Lemminkäinen and YIT will complete the merger
LEMMINKÄINEN OYJ INTERIM FINANCIAL REVIEW 6.5.2010, AT 9:00 LEMMINKÄINEN'S INTERIM FINANCIAL REVIEW 1 JANUARY TO 31 MARCH, 2010: Market recovery reflected in improved order book. First quarter result was a loss. Summary for January-March 2010 (comparative figures 1-3/2009): - Net sales fell 17% to EUR 284.4 million (343.5) - Operati
LEMMINKÄINEN OYJ INTERIM FINANCIAL REVIEW 6.5.2010, AT 9:00 LEMMINKÄINEN'S INTERIM FINANCIAL REVIEW 1 JANUARY TO 31 MARCH, 2010: Market recovery reflected in improved order book. First quarter result was a loss. Summary for January-March 2010 (comparative figures 1-3/2009): - Net sales fell 17% to EUR 284.4 million (343.5) - Operations outside Finland accounted for 23% or EUR 64.0 million (71.7) of net sales. - The operating profit was EUR -28.5 million (-6.9). The operating margin was -10.0% (-2.0). - The result before taxes was EUR -33.9 million (-16.7) - Earnings per share were EUR -1.52 (-0.81) - The order book rose slightly and at the end of the review period was EUR 1,199.8 million (1,141.7) - Operations outside Finland accounted for 23 % or EUR 272.6 million (350.0) of the order book. - Cash flow from operating activities was EUR -49.9 million (-85.4) - The equity ratio was 33.7% (25.5) and gearing was 114.4% (147.1) -------------------------------------------------------------------------------- | Key figures, EUR million*) | 1-3/2010 | 1-3/2009 | 1-12/2009 | -------------------------------------------------------------------------------- | Net sales | 284.4 | 343.5 | 1,965.5 | -------------------------------------------------------------------------------- | of which operations outside | 64.0 | 71.7 | 527.6 | | Finland | | | | -------------------------------------------------------------------------------- | Operating profit | -28.5 | -6.9 | 23.2 | -------------------------------------------------------------------------------- | Operating margin, % | -10.0 | -2.0 | 1.2 | -------------------------------------------------------------------------------- | Profit before taxes | -33.9 | -16.7 | -10.2 | -------------------------------------------------------------------------------- | Profit for accounting period | -26.4 | -13.3 | -23.8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Order book | 1,199.8 | 1,141.7 | 983.6 | -------------------------------------------------------------------------------- | of which operations outside | 272.6 | 350.0 | 213.5 | | Finland | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity ratio, % | 33.7 | 25.5 | 31.0 | -------------------------------------------------------------------------------- | Gearing, % | 114.4 | 147.1 | 110.2 | -------------------------------------------------------------------------------- | Liquid funds | 38.3 | 154.5 | 74.4 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 387.3 | 605.1 | 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 own housing production remained subdued until the summer of 2009 owing to the economic downturn. Consequently, significantly fewer own housing developments than on the first quarter 2009 were completed and, because of the change in income recognition principle, recognised as income during the review period. Housing sales continued to be brisk in both Finland and Russia, and starts were made on 145 units in own housing developments during the first quarter. Exceptionally severe winter conditions prevented paving operations in Norway, Denmark and Lithuania, where paving work would be carried out in normal winter conditions. However, the infrastructure construction order book developed well, and at the end of the review period was higher than in the comparison period. The competition in technical building services increased, and the price level of materials continued to rise. However, the order book was up by a third on the comparison period. Demand for technical building services is expected to rise as new construction picks up. The exceptionally long and snowy winter delayed starts on roofing and waterproofing contracts. With the pick-up in housing production, demand for pre-cast concrete staircase and façade elements rose during the review period. Lemminkäinen executed a directed share issue to institutional investors during the review period. The funds raised from the issue, a total of EUR 39.5 million, were used during the review period for the amortisation of short-term loans. President & CEO Timo Kohtamäki: ”Lemminkäinen published its new strategy in November 2009, and we have now initiated measures needed to achieve the set goals. Last year we adjusted the number of our employees in response to the drop in construction volumes. This year we are seeking cost savings and efficiency improvements by developing our business operations. We are streamlining the Group's structure and continuing to develop our businesses towards our strategic goal of one united Lemminkäinen. Besides improving our financial position, we are also seeking profitable growth in this strategy period. The main focus areas are renovation construction, technical building services, residential construction in Russia, and infrastructure construction in the Nordic countries. The directed share issue completed during the review period gives us more room to manoeuvre and enables us to carry out our next strategic projects. In April we acquired a plot of land in St. Petersburg on which we are starting to construct a 540-unit apartment building. This is to take advantage of Russia's growing housing market. Two recent acquisitions in Norway will strengthen our position on the country's infrastructure market. Furthermore, we have expanded our offering of renovation construction services with a water pipe coating method that avoids the demolition of existing structures. Lemminkäinen typically records a loss in the first quarter of the year owing to the seasonal nature of our operations, and the severe winter conditions experienced in this review period amplified that seasonal effect. The housing production slowdown that began in the second half of 2008 continued to have an impact on the results of our operations, since significantly fewer housing units in own developments were completed and recognised as income in the first quarter than in the comparison period. However, the housing market has picked up since Q3 2009 and the housing production started at that time will be showing up in our net sales towards the end of 2010. This year Lemminkäinen has made starts on about 145 units in own housing developments in Finland. After the difficult market conditions of last year, our order book developed well in the review period and finished higher than its year-end level. Even though 2010 is expected to be a challenging year for the construction sector, there are indications that the general economic outlook is improving.” Outlook for 2010 According to economic forecasts, Finland's gross domestic production is expected to return to growth in 2010, but the total volume of construction is still estimated to contract. The number of new building starts will be up on 2009, and housing production in particular is estimated to pick up with the recovery in housing sales. Non-residential construction is likely to remain more subdued than last year. Renovation construction is estimated to continue its steady growth, and demand for technical building services is estimated to remain stable. In Russia the pick-up in the housing market continued in the first quarter and the volume of construction is estimated to grow during 2010. Most of new major transport infrastructure projects will be underway in 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. The other Nordic countries have budgeted additional investments on the development of infrastructure construction, which is estimated to 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 growing 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, 6 May 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 31 March 2010 Tabulated Section of the Interim Financial Review DISTRIBUTION NASDAQ OMX Helsinki Key media www.lemminkainen.com INTERIM FINANCIAL REVIEW 1 January to 31 March 2010 OPERATING ENVIRONMENT Markets in Finland The outlook for construction in the coming years is quite favourable. In 2010 the volume of construction is expected to contract by 2 per cent on 2009, but a return to growth is expected to occur already in 2011. The decrease will be mainly in non-residential building and infrastructure construction, whereas the number of new building starts is expected to be 7 per cent higher than in 2009. Housing sales have picked up significantly since last year, and housing production is expected to grow markedly this year. The volume of privately financed housing production in particular is growing. Some 27,500 new housing starts will be made in Finland during 2010, which is about a fifth more than in 2009. Despite the slowdown of the real estate market, the number of new commercial and office building starts is expected to remain at the 2009 level. There are a lot of non-residential building projects in the pipeline, but their start dates have been put back. The number of starts on public service buildings is also expected to remain at the 2009 level, but industrial construction is expected to decline. The construction of logistics centres has remained brisk. Renovation construction is expected to increase at an annual rate of about 2 per cent over the next two years. The growth and ageing of the building stock as well as its upgrading to modern technical standards are increasing the demand for renovation construction. The volume of infrastructure construction is expected to decrease by 2 per cent during 2010. New infrastructure projects are expected to start up in the coming years, and consequently