Listing prospectus for YIT’s EUR 100 million secured green notes is available and the amendments to the terms of EUR 100 million green notes 2026 have become effective
Back
- Stock Exchange Release
- 26.04.2013 07:00 CET
YIT’S INTERIM REPORT FOR JANUARY 1 – MARCH 31, 2013: Slow start for the year – partial demerger proceeding according to plan
YIT CORPORATION INTERIM REPORT April 26, 2013 at 8:00 a.m.
YIT’S INTERIM REPORT FOR JANUARY 1 – MARCH 31, 2013
Slow start for the year – partial demerger proceeding according to plan
- The operating profit for the segments decreased by 27 percent in January–March compared to the previous year, amounting to EUR 40.2 million (1–3/2012: EUR 55.1 million). The operating profit for International Construction Services increased compared to the previous year. The operating profit for Building Services Northern Europe decreased significantly.
- The revenue for the segments for the first quarter decreased slightly compared to the previous year, amounting to EUR 1,041.6 million (1–3/2012: EUR 1,098.3 million). Revenue grew in International Construction Services where the growth of revenue was supported by the high volume of residential production and favourable residential sales in Russia.
- The order backlog of the segments was on a par with the previous year, amounting to EUR 3,956.2 million (3/2012: EUR 3,965.5 million). The order backlog was at the same level as at the end of 2012.
- The Group’s profit before taxes based on segment reporting was 27 percent lower than the year before in January–March, amounting to EUR 33.8 million (1–3/2012: EUR 46.1 million).
- The Group’s earnings per share based on segment reporting decreased by 26 percent in January–March from the year before, amounting to EUR 0.20 (1–3/2012: EUR 0.27).
GUIDANCE: The Group revenue based on segment reporting for 2013 to remain at the level of 2012 and operating profit to grow in 2013
YIT Corporation reiterates its estimate issued in connection with the financial statements for 2012, according to which it estimates the Group revenue based on segment reporting for 2013 to remain at the level of 2012 and operating profit to grow in 2013.
The guidance does not take into account one-off costs relating to the planned demerger.
Increased uncertainty about general macroeconomic development is impacting YIT's business operations and customers.
Juhani Pitkäkoski, President and CEO: Order backlog strengthened clearly in Building Services Central Europe
We are satisfied with the continued good development in Construction Services during the first quarter. With regard to Construction Services Finland, the change in asset transfer tax that took effect at the beginning of March accelerated residential sales, especially in February. In Russia, residential sales strengthened after the January holiday season. We responded to the continued favourable demand by starting up the construction of more than 1,700 residential units in total during the first quarter.
In Building Services Northern Europe the revenue decreased during the first quarter. As a result of prolonged uncertainty the customers have postponed additional service and maintenance work further. Personnel cuts of 600 employees in Building Services Northern Europe are underway, and cost adjustments will be continued further during 2013. We estimate the profitability of Building Services Northern Europe to improve during the current year. The strengthening of the order backlog of Building Services and picking up of demand in Germany will contribute to the development during the rest of the year.
Preparations for developing the Group’s business towards a new strategic growth phase have continued. Our aim is to demerge the Building Services business to a separate group and continue the Construction Services business in the current YIT Group. The preparation of the demerger has progressed according to plans, and we aim to have Caverion, which will focus on building services, admitted for public trading on the Helsinki Stock Exchange at the beginning of July.
KEY FIGURES
Development of the Group based on segment reporting (percentage of completion, POC)
| Revenue, EUR million | 1-3/13 | 1-3/12 | Change |
| Building Services Northern Europe | 468.6 | 513.1 | -9% |
| Building Services Central Europe | 139.2 | 159.4 | -13% |
| Construction Services Finland | 326.0 | 329.5 | -1% |
| International Construction Services | 119.0 | 107.9 | 10% |
| Other items | -11.3 | -11.6 | |
| Group, total | 1,041.6 | 1,098.3 | -5% |
| Operating profit, EUR million | 1-3/13 | 1-3/12 | Change |
| Building Services Northern Europe | 2.2 | 14.5 | -85% |
| Building Services Central Europe | 3.4 | 5.2 | -34% |
| Construction Services Finland | 26.5 | 31.4 | -16% |
| International Construction Services | 11.6 | 9.7 | 20% |
| Other items | -3.5 | -5.7 | |
| Group, total | 40.2 | 55.1 | -27% |
| Operating profit margin, % | 1-3/13 | 1-3/12 |
| Building Services Northern Europe | 0.5 | 2.8 |
| Building Services Central Europe | 2.5 | 3.3 |
| Construction Services Finland | 8.1 | 9.5 |
| International Construction Services | 9.8 | 9.0 |
| Group, total | 3.9 | 5.0 |
| Order backlog, EUR million | 3/13 | 3/12 | Change | 3/13 | 12/12 | Change | |
| Building Services Northern Europe | 844.7 | 969.4 | -13% | 844.7 | 819.0 | 3% | |
| Building Services Central Europe | 470.5 | 500.5 | -6% | 470.5 | 380.1 | 24% | |
| Construction Services Finland | 1,424.9 | 1,428.0 | 0% | 1,424.9 | 1,499.0 | -5% | |
| International Construction Services | 1,285.3 | 1,142.9 | 12% | 1,285.3 | 1,266.1 | 2% | |
| Other items | -69.1 | -75.3 | -69.1 | -62.8 | |||
| Group, total | 3,956.2 | 3,965.5 | 0% | 3,956.2 | 3,901.5 | 1% |
Key ratios of segment reporting (percentage of completion, POC)
| 1-3/13 | 1-3/12 | Change | |
| Profit before taxes, EUR million | 33.8 | 46.1 | -27% |
| Profit for the review period, EUR million 1) | 25.6 | 33.9 | -25% |
| Earnings/share, EUR | 0.20 | 0.27 | -26% |
| Operating cash flow after investments, EUR million | -7.5 | -9.0 | |
| Personnel at the end of period | 24,923 | 25,703 | -3% |
1) Attributable to equity holders of the parent company
INFORMATION SESSION, WEBCAST AND CONFERENCE CALL
YIT will hold a news conference on the interim report on Friday, April 26, 2013, at 10:00 a.m. (Finnish Time, EEST). The news conference will be held in English at YIT's head office at Panuntie 11, 00620 Helsinki, Finland. The event is intended for analysts, portfolio managers and the media.
The news conference and the presentation, given by the company’s President and CEO, Juhani Pitkäkoski, can be viewed live on YIT’s website at www.yitgroup.com/webcast. The live webcast will start at 10:00 a.m. (Finnish time, EEST). A recording of the webcast will be available at the same address starting at approximately 12:00 noon (Finnish time, EEST).
It is also possible to participate in the event through a conference call. Participants are requested to call the assigned number +44 (0)20 7162 0077 at least five minutes before the conference call begins, at 9:55 a.m. (Finnish time, EEST) at the latest. The participants will be asked to provide the following conference ID: 930771. During the webcast and conference call, all questions should be presented in English. At the end of the event, there will also be an opportunity for the media to ask questions in Finnish.
Schedule in different time zones:
| Interim Report published | News conference, conference call and live webcast | Recorded webcast available | |
| EEST (Helsinki) | 8:00 | 10:00 | 12:00 |
| CEST (Paris, Stockholm) | 7:00 | 9:00 | 11:00 |
| BST (London) | 6:00 | 8:00 | 10:00 |
| US EDT (New York) | 1:00 | 3:00 | 5:00 |
Financial reports and other investor information are available at YIT's website, www.yitgroup.com/investors. The materials may be ordered via the website, by sending e-mail to InvestorRelations@yit.fi or by telephone on +358 20 433 2257.
YIT Corporation
Juhani Pitkäkoski
President and CEO
For further information, please contact:
Timo Lehtinen, Chief Financial Officer, YIT Corporation, tel. +358 45 670 0626, timo.lehtinen@yit.fi
Hanna-Maria Heikkinen, Vice President, Investor Relations, YIT Corporation, tel. +358 40 826 2172, hanna-maria.heikkinen@yit.fi
Distribution: NASDAQ OMX Helsinki, principal media, www.yitgroup.com
INTERIM REPORT JANUARY 1 – MARCH 31, 2013
CONTENTS
- Group financial development based on segment reporting
- Development by business segment
- Personnel
- Strategic objectives
- Progress of the partial demerger
- Group financial development based on Group reporting (IFRS, IFRIC 15)
- Resolutions passed at the Annual General Meeting
- Shares and shareholders
- Most significant short-term business risks and risk management
- More extensive and balanced reporting as part of corporate responsibility
- Outlook for 2013
- Tables to the Interim Report
GROUP FINANCIAL DEVELOPMENT BASED ON SEGMENT REPORTING
Accounting principles applied in the interim report
YIT Corporation’s management follows the development of the company’s business according to the percentage of completion-based reporting method for each segment. Therefore, the descriptive part of the interim report focuses on describing the company’s performance according to this reporting. YIT also reports on its operations in accordance with IFRS guidelines, where the company applies, for example, the IFRIC 15 guidelines. The effects of the differences of the recognition principles are presented in detail in the tables to the interim report.
Revenue of business segments decreased slightly compared to the previous year
| Revenue, EUR million | 1-3/13 | 1-3/12 | Change |
| Building Services Northern Europe | 468.6 | 513.1 | -9% |
| Building Services Central Europe | 139.2 | 159.4 | -13% |
| Construction Services Finland | 326.0 | 329.5 | -1% |
| International Construction Services | 119.0 | 107.9 | 10% |
| Other items | -11.3 | -11.6 | |
| Group, total | 1,041.6 | 1,098.3 | -5% |
The revenue of YIT’s segments for the first quarter decreased slightly compared to the previous year, amounting to EUR 1,041.6 million (1–3/2012: EUR 1,098.3 million). Revenue grew in International Construction Services compared to the previous year. The growth in International Construction Services revenue was supported by the high volume of housing production and continued good residential sales in Russia. Changes in foreign exchange rates increased the segments' revenue for January–March by EUR 7.8 million compared to the previous year.
In January–March, Finland accounted for 43 percent (1–3/2012: 42%) of the Group’s revenue according to segment reporting, Sweden for 16 percent (1–3/2012: 16%), Norway for 13 percent (1–3/2012: 13%), Germany for 10 percent (1–3/2012: 11%), Russia for 10 percent (1–3/2012: 8%), Denmark for 3 percent (1–3/2012: 3%), Austria for 3 percent (1–3/2012: 3%) and the Baltic countries for 2 percent (1–3/2012: 2%).
Operating profit of the segments decreased clearly
| Operating profit, EUR million | 1-3/13 | 1-3/12 | Change |
| Building Services Northern Europe | 2.2 | 14.5 | -85% |
| Building Services Central Europe | 3.4 | 5.2 | -34% |
| Construction Services Finland | 26.5 | 31.4 | -16% |
| International Construction Services | 11.6 | 9.7 | 20% |
| Other items | -3.5 | -5.7 | |
| Group, total | 40.2 | 55.1 | -27% |
| Operating profit margin, % | 1-3/13 | 1-3/12 |
| Building Services Northern Europe | 0.5 | 2.8 |
| Building Services Central Europe | 2.5 | 3.3 |
| Construction Services Finland | 8.1 | 9.5 |
| International Construction Services | 9.8 | 9.0 |
| Group, total | 3.9 | 5.0 |
YIT's operating profit based on segment reporting decreased by 27 percent compared to the previous year, amounting to EUR 40.2 million in January–March (1–3/2012: EUR 55.1 million). The operating profit margin based on segment reporting was 3.9 percent (1–3/2012: 5.0%). The operating profit for the review period does not include borrowing costs according to IAS 23 which, due to the amendment to the recording method, are included in borrowing costs (the comparison figures have been adjusted correspondingly). IAS 23 defines the recording method of borrowing costs in long-term construction projects.
The operating profit for International Construction Services increased compared to the previous year. In Construction Services Finland, operating profit decreased on the previous year. Operating profit decreased significantly in Building Services Northern Europe as the customers postponed additional service and maintenance work further as a result of prolonged uncertainty. In Building Services Northern Europe, the weak profitability of the project business and tight price competition and low business volume, typical of the first quarter, contributed to the decrease in operating profit. In addition, adjustment expenses of approximately EUR 2.8 million burdened the operating profit of the segment. In Building Services Central Europe the operating profit decreased clearly.
The depreciations booked by YIT amounted to EUR 10.3 million euros during the review period (1–3/2012: EUR 10.9 million).
Order backlog remained strong
| Order backlog, EUR million | 3/13 | 3/12 | Change | 3/13 | 12/12 | Change | |
| Building Services Northern Europe | 844.7 | 969.4 | -13% | 844.7 | 819.0 | 3% | |
| Building Services Central Europe | 470.5 | 500.5 | -6% | 470.5 | 380.1 | 24% | |
| Construction Services Finland | 1,424.9 | 1,428.0 | 0% | 1,424.9 | 1,499.0 | -5% | |
| International Construction Services | 1,285.3 | 1,142.9 | 12% | 1,285.3 | 1,266.1 | 2% | |
| Other items | -69.1 | -75.3 | -69.1 | -62.8 | |||
| Group, total | 3,956.2 | 3,965.5 | 0% | 3,956.2 | 3,901.5 | 1% |
The order backlog of YIT's segments was EUR 3,956.2 million at the end of March (3/2012: EUR 3,965.5 million), on a par with the previous year and the end of 2012, at which time it stood at EUR 3,901.5 million.
The order backlog of Building Services Northern Europe decreased compared to the previous year as the result of a weaker market situation. In addition, the order backlog of Building Services Central Europe decreased compared to the previous year, yet it increased by 24 percent compared to last December due to strengthened demand in Germany and Austria. The order backlog of International Construction Services grew compared to the previous year as a result of residential start-ups.
Capital expenditure and acquisitions
Gross capital expenditure on non-current assets included on the balance sheet totalled EUR 9.6 million (1–3/2012: EUR 13.6 million) during January-March, representing 0.9 percent (1–3/2012: 1.2%) of revenue. Investments in construction equipment amounted to EUR 1.0 million (1–3/2012: EUR 2.8 million) and investments in information technology to EUR 1.6 million (1–3/2012: EUR 2.5 million).
YIT made no acquisitions during the review period. YIT has increased its holding in YIT Moskovia by 5.92 percentage points and now holds all of the shares in the company.
Strong cash flow in Building Services Northern Europe
The Group's operating cash flow after investments for January–March amounted to EUR -7.5 million (1–3/2012: EUR -9.0 million). The cash flow was strong in Building Services Northern Europe. Building Services Central Europe’s cash flow for the first quarter remained weak because YIT did not receive any significant advance payments from its customers. Residential sales supported the cash flow in Construction Services Finland during the first quarter. In Russia, the sales inventory of apartments and plot investments increased.
The return on investment based on segment reporting amounted to 13.7 percent for the last 12 months (1–12/2012: 14.4%). At the end of March, the Group's invested capital based on segment reporting amounted to EUR 1,894.4 million (12/2012: EUR 1,916.9 million). Invested capital is calculated by deducting non-interest bearing liabilities from the balance sheet total.
Profit before taxes decreased
Profit before taxes based on segment reporting decreased by 27 percent compared to the previous year, amounting to EUR 33.8 million in January–March (1–3/2012: EUR 46.1 million).
Earnings per share based on segment reporting decreased by 26 percent in January–March from the year before, amounting to EUR 0.20 (1–3/2012: EUR 0.27).
The effective tax rate of the Group based on segment reporting was 24.2 percent during the review period (1–12/2011: 24.3%).
DEVELOPMENT BY BUSINESS SEGMENT
Development by business segment is presented using figures compliant with segment reporting.
BUILDING SERVICES NORTHERN EUROPE
| 1-3/13 | 1-3/12 | Change | |
| Revenue, EUR million | 468.6 | 513.1 | -9% |
| Operating profit, EUR million | 2.2 | 14.5 | -85% |
| Operating profit margin, % | 0.5 | 2.8 |
| 4/12-3/13 | 1-12/12 | |
| Return on operative invested capital (last 12 months), %1) | 9.0 | 11.0 |
| 3/13 | 3/12 | Change | 3/13 | 12/12 | Change | ||
| Operative invested capital, EUR million | 321.5 | 327.8 | -2% | 321.5 | 344.8 | -7% | |
| Order backlog, EUR million | 844.7 | 969.4 | -13% | 844.7 | 819.0 | 3% |
| Revenue, EUR million | 1-3/13 | 1-3/12 | Change |
| Sweden | 126.4 | 142.2 | -11% |
| Finland | 165.2 | 178.5 | -7% |
| Norway | 133.6 | 147.1 | -9% |
| Denmark | 31.1 | 34.0 | -9% |
| Russia and the Baltic countries | 12.3 | 11.2 | 10% |
| Total | 468.6 | 513.1 | -9% |
1) In the comparison figures the impact of IAS 19 and adjustments of internal items have been taken into account.
