the order determined by the court. It is likely that district court
proceedings will continue into 2011.
No provision for future expense has been made in respect of the statements of
claims submitted so far to the district court by the municipalities and the
Finnish Road Administration.
Lemminkäinen will provide further updates on the matter in connection with
interim financial reviews or, if necessary, as separate releases.