the decline of infrastructure construction is expected to stop in 2011. With the slowdown of new construction, the emphasis in the technical building services sector has shifted to renovation construction, and its demand is expected to continue growing in the coming years. Demand for technical building services is also expected to rise as residential construction picks up. Markets outside Finland In the Nordic countries, government stimulus measures have kept the infrastructure markets at good levels. In Norway and Denmark demand for paving works has been brisk, but competition in the industry has intensified. In Sweden significant tunnel projects in the Stockholm area provide work for infrastructure builders. In the Baltic states the construction market continues to be challenging. However, in spite of the difficult market conditions, infrastructure construction in the Baltic area showed some slight signs of recovery. In Russia, housing sales picked up markedly towards the end of 2009 and continued to be brisker than last year during the first quarter. The Russian economy is expected to recover at the same rate as the rest of the world. The growth forecast for this year is about 6 per cent, and economic growth is expected to continue in 2011 and 2012. NET SALES -------------------------------------------------------------------------------- | Net sales by business sector, EUR | 1-3/2010 | 1-3/2009 | 1-12/2009 | | million | | | | -------------------------------------------------------------------------------- | Building Construction*) | 168.7 | 205.3 | 868.7 | -------------------------------------------------------------------------------- | Infrastructure Construction**) | 51.3 | 68.0 | 768.0 | -------------------------------------------------------------------------------- | Technical Building Services | 54.2 | 55.3 | 233.8 | -------------------------------------------------------------------------------- | Building Products**) | 20.3 | 22.6 | 154.2 | -------------------------------------------------------------------------------- | Other operations and Group | -9.4 | -7.1 | -42.2 | | eliminations | | | | -------------------------------------------------------------------------------- | Business sectors, total | 285.2 | 344.1 | 1,982.6 | -------------------------------------------------------------------------------- | Unallocated Items | -0.8 | -0.6 | -17.1 | -------------------------------------------------------------------------------- | Group total (IFRS) | 284.4 | 343.5 | 1,965.5 | -------------------------------------------------------------------------------- | of which operations outside | 64.0 | 71.7 | 527.6 | | 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. Lemminkäinen Group's first-quarter net sales were 17% down on Q1 last year at EUR 284.4 million (343.5). Net sales declined in all of Lemminkäinen's business sectors, but especially in Building Construction and Infrastructure Construction. Of total net sales, 77% (79) was generated in Finland, 15% (10) in other Nordic countries, 1% (5) in Russia and 7% (6) in other countries. OPERATING PROFIT -------------------------------------------------------------------------------- | Operating profit by business | 1-3/2010 | 1-3/2009 | 1-12/2009 | | sector, | | | | | EUR million | | | | -------------------------------------------------------------------------------- | Building Construction*) | 1.2 | 11.4 | 36.4 | -------------------------------------------------------------------------------- | Infrastructure Construction**) | -24.3 | -18.2 | 22.0 | -------------------------------------------------------------------------------- | Technical Building Services | 1.1 | 2.5 | 12.2 | -------------------------------------------------------------------------------- | Building Products**) | -3.7 | -2.1 | 10.4 | -------------------------------------------------------------------------------- | Other operations | -3.4 | -0.2 | -61.7 | -------------------------------------------------------------------------------- | Business sectors, total | -29.1 | -6.5 | 19.4 | -------------------------------------------------------------------------------- | Unallocated Items | 0.6 | -0.4 | 3.8 | -------------------------------------------------------------------------------- | Group total (IFRS) | -28.5 | -6.9 | 23.2 | -------------------------------------------------------------------------------- | Operating margin by business | 1-3/2010 | 1-3/2009 | 1-12/2009 | | sector, % | | | | -------------------------------------------------------------------------------- | Building Construction*) | 0.7 | 5.6 | 4.2 | -------------------------------------------------------------------------------- | Infrastructure Construction**) | -47.3 | -26.8 | 2.9 | -------------------------------------------------------------------------------- | Technical Building Services | 2.0 | 4.6 | 5.2 | -------------------------------------------------------------------------------- | Building Products**) | -18.1 | -9.2 | 6.8 | -------------------------------------------------------------------------------- | Group total (IFRS) | -10.0 | -2.0 | 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 operations in the first quarter of 2010 were clearly loss-making, and the operating result was EUR -28.5 million (-6.9). Lemminkäinen's first-quarter result typically shows a loss due to seasonal variations. ORDER BOOK -------------------------------------------------------------------------------- | Order book by business sector, | 31.3.2010 | 31.3.2009 | 31.12.2009 | | EUR million | | | | -------------------------------------------------------------------------------- | Building Construction*) | 534.9 | 540.8 | 520.8 | -------------------------------------------------------------------------------- | Infrastructure Construction**) | 515.1 | 474.8 | 319.2 | -------------------------------------------------------------------------------- | Technical Building Services | 114.1 | 85.8 | 106.8 | -------------------------------------------------------------------------------- | Building Products**) | 35.7 | 40.3 | 36.8 | -------------------------------------------------------------------------------- | Group, total | 1 199.8 | 1 141.7 | 983.6 | -------------------------------------------------------------------------------- | of which international orders | 272.6 | 350.0 | 213.5 | -------------------------------------------------------------------------------- *) 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 was slightly higher than a year ago, and at the end of the review period was EUR 1,199.8 million (1,141.7). Operations outside Finland accounted for 23 % (31) of the order book. 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 Tekmanni 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 31 March 2010 was EUR 1,017.0 million (1,318.8). The return on investment was -3.1% (0.4) and the equity ratio 33.7% (25.5). Gearing was 114.4% (147.1). According to the cash flow statement, the cash flow from operating activities was EUR -49.9 million (-85.4), the cash flow from investing activities EUR -7.6 million (-11.1) and the cash flow from financing activities EUR 23.8 million (3.1). The cash flow for the review period includes the payment of dividends totalling EUR 1.9 million (13.9). The 2009 dividends include only dividends paid to the minority interests of subsidiaries. Working capital declined 22% to EUR 668.3 million (857.3) and net working capital fell 23% to EUR 363.7 million (472.8). Liquid funds at the end of the review period were EUR 38.3 million (154.5). The amount of interest-bearing debt at the end of the review period was EUR 387.3 million (605.1), of which EUR 206.4 million was short-term debt and EUR 180.9 million long-term debt. Interest-bearing net debt was EUR 349.0 million (450.6). Net financing expenses were EUR 5.5 million (9.8), representing 1.9% (2.9) of net sales. Lemminkäinen's interest-bearing debt comprised loans from financial institutions 35% (59), commercial paper 11% (12), project loans related to own housing production and non-residential construction 9% (17), TyEL (employee pensions premium) loans 27% (0), finance leasing liabilities 14% (9) and other liabilities 4% (2). The final part of the TyEL pension premium loan allocation was drawn during the review period. At the end of the review period Lemminkäinen had an unused EUR 150 million line of credit. BUSINESS SECTORS BUILDING CONSTRUCTION -------------------------------------------------------------------------------- | Key figures, EUR million*) | 1-3/2010 | 1-3/2009 | 1-12/2009 | -------------------------------------------------------------------------------- | Net sales | 168.7 | 205.3 | 868.7 | -------------------------------------------------------------------------------- | Operating profit**) | 1.2 | 11.4 | 36.4 | -------------------------------------------------------------------------------- | Operating margin, % | 0.7 | 5.6 | 4.2 | -------------------------------------------------------------------------------- | Order book at end of period | 534.9 | 540.8 | 520.8 | -------------------------------------------------------------------------------- *) 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.. Starting from 1 January 2010, Lemminkäinen observes the interpretation IFRIC 15 - Agreements for the Construction of Real Estate, which affects especially the income recognition practice for own housing production, the basis of which has changed from percentage-of-completion to full completion and delivery. IFRIC 15 interpretation also affects the recognition of income from own non-residential development projects, which are now assessed project-specifically. The changes in income recognition principles mean that there will be more quarterly variation in the net sales and