The revenue for Building Services Northern Europe decreased in January–March compared to the previous year, amounting to EUR 468.6 million (1–3/2012: EUR 513.1 million). Changes in foreign exchange rates increased the revenue for the review period by EUR 9.3 million compared to the previous year.
The segment's operating profit for the review period decreased by 85 percent from the previous year to EUR 2.2 million (1–3/2012: EUR 14.5 million). Customers postponed additional service and maintenance work, and as a result, the utility rate of operations was too low.
In Building Services Northern Europe, cost adjustments will continue in 2013 and profitability is expected to improve compared to the previous year. The restructuring of operations proceeded during the review period in all countries where Building Services Northern Europe operates. The aim is to decrease the number of personnel by 600 employees in 2013; of these, personnel cuts amounting to approximately 200 employees were carried out during the first quarter, which resulted in adjustment costs of approximately EUR 2.8 million.
The effects of the implemented cost-savings are expected to be shown as improved profitability during the rest of the year. The additional service and maintenance work postponed by customers since the fourth quarter of 2012 is expected to result in increasing demand, which is also estimated to contribute to the favourable development of revenue and profitability during the rest of the year.
The order backlog at the end of March decreased by 13 percent on the previous year, amounting to EUR 844.7 million (3/2012: EUR 969.4 million). The order backlog increased slightly from the end of December (12/2012: EUR 819.0 million).
New orders in the project business
During the first quarter, YIT started electrical and tele technical installations in the new Fornebuporten project outside Oslo in Norway. The value of the contract is approximately EUR 19 million over the next three years.
An agreement on all technical installations of a new court house during the construction phase as well as a maintenance agreement for the next 25 years was signed in Viborg, Denmark. The value of the contract is approximately EUR 17.5 million.
In the future, YIT will aim to increase the share of service and maintenance business as well as strengthen its position, particularly in large Design & Build projects, in Building Services Northern Europe.
Revenue of service and maintenance operations decreased
YIT aims to be the leading provider of energy-efficient technical systems, solutions and life-cycle services in the Nordic countries and in Central Europe. The target is to increase service and maintenance operations at a faster rate than other operations.
The revenue of service and maintenance operations decreased by 11 percent and their share of the segment revenue for January–March was EUR 291.3 million (1–3/2012: EUR 328.1 million), or 62 percent of the segment's total revenue in January–March (1–3/2012: 64%).
A service agreement between YIT Kiinteistötekniikka and Fläkt Woods on the efficiency improvements and turnkey execution with regard to the maintenance and service operations of production machinery, equipment and buildings at the Turku, Toijala and Kihniö plants took effect in February. The Contract includes outsourcing and transfer of business. According to the contract, the production maintenance personnel of Fläkt Woods’ Turku and Kihniö plants were transferred to YIT Kiinteistötekniikka Oy as continuing employees. As for the Toijala plant, the operations were transferred to YIT from another service provider. In addition, the signed contract also included a ServiFlex service agreement on comprehensive production and building maintenance. The initial term of the agreement is two years, after which it will continue until further notice.
In Russia, YIT has signed several service agreements with the Castorama chain, British Petroleum Plc and World Class Fitness, among others. The total value of these agreements is over EUR 5 million.
Number of energy efficiency projects is increasing
In Finland YIT signed an agreement on an ESCO project aiming for energy savings with the municipality of Siilinjärvi during the first quarter. The project comprises the modernisation of building automation and heating and ventilation equipment in nine properties. The investments will be implemented during 2013. The ESCO service agreement can be extended for ten years. The total value of the project is EUR 1.1 million.
BUILDING SERVICES CENTRAL EUROPE
| 1-3/13 | 1-3/12 | Change | |
| Revenue, EUR million | 139.2 | 159.4 | -13% |
| Operating profit, EUR million | 3.4 | 5.2 | -34% |
| Operating profit margin, % | 2.5 | 3.3 |
| 4/12-3/13 | 1-12/12 | |
| Return on operative invested capital (last 12 months), % | 23.3 | 32.5 |
| 3/13 | 3/12 | Change | 3/13 | 12/12 | Change | ||
| Operative invested capital, EUR million | 118.8 | 97.0 | 22% | 118.8 | 96.6 | 23% | |
| Order backlog, EUR million | 470.5 | 500.5 | -6% | 470.5 | 380.1 | 24% |
| Revenue, EUR million | 1-3/13 | 1-3/12 | Change |
| Germany | 100.9 | 124.7 | -19% |
| Austria | 35.9 | 30.0 | 19% |
| Poland, the Czech Republic and other countries | 2.5 | 4.7 | -47% |
| Total | 139.2 | 159.4 | -13% |
The revenue of Building Services Central Europe decreased by 13 percent in January–March compared to the previous year, amounting to EUR 139.2 million (1–3/2012: EUR 159.4 million). The decrease in revenue during the review period was due to weakening demand, especially in the market for large projects in Germany during the latter half of 2012 and the low level of activity in Central Eastern Europe. Revenue continued to increase in Austria during the review period and amounted to EUR 35.9 million (1–3/2012: EUR 30.0 million).
The operating profit for January–March decreased clearly compared to the previous year, mainly due to the lower volume of German operations, and amounted to EUR 3.4 million (1–3/2012: EUR 5.2 million).
Demand in the Central European building systems market strengthened during the first quarter compared to the end of the previous year. The order backlog at the end of March increased by 24 percent from the end of December 2012 (12/2012: EUR 380.1 million) but decreased by 6 percent from the year before. The order backlog amounted to EUR 470.5 million at the end of March (3/2012: EUR 500.5 million).
Service and maintenance revenue is growing
Service and maintenance operations generated EUR 48.6 million (1–3/2012: EUR 45.6 million), or 35 percent of the segment's total revenue in January–March (1–3/2012: 29%). The share of service and maintenance was still significantly lower in Building Services Central Europe (1–3/2013: 35%) than in Building Services Northern Europe (1–3/2013: 62%), and therefore the opportunities for increasing it in Building Services Central Europe are good. The volume of service and maintenance was already increasing, and it generated 7 percent more turnover during the first quarter than the corresponding period the previous year.
During the first quarter, YIT signed new, minor service and maintenance agreements and several long-term agreements were renewed and extended, such as the agreement on the delivery of technical and infrastructural facility management for 2013 and maintenance of all building systems for TOTAL Raffinerie Mitteldeutschland in Germany.
Recovery in the German project market
Decision-making in Germany and Austria on new investments is still slow, but positive signs can be seen.
YIT secured several significant projects during the first quarter. Among others, YIT received a contract worth over EUR 35 million for the expansion of the terminal at the Franz-Josef Strauss International Airport in Munich, Germany. The project covers heating and cooling systems, sanitation and fire extinguishing technology, and electrical engineering. YIT’s individually developed construction process and implementation concept as well as relevant references played a key role in the contract decision.
Furthermore, YIT will supply, in collaboration with GETEC, the heating, cooling and ventilation systems for the expansion and renovation work at the Landesklinikum Mistelbach-Gänserndorf hospital in Austria. The project should be completed by 2016. The contract with VAMED covers approx. 54,000 m² of gross floor area with three underground levels, five above-ground floors and a helipad. A total of 41 ventilation systems will be commissioned within the project. In addition, YIT will be installing 3.0 MW heating systems and 2.2 MW cooling systems. To keep energy consumption and operating costs to a minimum, heat recovery systems that recycle approximately 65% of the generated heat will also be used. YIT has extensive system experience when it comes to hospital projects.
CONSTRUCTION SERVICES FINLAND
| 1-3/13 | 1-3/12 | Change | |
| Revenue, EUR million | 326.0 | 329.5 | -1% |
| Operating profit, EUR million | 26.5 | 31.4 | -16% |
| Operating profit margin, % | 8.1 | 9.5 |
| 3/13 | 3/12 | Change | 3/13 | 12/12 | Change | ||
| Operative invested capital, EUR million | 584.2 | 552.1 | 6% | 584.2 | 581.7 | 0% | |
| - of which plot reserves, EUR million | 289.1 | 297.0 | -3% | 289.1 | 284.2 | 2% | |
| Order backlog, EUR million | 1,424.9 | 1,428.0 | 0% | 1,424.9 | 1,499.0 | -5% |
| 4/12-3/13 | 1-12/12 | |
| Return on operative invested capital (last 12 months), % | 22.7 | 23.5 |
The revenue of Construction Services Finland remained on a par with the previous year, amounting to EUR 326.0 million in January–March (1–3/2012 EUR 329.5 million). The growth in revenue was supported by the high volume of housing production and continued good residential sales in the first quarter.
The segment’s operating profit decreased by 16 percent in January–March compared to the previous year, amounting to EUR 26.5 million (1–3/2012: EUR 31.4 million). The operating profit of business premises operations decreased significantly.
The order backlog at the end of March remained on a par with the previous year, amounting to EUR 1,424.9 million (3/2012: EUR 1,428.0 million). The order backlog decreased slightly from the end of December 2012, at which time it stood at EUR 1,499.0 million.
The segment's capital tied into plot reserves totalled EUR 289.1 million at the end of March (12/2012: EUR 284.2 million). The reserves included 1,832,000 square metres of residential plots (12/2012: 1,796,000) and 870,000 square metres of business premises (12/2012: 877,000).
Good residential sales to consumers continued
Residential sales continued at a good level in the first quarter. The demand focused particularly on residential units in the final stages of construction and completed residential units. Housing prices remained stable during the review period. Interest rates remained low during the first quarter, but customers’ access to financing became more difficult with banks tightening their credit terms.
In February, YIT and Ålandsbanken’s new housing fund signed an agreement on the sale of 221 apartments in the Helsinki region and other growth centres in Finland. The value of the agreement was approximately EUR 43 million. Residential sales during the first quarter were also partly supported by the change in asset transfer tax legislation that took force in March 2013, increasing the asset transfer tax from 1.6% to 2.0%. The tax is calculated from the debt-free price of the apartment. In particular, the amendment had a positive impact on residential sales in February. Correspondingly, as expected, sales have been slightly softer than normal since the beginning of March.
Residential construction in Finland, number of residential units
| 1-3/13 | 1-3/12 | Change | 10-12/12 | 7-9/12 | 4-6/12 | ||
| Sold | 715 | 775 | -8% | 597 | 668 | 717 | |
| - of which directly to consumers* | 661 | 453 | 46% | 505 | 414 | 497 | |
| Start-ups | 586 | 559 | 5% | 531 | 770 | 996 | |
| - of which directly to consumers | 532 | 237 | 124% | 439 | 516 | 776 | |
| Completed | 895 | 616 | 45% | 579 | 591 | 936 | |
| - of which directly to consumers | 560 | 499 | 12% | 427 | 591 | 847 | |
| Under construction** | 3,931 | 4,049 | -3% | 4,240 | 4,288 | 4,109 | |
| - of which sold** | 2,247 | 2,398 | -6% | 2,409 | 2,409 | 2,293 | |
| For sale** | 2,153 | 1,966 | 10% | 2,282 | 2,348 | 2,245 | |
| - of which completed | 469 | 315 | 49% | 451 | 469 | 429 |
*) Includes 221 residential units sold to Ålandsbanken’s housing fund.
**) At the end of the period.
Changes in the number of residential units may take place after the start of construction due to the division or combination of residences.
The focus for YIT's housing construction is on residential development projects aimed directly at consumers in accordance with market demand. YIT is also active in housing products aimed at investors. During the first quarter, YIT started the construction of 532 residential units as own development projects. In addition, YIT started up the construction of a total of 54 residential units as tender-based projects in the first quarter. YIT has actively replenished its plot reserves by acquiring plots and making preliminary agreements on plots in order to also ensure good opportunities for residential start-ups in the future.
Of the residential units under construction, 57 percent have been sold (3/2012: 59%), which reduces YIT's sales risk. The sales inventory is focused on medium-priced residential production: approximately 70 percent of the residential units for sale are priced at less than EUR 300,000.
YIT is well prepared to adjust its residential production according to the market situation. The costs of completing the current residential and business premises development projects for sale amounted to EUR 364.2 million at the end of March 2013 (3/2012: EUR 292.2 million).
Challenges in the business and office premises market
The development of the business and office premises market was as soft as expected in the first quarter, and the order backlog of YIT's business and office premises operations remained at a moderate level. Lease agreements were signed for approximately 6,700 square metres of premises. However, the leasing of business and office premises under construction progressed slower than planned in January–March, and as a result, sales of own development projects have been postponed towards the end of the year. Rents for business premises and investors’ yield requirements remained stable in the first quarter.
YIT signed an agreement with Finnreit Fund Management Company Ltd on the sale of the assisted living facilities located in Hyrylä, Tuusula, Finland, to the eQ Care (non-UCITS) fund. The value of the agreement was approximately EUR 6.2 million. Palvelukoti Joenranta Oy is the tenant of the building, which was completed in January 2013. The floor area of the building is 3,600 square metres and it has places for 47 residents.
Development of infrastructure services remained stable
The demand for infrastructure construction remained stable in the first quarter, but the order backlog of infrastructure services at the end of March 2013 decreased compared to the previous year. Significant on-going road projects proceeded according to plans during the first quarter.
YIT and the City of Lahti signed an agreement on two regional maintenance contracts in the Lahti region in March. Both contracts will commence during the second quarter, and their combined value is over EUR 7 million. The term of the contract for the eastern districts of Lahti is five years and four months and that of the northern districts of Lahti is six years and four months.
INTERNATIONAL CONSTRUCTION SERVICES
| 1-3/13 | 1-3/12 | Change | |
| Revenue, EUR million | 119.0 | 107.9 | 10% |
| Operating profit, EUR million | 11.6 | 9.7 | 20% |
| Operating profit margin, % | 9.8 | 9.0 |
| 3/13 | 3/12 | Change | 3/13 | 12/12 | Change | ||
| Operative invested capital, EUR million | 718.7 | 651.8 | 10% | 718.7 | 708.3 | 1% | |
| - of which plot reserves, EUR million | 401.5 | 346.1 | 16% | 412.7 | 389.3 | 6% | |
| Order backlog, EUR million | 1,285.3 | 1,142.9 | 12% | 1,285.3 | 1,266.1 | 2% |
| 4/12-3/13 | 1-12/12 | |
| Return on operative invested capital (last 12 months), % | 12.0 | 12.3 |
The revenue of International Construction Services for January–March increased by 10 percent compared to the previous year, amounting to EUR 119.0 million (1–3/2012: EUR 107.9 million).
The operating profit for January–March increased compared to the previous year, amounting to EUR 11.6 million (1–3/2012: EUR 9.7 million). The growth in revenue and operating profit was supported by the high volume of housing production and continued good residential sales in Russia.
Due to the high number of residential start-ups, the order backlog at the end of March increased by 12 percent on the previous year, amounting to EUR 1,285.3 million (3/2012: EUR 1,142.9 million). The order backlog was on a par with the end of December 2012, at which time it stood at EUR 1,266.1 million. The segment's order backlog was partially improved by the strengthening of the ruble, which had an impact of EUR 14.6 million in January–March.
The costs of completing the current residential and business premises development projects for sale in International Construction Services amounted to EUR 570 million at the end of March 2013 (3/2012: EUR 431.0 million).
The segment's capital tied into plot reserves totalled EUR 401.5 million at the end of March (12/2012: EUR 389.3 million). The reserves included 2,751,000 square metres of residential plots (12/2012: 2,590,000) and 574,000 square metres of business premises in Russia, the Baltic countries, the Czech Republic and Slovakia (12/2012: 574,000).
The segment’s return on operative invested capital for the last 12 months was 12.0 percent, which was still below the Group’s strategic target (20%). YIT aims to increase the segment’s return on invested capital primarily by increasing the volume of operations, improving project-level profitability and increasing further capital efficiency.
Russian residential sales continued well
Russia generated 82 percent of the revenue of International Construction Services for January–March (1–3/2012: 79%). Revenue in Russia increased from the previous year to EUR 97.6 million (1-3/2012: EUR 85.6 million).
The capital tied into plot reserves in Russia amounted to EUR 314.2 million at the end of March (12/2012: EUR 302.0 million). The reserves included 2,353,000 square metres of residential plots (12/2012: 2,179,000) and 446,000 square metres of business premises (12/2012: 446,000).
