2011-10-28 07:00:00 CEST
2011-10-28 07:00:26 CEST
REGULATED INFORMATION
YIT - Interim report (Q1 and Q3)
YIT'S INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 2011: RECORD HIGH RESIDENTIAL SALES IN RUSSIA, THE GROUP'S STRONG ORDER BACKLOG RAISES VISIBILITY
Helsinki, 2011-10-28 07:00 CEST (GLOBE NEWSWIRE) -- YIT CORPORATION
INTERIM REPORT OCTOBER 28, 2011 AT 8:00 A.M.
YIT'S INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 2011: RECORD HIGH RESIDENTIAL
SALES IN RUSSIA, THE GROUP'S STRONG ORDER BACKLOG RAISES VISIBILITY
SEGMENT REPORTING 1-9/2011 (1-9/2010): Revenue increased by 23 percent
-- The operating profit of the segments was 3 percent higher than in the
previous year, amounting to EUR 164.3 million (1-9/2010: EUR 159.4
million). Operating profit in Building Services Central Europe more than
doubled as the result of the acquisition completed at the beginning of
September 2010 and successful measures to improve profitability. Operating
profit remained at the previous year's level in Construction Services
Finland.
-- The revenue of the segments was 23 percent higher than in the previous
year, increasing to EUR 3,260.3 million (1-9/2010: EUR 2,659.4 million).
Revenue increased across all segments. The growth of revenue was supported
by an acquisition in Central Europe completed at the beginning of September
2010, the slight picking up of demand for building system services,
continuously favourable residential sales and the picking up of the
business premises market in Finland.
-- The order backlog of the segments was 4 percent higher than the year
before, amounting to EUR 3,489.0 million (9/2010: EUR 3,366.9 million). The
order backlog increased from the end of June 2011 in Construction Services
Finland.
SEGMENT REPORTING 7-9/2011 (7-9/2010): EUR 10 million cost provision for
rectifying the ammonia problem in St. Petersburg residential units
-- The operating profit of the segments was 25 percent lower than in the
previous year, amounting to EUR 43.6 million (7-9/2010: EUR 57.9 million).
-- Excessive levels of ammonia have been found in residential units built by
the company in St. Petersburg. The profitability of International
Construction Services is weakened by the costs incurred for rectifying the
ammonia problem, which the company currently estimates at EUR 10 million. A
cost provision of the said amount has been made for covering these costs in
the third quarter.
-- The revenue of the segments was 19 percent higher than in the previous
year, amounting to EUR 1,096.5 million (7-9/2010: EUR 924.2 million).
GROUP REPORTING 1-9/2011 (1-9/2010): Profit before taxes increased by 54
percent, financial position was strengthened
-- The Group's profit before taxes increased by 54 percent from the previous
year to EUR 125.3 million in January-September (1-9/2010: EUR 81.6
million).
-- Earnings per share increased by 53 percent to EUR 0.72 (1-9:2010: EUR
0.47).
-- Cash reserves amounted to EUR 224.1 million at the end of September
(6/2010: EUR 234.1 million). In addition, committed credit and overdraft
facilities amounting to a total of EUR 316.1 million are available.
GUIDANCE: Combined revenue and operating profit of the segments will increase
compared to 2010
YIT Corporation revised its outlook regarding the operating profit for 2011 in
a stock exchange release on October 12, 2011. YIT reiterates its estimate
issued on October 12, 2011, according to which the total operating profit of
all its business segments will increase in 2011 compared to 2010. In its
outlook issued in connection with the financial statements for 2010 (February
4, 2011), YIT estimated that in 2011, the combined operating profit of the
business segments would grow clearly compared to 2010.
Earlier guidance:
YIT estimated that in 2011 the combined revenue of the business segments will
grow and operating profit will grow clearly compared to 2010.
New guidance:
YIT estimates that in 2011 the combined revenue and operating profit of the
business segments will grow compared to 2010.
YIT estimates residential sales to continue to be good in both Finland and
Russia. In the short term, however, the times-to-sale of residential units may
be prolonged. In particular, residential construction activity in Russia,
German building services and Building Services Northern Europe will provide
opportunities for improving profitability.
The clearly increased uncertainty of the general macroeconomic development may
have a negative effect also on decision-making by YIT's customers and thereby
the development and performance of YIT's business operations.