profitability of the Building Construction business sector, depending on the exact timing of project completions. The net sales of the Building Construction business sector were EUR 168.7 million (205.3). The business sector generated 76% (80) of its net sales in Finland, 13% (4) in other Nordic countries, 2% (7) in Russia, and 9% (9) in other countries. The operating profit was EUR 1.2 million (11.4). As Lemminkäinen's own housing production remained subdued until the summer of 2009, significantly fewer own housing developments than in the comparison period were completed and, because of the change in income recognition principle, recognised as income during the review period. Also the decline in construction volumes reduced the net sales and operating profit for the review period. In addition, non-recurring items stemming from restructuring and personnel adjustment measures were recognised during the review period. As a consequence of the new income recognition principle, this year's net sales and operating profit will be skewed towards the end of the year, when the Company's own housing developments started in the second half of 2009 will be completed. The business sector's order book remained at the level of the comparison period and was EUR 534.9 million (540.8). Orders from outside Finland contributed EUR 81.3 million (112.3) to the order book. Operations in Finland -------------------------------------------------------------------------------- | Lemminkäinen's private-sector | 1-3/2010 | 1-3/2009 | 1-12/2009 | | housing production, Finland | | | | -------------------------------------------------------------------------------- | Housing starts | 145 | 0 | 351 | -------------------------------------------------------------------------------- | Housing units sold | 169 | 123 | 771 | -------------------------------------------------------------------------------- | Unsold completed units | 54 | 230 | 533 | -------------------------------------------------------------------------------- | Completed | 496 | 357 | 405 | -------------------------------------------------------------------------------- | Under construction at end of | 205 | 193 | 193 | | period | | | | -------------------------------------------------------------------------------- | of which unsold | 227 | 560 | 263 | -------------------------------------------------------------------------------- Lemminkäinen made 135 contracted housing starts in the review period. The total number of housing starts made in Finland during the review period was 280. At the end of the review period Lemminkäinen owned a total of 882,000 m2 of unused building rights in Finland, of which approx. 379,000 m2 were residential building rights. The Company also had binding or conditional co-operation and zoning agreements for about 801,000 m², of which about 318,000 m² were residential building rights. The balance sheet value of the building plots was EUR 90.5 million (87.0). Non-residential building construction remained subdued in the review period, and demand for office construction in particular was minimal. Demand for commercial and logistics buildings remained at a reasonable level. Lemminkäinen is building a logistics centre for Inex Partners Oy in Sipoo. In addition to project management contracting, Lemminkäinen is responsible for the excavation and crushing contract for the foundation works as well as the electrical installations. The total value of the works is approx. EUR 26 million, and they will be completed in March 2012. During the review period Lemminkäinen also agreed to build a logistics centre for Etola Group's Etra Oy in Hämeenlinna. The building will have a floor area of 20,000 m² and will be completed in April 2011. Real estate developments by public-sector organisations remained at a reasonable level in the review period. Lemminkäinen is building a new ecological office building that will be used by the City of Helsinki Environment Centre and the Department of Environmental Sciences of the University of Helsinki. The building will be completed in summer 2011. The contract is representative of advanced environmentally friendly construction, and it is worth approx. EUR 10.5 million. The renovation construction market remained stable during the review period. Renovation construction accounted for about 22% (15) of Lemminkäinen's building construction business in the review period. Operations outside Finland: Housing sales in Russia continued to be brisker than in the previous year. The number of housing units sold in Lemminkäinen's own developments in Russia during the first quarter was 54 (22). At the end of the review period the Company had 498 (313) housing units under construction, of which 339 were unsold. The number of unsold completed units at the end of the review period was 5 (0). The value of the inventories that Lemminkäinen had tied up in Russia at the end of the review period was EUR 47.9 million (34.0). After the review period Lemminkäinen acquired a building plot in St. Petersburg for a new apartment building. The 540-unit building is expected to be completed in autumn 2013. In Sweden the number of unsold completed housing units was 11 (2). The main focus of Lemminkäinen's other operations outside Finland is on industrial construction in countries such as China, India and Poland. INFRASTRUCTURE CONSTRUCTION -------------------------------------------------------------------------------- | Key figures, EUR million*) | 1-3/2010 | 1-3/2009 | 1-12/2009 | -------------------------------------------------------------------------------- | Net sales | 51.3 | 68.0 | 768.0 | -------------------------------------------------------------------------------- | Operating profit**) | -24.3 | -18.2 | 22.0 | -------------------------------------------------------------------------------- | Operating margin, % | -47.3 | -26.8 | 2.9 | -------------------------------------------------------------------------------- | Order book at end of period | 515.1 | 474.8 | 319.2 | -------------------------------------------------------------------------------- *) 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 were EUR 51.3 million (68.0). The business sector generated 56% (58) of its net sales in Finland, 41% (36) in the other Nordic countries and 3% (6) in the Baltic states. The operating result was EUR -24.3 million. The business sector typically makes a loss in the first quarter due to seasonal variations. Exceptionally severe winter conditions prevented paving operations in Norway, Denmark and Lithuania, where paving work would be carried out in normal winter conditions. This weakened the net sales and operating profit on the first quarter. In Finland the new rock engineering contracts were not started up in full during the review period. The business sector's order book developed well in the first quarter and at the end of the review period it was 8% higher than on the comparison period. The order book at the end of the review period was EUR 515.1 million (474.8). Operations in Finland The exceptional winter increased the need for infrastructure maintenance works, and the anticipated constraints on municipal finances has not had a significant impact on demand for paving works. The employment situation in rock engineering improved with the start-up of new contracts during the review period. Demand for transport infrastructure construction picked up and Lemminkäinen won a number of road and railway contracts. Demand for mineral aggregates and crushing contracting was weak in the winter season, but the business order book at the end of the review period was good, partly as a result of the pick-up in building construction. Operations outside Finland The exceptional winter during the review period prevented almost all paving operations in Norway and Denmark. In spite of tougher competition, the order books in these countries at the end of the review period were at the level of the comparison period. In Sweden the emphasis in Lemminkäinen's infrastructure construction in the review period was on foundation reinforcement and rock engineering works. In the review period Lemminkäinen won an excavation contract for LKAB's Kiiruna iron ore mine. The contract is worth approx. EUR 5 million and it expands Lemminkäinen's scope of operations to the Swedish mine excavation market. In spite of the difficult economic situation, the Baltic infrastructure market showed slight signs of recovery, and demand for infra works was at a reasonable level. The order books of the Baltic states developed favourably in the review period. After the review period Lemminkäinen acquired a 75 % majority interest in Asfalt Remix AS, a Norwegian company specialising in the cold milling of asphalt pavement. In 2009 the acquired company generated net sales of approx. EUR 8 million and employed about 25 people. The acquisition broadens the service offering of Lemminkäinen's paving business in the Norwegian infrastructure market. After the review period Lemminkäinen also acquired a 90.1 % majority interest in Risa Rock AS, a Norwegian company specialising in tunnel excavation. Risa Rock AS's net sales in 2009 were EUR 16 million and it employed 20 people. The acquisition broadens the service offering of Lemminkäinen's Norwegian infrastructure construction business to the rock engineering market. TECHNICAL BUILDING SERVICES -------------------------------------------------------------------------------- | Key figures, EUR million | 1-3/2010 | 1-3/2009 | 1-12/2009 | -------------------------------------------------------------------------------- | Net sales | 54.2 | 55.3 | 233.8 | -------------------------------------------------------------------------------- | Operating profit*) | 1.1 | 2.5 | 12.2 | -------------------------------------------------------------------------------- | Operating