Residential sales in Russia have been at the normal level in April.
Residential construction in Russia, number of residential units
| 1-3/13 | 1-3/12 | Change | 10-12/12 | 7-9/12 | 4-6/12 | ||
| Sold | 889 | 955 | -7% | 1,288 | 1,032 | 934 | |
| Start-ups | 1,146 | 1,540 | -26% | 1,818 | 1,006 | 1,123 | |
| Completed 1) | 512 | 593 | -14% | 2,217 | 622 | 765 | |
| Under construction* | 9,290 | 8,313 | 12% | 8,662 | 8,995 | 8,670 | |
| - of which sold* | 3,148 | 2,881 | 9% | 3,020 | 3,576 | 3,159 | |
| For sale* | 6,838 | 5,799 | 18% | 6,530 | 5,961 | 5,987 | |
| - of which completed | 696 | 367 | 90% | 888 | 542 | 476 |
*) At the end of the period.
| Under construction at the end of the period | 3/13 | 3/12 | Change | 12/12 | 9/12 | 6/12 | |
| St. Petersburg | 2,168 | 2,102 | 3% | 2,686 | 2,323 | 2,290 | |
| Moscow region | 4,198 | 3,882 | 8% | 3,796 | 4,259 | 4,016 | |
| Yekaterinburg, Kazan, Rostov-on-Don and Moscow | 2,924 | 2,329 | 26% | 2,180 | 2,413 | 2,364 |
1) Completion of the projects requires commissioning by the authorities.
In Russia, the focus of operations is on residential development projects in St. Petersburg, Moscow and cities in the Moscow region, Yekaterinburg, Tyumen, Rostov-on-Don and Kazan. YIT actively continued plot investments in the Moscow region, Rostov-on-Don and St. Petersburg during the first quarter.
Residential sales were supported by continued favourable consumer confidence. Residential sales have also been supported by YIT's established position as a reliable construction company in Russia, YIT's diverse housing offering, YIT's own marketing and promotion measures and extensive housing loan cooperation with banks. The significance of loan financing has remained high in Russia, and, in the first quarter, customers have taken out housing loans in 38 percent of YIT's residential sales.
Interest rates for mortgages increased further in Russia during the first quarter, but remained at a locally moderate level. YIT has succeeded in negotiating new, favourable loan programmes with banks, and as a result, the increase in the interest rates of YIT’s customers’ mortgages has been lower than expected.
After the holiday season at the beginning of the year, residential sales have picked up in March and April. Housing prices remained stable during the first quarter of 2013.
Based on the favourable demand, YIT has started up new residential projects in Russia, and in the first quarter start-ups began in the Moscow region, Rostov-on-Don and Yekaterinburg as planned. In St. Petersburg, the process of the authorities is slow, which has also caused delays to the start of a number of YIT’s projects. The costs of construction have remained stable.
The number of residential units for sale has been increased in a controlled manner, and the sales inventory at the end of March was geographically balanced. The number of completed but unsold residential units decreased during the first quarter. Of the residential units under construction, 34 percent had been sold (3/2013: 35%).
After the handover of residential projects, YIT offers its customers service and maintenance in St. Petersburg, the Moscow region, Yekaterinburg and Rostov-on-Don. At the end of March 2013, YIT was responsible for the service and maintenance of approximately 14,000 residential units.
Revival of the residential market has continued in the Baltic countries and Central Eastern Europe
Estonia, Latvia, Lithuania, the Czech Republic and Slovakia accounted for 18 percent of the revenue of International Construction Services for January–March (1–3/2012: 21%). Revenue generated in these countries decreased slightly compared to the year before to EUR 21.3 million (1–3/2012: EUR 22.3 million). The capital tied into plot reserves in the Baltic countries, the Czech Republic and Slovakia totalled EUR 87.3 million at the end of March (12/2012: EUR 87.3 million). The reserves included 398,000 square metres of residential plots (12/2012: 411,000) and 128,000 square metres of business premises (12/2012: 128,000).
Residential sales improved in the Baltic countries during the first quarter on the previous year. YIT will shift the focus of operations from tender-based production to own residential development projects in order to improve profitability as residential demand revives.
Residential construction in the Baltic countries and Central Eastern Europe, number of residential units
| 1-3/13 | 1-3/12 | Change | 10-12/12 | 7-9/12 | 4-6/12 | ||
| Sold | 109 | 75 | 45% | 118 | 99 | 92 | |
| Start-ups | 114 | 0 | 0 | 246 | 284 | ||
| Completed | 146 | 232 | -37% | 107 | 35 | 47 | |
| Under construction* | 684 | 378 | 81% | 715 | 822 | 615 | |
| - of which sold* | 102 | 104 | -2% | 108 | 131 | 110 | |
| For sale* | 750 | 526 | 43% | 743 | 861 | 718 | |
| - of which completed | 168 | 252 | -33% | 136 | 170 | 213 |
*) At the end of the period.
The construction of 114 residential units was started in Tallin, Bratislava and Prague during the first quarter of 2013 (1–3/2012: 0). At the end of March, there were 684 residential units under construction (3/2012: 378). During the review period, housing prices increased slightly in the Baltic countries and remained stable in the Czech Republic and Slovakia. The demand for YIT’s residential units has continued to be good.
YIT's residential sales inventory has grown in the Baltic countries, the Czech Republic and Slovakia, and YIT aims to increase the number of residential units for sale in accordance with demand. In January–March, a total of 109 residential units were sold in these countries (1–3/2012: 75). At the end of March, there were 750 residential units for sale (3/2012: 526), of these 168 were completed (3/2012: 252). The number of residential units completed during the first quarter of 2013 was 146 (1–3/2012: 232).
Construction of business premises in the Baltic countries and Central Eastern Europe
During the first quarter, YIT signed an agreement on building technical maintenance buildings for the Klaipeda port terminal in western Lithuania. The project is part of the contract signed by a consortium between Lemminkäinen and YIT for the renewal of the container terminal at Klaipeda Port. YIT Group’s Lithuanian subsidiary YIT Kausta is responsible for YIT’s role in the consortium. The total value of the project is EUR 28 million, of which YIT’s share represents slightly over EUR 6 million.
PERSONNEL
| Personnel by business segment | 3/13 | 3/12 | Change | 3/13 | 12/12 | Change | |
| Building Services Northern Europe | 14,870 | 15,640 | -5% | 14,870 | 15,159 | -2% | |
| Building Services Central Europe | 3,311 | 3,505 | -6% | 3,311 | 3,380 | -2% | |
| Construction Services Finland | 3,449 | 3,438 | 0% | 3,449 | 3,540 | -3% | |
| International Construction Services | 2,905 | 2,730 | 6% | 2,905 | 2,808 | 3% | |
| Corporate Services | 388 | 390 | -1% | 388 | 396 | -2% | |
| Group, total | 24,923 | 25,703 | -3% | 24,923 | 25,283 | -1% |
| Personnel by country | 3/13 | 3/12 | Change | 3/13 | 12/12 | Change | |
| Finland | 8,684 | 8,967 | -3% | 8,684 | 8,868 | -2% | |
| Sweden | 4,273 | 4,690 | -9% | 4,273 | 4,492 | -5% | |
| Norway | 3,646 | 3,621 | 1% | 3,646 | 3,642 | 0% | |
| Germany | 2,408 | 2,577 | -7% | 2,408 | 2,450 | -2% | |
| Russia | 2,754 | 2,579 | 7% | 2,754 | 2,650 | 4% | |
| Denmark | 1,093 | 1,169 | -7% | 1,093 | 1,104 | -1% | |
| Baltic countries | 1,002 | 989 | 1% | 1,002 | 991 | 1% | |
| Other countries (Central Europe excl. Germany) | 1,063 | 1,111 | -4% | 1,063 | 1,086 | -2% | |
| Group, total | 24,923 | 25,703 | -3% | 24,923 | 25,283 | -1% |
In January–March 2013, the Group employed 25,009 people on average (1–3/2012: 25,821). At the end of March, the Group employed 24,923 people (3/2012: 25,703). The personnel expenses for January–March amounted to a total of EUR 350.3 million (1–3/2012: EUR 365.0 million).
The cost effect of YIT’s share-based incentive scheme was about EUR 2.0 million in January–March 2013 (1–3/2012: EUR 1.4 million).
STRATEGIC OBJECTIVES
YIT Corporation's Board of Directors confirmed the Group's strategy for 2013–2014 on September 20, 2012. The key strategic objective is increasingly focused, balanced and profitable growth. It was decided that the Group’s strategic long-term targets remain unchanged: average annual revenue growth of more than 10 percent, return on investment of 20 percent, operating cash flow after investments sufficient for dividend payout and reduction of debt, equity ratio of 35 percent and dividend payout of 40–60 percent of net profit for the period. The target levels are based on figures reported by the company on the basis of the percentage of completion in accordance with the current emphasis. When determining the target levels, the assumption was made that economic growth in YIT’s market areas will continue.
In terms of business operations, the focus areas for YIT’s growth continue to be building systems service and maintenance operations and residential construction. Growth is being sought organically and through acquisitions. Particular focus areas for growth include residential construction in Russia and building services in Germany.
To support its strategic goals, YIT has launched three development programmes which focus on energy-efficient solutions, the best quality living experience and efficient building services. Building Services Northern Europe will focus on improving profitability and strengthening its cash flow. In addition to increasing the share of service and maintenance business, Building Services Central Europe will seek to strengthen its position during the strategy period, particularly in large Design & Build projects. In residential construction, YIT is investing in innovative solutions and strengthening its forerunner status. In Construction Services Finland, YIT is responding to customer demand by particularly increasing the production of moderately priced housing during the strategy period. YIT aims to expand in building system services in the German-speaking region further. In International Construction Services, the company is focusing on expanding in Russia. The focus of operations in all construction business areas is on increasing the share of own development production.
YIT published a stock exchange release on the confirmation of the strategy on September 21, 2012, and materials for the Capital Market Day focusing on the strategic focus areas on September 25, 2012.
PROGRESS OF THE PARTIAL DEMERGER
In accordance with the decisions of YIT Corporation’s Board of Directors, the company has continued the preparations for the development of the Group’s business operations towards a new strategic growth phase. In order to achieve this, the Construction Services business and Building Services business would be demerged into separate groups. YIT published a stock exchange release on starting the preparations for the demerger on February 5, 2013.
YIT’s Board of Directors approved and published the demerger plan for the partial demerger on February 21, 2013. According to the demerger plan, YIT will demerge so that all of the assets and liabilities related to YIT’s Building Systems business are transferred to a company to be established in the demerger named Caverion Corporation (“Caverion”). YIT’s Construction Services business will remain with YIT.
The demerger will become effective when YIT's Extraordinary General Meeting has approved the demerger and its implementation is recorded with the Finnish Trade Register. The planned registration date is June 30, 2013, after which the shares of Caverion will be admitted for public trading on Nasdaq OMX Helsinki Oy. Trading in Caverion shares is intended to commence as soon as possible after the implementation of the demerger.
The approval of the demerger plan requires that the resolution on approval be made by a statutory majority of two-thirds of the shares and votes represented at the general meeting of shareholders. In addition, the implementation of the demerger depends on YIT’s creditors not objecting to the demerger or that any creditors objecting to the demerger have been paid or received a sufficient security for their receivable in accordance with a court ruling.
The demerger plan includes the proposals of YIT’s Board of Directors to the Extraordinary General Meeting planned to be held on June 17, 2013, concerning, among other items, the Articles of Association of Caverion, the proceedings for election of the members of the Board of Directors and auditor of Caverion, the demerger consideration to YIT’s shareholders and the distribution of the assets and liabilities of YIT to Caverion.
According to the demerger plan, YIT’s shareholders shall receive as demerger consideration one (1) share in Caverion for each share owned in YIT. No action is required from the shareholders in relation to the receipt of the demerger consideration.
More detailed information related to the demerger is presented in the demerger prospectus, anticipated to be published at the beginning of June 2013.
All demerger-related information is available in the Investors section of YIT's website at www.yitgroup.com/demerger.
GROUP FINANCIAL DEVELOPMENT BASED ON GROUP REPORTING (IFRS, IFRIC 15)
| 1-3/13 | 1-3/12 | Change | |
| Revenue, EUR million | 1,035.2 | 1,098.4 | -6% |
| Operating profit, EUR million | 35.3 | 55.0 | -36% |
| Operating profit margin, % | 3.4 | 5.0 | |
| Profit before taxes, EUR million | 33.5 | 49.7 | -33% |
| Profit for the review period, EUR million 1) | 25.1 | 36.4 | -31% |
| Earnings/share, EUR | 0.20 | 0.29 | -31% |
| Operating cash flow after investments, EUR million | -7.5 | -9.0 |
1) Attributable to equity holders of the parent company
| 3/13 | 3/12 | Change | 3/13 | 12/12 | Change | ||
| Order backlog, EUR million | 4,291.9 | 4,385.3 | -2% | 4,291.9 | 4,245.1 | 1% | |
| Return on investment (last 12 months), % | 14.0 | 13.1 | 14.0 | 14.9 | |||
| Equity ratio, % | 31.1 | 27.8 | 31.1 | 32.5 | |||
| Gearing ratio, % | 88.9 | 87.6 | 88.9 | 73.9 |
Revenue based on Group reporting decreased by 6 percent compared to the previous year, amounting to EUR 1,035.2 million in January–March (1-3/2012: EUR 1,098.4 million). In Group-level reporting, own residential development projects are only recognised as income upon project delivery. The completion schedules for own development projects affect the Group's revenue recognition, and therefore Group-level figures may fluctuate greatly between different quarters. The number of residential units completed in Russia, the Baltic countries and Central Eastern Europe during the first quarter was clearly lower than the year before, while in Finland, the number of residential units completed was clearly higher than the year before.
Following the IFRIC 15 adjustment, the Group's operating profit for January–March decreased by 36 percent compared to the previous year, amounting to EUR 35.3 million (1–3/2012: EUR 55.0 million). Following the IFRIC 15 adjustment, the Group's operating profit margin for January–March was 3.4 percent (1–3/2012: 5.0%).
Profit before taxes based on Group reporting decreased by 33 percent compared to the previous year, amounting to EUR 33.5 million in January–March (1–3/2012: EUR 49.7 million).
Earnings per share based on Group reporting decreased by 31 percent from the year before in January–March, amounting to EUR 0.20 (1–3/2012: EUR 0.29).
In January–March, the effective tax rate based on Group reporting was 25.1 percent (1–12/2012: 24.4%).
The order backlog based on Group reporting amounted to EUR 4,291.9 million at the end of March (3/2012: EUR 4,385.3 million).
Return on investment amounted to 14.0 percent for the last 12 months (1–3/2012: 13.1%). At the end of March, the Group's invested capital amounted to EUR 1,896.5 million (3/2012: EUR 1,814.4 million). Invested capital is calculated by deducting non-interest bearing liabilities from the balance sheet total. The balance sheet total at the end of March was EUR 3,644.3 million (3/2012: EUR 3,620.2 million).
Of the Group's invested capital, 32 percent (12/2012: 30%), or EUR 608.4 million (12/2012: EUR 585.2 million) was invested in Russia. The amount of capital invested in Russia increased slightly compared to the end of December, and the exchange rate changes of the ruble increased the capital invested by EUR 8.6 million in January–March. Smaller project sizes, gradual building in projects, sales of residential units at an earlier construction phase, improved terms of payment and an increased share of mortgage deals all increase capital efficiency.
The equity ratio decreased compared to the end of December 2012, amounting to 31.1 percent (12/2012: 32.5%).
Diverse capital structure – financial position has been strengthened with the partial demerger approaching
YIT’s financing consists of diverse sources of financing and its financial position was strengthened during the first quarter of 2013. Cash and cash equivalents amounted to EUR 130.3 million at the end of March (12/2012: EUR 175.7 million). In addition, YIT has undrawn committed credit facilities amounting to EUR 280 million and undrawn overdraft facilities amounting to EUR 79.9 million. Of the credit facilities, EUR 30 million will fall due in December 2014 and EUR 250 million in December 2015.
In addition to these credit facilities, YIT has signed two new loan agreements as part of the demerger process. The loan agreement with a Nordic bank group amounting to a total of EUR 267 million includes an amortizing long-term loan facility of EUR 140 million falling due in June 2016, a long-term revolving credit facility of EUR 60 million falling due in June 2016 and a short-term bridge loan facility of EUR 67 million falling due in June 2014. Upon the registration of the partial demerger, this loan agreement will be transferred to Caverion Corporation.