The profit outlook is based on the segment-level reporting, i.e. recognition of
income based on the percentage of completion.
KEY FIGURES
Development of the segments and the Group
Revenue, EUR million 1-9/11 1-9/10 Change 7-9/11 7-9/10
Change
--------------------------------------------------------------------------------
------
Building Services Northern Europe 1,497.5 1,284.4 17% 511.9 416.8
23%
--------------------------------------------------------------------------------
------
Building Services Central Europe 579.0 291.5 99% 210.8 134.2
57%
--------------------------------------------------------------------------------
------
Construction Services Finland 891.2 807.8 10% 269.4 279.7
-4%
--------------------------------------------------------------------------------
------
International Construction Services 343.3 330.9 4% 122.5 111.9
9%
--------------------------------------------------------------------------------
------
Other items -50.7 -55.2 -18.1 -18.4
--------------------------------------------------------------------------------
------
YIT's segments total 3,260.3 2,659.4 23% 1,096.5 924.2
19%
--------------------------------------------------------------------------------
------
IFRIC 15 adjustment -68.5 -209.8 -11.6 -94.6
--------------------------------------------------------------------------------
------
YIT Group total 3,191.8 2,449.6 30% 1,084.9 829.6
31%
--------------------------------------------------------------------------------
------
Operating profit, EUR million 1-9/11 1-9/10 Change 7-9/11 7-9/10 Change
--------------------------------------------------------------------------------
Building Services Northern 55.8 65.2 -14% 19.9 20.2 -1%
Europe
--------------------------------------------------------------------------------
Building Services Central Europe 24.0 7.5 220% 7.9 2.7 193%
--------------------------------------------------------------------------------
Construction Services Finland 79.5 78.7 1% 21.1 29.3 -28%
--------------------------------------------------------------------------------
International Construction 19.8 21.3 -7% -0.9 9.2
Services
--------------------------------------------------------------------------------
Other items -14.8 -13.3 -4.4 -3.4
--------------------------------------------------------------------------------
YIT's segments total 164.3 159.4 3% 43.6 57.9 -25%
--------------------------------------------------------------------------------
IFRIC 15 adjustment -21.8 -55.7 -8.2 -24.0
--------------------------------------------------------------------------------
YIT Group total 142.5 103.7 37% 35.4 33.9 4%
--------------------------------------------------------------------------------
Operating profit margin, % 1-9/11 1-9/10 7-9/11 7-9/10
-------------------------------------------------------------------
Building Services Northern Europe 3.7 5.1 3.9 4.8
-------------------------------------------------------------------
Building Services Central Europe 4.2 2.6 3.7 2.0
-------------------------------------------------------------------
Construction Services Finland 8.9 9.7 7.8 10.5
-------------------------------------------------------------------
International Construction Services 5.8 6.4 -0.7 8.2
-------------------------------------------------------------------
YIT's segments total 5.0 6.0 4.0 6.3
-------------------------------------------------------------------
YIT Group total 4.5 4.2 3.3 4.1
-------------------------------------------------------------------
Order backlog, EUR million 9/11 9/10 Change 9/11 6/11 Change
--------------------------------------------------------------------------------
Building Services Northern 886.1 743.0 19% 886.1 879.5 1%
Europe
--------------------------------------------------------------------------------
Building Services Central 523.9 589.1 -11% 523.9 554.1 -5%
Europe
--------------------------------------------------------------------------------
Construction Services 1,289.3 1,205.2 7% 1,289.3 1,239.5 4%
Finland
--------------------------------------------------------------------------------
International Construction 850.1 884.8 -4% 850.1 896.4 -5%
Services
--------------------------------------------------------------------------------
Other items -60.3 -55.2 -60.3 -60.2
--------------------------------------------------------------------------------
YIT's segments total 3,489.0 3,366.9 4% 3,489.0 3,509.4 -1%
--------------------------------------------------------------------------------
IFRIC 15 adjustment 249.3 360.6 249.3 287.5
--------------------------------------------------------------------------------
YIT Group total 3,738.3 3,727.5 0% 3,738.3 3,796.9 -2%
--------------------------------------------------------------------------------
Key figures of Group reporting (IFRIC 15)
1-9/11 1-9/10 Change 7-9/11 7-9/10 Change
--------------------------------------------------------------------------------
Profit before taxes, EUR million 125.3 81.6 54% 27.6 27.0 2%
--------------------------------------------------------------------------------
Profit for the review period, 90.0 58.0 55% 18.9 18.7 1%
EUR million
--------------------------------------------------------------------------------
Earnings/share, EUR 0.72 0.47 53% 0.15 0.16 -6%
--------------------------------------------------------------------------------
Operating cash flow after -31.4 -56.1 44% -47.3 -121.6 61%
investments, EUR million
--------------------------------------------------------------------------------
9/11 9/10 Change 9/11 6/11 Change
--------------------------------------------------------------------------------
Return on investment (last 12 15.5 10.6 15.5 15.6
months) %
--------------------------------------------------------------------------------
Equity ratio, % 29.2 29.2 29.2 29.7
--------------------------------------------------------------------------------
Gearing ratio, % 86.8 80.5 86.8 79.9
--------------------------------------------------------------------------------
Personnel at the end of period 26,502 25,943 2 % 26,502 26,807 -1%
--------------------------------------------------------------------------------
NEWS CONFERENCE, WEBCAST AND CONFERENCE CALL
YIT will hold a news conference on the interim report on Friday, October 28,
2011, at 10:00 a.m. (Finnish Time, EEST). The news conference will be held in
English. The news conference will be held 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. The webcast
replay will be available at the same address starting at approximately 12:00
noon.