margin, % | 2.0 | 4.6 | 5.2 | -------------------------------------------------------------------------------- | Order book at end of period | 114.1 | 85.8 | 106.8 | -------------------------------------------------------------------------------- *) 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 Technical Building Services business sector remained at the level of the comparison period and were EUR 54.2 million (55.3). The operating profit was EUR 1.1 million (2.5). Stiffening competition and higher material prices weakened the review period's result. The business sector's order book was up by a third on the Q1 in 2009 at EUR 114.1 million (85.8) The emphasis in technical building services has shifted to renovation construction and servicing and maintenance work. After the review period Lemminkäinen announced that it was broadening its offering in pipe renovation by introducing a pipe coating method that avoids the demolition of existing structures. The coating technology selected was developed by LSE-System AG of Switzerland, which patented and introduced the technique in 1987. Demand for the business sector's industrial services in the review period was minimal after industry had cut back on its investments and maintenance functions. BUILDING PRODUCTS -------------------------------------------------------------------------------- | Key figures, EUR million*) | 1-3/2010 | 1-3/2009 | 1-12/2009 | -------------------------------------------------------------------------------- | Net sales | 20.3 | 22.6 | 154.2 | -------------------------------------------------------------------------------- | Operating profit**) | -3.7 | -2.1 | 10.4 | -------------------------------------------------------------------------------- | Operating margin, % | -18.1 | -9.2 | 6.8 | -------------------------------------------------------------------------------- | Order book at end of period | 35.7 | 40.3 | 36.8 | -------------------------------------------------------------------------------- *) 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 20.3 million (22.6) and the operating profit EUR -3.7 million (-2.1). The business sector typically makes a loss in the first quarter due to seasonal variations. The exceptionally snowy winter coupled with tougher competition and higher raw material prices weakened profitability on the comparison period. The order book at the end of the review period was EUR 35.7 million (40.3). With the recovery of housing construction, demand for pre-cast concrete staircase and façade elements picked up in the review period. 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 28.12 (15.80) at the end of the review period. The market capitalisation at the end of the review period was EUR 552.4 million (268.9). Altogether 1,769,613 shares (433,063) were traded during the review period. The total value of the turnover was EUR 43.1 million (6.6). At the end of the review period the Company had 5,156 (4,667) 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 Tekmanni 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 Investments made during the review period amounted to EUR 7.5 million (10.3). The investments were mainly replacement investments for infrastructure construction. PERSONNEL The average number of employees in the Group during the review period was 7,339 (8,098), down 9% on the comparison period. 72% (69) of the personnel worked in Finland, 11% (11) in other Nordic countries, 11% (12) in the Baltic states and 6% (8) in other countries. In 2009 Lemminkäinen adjusted its number of personnel to the prevailing market situation. The biggest personnel reductions were made in the Building Construction and Building Products business sectors. -------------------------------------------------------------------------------- | Personnel, average | 1-3/2010 | 1-3/2009 | 1-12/2009 | -------------------------------------------------------------------------------- | Hourly paid employees | 4,466 | 4,918 | 5,559 | -------------------------------------------------------------------------------- | Salaried staff | 2,873 | 3,180 | 3,067 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Personnel, total | 7,339 | 8,098 | 8,626 | -------------------------------------------------------------------------------- | of whom working outside Finland | 2,094 | 2,517 | 2,607 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Personnel at the end of the | 7,398 | 7,998 | 7,759 | | review period | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Personnel by business sector, | 1-3/2010 | 1-3/2009 | 1-12/2009 | | average | | | | -------------------------------------------------------------------------------- | Building Construction | 2,147 | 2,526 | 2,356 | -------------------------------------------------------------------------------- | Infrastructure Construction*) | 2,498 | 2,815 | 3,395 | -------------------------------------------------------------------------------- | Technical Building Services | 1,865 | 1,940 | 1,941 | -------------------------------------------------------------------------------- | Building Products*) | 714 | 707 | 820 | -------------------------------------------------------------------------------- | Parent company | 115 | 110 | 114 | -------------------------------------------------------------------------------- | Total | 7,339 | 8,098 | 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. 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. 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, 22 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 about EUR 67 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 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. THE ENVIRONMENT Lemminkäinen Group takes life-cycle and environmental perspectives into account when developing its operations, products and services. The management of environmental affairs and the effects of the Group's operations on the environment are continuously monitored by means of internal monitoring and control programmes. The Company's Annual Report and website provide more information on Lemminkäinen's environmental issues. 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 financial crisis and economic downturn are 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, but the total volume of construction is still estimated to contract. The number of new building starts will be up on 2009, and housing production in particular is estimated to pick up with the recovery in housing sales. Non-residential construction is likely to remain more subdued than last year. Renovation construction is estimated to continue its steady growth, and demand for technical building services is estimated to remain stable. In Russia the pick-up in the housing market continued in the first quarter and the volume of construction is estimated to grow during 2010. Most of new major transport infrastructure projects will be underway in 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. The other Nordic countries have budgeted additional investments on the development of infrastructure construction, which is estimated to 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 growing 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 AGM 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. Other events Lemminkäinen acquired a building plot in St. Petersburg to construct a new apartment building. The 540-unit building is expected to be completed in autumn 2013. Lemminkäinen acquired a 75 % majority interest in Asfalt Remix AS, a Norwegian company specialising in the cold milling of asphalt pavement. In 2009 the acquired company generated net sales of approx. EUR 8 million and employed about 25 people. The acquisition broadens the service offering of Lemminkäinen's paving business to the Norwegian infrastructure market. Lemminkäinen acquired a 90.1 % majority interest in Risa Rock AS, a Norwegian company specialising in tunnel excavation. Risa Rock AS's net sales in 2009 were EUR 16 million and it employed 20 people. The acquisition broadens the service offering of Lemminkäinen's Norwegian infrastructure construction business to the rock engineering market. Lemminkäinen announced that it was broadening its offering in pipe renovation methods by introducing a pipe coating method that avoids the demolition of existing structures. The coating technology selected was developed by LSE-System AG of Switzerland, which patented and introduced the technique in 1987. Helsinki, 6 May 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 same IFRS recognition and measurement principles as those applied in the annual financial statements for 2009 with the below-mentioned changes. As the tabulated section is presented in abridged format, not all of the requirements of the IAS 34 Interim Financial Reporting Standard have been observed in the preparation of the review. 