In addition, YIT has signed a EUR 150 million bank financing agreement that will fall due in December 2014 at the latest. These new loan agreements and the existing credit facilities will create a sufficient liquidity buffer for implementing the partial demerger and continuing and developing the business operations. Both of the new loan agreements are undrawn and thereby the total amount of committed financing agreements available to YIT on March 31, 2013, was EUR 697 million. The new loan agreements include a financial covenant linked to YIT’s equity ratio, taking effect also with regard to YIT’s existing revolving credit facilities and bank loans after the demerger. After the demerger, the loans transferred to Caverion Corporation will be subject to a financial covenant based on the ratio of Caverion Group’s net debt to EBITDA.
The gearing ratio increased clearly during the first quarter of 2013. The gearing ratio was 88.9 per cent at the end of March (12/2012: 73.9%). Net Interest-bearing debt increased and amounted to EUR 839.0 million at the end of March (12/2012: EUR 746.2 million).
Net financial expenses decreased in January–March compared to the previous year and amounted to EUR 1.9 million (1–3/2012: EUR 5.2 million), or 0.2 percent of the Group's revenue (1–3/2012: 0.5%). The decrease in net financial expenses was due to an increase in the fair value of interest rate hedges outside hedge accounting and non-recurring financial income. The net financial expenses include EUR 4.6 million of capitalisations of interest expenses in compliance with IAS 23 (1–3/2012: EUR 3.8 million). The exchange rate differences included in the net financial expenses, totalling EUR -0.6 million (1–3/2012: EUR -1.0 million), were comprised almost entirely of the costs of hedging debt investments in Russia.
The hedged ruble exposure increased from the end of December 2012. At the end of March 2013, EUR 133.6 million of the capital invested in Russia was comprised of debt investments (12/2012: EUR 125.2 million) and EUR 474.8 million was equity investments or similar fixed net investments (12/2012: EUR 460.0 million). In accordance with YIT's hedging policy, the debt investments are hedged against exchange rate risk, while equity investments are not hedged due to their permanent nature.
Borrowings increased and amounted to EUR 969.3 million at the end of March (12/2012: EUR 921.9 million), and the average interest rate was 2.9 percent (12/2012: 3.1%). Fixed-rate loans accounted for approximately 71 percent of the Group’s borrowings (12/2012: 75%). Of the loans, approximately 45 percent had been raised directly from the capital and money markets (12/2012: 40%), approximately 40 percent from banks and other financial institutions (12/2012: 45%) and approximately 15 percent from insurance companies (12/2012: 15%). The maturity distribution of long-term loans was balanced. A total of EUR 97.3 million of long-term loans will mature in 2013.
The total amount of construction-stage contract receivables sold to financial institutions decreased slightly from the end of December 2012, amounting to EUR 253.0 million at the end of March (12/2012: EUR 265.5 million). Of this amount, EUR 163.6 million is included in current borrowings on the balance sheet (12/2012: EUR 175.4 million) and the remainder comprises off-balance sheet items in accordance with IAS 39. Interest expenses on receivables sold to financial companies amounted to EUR 0.8 million during the review period (1–3/2012: EUR 1.4 million) and these are fully included in the financial expenses.
Participations in the housing corporation loans of unsold completed residential units amounted to EUR 79.5 million at the end of March (12/2012: EUR 77.5 million), and they are included in current borrowings. The interest on the participation is included in housing corporation charges and is thus booked in project expenses. Interest on the participation amounted to EUR 0.6 million in the review period (1–3/2012: EUR 0.5 million).
During the first quarter, YIT Corporation paid out dividends of EUR 94.0 million for 2012 in compliance with the resolution of the Annual General Meeting.
The Group's solid financial position enables the implementation of YIT's growth strategy and the acquisitions, reorganisations as well as plot investments it requires. On the other hand, the Group has also prepared for macroeconomic uncertainty by diversifying the sources of financing and maintaining a strong liquidity position.
RESOLUTIONS PASSED AT THE ANNUAL GENERAL MEETING
YIT Corporation’s Annual General Meeting was held on March 15, 2013. The Annual General Meeting adopted the 2012 financial statements, discharged the members of the Board of Directors and the President and CEO from liability, confirmed the dividend as proposed by the Board of Directors, decided on the Board of Directors' fees and elected the auditor. The Annual General Meeting confirmed the composition of the Board of Directors: Henrik Ehrnrooth (Chairman), Reino Hanhinen (Vice Chairman), Kim Gran, Satu Huber, Erkki Järvinen, Ari Lehtoranta and Michael Rosenlew were elected as Board members.
At its organisational meeting on March 15, 2013, the Board elected the chairmen and members of the Audit Committee, Personnel Committee as well as the Working Committee from among its number.
YIT Corporation published stock exchange releases on the resolutions passed at the Annual General Meeting and the organisation of the Board of Directors on March 15, 2013. The stock exchange releases and a presentation of the members of the Board of Directors are available at YIT's website: www.yitgroup.com.
SHARES AND SHAREHOLDERS
The company has one series of shares. Each share carries one vote and confers an equal right to a dividend.
Share capital and number of shares
YIT Corporation's share capital and the number of shares outstanding did not change during the review period. YIT Corporation’s share capital was EUR 149,216,748.22 at the beginning of 2013 (2012: EUR 149,216,748.22), and the number of shares outstanding was 127,223,422 (2013: 127,223,422).
Treasury shares and authorisations of the Board of Directors
In accordance with the Limited Liability Companies Act, the Annual General Meeting decides on the buyback and conveyance of shares, as well as any decisions leading to changes in the share capital. The Annual General Meeting of YIT Corporation resolved on March 15, 2013, to authorise the Board of Directors to purchase the company's shares as proposed by the Board of Directors. In addition to this, the Board of Directors maintains a valid share issue authorisation issued by YIT’s Annual General Meeting on March 10, 2010. The authorisation is valid for five years after its granting. The share issue authorisation also includes an authorisation to decide on the conveyance of treasury shares.
YIT Corporation held 1,839,577 treasury shares at the beginning of the review period purchased on the basis of the authorisation given by the General Meeting of October 6, 2008. During the review period, 3,726 shares were returned to the company in accordance with the terms and conditions of the share-based incentive scheme, after which the company held 1,843,303 treasury shares at the end of March 2013.
Trading in shares
The price of YIT's share was EUR 15.08 at the beginning of the year (January 1, 2012: EUR 12.38). The closing rate of the share on the last trading day of the review period on March 28, 2013, was EUR 16.25 (March 30, 2012: EUR 16.12). The share price increased by approximately 8 percent during January–March. The highest price of the share during the review period was EUR 17.88 (1–3/2012: EUR 17.25), the lowest was EUR 15.02 (1–3/2012: EUR 12.12) and the average price was EUR 16.74 (1–3/2012: EUR 15.36). Share turnover on Nasdaq OMX in January–March amounted to 21,381 thousand shares (1–3/2012: 35,141 thousand). The value of share turnover was EUR 358.0 million (1–3:2012: EUR 539.9 million), source: Nasdaq OMX.
In addition to the Helsinki Stock Exchange, YIT's shares are also traded in other market places, such as Chi-X, BATS and Turquoise. The share of trade volume on alternative market places increased slightly compared to the previous year during the review period. During January–March, 7,189 thousand YIT Corporation shares changed hands in alternative market places (1–3/2012: 9,783 thousand), corresponding to approximately 26 percent of the total share trade (1–3/2012: 22%). Of the alternative market places, YIT shares changed hands particularly in Chi-X, source: Fidessa Fragmentation Index.
YIT Corporation’s market capitalisation at the end of the review period was EUR 2,037.4 million (3/2012: EUR 2,019.3 million). Market capitalisation has been calculated excluding the shares held by the company.
Number of shareholders and flagging notifications
At the end of March 2013, the number of registered shareholders was 37,723 (3/2012: 36,435). At the end of March 2013, a total of 35.8 percent of the shares were owned by nominee-registered and non-Finnish investors (3/2012: 31.8%).
During the review period, the company received no "flagging notifications" of change in ownership in YIT Corporation in accordance with Chapter 2, section 9 of the Securities Market Act.
MOST SIGNIFICANT SHORT-TERM BUSINESS RISKS AND RISK MANAGEMENT
YIT classifies as risks those factors that might endanger the achievement of the Group's strategic and financial goals if they should materialise. Risks are divided into strategic, operational, financial and event risks. The identification and management of risk factors takes into account the special features of the business and operating environment. Risk management is an integral part of the Group’s management, monitoring and reporting systems. The nature and probability of strategic risks is continuously monitored and reported on. A strategic risk assessment is carried out at Group level once a year in connection with the review of the strategy.
YIT has developed the Group's business structure to be balanced and more tolerant of economic fluctuations. The share of steadily developing service and maintenance operations has been increased. Operations have been expanded geographically so that economic fluctuations impact operations at different times in different markets. The business model has also been developed so that the construction services can operate independently. Continuous monitoring and analysis make it possible to react quickly to changes in the operating environment and to utilise the new business opportunities provided by them.
The Group's aim is to grow profitably, both organically and through acquisitions. Risks associated with acquisitions and outsourcing are managed by selecting projects according to strict criteria and effective integration processes that familiarise new employees with YIT's values, operating methods and strategy. The Group has a uniform process and guidelines for the implementation of acquisitions.
YIT's typical operational risks include risks related to plot investments, sales risk of residential and commercial development projects and risks related to contract tenders, service agreements, project management and personnel. YIT manages sales risk by matching the number of housing start-ups with the estimated residential demand and the number of unsold residential units (the figures for residential production are presented under Development by business segment) and by normally securing key tenants and/or the investor prior to starting a business premises project. Changes in the availability of housing loans and real estate financing are key risks related to the demand for residential units.
No write-offs were made to plots in the review period. YIT tests the value of its plots as required by IFRS accounting principles. Plot reserves are measured at acquisition cost and the plot value is impaired when it is estimated that the building being constructed on the plot will be sold at a price lower than the sum of the price of the plot and the construction costs.
Financial risks include risks related to the sufficiency of financing, currency and interest rates, credit and counterparty risks and risks related to the reporting process. Financial risks are managed through accounting and financing policies as well as internal and external auditing.
Approximately 56 percent of the revenue of YIT during the review period was derived from euro countries. The other key currencies are the Swedish krona and the Norwegian krone as well as the Russian ruble. The Group’s most significant currency risk is related to investments denominated in rubles. Capital invested in Russia totalled EUR 608.4 million at the end of the period (12/2012: EUR 585.2 million). The amount of equity or equivalent net investments at the end of the period came to EUR 474.8 million (12/2012: EUR 460.0 million). The equity investments in the Russian subsidiaries are unhedged in accordance with the treasury policy, and a potential devaluation of the ruble would have an equal negative impact on the Group's shareholders' equity. Debt investments amounted to EUR 133.6 million at the end of the period (12/2012: EUR 125.2 million), and this exposure was hedged in full. The differences in the interest rates between the euro and ruble have an effect on hedging costs and therefore net financial expenses.
Possible event risks include accidents related to personal or information security as well as sudden and unforeseen material damage to premises, project sites and other property resulting, for example, from fire, collapse or theft. YIT complies with a group-wide security policy covering the different areas of security.
A more detailed account of YIT's risk management policy and the most significant risks has been published in the Annual Report 2012. Financing risks are described in more detail in the notes to the Financial Statements for 2012.
MORE EXTENSIVE AND BALANCED REPORTING AS PART OF CORPORATE RESPONSIBILITY
YIT has published its first corporate responsibility report compliant with the international Global Reporting Initiative (GRI) guidelines. The report can be found as part of YIT’s Annual Report 2012. In practice, this means more balanced reporting of the financial, social and environmental aspects related to YIT’s business. Compared to the previous years, more information on YIT’s energy consumption, carbon dioxide emissions and personnel matters are now available. There is a GRI table at the end of the report, making it easier to find information in the report.
OUTLOOK FOR 2013
YIT Corporation reiterates its estimate issued in connection with the financial statements for 2012, according to which it estimates the Group revenue based on segment reporting for 2013 to remain at the level of 2012 and operating profit to grow in 2013.
The guidance does not take into account one-off costs relating to the planned demerger.
Increased uncertainty about general macroeconomic development is impacting YIT's business operations and customers.
Building Services Northern Europe
The market situation in building services will vary by country in the Nordic countries in 2013.
The service and maintenance market is estimated to remain stable or even grow slightly in all countries in 2013. The increase in technology in buildings increases the need for new services, and the demand for energy efficiency services is expected to remain stable. The service and maintenance market is expected to grow particularly in Norway by 3–4 percent.
Demand in the project market is expected to weaken further in 2013 in Finland, Sweden and Denmark. The size of the Swedish project market as a whole is expected to decrease by approximately 5 percent during 2013, mainly due to weakening demand. The Norwegian project market has developed well during the first quarter of the year, and the favourable development is expected to continue during 2013.
In the Baltic countries and Russia, both the project and service market demand is estimated to remain low.
Building Services Central Europe
In Building Services Central Europe, the service and maintenance market is expected to grow at a moderate rate. The opportunities for growth in service and maintenance are still quite favourable, particularly in Germany and Austria. In Poland, the building system services market will continue to grow but suffer from oversupply, which will have a negative impact on prices. The building system services market in the rest of Central Eastern Europe (the Czech Republic and Romania) is developing slowly with a low level of activity.
Decision-making on new investments is still slow, but positive signs can be seen. After the stagnation in 2012, new investments in building systems are expected to increase slightly in Germany and Austria. Increasing public investments and increasing need for renovation and repair work are expected to underlie the growth. Project demand is estimated to continue to decrease slightly or remain at the current level in Central Eastern Europe.
Growth in the demand for energy-efficient services is possible over the next few years with tightening environmental legislation, particularly in Germany and Austria. Certifications and general energy efficiency are becoming increasingly important for value generation in the Central European property market, which will continue to support the growth opportunities. Services and projects related to the maintenance of traffic infrastructure are also estimated to develop favourably.
Construction Services Finland
With regard to Construction Services Finland, housing demand is expected to continue to be good, with the need for new housing remaining high. Residential demand continues to be supported by continued low interest rates, relatively stable employment rates and migration to growth centres. Furthermore, the population and the number of household-dwelling units will increase with continued migration and the increasing number of one-person households.
According to the April 2013 estimate by the Confederation of Finnish Construction Industries RT (CFCI), the construction of 27,000 residential units will start in Finland during 2013. According to a report published by VTT in January 2012, the annual need for the production of new residential units amounts to 24,000–29,000 residential units over the long term. YIT's goal is to strengthen its position as the leading housing developer in Finland.
YIT estimates that housing prices will remain stable in 2013. Construction costs are estimated to increase, mainly due to new energy regulations, but the increase is expected to be moderate in 2013.
With regard to the construction of business premises, real estate investors are still cautious due to the general economic situation, and in order to control risks the Helsinki metropolitan area and good tenants are appreciated. The very low level of long-term interest rates increases investors’ interest in high-yield properties. According to Euroconstruct’s December 2012 estimate, construction of business premises will decrease by approximately 19 percent in Finland during 2013. Vacancy rates for offices are still high, with vacant building stock also including relatively old office premises in poor condition. YIT estimates that the demand will focus on modern and energy-efficient offices. YIT estimates that the renovation of business premises will grow in 2013.
According to Euroconstruct’s December 2012 estimate, commercial construction will decrease by approximately 12 percent in Finland during 2013. The shift of the retail trade towards ever larger business properties and the expansion of foreign retail chains in Finland will support construction activity. Vacancy rates for commercial premises are rather low.
The infrastructure construction market is expected to remain stable and at the same level as in 2012 (Euroconstruct, December 2012). Rail and metro construction will continue to increase in 2013, and several major road projects will be underway in 2013–2014. The market situation for rock construction is expected to remain favourable, with the focus shifting from excavation to interiors and engineering. The road maintenance market is estimated to remain stable.
International Construction Services
The volume of residential construction is estimated to increase in Russia in 2013. However, the growth is expected to slow down slightly compared to the previous year as the forecasts of economic growth in Russia have been lowered recently and the price of oil has also decreased recently.
Moscow, the Moscow region and St. Petersburg make up the largest residential markets in Russia: these areas account for approximately one-fifth of all residential construction. Residential demand has been supported by the reasonably good economic development in Russia, good consumer confidence and favourable development in the housing loan market, even though housing loan interest rates began to increase at the end of 2011.