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.
During the webcast and conference call, questions must be asked in English.
After the session, there will also be an opportunity for the media to ask
questions in Finnish.
Schedule in different time zones:
Interim The investor and analyst event, Recorded
Report conference call and live webcast webcast
published available
--------------------------------------------------------------------------------
EEST 8:00 10:00 12:00
(Helsinki)
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CEST (Paris, 7:00 9:00 11:00
Stockholm)
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BST (London) 6:00 8:00 10:00
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US EDT (New 1:00 3:00 5:00
York)
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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 an 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 - SEPTEMBER 30, 2011
CONTENTS
-- Group's financial development
-- Strategic objectives
-- Development by business segment
-- Personnel
-- Resolutions passed at the Annual General Meeting
-- Shares and shareholders
-- Most significant short-term business risks and risk management
-- Outlook for 2011
-- Tables to the Interim Report
GROUP'S FINANCIAL DEVELOPMENT
Changes in organisational structure and Group management
As a result of the acquisition completed at the beginning of September 2010,
the significance of Central Europe to the Group has increased clearly. YIT's
business segment structure was revised from March 1, 2011, with Building and
Industrial Services being divided into two segments: Building Services Northern
Europe and Building Services Central Europe. From March 1, 2011, YIT's four
business segments are: Building Services Northern Europe, Building Services
Central Europe, Construction Services Finland and International Construction
Services. YIT's comparable figures for 2010 according to the new business
segment structure were published in a separate stock exchange release on March
24, 2011.
Karl-Walter Schuster (61) was appointed as the head of Building Services
Central Europe and as a member of the Group Management Board from March 1,
2011. Previously, he acted as the head of the Central Europe division within
the Building and Industrial Services business segment. Matti Malmberg (51) was
appointed as the head of Building Services Northern Europe and as a member of
the Group Management Board from June 29, 2011. Previously, he acted as the head
of building system services in Finland, Russia and the Baltic countries.
During the second quarter, YIT Corporation's Board of Directors established a
new committee with the purpose of assisting the Board in matters related to the
development of YIT's business. The members of this Working Committee are the
Board of Directors' Chairman Henrik Ehrnrooth (Chair) and Vice Chairman Reino
Hanhinen, as well as Michael Rosenlew, appointed by the Board of Directors from
among its number.