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. The revision does not have any essential bearing on the figures presented in the Interim Financial Review. - 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 balance sheet 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) Guarantees and contingent liabilities 11) Legal proceedings 1) CONSOLIDATED INCOME STATEMENT -------------------------------------------------------------------------------- | | 1-3/ | 1-3/ | 1-12/ | -------------------------------------------------------------------------------- | EUR mill. | 2010 | 2009 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 284.4 | 343.5 | 1 965.5 | -------------------------------------------------------------------------------- | Operating income and expenses | -308.0 | -345.4 | -1 | | | | | 909.6 | -------------------------------------------------------------------------------- | Depreciation | 4.7 | 4.7 | 34.3 | -------------------------------------------------------------------------------- | Share of the results of affiliated companies | -0.2 | -0.2 | 1.5 | -------------------------------------------------------------------------------- | Operating profit/loss | -28.5 | -6.9 | 23.2 | -------------------------------------------------------------------------------- | Financial expenses | 12.1 | 20.1 | 54.1 | -------------------------------------------------------------------------------- | Financial income | 6.7 | 10.3 | 20.7 | -------------------------------------------------------------------------------- | Profit/loss before taxes | -33.9 | -16.7 | -10.2 | -------------------------------------------------------------------------------- | Income taxes | 7.6 | 3.4 | -13.6 | -------------------------------------------------------------------------------- | Profit/loss for the accounting period | -26.4 | -13.3 | -23.8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Distribution of the profit/loss for the | | | | | accounting period | | | | -------------------------------------------------------------------------------- | To shareholders of the parent company | -26.7 | -13.9 | -26.2 | -------------------------------------------------------------------------------- | To minority interests | 0.3 | 0.5 | 2.4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EPS calculated from profit/loss attributable to parent | | | | company shareholders | | | -------------------------------------------------------------------------------- | Earnings per share, diluted and undiluted, EUR | -1.52 | -0.81 | -1.54 | -------------------------------------------------------------------------------- 2) CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME -------------------------------------------------------------------------------- | | 1-3/ | 1-3/ | 1-12/ | -------------------------------------------------------------------------------- | EUR mill. | 2010 | 2009 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/loss for the accounting period | -26.4 | -13.3 | -23.8 | -------------------------------------------------------------------------------- | Translation difference | 2.0 | 1.5 | 3.4 | -------------------------------------------------------------------------------- | Hedging of net investment in foreign subsidiary | | -1.1 | -0.4 | -------------------------------------------------------------------------------- | Cash flow hedge | -0.1 | -0.6 | -0.2 | -------------------------------------------------------------------------------- | Change in fair value | 0.1 | | | -------------------------------------------------------------------------------- | Other comprehensive income, total | 1.9 | -0.1 | 2.8 | -------------------------------------------------------------------------------- | Comprehensive income for the accounting period | -24.5 | -13.4 | -21.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Distribution of comprehensive income for the | | | | | accounting period | | | | -------------------------------------------------------------------------------- | To shareholders of the parent company | -24.7 | -14.0 | -23.4 | -------------------------------------------------------------------------------- | To minority interests | 0.3 | 0.5 | 2.4 | -------------------------------------------------------------------------------- 3) CONSOLIDATED BALANCE SHEET -------------------------------------------------------------------------------- | EUR mill. | 03/2010 | 03/2009 | 12/2009 | -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Tangible assets | 184.4 | 194.2 | 184.6 | -------------------------------------------------------------------------------- | Goodwill | 78.6 | 76.2 | 78.3 | -------------------------------------------------------------------------------- | Other intangible assets | 4.5 | 2.5 | 2.7 | -------------------------------------------------------------------------------- | Investments | 12.9 | 11.1 | 12.8 | -------------------------------------------------------------------------------- | Deferred tax asset | 22.6 | 16.3 | 14.3 | -------------------------------------------------------------------------------- | Other non-current receivables | 7.4 | 6.8 | 7.5 | -------------------------------------------------------------------------------- | Total | 310.4 | 307.0 | 300.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Inventories | 387.2 | 438.5 | 374.7 | -------------------------------------------------------------------------------- | Trade and other receivables | 281.1 | 418.7 | 305.1 | -------------------------------------------------------------------------------- | Cash funds | 38.3 | 154.5 | 74.4 | -------------------------------------------------------------------------------- | Total | 706.6 | 1,011.7 | 754.3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets, total | 1,017.0 | 1,318.8 | 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 | -2.1 | -2.3 | -2.0 | -------------------------------------------------------------------------------- | Fair value reserve | 0.1 | | | -------------------------------------------------------------------------------- | Invested unrestricted equity reserve | 63.5 | | | -------------------------------------------------------------------------------- | Translation differences | 0.3 | -4.2 | -1.7 | -------------------------------------------------------------------------------- | Retained earnings | 225.5 | 261.6 | 261.6 | -------------------------------------------------------------------------------- | Profit/loss for the period | -26.7 | -13.9 | -26.2 | -------------------------------------------------------------------------------- | Shareholders' equity before minority | 300.4 | 281.0 | 271.5 | | interest | | | | -------------------------------------------------------------------------------- | Minority interest | 4.6 | 25.4 | 23.2 | -------------------------------------------------------------------------------- | Shareholders' equity, total | 305.0 | 306.4 | 294.8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 14.9 | 18.5 | 19.0 | -------------------------------------------------------------------------------- | Pension liabilities | 0.5 | 0.2 | 0.7 | -------------------------------------------------------------------------------- | Provisions | 2.6 | 2.3 | 1.8 | -------------------------------------------------------------------------------- | Financial liabilities | 180.9 | 118.4 | 290.7 | -------------------------------------------------------------------------------- | Other liabilities | 2.2 | 1.9 | 2.4 | -------------------------------------------------------------------------------- | Total | 201.1 | 141.2 | 314.6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Accounts payable and other liabilities | 297.9 | 377.5 | 328.4 | -------------------------------------------------------------------------------- | Provisions | 6.7 | 7.0 | 8.3 | -------------------------------------------------------------------------------- | Financial liabilities | 206.4 | 486.7 | 108.4 | -------------------------------------------------------------------------------- | Total | 511.0 | 871.2 | 445.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' equity and | | | | -------------------------------------------------------------------------------- | liabilities, total | 1,017.0 | 1,318.8 | 1,054.4 | -------------------------------------------------------------------------------- 4) CONSOLIDATED CASH FLOW STATEMENT -------------------------------------------------------------------------------- | | 1-3/ | 1-3/ | 1-12/ | -------------------------------------------------------------------------------- | EUR mill. | 2010 | 2009 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/loss before taxes | -33.9 | -16.7 | -10.2 | -------------------------------------------------------------------------------- | Depreciation | 4.7 | 4.7 | 34.3 | -------------------------------------------------------------------------------- | Other adjustments | 4.0 | 8.3 | 33.9 | -------------------------------------------------------------------------------- | Cash flow before change in working capital | -25.2 | -3.6 | 58.0 | -------------------------------------------------------------------------------- | Change in working capital | -12.6 | -66.3 | 52.4 | -------------------------------------------------------------------------------- | Financial items | -6.1 | -9.3 | -30.2 | -------------------------------------------------------------------------------- | Direct taxes paid | -6.0 | -6.2 | -16.0 | -------------------------------------------------------------------------------- | Cash flow from operating activities | -49.9 | -85.4 | 64.2 | -------------------------------------------------------------------------------- | Cash flow provided by investing activities | 2.4 | 0.2 | 11.9 | -------------------------------------------------------------------------------- | Cash flow used in investing activities | -10.1 | -11.3 | -30.5 | -------------------------------------------------------------------------------- | Share issue for cash consideration | 39.5 | | | -------------------------------------------------------------------------------- | Change in non-current receivables | 0.1 | -0.4 | 0.0 | -------------------------------------------------------------------------------- | Drawings of loans | 88.1 | 89.3 | 562.3 | -------------------------------------------------------------------------------- | Repayments of loans | -102.1 | -71.8 | -764.6 | -------------------------------------------------------------------------------- | Dividends paid | -1.9 | -13.9 | -18.0 | -------------------------------------------------------------------------------- | Cash flow from financing activities | 23.8 | 3.1 | -220.2 | -------------------------------------------------------------------------------- | Change