The future outlook for Russian residential construction is good. Living space per person is still clearly lower than in Western Europe and housing is in poor condition, which creates the need for new, high-quality housing. Furthermore, the middle class is expected to grow in proportion to the population and the number of household-dwelling units is expected to increase. The development of the housing loan market in Russia has also contributed to the expansion of the potential buyer base. YIT has promoted the availability of loans to consumers through extensive cooperation with banks. YIT expects housing prices to increase in Russia in 2013, but clearly less than in 2012.
The volume of business premises construction is expected to grow moderately in 2013 according to VTT’s statistics. YIT’s largest individual market is St. Petersburg, where YIT will continue the marketing and sales of the Gorelovo industrial park.
In the Baltic countries, residential demand has still been supported by improved consumer confidence and the employment situation as well as accelerated economic growth. Latvia joining the euro is expected to strengthen the country’s economic development. Housing prices have also increased slightly. Residential construction is expected to remain at the level of the previous year in the Czech Republic and Slovakia in 2013. Economic growth has come to a standstill and the country has increased the value added tax on housing sales as of the beginning of 2013. In Slovakia, the housing market is supported by the stable price level of housing, moderate economic growth and interest rates remaining low, but growing unemployment is seen as a risk.
INTERIM REPORT JAN 1 – MARCH 31, 2013: TABLES
The information presented in the interim report has not been audited.
1. SEGMENT REPORTING
1.1 Segment reporting accounting principles
1.2 Key figures, segment reporting
1.3 Revenue, segment reporting
1.4 Operating profit and Profit for the review period, segment reporting
1.5 Order backlog, segment reporting
1.6 YIT Group figures by quarter, segment reporting
1.7 Segment information by quarter, segment reporting
1.8 Reconciliation of the segment reporting and the group reporting
2. GROUP REPORTING, IFRS
2.1 Key figures, IFRS
2.2 YIT Group figures by quarter, IFRS
2.3 Consolidated income statement Jan 1 - March 31, 2013, IFRS
2.4 Statement of comprehensive income Jan 1 - March 31, 2013, IFRS
2.5 Consolidated balance sheet, IFRS
2.6 Consolidated statement of changes in equity
2.7 Consolidated cash flow statement
2.8 Accounting principles of the Interim report
2.9 Definitions of key financial figures
2.10 Financial risk management
2.11 Unusual items affecting operating profit
2.12 Business combinations and disposals
2.13 Changes in property, plant and equipment
2.14 Inventories
2.15 Notes on equity
2.16 Borrowings and fair values
2.17 Change in contingent liabilities and assets and commitments
2.18 Transactions with associated companies and joint ventures
1. SEGMENT REPORTING
1.1 Accounting principles of segment reporting
Building Services Northern Europe and Building Services Central Europe segments’ reporting to YIT Group’s management board is based on YIT Group’s accounting principles. In the reporting of Construction Services Finland segment and International Construction Services segment, the revenue from own residential and commercial development projects is recognised on the basis of the percentage of degree of completion and the degree of sale, using percentage of completion method, which does not fully comply with Group’s IFRS accounting principles. According to Group’s IFRS accounting principles revenue from own residential and commercial development projects is recognised at the completion. In the case of YIT’s commercial real estate development projects, the recognition practice will be evaluated on a case-by-case basis and in accordance with the terms and conditions of each contract. Sold projects are recognised either when the construction work has started or when the project is complete. The share of income and expenses to be recognised is calculated by multiplying the percentage of completion by the percentage of sale multiplied by the occupancy rate. YIT usually sells commercial real estate development projects to investors either prior to construction or during an early phase. The impact on revenue and operating profit of two revenue recognition principles is shown in the line IFRIC 15 adjustment. As a result of the accounting policy, Group figures can fluctuate greatly between quarters. The chief operating decision-maker has been identified as the YIT Group’s Management Board, which review the Group’s internal reporting in order to assess performance and allocate resources to the segments.
In January 1, 2013 the Group has adopted a new recording method in segment reporting. The IAS 23 concerning the capitalisation of borrowing costs is not applied in segment reporting. IAS 23 standard provides that borrowing costs directly attributable to certain qualified assets, for example construction project, shall be capitalized as part of the cost of that asset. The comparison figures have been adjusted correspondingly. The change increased the operating profit in segment reporting EUR 13.6 million in 1-12/2012, EUR 9.2 million in 1-9/2012, EUR 5.9 million in 1-6/2012 and EUR 2.9 million in 1-3/2012.
1.2 Key figures, segment reporting
| 1-3/13 | 1-3/12 | Change | 1-12/12 | |
| Revenue, EUR million | 1,041.6 | 1 098.3 | -5% | 4,675.9 |
| Operating profit, EUR million | 40.2 | 55.1 | -27% | 262.2 |
| % of revenue | 3.9 | 5.0 | 5.6 | |
| Profit before taxes, EUR million | 33.8 | 46.1 | -27% | 223.6 |
| Profit for the report period, EUR million 1) | 25.6 | 33.9 | -25% | 168.1 |
| Earnings per share, EUR | 0.20 | 0.27 | -26% | 1.34 |
| Diluted earnings per share, EUR | 0.20 | 0.27 | -26% | 1.34 |
| Equity per share, EUR | 8.01 | 7.41 | 8% | 8.50 |
| Return on investment, from the last 12 months, % | 13.7 | 15.1 | -9% | 14.4 |
| Equity ratio, % | 33.2 | 30.4 | 9% | 34.5 |
| Order backlog at the end of the period, EUR million | 3,956.2 | 3,965.5 | 0% | 3,901.5 |
| Average number of personnel | 25,009 | 25,821 | -3% | 25,833 |
1) Attributable to equity holders of the parent company
1.3 Revenue, segment reporting
| EUR million | 1-3/13 | 1-3/12 | Change | 1-12/12 |
| Building Services Northern Europe | 468.6 | 513.1 | -9% | 2,089.2 |
| - Group internal | -11.4 | -11.5 | -55.1 | |
| - external | 457.3 | 501.6 | -9% | 2,034.2 |
| Building Services Central Europe | 139.2 | 159.4 | -13% | 714.2 |
| - Group internal | -0.1 | 0.0 | -0.8 | |
| - external | 139.1 | 159.4 | -13% | 713.4 |
| Construction Services Finland | 326.0 | 329.5 | -1% | 1,329.0 |
| - Group internal | -0.3 | -0.3 | -1.8 | |
| - external | 325.7 | 329.2 | -1% | 1,327.2 |
| International Construction Services | 119.0 | 107.9 | 10% | 599.6 |
| - Group internal | 0.0 | 0.0 | -0.3 | |
| - external | 118.9 | 107.8 | 10% | 599.3 |
| Other items | 0.5 | 0.3 | 1.8 | |
| Revenue in total, segment reporting | 1,041.6 | 1,098.3 | -5% | 4,675.9 |
| IFRIC 15 adjustments | -6.4 | 0.1 | 29.9 | |
| Revenue in total, IFRS | 1,035.2 | 1,098.4 | -6% | 4,705.9 |
1.4 Operating profit and Profit for the review period, segment reporting
| EUR million | 1-3/13 | 1-3/12 | Change | 1-12/12 |
| Building Services Northern Europe | 2.2 | 14.5 | -85% | 41.1 |
| Building Services Central Europe | 3.4 | 5.2 | -34% | 27.4 |
| Construction Services Finland | 26.5 | 31.4 | -16% | 134.1 |
| International Construction Services | 11.6 | 9.7 | 20% | 80.4 |
| Other items | -3.5 | -5.7 | -20.7 | |
| Operating profit total, segment reporting | 40.2 | 55.1 | -27% | 262.1 |
| Financial income and expenses | -6.4 | -9.0 | -29% | -38.7 |
| Profit before taxes, segment reporting | 33.8 | 46.1 | -27% | 223.6 |
| Taxes | -8.2 | -12.0 | -32% | -54.5 |
| Attributable to non-controlling interests | 0.0 | -0.3 | -94% | -1.0 |
| Profit for the review period, segment reporting | 25.6 | 33.9 | -25% | 168.1 |
| IFRIC 15 adjustments | -0.5 | 2.6 | 10.6 | |
| Profit for the review period, IFRS | 25.1 | 36.4 | -31% | 178.6 |
Operating profit margin, segment reporting
| % | 1-3/13 | 1-3/12 | 1-12/12 |
| Building Services Northern Europe | 0.5 | 2.8 | 2.0 |
| Building Services Central Europe | 2.5 | 3.3 | 3.8 |
| Construction Services Finland | 8.1 | 9.5 | 10.1 |
| International Construction Services | 9.8 | 9.0 | 13.4 |
| Operating profit, segment reporting | 3.9 | 5.0 | 5.6 |
1.5 Order backlog, segment reporting
| EUR million | 3/13 | 3/12 | Change | 12/12 |
| Building Services Northern Europe | 844.7 | 969.4 | -13% | 819.0 |
| Building Services Central Europe | 470.5 | 500.5 | -6% | 380.1 |
| Construction Services Finland | 1,424.9 | 1,428.0 | 0% | 1,499.0 |
| International Construction Services | 1,285.3 | 1,142.9 | 12% | 1,266.1 |
| Other items | -69.1 | -75.3 | -62.8 | |
| Order backlog total, segment reporting | 3,956.2 | 3,965.5 | 0% | 3,901.5 |
| IFRIC 15 adjustments | 335.7 | 419.8 | -20% | 343.5 |
| Order backlog, IFRS | 4,291.9 | 4,385.3 | -2% | 4,245.1 |
1.6 YIT Group figures by quarter, segment reporting
| 1-3/13 | 1-3/12 | 4-6/12 | 7-9/12 | 10-12/12 | |
| Revenue, EUR million | 1,041.6 | 1,098.3 | 1,184.5 | 1,115.3 | 1,277.8 |
| Operating profit, EUR million | 40.2 | 55.1 | 63.3 | 71.5 | 72.3 |
| % of revenue | 3.9 | 5.0 | 5.3 | 6.4 | 5.7 |
| Profit before taxes, EUR million | 33.8 | 46.1 | 53.1 | 62.5 | 61.9 |
| Profit for the review period, EUR million 1) | 25.6 | 33.9 | 40.6 | 48.6 | 45.0 |
| Earnings/share, EUR | 0.20 | 0.27 | 0.32 | 0.39 | 0.36 |
| Diluted earnings/share, EUR | 0.20 | 0.27 | 0.32 | 0.39 | 0.36 |
| Equity/share, EUR | 8.01 | 7.41 | 7.60 | 8.15 | 8.50 |
| Return on investment, from the last 12 months, % | 13.7 | 15.1 | 13.9 | 14.9 | 14.4 |
| Equity ratio, % | 33.2 | 30.4 | 31.2 | 32.8 | 34.5 |
| Order backlog at the end of the period, EUR million | 3,956.2 | 3,965.5 | 4,045.4 | 4,018.6 | 3,901.5 |
| Average number of personnel | 25,009 | 25,821 | 25,998 | 26,002 | 25,478 |
| Personnel at the end of the period | 24,923 | 25,703 | 26,255 | 25,788 | 25,283 |
1) Attributable to equity holders of the parent company
1.7. Segment information by quarter, segment reporting
Revenue by business segment
| EUR million | 1-3/13 | 1-3/12 | 4-6/12 | 7-9/12 | 10-12/12 |
| Building Services Northern Europe | 468.6 | 513.1 | 538.1 | 485.3 | 552.7 |
| Building Services Central Europe | 139.2 | 159.4 | 179.5 | 179.5 | 195.8 |
| Construction Services Finland | 326.0 | 329.5 | 347.9 | 308.9 | 342.6 |
| International Construction Services | 119.0 | 107.9 | 133.4 | 153.3 | 205.0 |
| Other items | -11.3 | -11.6 | -14.4 | -11.7 | -18.3 |
| Revenue in total, segment reporting | 1,041.6 | 1,098.3 | 1,184.5 | 1,115.3 | 1,277.8 |
Operating profit by business segment
| EUR million | 1-3/13 | 1-3/12 | 4-6/12 | 7-9/12 | 10-12/12 |
| Building Services Northern Europe | 2.2 | 14.5 | 15.2 | 15.4 | -4.0 |
| Building Services Central Europe | 3.4 | 5.2 | 6.6 | 4.8 | 10.8 |
| Construction Services Finland | 26.5 | 31.4 | 33.5 | 28.9 | 40.2 |
| International Construction Services | 11.6 | 9.7 | 14.1 | 25.7 | 31.0 |
| Other items | -3.5 | -5.7 | -6.1 | -3.2 | -5.7 |
| Operating profit in total, segment reporting | 40.2 | 55.1 | 63.3 | 71.5 | 72.3 |
Operating profit margin by business segment
| % | 1-3/13 | 1-3/12 | 4-6/12 | 7-9/12 | 10-12/12 |
| Building Services Northern Europe | 0.5 | 2.8 | 2.8 | 3.2 | -0.7 |
| Building Services Central Europe | 2.5 | 3.3 | 3.7 | 2.6 | 5.5 |
| Construction Services Finland | 8.1 | 9.5 | 9.6 | 9.3 | 11.7 |
| International Construction Services | 9.8 | 9.0 | 10.6 | 16.7 | 15.1 |
Order backlog by business segment
| EUR million | 3/13 | 3/12 | 6/12 | 9/12 | 12/12 |
| Building Services Northern Europe | 844.7 | 969.4 | 955.1 | 904.9 | 819.0 |
| Building Services Central Europe | 470.5 | 500.5 | 473.4 | 435.5 | 380.1 |
| Construction Services Finland | 1,424.9 | 1,428.0 | 1,499.9 | 1,541.0 | 1,499.0 |
| International Construction Services | 1,285.3 | 1,142.9 | 1,186.7 | 1,207.4 | 1,266.1 |
| Other items | -69.1 | -75.3 | -69.7 | -70.1 | -62.8 |
| Order backlog, segment reporting | 3,956.2 | 3,965.5 | 4,045.4 | 4,018.6 | 3,901.5 |
Operative invested capital*)
| EUR million | 3/13 | 3/12 | 6/12 | 9/12 | 12/12 |
| Building Services Northern Europe | 321.5 | 327.8 | 352.0 | 393.6 | 344.8 |
| Building Services Central Europe | 118.8 | 97.0 | 107.0 | 114.2 | 96.6 |
| Construction Services Finland | 584.2 | 552.1 | 515.3 | 546.8 | 581.7 |
| International Construction Services | 718.7 | 651.8 | 655.7 | 703.8 | 708.3 |
Return on operative invested capital*)
| Last 12 months, % | 3/13 | 3/12 | 6/12 | 9/12 | 12/12 |
| Building Services Northern Europe | 9.0 | 23.4 | 20.3 | 16.9 | 11.0 |
| Building Services Central Europe | 23.3 | 60.2 | 39.9 | 30.9 | 32.5 |
| Construction Services Finland | 22.7 | 24.6 | 25.0 | 24.3 | 23.5 |
| International Construction Services | 12.0 | 6.1 | 6.5 | 10.5 | 12.3 |
*) Only operational items are taken into account in calculating the segments’ invested capital.