Revenue of the segments increased by almost a quarter on the previous year
Revenue, EUR million 1-9/11 1-9/10 Change 7-9/11 7-9/10
Change
--------------------------------------------------------------------------------
------
Building Services Northern Europe 1,497,5 1,284.4 17% 511.9 416.8
23%
--------------------------------------------------------------------------------
------
Building Services Central Europe 579.0 291.5 99% 210.8 134.2
57%
--------------------------------------------------------------------------------
------
Construction Services Finland 891.2 807.8 10% 269.4 279.7
-4%
--------------------------------------------------------------------------------
------
International Construction Services 343.3 330.9 4% 122.5 111.9
9%
--------------------------------------------------------------------------------
------
Other items -50.7 -55.2 -18.1 -18.4
--------------------------------------------------------------------------------
------
YIT's segments total 3,260.3 2,659.4 23% 1,096.5 924.2
19%
--------------------------------------------------------------------------------
------
IFRIC 15 adjustment -68.5 -209.8 -11.6 -94.6
--------------------------------------------------------------------------------
------
YIT Group total 3,191.8 2,449.6 30% 1,084.9 829.6
31%
--------------------------------------------------------------------------------
------
The revenue of YIT's segments increased by 23 percent in January-September
compared to the previous year, amounting to EUR 3,260.3 million (1-9/2010: EUR
2,659.4 million). Revenue increased across all segments. The revenue of
Building Services Central Europe increased compared to the year before
particularly as the result of the acquisition completed in September 2010. The
growth in revenue was also supported by a slight revival in the demand for
building services, continued good residential sales and the revival of the
business premises market in Finland. Changes in foreign exchange rates
increased the segments' revenue for the review period by EUR 36.1 million
compared to the previous year.
Following the IFRIC 15 adjustment, YIT Group's revenue increased by 30 percent
from the previous year and was EUR 3,191.8 million for January-September
(1-9/2010: EUR 2,449.6 million). The completion schedules of own-based property
development projects affect the Group's revenue recognition, and therefore
Group-level figures may fluctuate greatly between different quarters. In
January-September, the number of residential units completed in Russia was
lower than the year before, while in Finland, the Baltic Countries and Central
Eastern Europe, more residential units were completed than the year before.
In January-September 2011, Finland accounted for 41 percent of the Group's
revenue (44%), Sweden for 16 percent (16%), Germany for 14 percent (8%), Norway
for 12 percent (14%), Russia for 7 percent (8%), Denmark for 4 percent (4%),
the Baltic countries for 2 percent (2%) and other countries for 5 percent (4%).
Operating profit of the segments remained at the previous year's level
Operating profit, EUR million 1-9/11 1-9/10 Change 7-9/11 7-9/10 Change
--------------------------------------------------------------------------------
Building Services Northern 55.8 65.2 -14% 19.9 20.2 -1%
Europe
--------------------------------------------------------------------------------
Building Services Central Europe 24.0 7.5 220% 7.9 2.7 193%
--------------------------------------------------------------------------------
Construction Services Finland 79.5 78.7 1% 21.1 29.3 -28%
--------------------------------------------------------------------------------
International Construction 19.8 21.3 -7% -0.9 9.2 -110%
Services
--------------------------------------------------------------------------------
Other items -14.8 -13.3 -4.6 -3.4
--------------------------------------------------------------------------------
YIT's segments total 164.3 159.4 3% 43.6 57.9 -25%
--------------------------------------------------------------------------------
IFRIC 15 adjustment -21.8 -55.7 -8.2 -24.0
--------------------------------------------------------------------------------
YIT Group total 142.5 103.7 37% 35.4 33.9 4%
--------------------------------------------------------------------------------
Operating profit margin, % 1-9/11 1-9/10 7-9/11 7-9/10
-------------------------------------------------------------------
Building Services Northern Europe 3.7 5.1 3.9 4.8
-------------------------------------------------------------------
Building Services Central Europe 4.2 2.6 3.7 2.0
-------------------------------------------------------------------
Construction Services Finland 8.9 9.7 7.8 10.5
-------------------------------------------------------------------
International Construction Services 5.8 6.4 -0.7 8.2
-------------------------------------------------------------------
YIT's segments total 5.0 6.0 4.0 6.3
-------------------------------------------------------------------
YIT Group total 4.5 4.2 3.3 4.1
-------------------------------------------------------------------
The operating profit of YIT's segments increased by 3 percent in
January-September compared to the previous year, amounting to EUR 164.3 million
(1-9/2010: EUR 159.4 million). The operating profit margin calculated on the
basis of the segment figures was 5.0 percent (1-9/2010: 6.0%). The operating
profit of the segments includes EUR -6.3 million (1-9/2010: EUR -1.8 million)
of borrowing costs according to IAS 23. The IAS 23 standard defines the
recording method of borrowing costs in long-term construction projects.
The third quarter operating profit margin of Building Systems Northern Europe
fell short of the previous year due to strict price competition, especially in
project operations, and the relatively low level of new building system and
industrial investments. In Building Services Central Europe, operating profit
improved particularly with the German operations improving their performance.