in cash funds | -33.7 | -93.5 | -174.6 | -------------------------------------------------------------------------------- | Cash funds at beginning of period | 74.4 | 250.1 | 250.1 | -------------------------------------------------------------------------------- | Translation difference of cash funds | -2.3 | -2.2 | -1.1 | -------------------------------------------------------------------------------- | Cash funds at end of period | 38.3 | 154.5 | 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 mill. | A | B | C | D | E | F | G | H | I | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholde | | | | | | | | | | | rs' equity | | | | | | | | | | -------------------------------------------------------------------------------- | 1.1.2009 | 34.0 | 5.8 | -1.7 | | | -4.7 | 276.9 | 27.3 | 337. | | | | | | | | | | | 6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/los | | | | | | | | | | | s for the | | | | | | | | | | -------------------------------------------------------------------------------- | accounting | | | | | | | -13.9 | 0.5 | -13. | | period | | | | | | | | | 3 | -------------------------------------------------------------------------------- | Translatio | | | | | | 1.5 | | | 1.5 | | n | | | | | | | | | | | difference | | | | | | | | | | -------------------------------------------------------------------------------- | Hedging of net | | | | | | | | | | investment | | | | | | | | | -------------------------------------------------------------------------------- | in foreign | | | | | | -1.1 | | | -1.1 | | subsidiary | | | | | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | -0.6 | | | | | | -0.6 | | hedge | | | | | | | | | | -------------------------------------------------------------------------------- | Comprehensive | | -0.6 | | | 0.5 | -13.9 | 0.5 | -13. | | income, total | | | | | | | | 4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividend | | | | | | | -15.3 | -1.9 | -17. | | distributi | | | | | | | | | 2 | | on | | | | | | | | | | -------------------------------------------------------------------------------- | Change in | | | | | | | | | | -------------------------------------------------------------------------------- | minority | | | | | | | | -0.6 | -0.6 | | interest | | | | | | | | | | -------------------------------------------------------------------------------- | Transactio | | | | | | | | | | | ns with | | | | | | | | | | -------------------------------------------------------------------------------- | owners, | | | | | | | -15.3 | -2.5 | -17. | | total | | | | | | | | | 8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholde | | | | | | | | | | | rs' equity | | | | | | | | | | -------------------------------------------------------------------------------- | 31.3.2009 | 34.0 | 5.8 | -2.3 | | | -4.2 | 247.7 | 25.4 | 306. | | | | | | | | | | | 4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR mill. | A | B | C | D | E | F | G | H | I | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholde | | | | | | | | | | | rs' equity | | | | | | | | | | -------------------------------------------------------------------------------- | 1.1.2009 | 34.0 | 5.8 | -1.7 | | | -4.7 | 276.9 | 27.3 | 337. | | | | | | | | | | | 6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/los | | | | | | | | | | | s for the | | | | | | | | | | -------------------------------------------------------------------------------- | accounting | | | | | | | -26.2 | 2.4 | -23. | | period | | | | | | | | | 8 | -------------------------------------------------------------------------------- | Translatio | | | | | | 3.4 | | | 3.4 | | n | | | | | | | | | | | difference | | | | | | | | | | -------------------------------------------------------------------------------- | Hedging of net | | | | | | | | | | investment | | | | | | | | | -------------------------------------------------------------------------------- | in foreign | | | | | | -0.4 | | | -0.4 | | subsidiary | | | | | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | -0.2 | | | | | | -0.2 | | hedge | | | | | | | | | | -------------------------------------------------------------------------------- | Comprehensive | | -0.2 | | | 3.0 | -26.2 | 2.4 | -21. | | income, total | | | | | | | | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividend | | | | | | | -15.3 | -2.0 | -17. | | distributi | | | | | | | | | 3 | | on | | | | | | | | | | -------------------------------------------------------------------------------- | Change in | | | | | | | | | | -------------------------------------------------------------------------------- | minority | | | | | | | | -4.5 | -4.5 | | interest | | | | | | | | | | -------------------------------------------------------------------------------- | Transactio | | | | | | | | | | | ns with | | | | | | | | | | -------------------------------------------------------------------------------- | owners, | | | | | | | -15.3 | -6.5 | -21. | | total | | | | | | | | | 8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholde | | | | | | | | | | | rs' equity | | | | | | | | | | -------------------------------------------------------------------------------- | 31.12.2009 | 34.0 | 5.8 | -2.0 | | | -1.7 | 235.4 | 23.2 | 294. | | | | | | | | | | | 8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR mill. | A | B | C | D | E | F | G | H | I | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholder | | | | | | | | | | | s' equity | | | | | | | | | | -------------------------------------------------------------------------------- | 1.1.2010 | 34.0 | 5.8 | -2.0 | | | -1.7 | 235.4 | 23.2 | 294. | | | | | | | | | | | 8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/loss | | | | | | | | | | | for the | | | | | | | | | | -------------------------------------------------------------------------------- | accounting | | | | | | | -26.7 | 0.3 | -26. | | period | | | | | | | | | 4 | -------------------------------------------------------------------------------- | Translation | | | | | | 2.0 | | | 2.0 | | difference | | | | | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | -0.1 | | | | | | -0.1 | | hedge | | | | | | | | | | -------------------------------------------------------------------------------- | Change in | | | | 0.1 | | | | | 0.1 | | fair value | | | | | | | | | | -------------------------------------------------------------------------------- | Comprehensive | | -0.1 | 0.1 | | 2.0 | -26.7 | 0.3 | -24. | | income, total | | | | | | | | 5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share issue | | | | | | | | | | | to | | | | | | | | | | | investors | | | | | | | | | | -------------------------------------------------------------------------------- | for cash | | | | | 39.5 | | | | 39.5 | | considerati | | | | | | | | | | | on | | | | | | | | | | -------------------------------------------------------------------------------- | Share issue | | | | | | | | | | | to non- | | | | | | | | | | -------------------------------------------------------------------------------- | controlling | | | | | | | | | | | interest | | | | | | | | | | | for | | | | | | | | | | -------------------------------------------------------------------------------- | cash | | | | | 21.5 | | | | 21.5 | | considerati | | | | | | | | | | | on | | | | | | | | | | -------------------------------------------------------------------------------- | Transaction | | | | | | | | | | | expenses | | | | | | | | | | -------------------------------------------------------------------------------- | of share | | | | | -0.4 | | | | -0.4 | | issues | | | | | | | | | | -------------------------------------------------------------------------------- | Gains on | | | | | | | | | | | share-based | | | | | | | | | | -------------------------------------------------------------------------------- | payments | | | | | | | 0.0 | | 0.0 | -------------------------------------------------------------------------------- | Direct | | | | | | | | | | | bookings, | | | | | | | | | | -------------------------------------------------------------------------------- | goodwill | | | | | 2.9 | | -10.0 | | -7.2 | -------------------------------------------------------------------------------- | Cancellatio | | | | | | | | | | | n of | | | | | | | | | | | dividend | | | | | | | | | | -------------------------------------------------------------------------------- | liability | | | | | | | 0.1 | | 0.1 | -------------------------------------------------------------------------------- | Dividend | | | | | | | | -1.8 | -1.8 | | distributio | | | | | | | | | | | n | | | | | | | | | | -------------------------------------------------------------------------------- | Change in | | | | | | | | | | -------------------------------------------------------------------------------- | minority | | | | | | | | -17.1 | -17. | | interest | | | | | | | | | 1 | -------------------------------------------------------------------------------- | Transaction | | | | | | | | | | | s with | | | | | | | | | | -------------------------------------------------------------------------------- | owners, | | | | | 63.5 | | -9.9 | -18.9 | 34.7 | | total | | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholder | | | | | | | | | | | s' equity | | | | | | | | | | -------------------------------------------------------------------------------- | 31.3.2010 | 34.0 | 5.8 | -2.1 | 0.1 | 63.5 | 0.3 | 198.8 | 4.6 | 305. | | | | | | | | | | | 0 | -------------------------------------------------------------------------------- 6) CONSOLIDATED INCOME STATEMENT, QUARTERLY -------------------------------------------------------------------------------- | | 1-3/ | 10-12/ | 7-9/ | 4-6/ | 1-3/ | -------------------------------------------------------------------------------- | EUR mill. | 2010 | 2009 | 2009 | 2009 