1.8 Reconciliation of the segment reporting and the group reporting
| 1-3/2013 | 1-3/2012 | 1-12/2012 | ||||||||||
| Income statement, EUR million | Segment reporting | IFRIC 15 adjustments | IFRS | Segment reporting | IFRIC 15 adjustments | IFRS | Segment reporting | IFRIC 15 adjustments | IFRS | |||
| Revenue | 1,041.6 | -6.4 | 1,035.2 | 1,098.3 | 0.1 | 1,098.4 | 4,675.9 | 29.9 | 4,705.9 | |||
| Other operating income and expenses | -991.1 | 1.5 | -989.6 | -1,032.3 | -0.1 | -1,032.5 | -4,368.8 | -33.1 | -4,401.9 | |||
| Depreciation | -10.3 | 0.0 | -10.3 | -10.9 | -10.9 | -44.9 | -44.9 | |||||
| Operating profit | 40.2 | -4.9 | 35.3 | 55.1 | -0.1 | 55.0 | 262.2 | -3.1 | 259.1 | |||
| Financial income and expenses | -6.4 | 4.6 | -1.9 | -9.0 | 3.8 | -5.2 | -38.7 | 17.4 | -21.2 | |||
| Profit before taxes | 33.8 | -0.3 | 33.5 | 46.1 | 3.7 | 49.7 | 223.6 | 14.3 | 237.9 | |||
| Income taxes | -8.2 | -0.2 | -8.4 | -12.0 | -0.9 | -12.9 | -54.5 | -3.5 | -58.0 | |||
| Profit for the review period | 25.6 | -0.5 | 25.1 | 34.1 | 2.8 | 36.9 | 169.1 | 10.8 | 179.8 | |||
| Attributable to: | ||||||||||||
| Equity holders of the parent company | 25.6 | -0.5 | 25.1 | 33.9 | 2.6 | 36.4 | 168.1 | 10.6 | 178.6 | |||
| Non-controlling interests | 0.0 | 0.0 | 0.0 | 0.3 | 0.2 | 0.5 | 1.0 | 0.2 | 1.2 | |||
| Earnings/share, EUR | 0.20 | 0.20 | 0.27 | 0.29 | 1.34 | 1.43 | ||||||
| Diluted earnings/share, EUR | 0.20 | 0.20 | 0.27 | 0.29 | 1.34 | 1.43 | ||||||
| 1-3/2013 | 1-3/2012 | 1-12/2012 | |||||||
| Balance sheet, EUR million | Segment reporting | IFRIC 15 adjustments | IFRS | Segment reporting | IFRIC 15 adjustments | IFRS | Segment reporting | IFRIC 15 adjustments | IFRS |
| Non-current assets | |||||||||
| Other non-current assets | 521.3 | 0.0 | 521.3 | 534.4 | 534.4 | 529.2 | 529.2 | ||
| Deferred tax assets | 46.0 | 7.3 | 53.3 | 51.0 | 13.4 | 64.4 | 40.7 | 9.1 | 49.8 |
| Current assets | |||||||||
| Inventories | 1,627.5 | 329.4 | 1,956.9 | 1,429.0 | 345.8 | 1,774.8 | 1,579.3 | 322.1 | 1,901.5 |
| Trade and other receivables | 1,023.3 | -40.7 | 982.5 | 1,116.8 | -79.5 | 1,037.3 | 1,082.3 | -66.8 | 1,015.5 |
| Cash and cash equivalents | 130.3 | 0.0 | 130.3 | 209.3 | 209.3 | 175.7 | 175.7 | ||
| Total assets | 3,348.3 | 296.0 | 3,644.3 | 3,340.5 | 279.7 | 3,620.2 | 3,407.2 | 264.5 | 3,671.6 |
| Equity | 1,005.4 | -61.2 | 944.2 | 931.9 | -68.6 | 863.3 | 1,069.3 | -60.1 | 1,009.2 |
| Non-current liabilities | |||||||||
| Financial liabilities | 459.7 | 0.0 | 459.7 | 564.1 | 564.1 | 517.1 | 517.1 | ||
| Other non-current liabilities | 124.9 | 7.2 | 132.1 | 168.2 | 168.2 | 133.1 | 133.1 | ||
| Deferred tax liabilities | 98.3 | -2.5 | 95.8 | 81.9 | -6.0 | 75.9 | 96.9 | -7.5 | 89.4 |
| Current liabilities | |||||||||
| Financial liabilities | 429.3 | 80.3 | 509.6 | 292.2 | 108.9 | 401.1 | 332.9 | 72.0 | 404.9 |
| Advances received | 323.2 | 274.5 | 597.7 | 271.7 | 247.0 | 518.7 | 305.5 | 261.1 | 566.6 |
| Other current liabilities | 907.5 | -2.2 | 905.3 | 1,030.5 | -1.6 | 1,028.9 | 952.4 | -1.1 | 951.3 |
| Total equity and liabilities | 3,348.3 | 296.0 | 3,644.3 | 3,340.5 | 279.7 | 3,620.2 | 3,407.2 | 264.5 | 3,671.6 |
2. GROUP REPORTING, IFRS
2.1 Key figures, IFRS
| 3/13 | 3/12 | Change | 12/12 | |
| Earnings/share, EUR | 0.20 | 0.29 | -31% | 1.43 |
| Diluted earnings/share, EUR | 0.20 | 0.29 | -31% | 1.43 |
| Equity/share, EUR | 7.52 | 6.87 | 9% | 8.02 |
| Average share price during the period, EUR | 16.74 | 15.35 | 9% | 14.90 |
| Share price at the end of the period, EUR | 16.25 | 16.12 | 1% | 14.78 |
| Market capitalization at the end of the period, EUR million | 2,037.4 | 2,019.3 | 1% | 1,853.2 |
| Weighted average share-issue adjusted number of shares outstanding, thousands | 125,383 | 125,270 | 0% | 125,352 |
| Weighted average share-issue adjusted number of shares outstanding, thousands, diluted | 125,383 | 125,270 | 0% | 125,352 |
| Share-issue adjusted number of shares outstanding at the end of the period, thousands | 125,380 | 125,267 | 0% | 125,384 |
| Net interest-bearing debt at the end of the period, EUR million | 839.0 | 755.9 | 11% | 746.2 |
| Return on investment, from the last 12 months, % | 14.0 | 13.1 | 14.9 | |
| Equity ratio, % | 31.1 | 27.8 | 32.5 | |
| Gearing ratio, % | 88.9 | 87.6 | 73.9 | |
| Gross capital expenditures, EUR million | 9.6 | 13.6 | -29% | 44.6 |
| % of revenue | 0.9 | 1.2 | 0.9 | |
| Unrecognised order backlog at the end of the period, EUR million | 4,291.9 | 4,385.3 | -2% | 4,245.1 |
| of which order backlog outside Finland | 2,406.3 | 2,356.0 | 2% | 2,273.3 |
| Average number of personnel | 25,009 | 25,821 | -3% | 25,833 |
2.2 YIT Group figures by quarter, IFRS
| EUR million | 1-3/13 | 1-3/12 | 4-6/12 | 7-9/12 | 10-12/12 |
| Revenue, EUR million | 1,035.2 | 1,098.4 | 1,218.9 | 1,103.6 | 1,284.9 |
| Operating profit, EUR million | 35.3 | 55.0 | 67.5 | 63.4 | 73.1 |
| % of revenue | 3.4 | 5.0 | 5.5 | 5.7 | 5.7 |
| Financial income, EUR million | 1.4 | 1.4 | 2.8 | 0.1 | 1.2 |
| Exchange rate differences, EUR million | -0.6 | -1.0 | -1.6 | -1.8 | -1.3 |
| Financial expenses, EUR million | -2.6 | -5.7 | -7.3 | -2.6 | -5.5 |
| Profit before taxes, EUR million | 33.5 | 49.7 | 61.4 | 59.0 | 67.6 |
| % of revenue | 3.2 | 4.5 | 5.0 | 5.4 | 5.3 |
| Balance sheet total, EUR million | 3,644.3 | 3,620.2 | 3,635.8 | 3,711.4 | 3,671.6 |
| Earnings/share, EUR | 0.20 | 0.29 | 0.37 | 0.37 | 0.39 |
| Equity/share, EUR | 7.52 | 6.87 | 7.12 | 7.64 | 8.02 |
| Share price at the end of the period, EUR | 16.25 | 16.12 | 13.38 | 14.93 | 14.78 |
| Market capitalization, EUR million | 2,037.4 | 2,019.3 | 1,677.7 | 1,872.0 | 1,853.2 |
| Return on investment, from the last 12 months, % | 14.0 | 13.1 | 12.7 | 14.0 | 14.9 |
| Equity ratio, % | 31.1 | 27.8 | 29.1 | 30.8 | 32.5 |
| Net interest-bearing debt at the end of the period, MEUR | 839.0 | 755.8 | 803.1 | 827.3 | 746.2 |
| Gearing ratio, % | 88.9 | 87.6 | 89.7 | 86.1 | 73.9 |
| Gross capital expenditures, EUR million | 9.6 | 13.6 | 10.6 | 10.1 | 10.3 |
| % of revenue | 0.9 | 1.2 | 0.9 | 0.9 | 0.8 |
| Unrecognised order backlog at the end of the period, EUR million | 4,291.9 | 4,385.3 | 4,409.3 | 4,462.0 | 4,245.1 |
| Personnel at the end of the period | 24,923 | 25,703 | 26,255 | 25,788 | 25,283 |
2.3 Consolidated income statement Jan 1 - March 31, 2013, IFRS
| EUR million | 1-3/13 | 1-3/12 | Change | 1-12/12 |
| Revenue | 1,035.2 | 1,098.4 | -6% | 4,705.9 |
| of which activities outside Finland | 608.5 | 639.2 | -5% | 2,777.3 |
| Other operating income and expenses | -989.5 | -1,032.6 | -4% | -4,402.1 |
| Share of results of associated companies | -0.1 | 0.1 | -153% | 0.2 |
| Depreciation and impairments | -10.3 | -10.9 | -5% | -44.9 |
| Operating profit | 35.3 | 55.0 | -36% | 259.1 |
| % of revenue | 3.4 | 5.0 | 5.5 | |
| Financial income | 1.4 | 1.4 | -3% | 5.5 |
| Exchange rate differences | -0.6 | -1.0 | -35% | -5.8 |
| Financial expenses | -2.6 | -5.7 | -55% | -21.0 |
| Profit before taxes | 33.5 | 49.7 | -33% | 237.9 |
| % of revenue | 3.2 | 4.5 | 5.1 | |
| Income taxes | -8.4 | -12.9 | -35% | -58.0 |
| Profit for the review period | 25.1 | 36.9 | -32% | 179.8 |
| % of revenue | 2.4 | 3.4 | 3.8 | |
| Attributable to | ||||
| Equity holders of the parent company | 25.1 | 36.4 | -31% | 178.6 |
| Non-controlling interests | 0.0 | 0.5 | -97% | 1.2 |
| Earnings per share attributable to the equity holders of the parent company | ||||
| Earnings/share, EUR | 0.20 | 0.29 | -31% | 1.43 |
| Diluted earnings/share, EUR | 0.20 | 0.29 | -31% | 1.43 |
2.4 Statement of comprehensive income Jan 1 - March 31, 2013, IFRS
| EUR million | 1-3/13 | 1-3/12 | Change | 1-12/12 |
| Profit for the review period | 25.1 | 36.9 | -32% | 179.8 |
| Other comprehensive income | ||||
| Items that will not be reclassified to profit/loss | ||||
| - Change in fair value of defined benefit pension | 3.9 | -100% | 15.3 | |
| -- Deferred tax | -1.1 | -100% | -4.2 | |
| Items that may be reclassified subsequently to profit/loss | ||||
| - Cash flow hedges | 0.7 | -0.1 | -791% | 0.6 |
| -- Deferred tax | -0.2 | 0.0 | -0.1 | |
| - Change in fair value for available for sale investments | -0.4 | |||
| -- Deferrred tax | 0.1 | |||
| - Change in translation differences | 7.9 | 25.7 | -69% | 17.4 |
| Other comprehensive income, total | 8.4 | 28.4 | -70% | 28.6 |
| Total comprehensive result | 33.4 | 65.3 | -49% | 208.5 |
| Attributable to | ||||
| Equity holders of the parent company | 33.5 | 65.0 | -49% | 207.3 |
| Non-controlling interest | 0.0 | 0.3 | -95% | 1.2 |
2.5 Consolidated balance sheet, IFRS
| EUR million | 3/13 | 3/12 | Change | 12/12 |
| Assets | ||||
| Non-current assets | ||||
| Property, plant and equipment | 107.5 | 110.9 | -3% | 110.6 |
| Goodwill | 346.6 | 347.5 | 0% | 346.6 |
| Other intangible assets | 58.5 | 61.1 | -4% | 61.8 |
| Shares in associated companies | 0.5 | 3.2 | -84% | 0.6 |
| Other investments | 3.3 | 3.9 | -14% | 3.4 |
| Other receivables | 4.8 | 7.8 | -38% | 6.3 |
| Deferred tax assets | 53.3 | 64.4 | -17% | 49.8 |
| Current assets | ||||
| Inventories | 1,956.9 | 1,774.8 | 10 % | 1,901.5 |
| Trade and other receivables | 982.5 | 1 037.3 | -5 % | 1,015.5 |
| Cash and cash equivalents | 130.3 | 209.3 | -38 % | 175.7 |
| Total assets | 3,644.3 | 3,620.2 | 1 % | 3,671.6 |
| Equity and liabilities | ||||
| Equity attributable to equity holders of the parent company | ||||
| Share capital | 149.2 | 149.2 | 0% | 149.2 |
| Other equity | 794.0 | 711.1 | 12% | 856.7 |
| Non-controlling interest | 1.0 | 2.9 | -65% | 3.3 |
| Total equity | 944.2 | 863.3 | 9% | 1 009.2 |
| Non-current liabilities | ||||
| Deferred tax liabilities | 95.8 | 75.9 | 26% | 89.4 |
| Pension liabilities | 45.2 | 63.3 | -29% | 52.4 |
| Provisions | 49.6 | 55.1 | -10% | 48.5 |
| Borrowings | 459.7 | 564.1 | -19% | 517.1 |
| Other liabilities | 37.3 | 49.8 | -25% | 32.6 |
| Current liabilities | ||||
| Advances received | 597.7 | 518.7 | 15% | 566.6 |
| Trade and other payables | 860.7 | 965.7 | -11% | 896.1 |
| Provisions | 44.6 | 63.2 | -30% | 54.9 |
| Current borrowings | 509.6 | 401.1 | 27% | 404.9 |
| Total equity and liabilities | 3,644.3 | 3,620.2 | 1% | 3,671.6 |
2.6 Consolidated statement of changes in equity (IFRS)
| Attributable to equity holders of the parent company | ||||||||||
| EUR million | Share capital | Legal reserve | Other reserve | Cumulative translation differences | Fair value reserve | Treasury shares | Retained earnings | Total | Non-controlling interest | Total equity |
| Equity on January 1, 2012 | 149.2 | 1.9 | 2.8 | -23.4 | -3.6 | -9.7 | 801.5 | 918.7 | 2.5 | 921.1 |
| Defined benefit pension, re-measurement due to IAS 19 change | -37.0 | -37.0 | -37.0 | |||||||
| Adjusted equity on January 1, 2012 | 149.2 | 1.9 | 2.8 | -23.4 | -3.6 | -9.7 | 764.5 | 881.7 | 2.5 | 884.1 |
| Comprehensive income | ||||||||||
| Profit for the period | 36.5 | 36.5 | 0.5 | 37.0 | ||||||
| Profit for the period, re-measurement due to IAS 19 change | -0.1 | -0.1 | -0.1 | |||||||
| Other comprehensive income: | ||||||||||
| Change in fair value of defined benefit pension, re- measurement due to IAS 19 change | 3.9 | 3.9 | 3.9 | |||||||
| -Deferred tax | -1.1 | -1.1 | -1.1 | |||||||
| Cash flow hedges | -0.1 | -0.1 | -0.1 | |||||||
| - Deferred tax | 0.0 | 0.0 | 0.0 | |||||||
| Change in translation differences | 25.9 | 25.9 | -0.2 | 25.7 | ||||||
| Comprehensive income, total | 25.9 | -0.1 | 39.2 | 65.0 | 0.3 | 65.3 | ||||
| Transactions with owners | ||||||||||
| Dividend paid | -87.7 | -87.7 | -87.7 | |||||||
| Share-based incentive schemes | 1.4 | 1.4 | 1.4 | |||||||
| Transactions with owners, total | -86.3 | -86.3 | -86.3 | |||||||
| Equity on March 31, 2012 | 149.2 | 1.9 | 2.8 | 2.5 | -3.7 | -9.7 | 717.4 | 860.3 | 2.9 | 863.3 |
| Attributable to equity holders of the parent company | ||||||||||
| EUR million | Share capital | Legal reserve | Other reserve | Cumulative translation differences | Fair value reserve | Treasury shares | Retained earnings | Total | Non-controlling interest | Total equity |
| Equity on January 1, 2012 | 149.2 | 1.9 | 2.8 | -23.4 | -3.6 | -9.7 | 801.5 | 918.7 | 2.5 | 921.1 |
| Defined benefit pension, re-measurement due to IAS 19 change | -37.0 | -37.0 | -37.0 | |||||||
| Adjusted equity on January 1, 2012 | 149.2 | 1.9 | 2.8 | -23.4 | -3.6 | -9.7 | 764.5 | 881.7 | 2.5 | 884.1 |
| Comprehensive income | ||||||||||
| Profit for the period | 178.7 | 178.7 | 1.2 | 179.9 | ||||||
| Profit for the period, re-measurement due to IAS 19 change | -0.1 | -0.1 | -0.1 | |||||||
| Other comprehensive income: | ||||||||||
| Change in fair value of defined benefit pension, re-measurement due to IAS 19 change | 15.3 | 15.3 | 15.3 | |||||||
| -Deferred tax | -4.2 | -4.2 | -4.2 | |||||||
| Cash flow hedges | 0.6 | 0.6 | 0.6 | |||||||
| - Deferred tax | -0.1 | -0.1 | -0.1 | |||||||
| Change in fair value for available for sale investments | -0.4 | -0.4 | -0.4 | |||||||
| - Deferred tax | 0.1 | 0.1 | 0.1 | |||||||
| Change in translation differences | 17.4 | 17.4 | 17.4 | |||||||
| Comprehensive income, total | 17.4 | 0.2 | 189.7 | 207.3 | 1.2 | 208.5 | ||||
| Transactions with owners | ||||||||||
| Dividend paid | -87.7 | -87.7 | -0.4 | -88.1 | ||||||
| Share-based incentive schemes | 1.0 | 0.5 | 3.3 | 4.8 | 4.8 | |||||
| Transactions with owners, total | 1.0 | 0.5 | -84.4 | -82.9 | -0.4 | -83.3 | ||||
| Equity on December 31, 2012 | 149.2 | 1.9 | 3.8 | -6.1 | -3.4 | -9.2 | 869.8 | 1,005.9 | 3.3 | 1,009.2 |
| Attributable to equity holders of the parent company | ||||||||||
| EUR million | Share capital | Legal reserve | Other reserve | Cumulative translation differences | Fair value reserve | Treasury shares | Retained earnings | Total | Non-controlling interest | Total equity |