During the third quarter, the operating profit of Construction Services Finland
decreased as the result of impaired sales of high-value housing, the decrease
in the volume of housing production for investors, and lower profitability of
infrastructure services compared to previous year. The profitability of
International Construction Services was weakened by the costs incurred for
rectifying the ammonia problem, which the company currently estimates at EUR 10
million. A cost provision of the said amount has been made for covering these
costs in the third quarter.
In Group-level reporting, own-based residential development projects are only
recognised as income upon project delivery. Following the IFRIC 15 adjustment,
the Group's operating profit increased by 37 percent compared to the previous
year, amounting to EUR 142.5 million (1-9/2010: EUR 103.7 million). Following
the IFRIC 15 adjustment, the Group's operating profit margin was 4.5 (1-9/2010:
4.2%).
Profit before taxes increased by 54 percent
The financial expenses for the review period decreased compared to the previous
year due to a decrease in the hedged ruble exposure and higher IAS 23
adjustment.
The Group's profit before taxes increased by 54 percent from the previous year
to EUR 125.3 million in January-September (1-9/2010: EUR 81.6 million).
Earnings per share increased by 53 percent from the previous year to EUR 0.72
(1-9:2010: EUR 0.47).
Order backlog remained strong
Order backlog, EUR million 9/11 9/10 Change 9/11 6/11 Change
--------------------------------------------------------------------------------
Building Services Northern 886.1 743.0 19% 886.1 879.5 1%
Europe
--------------------------------------------------------------------------------
Building Services Central 523.9 589.1 -11% 523.9 554.1 -5%
Europe
--------------------------------------------------------------------------------
Construction Services 1,289.3 1,205.2 7% 1,289.3 1,239.5 4%
Finland
--------------------------------------------------------------------------------
International Construction 850.1 884.8 -4% 850.1 896.4 -5%
Services
--------------------------------------------------------------------------------
Other items -60.3 -55.2 -60.3 -60.2
--------------------------------------------------------------------------------
YIT's segments total 3,489.0 3,366.9 4% 3,489.0 3,509.4 -1%
--------------------------------------------------------------------------------
IFRIC 15 adjustment 249.3 360.6 249.3 287.5
--------------------------------------------------------------------------------
YIT Group total 3,738.3 3,727.5 0% 3,738.3 3,796.9 -2%
--------------------------------------------------------------------------------
The combined order backlog of YIT's segments was EUR 3,489.0 million at the end
of September (9/2010: EUR 3,366.9 million) or approximately 4 percent higher
than the previous year. The order backlog remained relatively unchanged from
the end of June 2011, at which time it stood at EUR 3,509.4 million.
The order backlog of Building Systems Northern Europe increased from the
previous year as the result of a slight revival in the demand for building
services. The order backlog of Construction Services Finland increased in
residential construction as well as in business premises.
Following the IFRIC 15 adjustment, YIT Group's order backlog was EUR 3,738.3
million at the end of September (9/2010: EUR 3,727.5 million).
Capital expenditure and acquisitions
Gross capital expenditure on non-current assets included on the balance sheet
totalled EUR 43.9 million (1-9/2010: EUR 99.1 million) during
January-September, representing 1.4 percent (1-9/2010: 4.0%) of revenue.
Investments in construction equipment amounted to EUR 12.2 million (1-9/2010:
EUR 6.7 million) and investments in information technology to EUR 9.0 million
(1-9/2010: EUR 5.9 million). Other investments, including acquisitions,
amounted to EUR 22.0 million (1-9/2010: EUR 86.5 million).
When assessing acquisitions, YIT's goal is to acquire companies that support
YIT's strategy of becoming the leading building system service provider in the
Nordic countries and Central Europe. The acquired company's business culture,
areas of competence and payback time of the purchase price of the acquired
company are key criteria.
During the third quarter, YIT completed two acquisitions in the Nordic
countries. In Finland, YIT acquired the business operations of Sakari Timonen
Oy, a specialist in refrigeration engineering. The company's annual revenue is
approximately EUR 1 million. In Norway, YIT acquired the piping installations
specialist Mercur. The company's annual revenue is approximately EUR 20 million
and it has approximately 100 employees. The acquisition of Mercur was one of
YIT's largest acquisitions in Norway after the Group expanded into Norway in
2003, and it will consolidate YIT's position as the leading supplier of
building systems in Norway. Both of the companies acquired during the third
quarter will be consolidated into the Building Systems Northern Europe segment.