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 284.4 | 525.1 | 568.6 | 528.3 | 343.5 | -------------------------------------------------------------------------------- | Operating income and expenses | -308.0 | -505.9 | -567.0 | -491.3 | -345.4 | -------------------------------------------------------------------------------- | Depreciation | 4.7 | 7.6 | 12.5 | 9.5 | 4.7 | -------------------------------------------------------------------------------- | Share of the results of | -0.2 | 0.4 | 1.1 | 0.3 | -0.2 | | affiliated companies | | | | | | -------------------------------------------------------------------------------- | Operating profit/loss | -28.5 | 12.0 | -9.8 | 27.8 | -6.9 | -------------------------------------------------------------------------------- | Financial expenses | 12.1 | 13.1 | 10.5 | 10.4 | 20.1 | -------------------------------------------------------------------------------- | Financial income | 6.7 | 5.2 | 4.1 | 1.2 | 10.3 | -------------------------------------------------------------------------------- | Profit/loss before taxes | -33.9 | 4.0 | -16.1 | 18.6 | -16.7 | -------------------------------------------------------------------------------- | Income taxes | 7.6 | -3.3 | -8.1 | -5.6 | 3.4 | -------------------------------------------------------------------------------- | Profit/loss for the | -26.4 | 0.7 | -24.2 | 13.0 | -13.3 | | accounting period | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Distribution of the profit/loss for | | | | | | the accounting period | | | | | -------------------------------------------------------------------------------- | To shareholders of the parent | -26.7 | -0.7 | -24.0 | 12.3 | -13.9 | | company | | | | | | -------------------------------------------------------------------------------- | To minority interests | 0.3 | 1.4 | -0.3 | 0.7 | 0.5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EPS calculated from profit/loss attributable to parent company | | | shareholders | | -------------------------------------------------------------------------------- | Earnings per share, diluted | | | | | | | and | | | | | | -------------------------------------------------------------------------------- | undiluted, EUR | -1.52 | -0.04 | -1.41 | 0.72 | -0.81 | -------------------------------------------------------------------------------- 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. | | | | | | | | | | -------------------------------------------------------------------------------- | 1-3/20 | BLDC | INFR | TECBS | BLDPR | OTHER | ELIM | SEGM | RECON | TOTAL | | 10 | O | A | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net | 168. | 51.3 | 54.2 | 20.3 | 2.8 | -12.2 | 285.2 | -0.8 | 284.4 | | sales | 7 | | | | | | | | | -------------------------------------------------------------------------------- | Deprec | | | | | | | | | | | i- | | | | | | | | | | -------------------------------------------------------------------------------- | ation | 0.6 | 3.3 | 0.2 | 0.8 | 0.2 | | 5.1 | -0.4 | 4.7 | -------------------------------------------------------------------------------- | Operat | | | | | | | | | | | ing | | | | | | | | | | -------------------------------------------------------------------------------- | profit | 1.2 | -24. | 1.1 | -3.7 | -3.4 | | -29.1 | 0.6 | -28.5 | | /loss | | 3 | | | | | | | | -------------------------------------------------------------------------------- The reconciling items for net sales comprise EUR -0.2 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 1.0 million in personnel expenses, EUR 0.3 million from the IFRS treatment of finance leasing, EUR 0.1 million from the equity share treatment of affiliated companies and EUR -0.8 million in other closing entries. -------------------------------------------------------------------------------- | EUR | | | | | | | | | | | mill. | | | | | | | | | | -------------------------------------------------------------------------------- | 1-3/20 | BLDC | INFR | TECBS | BLDPR | OTHER | ELIM | SEGM | RECON | TOTAL | | 09 | O | A | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net | 205. | 68.0 | 55.3 | 22.6 | 2.5 | -9.6 | 344.1 | -0.6 | 343.5 | | sales | 3 | | | | | | | | | -------------------------------------------------------------------------------- | Deprec | | | | | | | | | | | i- | | | | | | | | | | -------------------------------------------------------------------------------- | ation | 0.7 | 3.4 | 0.2 | 0.9 | 0.2 | | 5.4 | -0.7 | 4.7 | -------------------------------------------------------------------------------- | Operat | | | | | | | | | | | ing | | | | | | | | | | -------------------------------------------------------------------------------- | profit | 11.4 | -18. | 2.5 | -2.1 | -0.2 | | -6.5 | -0.4 | -6.9 | | /loss | | 2 | | | | | | | | -------------------------------------------------------------------------------- The reconciling items for net sales comprise EUR -0.2 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 -1.8 million in personnel expenses, EUR 1.2 million from the IFRS treatment of finance leasing, and EUR 0.2 million in other closing entries. -------------------------------------------------------------------------------- | NET SALES | 1-3/ | 1-3/ | 1-12/ | -------------------------------------------------------------------------------- | EUR mill. | 2010 | 2009 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Building Construction | 168.7 | 205.3 | 868.7 | -------------------------------------------------------------------------------- | Infrastructure Construction | 51.3 | 68.0 | 768.0 | -------------------------------------------------------------------------------- | Technical Building Services | 54.2 | 55.3 | 233.8 | -------------------------------------------------------------------------------- | Building Products | 20.3 | 22.6 | 154.2 | -------------------------------------------------------------------------------- | Other operations | 2.8 | 2.5 | 10.3 | -------------------------------------------------------------------------------- | Group eliminations | -12.2 | -9.6 | -52.5 | -------------------------------------------------------------------------------- | Segments total | 285.2 | 344.1 | 1,982.6 | -------------------------------------------------------------------------------- | Reconciling items | -0.8 | -0.6 | -17.1 | -------------------------------------------------------------------------------- | Group total, IFRS | 284.4 | 343.5 | 1,965.5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING PROFIT/LOSS | 1-3/ | 1-3/ | 1-12/ | -------------------------------------------------------------------------------- | EUR mill. | 2010 | 2009 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Building Construction | 1.2 | 11.4 | 36.4 | -------------------------------------------------------------------------------- | Infrastructure Construction | -24.3 | -18.2 | 22.0 | -------------------------------------------------------------------------------- | Technical Building Services | 1.1 | 2.5 | 12.2 | -------------------------------------------------------------------------------- | Building Products | -3.7 | -2.1 | 10.4 | -------------------------------------------------------------------------------- | Other operations | -3.4 | -0.2 | -61.7 | -------------------------------------------------------------------------------- | Segments total | -29.1 | -6.5 | 19.4 | -------------------------------------------------------------------------------- | Reconciling items | 0.6 | -0.4 | 3.8 | -------------------------------------------------------------------------------- | Group total, IFRS | -28.5 | -6.9 | 23.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES, QUARTERLY | 1-3/ | 10-12/ | 7-9/ | 4-6/ | 1-3/ | -------------------------------------------------------------------------------- | EUR mill. | 2010 | 2009 | 2009 | 2009 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Building Construction | 168.7 | 266.3 | 180.1 | 217.0 | 205.3 | -------------------------------------------------------------------------------- | Infrastructure Construction | 51.3 | 173.6 | 304.3 | 222.1 | 68.0 | -------------------------------------------------------------------------------- | Technical Building Services | 54.2 | 65.2 | 52.6 | 60.6 | 55.3 | -------------------------------------------------------------------------------- | Building Products | 20.3 | 38.9 | 48.8 | 44.0 | 22.6 | -------------------------------------------------------------------------------- | Other operations | 2.8 | 2.1 | 2.9 | 2.9 | 2.5 | -------------------------------------------------------------------------------- | Group eliminations | -12.2 | -19.2 | -8.8 | -14.9 | -9.6 | -------------------------------------------------------------------------------- | Segments total | 285.2 | 526.9 | 579.9 | 531.7 | 344.1 | -------------------------------------------------------------------------------- | Reconciling items | -0.8 | -1.8 | -11.3 | -3.4 | -0.6 | -------------------------------------------------------------------------------- | Group total, IFRS | 284.4 | 525.1 | 568.6 | 528.3 | 343.5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING PROFIT/LOSS, | 1-3/ | 10-12/ | 7-9/ | 4-6/ | 1-3/ | | QUARTERLY | | | | | | -------------------------------------------------------------------------------- | EUR mill. | 2010 | 2009 | 2009 | 2009 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Building Construction | 1.2 | 14.7 | 1.2 | 9.1 | 11.4 | -------------------------------------------------------------------------------- | Infrastructure Construction | -24.3 | -5.8 | 33.3 | 12.8 | -18.2 | -------------------------------------------------------------------------------- | Technical Building Services | 1.1 | 3.2 | 3.8 | 2.6 | 2.5 | -------------------------------------------------------------------------------- | Building