| Equity on January 1, 2013 | 149.2 | 1.9 | 3.8 | -6.1 | -3.4 | -9.2 | 869.8 | 1 005.9 | 3.3 | 1 009.2 |
| Comprehensive income | ||||||||||
| Profit for the period | 25.1 | 25.1 | 0.0 | 25.1 | ||||||
| Other comprehensive income: | 0.7 | 0.7 | 0.7 | |||||||
| Cash flow hedges | -0.2 | -0.2 | -0.2 | |||||||
| - Deferred tax | 0.0 | 0.0 | 0.0 | |||||||
| Change in fair value for available for sale investments | 0.0 | 0.0 | 0.0 | |||||||
| - Deferred tax | 0.7 | 0.7 | 0.7 | |||||||
| Change in translation differences | 7.9 | 7.9 | 7.9 | |||||||
| Comprehensive income, total | 7.9 | 0.5 | 25.1 | 33.5 | 0.0 | 33.4 | ||||
| Transactions with owners | ||||||||||
| Dividend paid | -94.0 | -94.0 | 0.0 | -94.0 | ||||||
| Share-based incentive schemes | 0.7 | 0.7 | 0.7 | |||||||
| Transactions with owners, total | -93.4 | -93.4 | 0.0 | -93.4 | ||||||
| Changes in ownership shares in subsidiaries | ||||||||||
| Changes in group ownership shares in subsidiaries - no loss of control | -2.9 | -2.9 | -2.3 | -5.1 | ||||||
| Changes in ownership shares in subsidiaries, total | -2.9 | -2.9 | -2.3 | -5.1 | ||||||
| Equity on March 31, 2013 | 149.2 | 1.9 | 3.8 | 1.7 | -2.9 | -9.2 | 798.6 | 943.2 | 1.0 | 944.2 |
2.7 Consolidated cash flow statement
| EUR million | 1-3/13 | 1-3/12 | Change | 1-12/12 |
| Cash flow from operating activities | ||||
| Net profit for the period | 25.1 | 36.9 | -32% | 179.8 |
| Reversal of accrual-based items | 7.9 | 42.0 | -81% | 127.5 |
| Change in working capital | ||||
| Change in trade and other receivables | 50.1 | 22.4 | 124% | 50.6 |
| Change in inventories | -42.7 | -55.7 | -23% | -197.6 |
| Change in current liabilities | -20.5 | -2.2 | 832% | 43.9 |
| Change in working capital, total | -13.1 | -35.6 | -63% | -103.1 |
| Interest paid | -10.9 | -11.4 | -5% | -35.4 |
| Other financial items, net | -2.6 | -6.2 | -58% | -9.9 |
| Interest received | 1.3 | 1.1 | 18% | 4.5 |
| Taxes paid | -11.3 | -23.9 | -53% | -42.0 |
| Net cash generated from operating activities | -3.6 | 3.0 | 121.5 | |
| Cash flow from investing activities | ||||
| Acquisition of subsidiaries, net of cash | -0.8 | -5.0 | -84% | -7.3 |
| Purchase of property, plant and equipment | -3.2 | -4.8 | -33% | -26.7 |
| Purchase of intangible assets | -1.3 | -2.6 | -50% | -8.4 |
| Increases in other investments | 0.0 | 0.0 | 0.0 | |
| Disposal of subsidiaries, net of cash | 0.0 | 0.0 | ||
| Disposal of affiliated companies | 2.9 | |||
| Proceeds from sale of fixed assets | 1.4 | 0.4 | 255% | 7.7 |
| Proceeds from sale of other investments | 0.0 | 0.1 | -103% | 0.7 |
| Net cash used in investing activities | -3.9 | -11.9 | -67% | -31.2 |
| Operating cash flow after investments | -7.5 | -9.0 | -17% | 90.4 |
| Cash flow from financing activities | ||||
| Change in loan receivables | 2.4 | -8.1 | -13.9 | |
| Change in current liabilities | 57.2 | 28.6 | 100% | -34.9 |
| Proceeds from borrowings | 0.0 | 50.0 | -100% | 150.0 |
| Repayments of borrowings | -8.8 | -58.8 | -85% | -136.6 |
| Payments of financial leasing debts | -0.2 | -0.1 | 109% | -0.7 |
| Dividends paid and other distribution of assets | -87.9 | -88.1 | ||
| Net cash used in financing activities | -37.4 | 11.6 | -422% | -124.2 |
| Net change in cash and cash equivalents | -44.9 | 2.6 | -33.9 | |
| Cash and cash equivalents at the beginning of the period | 174.6 | 204.8 | -15% | 204.8 |
| Change in the fair value of the cash equivalents | 0.6 | 2.0 | -69% | 3.8 |
| Cash and cash equivalents at the end of the period | 130.3 | 209.3 | -38% | 174.6 |
2.8 Accounting principles of the Interim report
YIT Corporation’s interim report for January 1 - March 31, 2013 has been drawn up in line with IAS 34: Interim Financial Reporting. The information presented in the interim report has not been audited. In the interim report the figures are presented in million euros doing the rounding on each line, which may cause some rounding inaccuracies in column and total sums.
The consolidated interim report has been prepared in compliance with the International Financial Reporting standards, and the principles for preparing the interim report are the same as those used for preparing the financial statements for 2012 except the changes in the following standards:
- IAS 19 (revised) Employee benefit: Standard includes changes to accounting principles of defined benefit plans.
- IFRS 13 Fair value measurement: The standard defines fair value. It sets out in a single standard a framework for measuring fair value and requirement for disclosures about fair value measurements.
- IAS 1 (amendment) Presentation of statements of changes in equity: Group presents components in other comprehensive income grouped to items that will not be reclassified to profit or loss and to items that may be reclassified subsequently to profit or loss.
Changes in International accounting standard IAS 19 Employee benefits and the restated corresponding period 2012
The Group adopted the new IAS 19 Employee benefits standard in January 1, 2013. Standard includes changes to accounting principles of defined benefit plans. The amendment eliminates the possibility to use the corridor approach and all the actuarial gains and losses are recognised immediately in the statement of other comprehensive income. The full net liability or net asset is recorded in the balance sheet. The expected interest income on assets is calculated using the same discount rate as calculating the present value of the defined benefit obligation. The changes in fair value of defined benefit pension are recorded in the statement of other comprehensive income where previously those were included in the personnel expenses in the income statement.
The revised IAS 19 standard requires that the amendments have been applied retrospectively to the reported financial statements. The impact on comparison figures are presented cumulatively in tables below.
As a result of the change the Group’s defined benefit liability was increased by EUR 25.1 million, defined benefit asset was decreased by EUR 10.3 million, shareholders’ equity was decreased by EUR 26.2 million and the balance sheet total was decreased by EUR 10.3 million in the balance sheet per December 31, 2012.
| Consolidated Balance Sheet, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS Jan 1, 2012 | Jan 1, 2012 | IFRS Jan 1, 2012 | |
| Assets | |||
| Non-current assets | |||
| Other non-current assets | 538.1 | -11.8 | 526.3 |
| Deferred tax assets | 60.3 | 60.3 | |
| Current assets | |||
| Inventories | 1,672.6 | 1,672.6 | |
| Trade and other receivables | 1,027.3 | 1,027.3 | |
| Cash and cash equivalents | 206.1 | 206.1 | |
| Total assets | 3,504.5 | -11.8 | 3,492.7 |
| Equity and Liabilities | |||
| Equity | 921.1 | -37.0 | 884.1 |
| Non-current liabilities | |||
| Financial liabilities | 522.9 | 522.9 | |
| Other non-current liabilities | 128.5 | 39.9 | 168.4 |
| Deferred tax liabilities | 88.3 | -14.7 | 73.6 |
| Current liabilities | |||
| Financial liabilities | 423.6 | 423.6 | |
| Advances received | 458.3 | 458.3 | |
| Other current liabilities | 961.6 | 961.6 | |
| Equity and Liabilities, total | 3,504.5 | -11.8 | 3,492.7 |
| Income statement, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS 1-3/12 | 1-3/12 | IFRS 1-3/12 | |
| Revenue | 1,098.4 | 1,098.4 | |
| Other operating income and expenses | -1,032.3 | -0.2 | -1,032.5 |
| Depreciation | -10.9 | -10.9 | |
| Operating profit | 55.2 | -0.2 | 55.0 |
| Financial income and expenses | -5.2 | -5.2 | |
| Profit before taxes | 49.9 | -0.2 | 49.7 |
| Income taxes | -12.9 | 0.0 | -12.9 |
| Profit for the review period | 37.0 | -0.1 | 36.9 |
| Attributable to: | |||
| Equity holders of the parent company | 36.5 | -0.1 | 36.4 |
| Non-controlling interests | 0.5 | 0.5 | |
| Earnings per share attributable to the equity holders of the parent company | |||
| Earnings/share, EUR | 0.29 | 0.29 | |
| Diluted earnings/share, EUR | 0.29 | 0.29 | |
| Comprehensive income, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS 1-3/12 | 1-3/12 | IFRS 1-3/12 | |
| Profit for the period | 37.0 | -0.1 | 36.9 |
| Other comprehensive income: | |||
| Change in fair value of defined benefit pension, re-measurement due to IAS 19 change | 3.9 | 3.9 | |
| -Deferred tax | -1.1 | -1.1 | |
| Cash flow hedges | -0.1 | -0.1 | |
| -Deferred tax | 0.0 | 0.0 | |
| Change in translation differences | 25.7 | 25.7 | |
| Other group income and expenses, total | 25.6 | 2.8 | 28.4 |
| Comprehensive income, total | 62.6 | 2.7 | 65.3 |
| Attributable to: | |||
| Equity holders of the parent company | 62.3 | 2.7 | 65.0 |
| Non-controlling interests | 0.3 | 0.3 |
| Consolidated Balance Sheet, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS 1-3/12 | 1-3/12 | IFRS 1-3/12 | |
| Assets | |||
| Non-current assets | |||
| Other non-current assets | 546.1 | -11.7 | 534.4 |
| Deferred tax assets | 64.4 | 64.4 | |
| Current assets | |||
| Inventories | 1,774.8 | 1,774.8 | |
| Trade and other receivables | 1,037.3 | 1,037.3 | |
| Cash and cash equivalents | 209.3 | 209.3 | |
| Total assets | 3,631.9 | -11.7 | 3,620.2 |
| Equity and Liabilities | |||
| Equity | 897.6 | -34.3 | 863.3 |
| Non-current liabilities | |||
| Financial liabilities | 564.1 | 564.1 | |
| Other non-current liabilities | 131.9 | 36.3 | 168.2 |
| Deferred tax liabilities | 89.5 | -13.6 | 75.9 |
| Current liabilities | |||
| Financial liabilities | 401.1 | 401.1 | |
| Advances received | 518.7 | 518.7 | |
| Other current liabilities | 1,028.9 | 1,028.9 | |
| Equity and Liabilities, total | 3,631.9 | -11.7 | 3,620.2 |
| Income statement, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS 1-6/12 | 1-6/12 | IFRS 1-6/12 | |
| Revenue | 2,317.3 | 2,317.3 | |
| Other operating income and expenses | -2,173.0 | -0.3 | -2,173.3 |
| Depreciation | -21.5 | -21.5 | |
| Operating profit | 122.8 | -0.3 | 122.5 |
| Financial income and expenses | -11.3 | -11.3 | |
| Profit before taxes | 111.5 | -0.3 | 111.2 |
| Income taxes | -27.9 | 0.1 | -27.8 |
| Profit for the review period | 83.6 | -0.2 | 83.4 |
| Attributable to: | |||
| Equity holders of the parent company | 83.4 | -0.2 | 83.2 |
| Non-controlling interests | 0.2 | 0.2 | |
| Earnings per share attributable to the equity holders of the parent company | |||
| Earnings/share, EUR | 0.67 | 0.66 | |
| Diluted earnings/share, EUR | 0.67 | 0.66 | |
| Comprehensive income, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS 1-6/12 | 1-6/12 | IFRS 1-6/12 | |
| Profit for the period | 83.6 | -0.2 | 83.4 |
| Other comprehensive income: | |||
| Change in fair value of defined benefit pension, re-measurement due to IAS 19 change | 9.5 | 9.5 | |
| -Deferred tax | -2.7 | -2.7 | |
| Cash flow hedges | -0.6 | -0.6 | |
| -Deferred tax | 0.1 | 0.1 | |
| Change in translation differences | 6.0 | 6.0 | |
| Other group income and expenses, total | 5.5 | 6.8 | 12.3 |
| Comprehensive income, total | 89.2 | 6.6 | 95.8 |
| Attributable to: | |||
| Equity holders of the parent company | 89.1 | 6.6 | 95.7 |
| Non-controlling interests | 0.1 | 0.1 |
| Consolidated Balance Sheet, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS 1-6/12 | 1-6/12 | IFRS 1-6/12 | |
| Assets | |||
| Non-current assets | |||
| Other non-current assets | 540.0 | -11.1 | 528.9 |
| Deferred tax assets | 53.7 | 53.7 | |
| Current assets | |||
| Inventories | 1,769.5 | 1,769.5 | |
| Trade and other receivables | 1,114.3 | 1,114.3 | |
| Cash and cash equivalents | 169.5 | 169.5 | |
| Total assets | 3,646.9 | -11.1 | 3,635.8 |
| Equity and Liabilities | |||
| Equity | 926.0 | -30.5 | 895.5 |
| Non-current liabilities | |||
| Financial liabilities | 549.9 | 549.9 | |
| Other non-current liabilities | 131.9 | 31.5 | 163.4 |
| Deferred tax liabilities | 89.6 | -12.1 | 77.5 |
| Current liabilities | |||
| Financial liabilities | 422.7 | 422.7 | |
| Advances received | 558.1 | 558.1 | |
| Other current liabilities | 968.8 | 968.8 | |
| Equity and Liabilities, total | 3,646.9 | -11.1 | 3,635.8 |
| Income statement, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS 1-9/12 | 1-9/12 | IFRS 1-9/12 | |
| Revenue | 3,421.0 | 3,421.0 | |
| Other operating income and expenses | -3,200.3 | -0.5 | -3,200.8 |
| Depreciation | -34.2 | -34.2 | |
| Operating profit | 186.4 | -0.5 | 185.9 |
| Financial income and expenses | -15.7 | -15.7 | |
| Profit before taxes | 170.8 | -0.5 | 170.3 |
| Income taxes | -40.6 | 0.1 | -40.5 |
| Profit for the review period | 130.1 | -0.3 | 129.8 |
| Attributable to: | |||
| Equity holders of the parent company | 129.7 | -0.3 | 129.4 |
| Non-controlling interests | 0.4 | 0.4 | |
| Earnings per share attributable to the equity holders of the parent company | |||
| Earnings/share, EUR | 1.03 | 1.03 | |
| Diluted earnings/share, EUR | 1.03 | 1.03 | |
| Comprehensive income, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS 1-9/12 | 1-9/12 | IFRS 1-9/12 | |
| Profit for the period | 130.1 | -0.3 | 129.8 |
| Other comprehensive income: | |||
| Change in fair value of defined benefit pension, re-measurement due to IAS 19 change | 14.1 | 14.1 | |
| -Deferred tax | -4.0 | -4.0 | |
| Cash flow hedges | -0.5 | -0.5 | |
| -Deferred tax | 0.1 | 0.1 | |
| Change in fair value for available for sale investments | -0.7 | -0.7 | |
| -Deferred tax | 0.2 | 0.2 | |
| Change in translation differences | 21.3 | 21.3 | |
| Other group income and expenses, total | 20.4 | 10.2 | 30.6 |
| Comprehensive income, total | 150.6 | 9.8 | 160.4 |
| Attributable to: | |||
| Equity holders of the parent company | 150.1 | 9.8 | 159.9 |
| Non-controlling interests | 0.4 | 0.4 |