Investments in growth impaired cash flow
The Group's operating cash flow for the review period after investments
amounted to EUR -31.4 million (1-9/2010: EUR -56.1 million). In July-September,
the Group's operating cash flow after investments amounted to EUR -47.3 million
(7-9/2010: EUR -121.6 million). Operating cash flow in the third quarter was
affected particularly by growth in sales inventory of own developed projects in
Finland, plot investments and a temporary increase in receivables in Building
Services Northern Europe.
At the end of September, the Group's invested capital amounted to EUR 1,849.4
million (6/2011: EUR 1,816.1 million). Of the Group's invested capital, 26
percent (6/2011: 29%), or EUR 472.7 million (6/2011: EUR 531.9 million) was
invested in Russia. Exchange rate changes of the ruble decreased the capitalinvested in Russia by EUR 39 million in July-September.
The Group's capital invested in Russia is primarily accounted for by the
International Construction Services segment. Capital invested in Russia
decreased during the third quarter in spite of an increase in residential
production. The use of capital has been made more efficient by decreasing the
size of projects, selling apartments at an earlier construction phase, improved
terms of payment and increasing the share of mortgage deals.
Return on investment amounted to 15.5 percent for the last 12 months
(7/2010-6/2011: 15.6%). Invested capital is calculated by deducting
non-interest bearing liabilities from the balance sheet total. The balance
sheet total at the end of September was EUR 3,418.6 million (6/2011: EUR
3,387.4 million).
The Group is also prepared for macroeconomic uncertainty, liquidity position is
strong
YIT has a diverse capital structure and a strong liquidity position. Cash
reserves amounted to EUR 224.1 million (6/2011: EUR 234.1 million) at the end
of September. In addition, committed credit and overdraft facilities amounting
to a total of EUR 316.1 million are available. New committed credit facilities
amounting to a total of EUR 100 million were agreed upon in September. YIT has
a total of EUR 250 million in committed credit facilities, of which EUR 50
million are valid until December 2013 and EUR 200 million until December 2015.
The committed credit facilities do not include an obligation to maintain
financial key ratios, i.e. covenants.
The gearing ratio increased slightly compared with the end of June 2011,
amounting to 86.8 percent at the end of September 2011 (6/2011: 79.9%). The
equity ratio decreased slightly to 29.2 percent (6/2011: 29.7%). The equity
ratio was impaired by the weakening of the ruble and the resulting negative
translation difference of EUR 23.2 million under shareholders' equity. Net
financing liabilities increased from the end of June 2011 to EUR 755.0 million
(6/2011: EUR 702.7 million).
Net financial expenses decreased to EUR 17.2 million during the review period
(1-9/2010: EUR 22.1 million), or 0.5 percent of the Group's revenue (1-9/2010:
0.9%). The net financial expenses include EUR 9.2 million of capitalisations in
compliance with IAS 23 (1-9/2010: EUR 4.8 million). The exchange rate
differences included in the net financial expenses, totalling EUR -2.1 million
(1-9/2010: EUR -6.5 million), were comprised almost entirely of costs of
hedging debt investments in Russia. The hedged ruble exposure has decreased. At
the end of September 2011, EUR 90.7 million of the capital invested in Russia
was comprised of debt investments (6/2011: EUR 117.9 million) and EUR 382.1
million was equity investments or similar fixed net investments (6/2011: EUR
414.4 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.
Financial liabilities amounted to EUR 979.1 million (6/2011: EUR 936.8 million)
at the end of September, and their average interest rate was 3.3 percent
(6/2011: 3.5%). Fixed-interest loans accounted for 50 percent (6/2011: 58%) of
the Group's financial liabilities. Of the loans, 46 percent (6/2011: 41%) had
been raised directly from the capital and money markets, 40 percent from banks
and other financial institutions (6/2011: 44%) and 13 percent from the
insurance companies (6/2011: 14%). The maturity distribution of long-term loans
is balanced. A total of EUR 15.3 million of long-term loans will mature during
the last quarter of 2011.
During the second quarter, YIT issued, under the company's programme for
issuance of notes, a EUR 100 million bond targeted at institutional and other
selected investors. Due by June 20, 2016, the bond carries an annual fixed
coupon rate of 4.750 percent and has an issue price of 99.843 percent. The
effective yield of the bond is 4.786 percent.