Products | -3.7 | 1.8 | 6.1 | 4.6 | -2.1 | -------------------------------------------------------------------------------- | Other operations | -3.4 | -3.4 | -56.0 | -2.1 | -0.2 | -------------------------------------------------------------------------------- | Segments total | -29.1 | 10.5 | -11.5 | 26.9 | -6.5 | -------------------------------------------------------------------------------- | Reconciling items | 0.6 | 1.5 | 1.8 | 0.9 | -0.4 | -------------------------------------------------------------------------------- | Group total, IFRS | -28.5 | 12.0 | -9.8 | 27.8 | -6.9 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | EUR mill. | 3/2010 | 3/2009 | 12/2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Building Construction | 373.1 | 398.3 | 357.9 | -------------------------------------------------------------------------------- | Infrastructure Construction | 230.0 | 265.3 | 253.9 | -------------------------------------------------------------------------------- | Technical Building Services | 28.6 | 29.2 | 30.5 | -------------------------------------------------------------------------------- | Building Products | 56.8 | 53.3 | 55.3 | -------------------------------------------------------------------------------- | Other operations | 38.1 | 42.0 | 43.6 | -------------------------------------------------------------------------------- | Segments total | 726.6 | 788.1 | 741.1 | -------------------------------------------------------------------------------- | Assets unallocated to segments | | | | -------------------------------------------------------------------------------- | and Group eliminations, total | 290.4 | 530.7 | 313.3 | -------------------------------------------------------------------------------- | Group total, IFRS | 1,017.0 | 1,318.8 | 1,054.4 | -------------------------------------------------------------------------------- 8) ECONOMIC TRENDS AND FINANCIAL INDICATORS -------------------------------------------------------------------------------- | | 3/2010 | 3/2009 | 12/2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on equity, % | -8.8 | -4.1 | -7.5 | -------------------------------------------------------------------------------- | Return on investment, % | -3.1 | 0.4 | 5.4 | -------------------------------------------------------------------------------- | Operating profit, % of net sales | -10.0 | -2.0 | 1.2 | -------------------------------------------------------------------------------- | Equity ratio, % | 33.7 | 25.5 | 31.0 | -------------------------------------------------------------------------------- | Gearing, % | 114.4 | 147.1 | 110.2 | -------------------------------------------------------------------------------- | Interest-bearing net debt, EUR million | 349.0 | 450.6 | 324.7 | -------------------------------------------------------------------------------- | Gross investments, EUR million | | | | -------------------------------------------------------------------------------- | (incl. leasing purchases) | 7.5 | 10.3 | 41.5 | -------------------------------------------------------------------------------- | Order book, EUR mill. | 1,199.8 | 1,141.7 | 983.6 | -------------------------------------------------------------------------------- | - of which foreign orders, EUR mill. | 272.6 | 350.0 | 213.5 | -------------------------------------------------------------------------------- | Average number of employees | 7 339 | 8 098 | 8 626 | -------------------------------------------------------------------------------- | Employees at end of period | 7 398 | 7 998 | 7 759 | -------------------------------------------------------------------------------- | Net sales, EUR mill. | 284.4 | 343.5 | 1,965.5 | -------------------------------------------------------------------------------- | - of which operations outside Finland, | 64.0 | 71.7 | 527.6 | | EUR mill. | | | | -------------------------------------------------------------------------------- | % of net sales | 22.5 | 20.9 | 26.8 | -------------------------------------------------------------------------------- 9) SHARE-SPECIFIC INDICATORS -------------------------------------------------------------------------------- | | 3/2010 | 3/2009 | 12/2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share, EUR | -1.52 | -0.81 | -1.54 | -------------------------------------------------------------------------------- | Equity per share, EUR | 15.29 | 16.51 | 15.95 | -------------------------------------------------------------------------------- | Dividend per share, EUR | 0.00 | 0.00 | 0.00 | -------------------------------------------------------------------------------- | Dividend to earnings ratio, % | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Market capitalisation, EUR mill. | 552.40 | 268.90 | 411.90 | -------------------------------------------------------------------------------- | Share price at end of period, EUR | 28.12 | 15.80 | 24.20 | -------------------------------------------------------------------------------- | Trading volume during period, | | | | -------------------------------------------------------------------------------- | 1000 shares | 1 770 | 433 | 1 918 | -------------------------------------------------------------------------------- | Number of issued shares, 1000 shares | 19,645 | 17,021 | 17,021 | -------------------------------------------------------------------------------- | Weighted average number of shares over | 17,532 | 17,021 | 17,021 | | the period, 1000 shares | | | | -------------------------------------------------------------------------------- 10) GUARANTEES AND CONTINGENT LIABILITIES -------------------------------------------------------------------------------- | EUR mill. | 3/2010 | 3/2009 | 12/2009 | -------------------------------------------------------------------------------- | Securities for own commitments | | | | -------------------------------------------------------------------------------- | Property mortgages | 80.0 | 0.0 | 80.0 | -------------------------------------------------------------------------------- | Business mortgages | 1,220.1 | 39.9 | 1,221.3 | -------------------------------------------------------------------------------- | Bonds pledged as security | 0.4 | 0.3 | 0.6 | -------------------------------------------------------------------------------- | Deposits | 0.1 | 0.1 | 0.1 | -------------------------------------------------------------------------------- | Total | 1,300.6 | 40.3 | 1,302.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Guarantees | | | | -------------------------------------------------------------------------------- | On behalf of affiliated companies | 0.0 | 18.8 | 0.0 | -------------------------------------------------------------------------------- | On behalf of others | 34.7 | 19.9 | 34.7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Minimum lease payments of irrevocable lease agreements | | -------------------------------------------------------------------------------- | One year or less | 11.9 | 13.1 | 11.1 | -------------------------------------------------------------------------------- | Over one year but no more | | | | -------------------------------------------------------------------------------- | than five years | 25.7 | 27.5 | 24.9 | -------------------------------------------------------------------------------- | Over five years | 19.0 | 27.7 | 20.7 | -------------------------------------------------------------------------------- | Total | 56.7 | 68.3 | 56.7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Purchase commitments of investments | 19.2 | 23.8 | 11.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Derivative contracts | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Forward foreign exchange contracts | | | | -------------------------------------------------------------------------------- | Nominal value | 28.0 | 130.6 | 36.6 | -------------------------------------------------------------------------------- | Fair value | -0.4 | 4.4 | -1.7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Currency options, calls purchased | | | | -------------------------------------------------------------------------------- | Nominal value | 6.4 | 6.8 | 0.0 | -------------------------------------------------------------------------------- | Fair value | 0.0 | 0.4 | 0.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Currency options, puts written | | | | -------------------------------------------------------------------------------- | Nominal value | 12.9 | 6.8 | 0.0 | -------------------------------------------------------------------------------- | Fair value | 0.0 | -0.2 | 0.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interest rate options, calls purchased | | | | -------------------------------------------------------------------------------- | Nominal value | 0.0 | 1.6 | 0.0 | -------------------------------------------------------------------------------- | Fair value | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interest rate options, puts written | | | | -------------------------------------------------------------------------------- | Nominal value | 0.0 | 1.6 | 0.0 | -------------------------------------------------------------------------------- | Fair value | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interest rate swap contracts | | | | -------------------------------------------------------------------------------- | Nominal value | 59.6 | 71.9 | 59.6 | -------------------------------------------------------------------------------- | Fair value | -3.6 | -3.9 | -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, 22 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 about EUR 67 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 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.