| Consolidated Balance Sheet, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS 1-9/12 | 1-9/12 | IFRS 1-9/12 | |
| Assets | |||
| Non-current assets | |||
| Other non-current assets | 539.7 | -10.9 | 528.8 |
| Deferred tax assets | 55.9 | 55.9 | |
| Current assets | |||
| Inventories | 1,858.5 | 1,858.5 | |
| Trade and other receivables | 1,118.2 | 1,118.2 | |
| Cash and cash equivalents | 150.0 | 150.0 | |
| Total assets | 3,722.3 | -10.9 | 3,711.4 |
| Equity and Liabilities | |||
| Equity | 987.9 | -27.3 | 960.6 |
| Non-current liabilities | |||
| Financial liabilities | 541.7 | 541.7 | |
| Other non-current liabilities | 121.1 | 27.3 | 148.4 |
| Deferred tax liabilities | 93.5 | -10.9 | 82.6 |
| Current liabilities | |||
| Financial liabilities | 435.6 | 435.6 | |
| Advances received | 593.6 | 593.6 | |
| Other current liabilities | 948.9 | 948.9 | |
| Equity and Liabilities, total | 3,722.3 | -10.9 | 3,711.4 |
| Income statement, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS 1-12/12 | 1-12/12 | IFRS 1-12/12 | |
| Revenue | 4,705.9 | 4,705.9 | |
| Other operating income and expenses | -4,401.8 | -0.1 | -4,401.9 |
| Depreciation | -44.9 | -44.9 | |
| Operating profit | 259.2 | -0.1 | 259.1 |
| Financial income and expenses | -21.2 | -21.2 | |
| Profit before taxes | 238.0 | -0.1 | 237.9 |
| Income taxes | -58.1 | 0.1 | -58.0 |
| Profit for the review period | 179.9 | -0.1 | 179.8 |
| Attributable to: | |||
| Equity holders of the parent company | 178.7 | -0.1 | 178.6 |
| Non-controlling interests | 1.2 | 1.2 | |
| Earnings per share attributable to the equity holders of the parent company | |||
| Earnings/share, EUR | 1.43 | 1.43 | |
| Diluted earnings/share, EUR | 1.43 | 1.43 | |
| Comprehensive income, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS 1-12/12 | 1-12/12 | IFRS 1-12/12 | |
| Profit for the period | 179.9 | -0.1 | 179.8 |
| Other comprehensive income: | |||
| Change in fair value of defined benefit pension, re-measurement due to IAS 19 change | 15.3 | 15.3 | |
| -Deferred tax | -4.2 | -4.2 | |
| Cash flow hedges | 0.6 | 0.6 | |
| -Deferred tax | -0.1 | -0.1 | |
| Change in fair value for available for sale investments | -0.4 | -0.4 | |
| -Deferred tax | 0.1 | 0.1 | |
| Change in translation differences | 17.4 | 17.4 | |
| Other group income and expenses, total | 17.6 | 11.0 | 28.6 |
| Comprehensive income, total | 197.5 | 10.9 | 208.5 |
| Attributable to: | |||
| Equity holders of the parent company | 196.3 | 11.0 | 207.3 |
| Non-controlling interests | 1.2 | 1.2 |
| Consolidated Balance Sheet, EUR million | Reported | Impact of | Restated |
| Group | IAS 19 | Group | |
| IFRS 1-12/12 | 1-12/12 | IFRS 1-12/12 | |
| Assets | |||
| Non-current assets | |||
| Other non-current assets | 539.5 | -10.3 | 529.2 |
| Deferred tax assets | 49.8 | 49.8 | |
| Current assets | |||
| Inventories | 1,901.5 | 1,901.5 | |
| Trade and other receivables | 1,015.5 | 1,015.5 | |
| Cash and cash equivalents | 175.7 | 175.7 | |
| Total assets | 3,682.0 | -10.3 | 3,671.6 |
| Equity and Liabilities | |||
| Equity | 1,035.4 | -26.2 | 1,009.2 |
| Non-current liabilities | |||
| Financial liabilities | 517.1 | 517.1 | |
| Other non-current liabilities | 108.0 | 25.1 | 133.1 |
| Deferred tax liabilities | 98.7 | -9.3 | 89.4 |
| Current liabilities | |||
| Financial liabilities | 404.9 | 404.9 | |
| Advances received | 566.6 | 566.6 | |
| Other current liabilities | 951.3 | 951.3 | |
| Equity and Liabilities, total | 3,682.0 | -10.3 | 3,671.6 |
Currency exchange rates used in the Interim report
| Average rate Jan-March, 2013 | Average rate Jan-March, 2012 | Balance sheet rate March 31, 2013 | Balance sheet rate March 31, 2012 | |||
| 1 EUR = | CZK | 25.5690 | 25.0830 | 25.7400 | 24.7300 | |
| DKK | 7.4588 | 7.4350 | 7.4553 | 7.4399 | ||
| HUF | 296.7100 | 296.8900 | 304.4200 | 294.9200 | ||
| MYR | 4.0685 | 4.0122 | 3.9650 | 4.0916 | ||
| NOK | 7.4308 | 7.5870 | 7.5120 | 7.6040 | ||
| PLN | 4.1558 | 4.2332 | 4.1804 | 4.1522 | ||
| RUB | 40.1446 | 39.5504 | 39.7617 | 39.2950 | ||
| SEK | 8.4918 | 8.8531 | 8.3553 | 8.8455 | ||
| SGD | 1.6339 | 1.6573 | 1.5900 | 1.6775 | ||
| USD | 1.3198 | 1.3107 | 1.2805 | 1.3356 | ||
| LTL | 3.4528 | 3.4528 | 3.4528 | 3.4528 | ||
| LVL | 0.6997 | 0.6985 | 0.7017 | 0.7003 |
2.9 Definitions of key financial figures
| Return on investment (ROI %) = | Group’s profit before taxes + interest expenses + other financial expenses +/- exchange rate differences x 100 Balance sheet total - capitalised interest - non-interest bearing liabilities (average) |
| Segment’s operative invested capital = | Tangible and intangible assets + goodwill + shares in associated companies + investments + inventories + trade receivables + other non-interest bearing operational receivables *) - provisions - trade payables - advances received - non-interest bearing liabilities *) *) excl. items associated with taxes, distribution of profit and financial items |
| Return on operative invested capital (%) = | Segment’s operating profit + interest included in operating profit Segment’s operative invested capital (average) |
| Equity ratio (%) = | Equity + non-controlling interest x 100 Balance sheet total - advances received |
| Gearing ratio (%) = | Interest-bearing liabilities - cash and cash equivalents x 100 Shareholder’s equity + non-controlling interest |
| Segment reporting, earnings / share (EUR) = | Net profit for the period (attributable for equity holders), segment reporting Share issue-adjusted average number of outstanding shares during the period |
| Group IFRS reporting, earnings/ share (EUR) = | Net profit for the period (attributable for equity holders), group reporting Share issue-adjusted average number of outstanding shares during the period |
| Equity/share (EUR) = | Shareholders’ equity Share issue-adjusted average number of outstanding shares at the end of period |
| Market capitalization = | (Number of shares - treasury shares) x share price on the closing date by share series |
2.10 Financial risk management
Financial risks include liquidity, interest rate, currency and credit risk, and their management is a part of the Group's treasury policy. The Board of Directors has approved this policy. The Group Treasury is responsible for the practical implementation of the policy in association with the business segments and units.
The Group's strategic financial targets guide the use and management of the Group's capital. Achieving the strategic targets is supported by maintaining an optimum Group capital structure. Capital structure is mainly influenced by controlling investments and the amount of working capital tied to business operations.
A more detailed account of financial risks has been published in the notes to the financial statements for 2012.
2.11 Unusual items affecting operating profit
| EUR million | 1-3/13 | 1-3/12 | Change | 1-12/12 |
| Building Services Northern Europe | 2,8 | -5,8 | ||
| Building Services Central Europe | -0,9 | |||
| International Construction Services | 7,0 | |||
| YIT Group, total | 2,8 | 0,3 |
In Building Services Northern Europe cost adjustments will continue in 2013. Approximately EUR 2.8 million adjustment costs were entered during the first quarter.
Building Services Northern Europe entered costs related to the reorganization of operations amounted to approximately EUR 3 million during the fourth quarter.
The operating profit for International Construction Services for the third quarter of 2012 was improved by the cancellation of a EUR 7.0 million cost provision due to the ammonia issue in St. Petersburg. YIT made a provision of EUR 10.0 during the third quarter of 2011 to cover the costs of rectifying the problem.
YIT started the restructuring of operations in Poland during the second quarter of 2012 and made a write-down of EUR 0.9 million in goodwill in the third quarter of 2012 as the result.
During the second quarter of 2012, the operating profit for Building Services Northern Europe was burdened by a non-recurring expense of EUR 2.8 million associated with the final financial report of a customer project completed in 2011.
2.12 Business combinations and disposals
There have been no acquisitions or disposals in 2013.
2.13 Changes in property, plant and equipment
| EUR million | 1-3/13 | 1-3/12 | Change | 1-12/12 |
| Carrying value at the beginning of the period | 110.8 | 110.8 | 0% | 110.8 |
| Translation difference change | -0.1 | 0.0 | 1.2 | |
| Increase | 3.5 | 4.7 | -25% | 27.7 |
| Increase through acquisitions | 0.0 | 0.3 | -97% | 0.5 |
| Decrease | -0.9 | -0.3 | 187% | -4.2 |
| Decrease through disposals | 0.0 | |||
| Depreciation and value adjustments | -5.8 | -5.9 | -1% | -23.8 |
| Reclassifications | -0.1 | 1.3 | -1.6 | |
| Carrying value at the end of the period | 107.5 | 110.9 | -3% | 110.6 |
2.14 Inventories
| EUR million | 3/13 | 3/12 | Change | 12/12 |
| Raw materials and consumables | 37.3 | 31.0 | 20% | 36.2 |
| Work in progress | 899.4 | 880.4 | 2% | 894.8 |
| Land areas and plot owning companies | 690.6 | 643.1 | 7% | 673.5 |
| Shares in completed housing and real estate companies | 239.6 | 147.1 | 63% | 232.0 |
| Advance payments | 89.0 | 70.4 | -26% | 64.1 |
| Other inventories | 1.1 | 2.5 | -57% | 0.9 |
| Total inventories | 1,956.9 | 1,774.8 | 10% | 1,901.5 |
2.15 Notes on equity
| Share capital and share premium account | Number of outstanding shares | Share capital (EUR million) | Treasury shares (EUR million) |
| January 1, 2013 | 125 383 845 | 149.2 | -9.2 |
| Return of treasury shares, Jan 1-March 31, 2013 | -3 726 | ||
| March 31, 2013 | 125 380 119 | 149.2 | -9.2 |
2.16 Borrowings and Fair Value
| EUR million | 3/2013 | 3/2013 | 12/12 | 12/12 |
| Fair value | Carrying value | Fair value | Carrying value | |
| Non-current liabilities | ||||
| Bonds | 267.4 | 273.1 | 320.9 | 330.3 |
| Loans from credit institutions | 86.6 | 77.5 | 88.4 | 93.9 |
| Pension loans | 102.9 | 95.2 | 104.6 | 99.1 |
| Other loans | 2.2 | 2.0 | 2.6 | 2.9 |
| Non-current liabilities, total | 459.1 | 447.8 | 516.5 | 526.2 |
| 3/2013 | 3/2013 | 12/12 | 12/12 | |
| EUR million | Fair value | Carrying value | Fair value | Carrying value |
| Current liabilities | ||||
| Bonds | 57.1 | 56.3 | 7.1 | 6.9 |
The fair values of bonds are based on the market price at the closing date. The fair values of other non-current loans are based on discounted cash flows. Discount rate is defined to be the rate YIT Group was to pay for an equivalent external loans at the year-end. It consist of risk free market rate and company and maturity related risk premium of 0.80-4.80% (0.80-4.00%) p.a.
Fair value estimation
Group measures the fair value measurement hierarchy as follows:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data.
Following table presents the group's assets and liabilities that are measured at fair value and their levels.
| Assets March 31, 2013 | ||||
| EUR million | Level 1 | Level 2 | Level 3 | Total |
| Available-for-sale investments | 2.1 | 1.3 | 3.3 | |
| Derivatives (hedge accounting not applied) | 0.4 | 0.4 | ||
| Total assets | 2.1 | 0.4 | 1.3 | 3.7 |
| Liabilities March 31, 2013 | ||||
| EUR million | Level 1 | Level 2 | Level 3 | Total |
| Derivatives (hedge accounting not applied) | 0.0 | 9.8 | 0.0 | 9.8 |
| Derivatives (hedge accounting applied) | 4.0 | 4.0 | ||
| Total liabilities | 0.0 | 13.8 | 0.0 | 13.8 |
| Assets December 31, 2012 | ||||
| EUR million | Level 1 | Level 2 | Level 3 | Total |
| Available-for-sale investments | 1.6 | 1.3 | 2.9 | |
| Derivatives (hedge accounting not applied) | ||||
| Total assets | 1.6 | 1.3 | 2.9 | |
| Liabilities December 31, 2012 | ||||
| EUR million | Level 1 | Level 2 | Level 3 | Total |
| Derivatives (hedge accounting not applied) | 11.4 | 11.4 | ||
| Derivatives (hedge accounting applied) | 4.7 | 4.7 | ||
| Total liabilities | 16.1 | 16.1 |
Changes in level 3 instruments:
| EUR million | Assets 03/13 | Liabilities 03/13 | Assets 12/12 | Liabilities 12/12 |
| Opening balance sheet | 1.3 | 1.3 | ||
| Transfers into/from level 3 | ||||
| Purchases and sales | 0.0 | |||
| Gains and losses recognised in profit or loss | ||||
| Gains and losses recognised in comprehensive profit or loss | ||||
| Closing balance | 1.3 | 1.3 |
2.17 Change in contingent liabilities and assets and commitments
| EUR million | 3/13 | 3/12 | Change | 12/12 |
| Collateral given for own commitments | ||||
| - Corporate mortgages | 10.8 | 30.2 | -64% | 29.3 |
| - Other pledged assets | ||||
| Other commitments to associated companies | 7.0 | 7.0 | 0% | 7.0 |
| Other commitments | ||||
| - Repurchase commitments | 363.1 | 286.7 | 27% | 349.3 |
| - Operating leases | 333.9 | 320.2 | 4% | 355.0 |
| - Rental guarantees for clients | 1.5 | 1.9 | -19% | 2.1 |
| - Other contingent liabilities | 1.3 | 1.4 | -8% | 2.0 |
| - Guarantees given | 0.0 | 0.0 | ||
| Liability under derivative contracts | ||||
| - Value of underlying instruments | ||||
| -- Interest rate derivatives | 575.8 | 355.7 | 62% | 579.6 |
| -- Foreign exchange derivatives | 155.6 | 150.8 | 3% | 220.4 |
| -- Commodity derivatives | 1.4 | 4.4 | -68% | 1.9 |
| - Market values | ||||
| -- Interest rate derivatives | -12.1 | -12.8 | -5% | -13.6 |
| -- Foreign exchange derivatives | -0.4 | -0.8 | -50% | -1.6 |
| -- Commodity derivatives | -0.9 | -0.3 | 200% | -0.9 |
| YIT Corporation’s guarantees on behalf of its subsidiaries | 1,496.1 | 1,584.7 | -6% | 1,537.3 |
2.18 Transactions with associated companies and joint ventures
| EUR million | 1-3/13 | 1-3/12 | Change | 1-12/12 |
| Sales | 14.6 | 12.9 | 13% | 70.0 |
| Purchases | 0.0 | 0.0 | 0.1 | |
| Trade and other receivables | 0.0 | 0.0 | 0.1 | |
| Trade and other liabilities | 0.0 | 0.0 | 0.0 |