The total amount of construction-stage contract receivables sold to financial
institutions was on par with the end of June 2011. The total amount of
construction-stage contract receivables sold to financial institutions amounted
to EUR 208.3 million at the end of September (6/2011: EUR 197.8 million). Of
this amount, EUR 189.9 million (6/2011: EUR 190.6 million) is included in
interest-bearing liabilities on the balance sheet and the remainder comprises
off-balance sheet items in accordance with IAS 39. Interest expenses on
receivables sold to financing companies amounted to EUR 3.8 million (1-9/2010:
EUR 1.6 million) during the review period and these are fully included in the
financial expenses of the review period.
Participations in the housing corporation loans of unsold completed residential
units amounted to EUR 38.7 million (6/2011: EUR 37.3 million) at the end of
September, and they are included in interest-bearing liabilities. The interest
on the participations, EUR 1.0 million (1-9/2010: EUR 0.7 million), is included
in housing corporation charges and is thus booked in project expenses.
YIT paid out dividends of EUR 81.3 million for 2010 during the second quarter
in compliance with the resolution of the Annual General Meeting.
The Group's balanced business structure and solid financial position enable the
implementation of YIT's growth strategy and the acquisitions and plot
investments required by it. On the other hand, the Group has also prepared for
macroeconomic uncertainty by strengthening its liquidity position.
STRATEGIC OBJECTIVES
YIT Corporation's Board of Directors confirmed the Group's strategy for
2012-2014 on September 21, 2011. The key strategic objective is balanced and
profitable growth. The Group's other strategic long-term target levels 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. 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 of YIT's growth continue to be
building systems service and maintenance operations and residential
construction. Growth is sought both through acquisitions and organically.
Building system services will be increased in the Nordic countries and Central
Europe, and residential construction in Finland, Russia, the Baltic countries
and Central Eastern Europe. The Group's potential new market areas are
Switzerland in building system services and Poland in construction services.
Particular focus areas for growth include residential construction in Russia
and building system services in Germany.
YIT published a stock exchange release on the confirmation of the strategy and
materials for the Capital Market Day focusing on the strategic focus areas on
September 22, 2011.
DEVELOPMENT BY BUSINESS SEGMENT
The development by business segment is presented using figures compliant with
segment reporting.
BUILDING SERVICES NORTHERN EUROPE
Key figures
1-9/11 1-9/10 Change 7-9/11 7-9/10 Change
-------------------------------------------------------------------------------
Revenue, EUR million 1,497.5 1,284.4 17% 511.9 416.8 23%
-------------------------------------------------------------------------------
Operating profit, EUR million 55.8 65.2 -14% 19.9 20.2 -1%
-------------------------------------------------------------------------------
Operating profit margin, % 3.7 5.1 3.9 4.8
-------------------------------------------------------------------------------
9/11 9/10 Change 9/11 6/11 Change
----------------------------------------------------------------------
Order backlog, EUR million 886.1 743.0 19% 886.1 879.5 1%
----------------------------------------------------------------------
Revenue, EUR million 1-9/11 1-9/10 Change 7-9/11 7-9/10
Change
--------------------------------------------------------------------------------
-
Finland 464.1 418.4 11% 164.8 136.3
21%
--------------------------------------------------------------------------------
-
Sweden 492.6 392.4 26% 167.5 125.6
33%
--------------------------------------------------------------------------------
-
Norway 377.9 343.2 10% 122.2 106.5
15%
--------------------------------------------------------------------------------
-
Denmark 122.9 100.0 23% 42.1 37.3
13%
--------------------------------------------------------------------------------
-
Russia and the Baltic countries 40.0 30.4 32% 15.3 11.1
38%
--------------------------------------------------------------------------------
-
Total 1,497.5 1,284.4 17% 511.9 416.8
23%
--------------------------------------------------------------------------------
-
The revenue of Building Services Northern Europe increased by 17 percent in
January-September compared to the previous year, amounting to EUR 1,497.5
million (1-9/2010: EUR 1,284.4 million). Revenue for the third quarter
increased by 23 percent to EUR 511.9 million (7-9/2010: EUR 416.8 million).
Changes in foreign exchange rates increased the revenue for January-September
by EUR 41.3 million compared to the previous year. The increase in revenue was
widespread: revenue increased in all countries.
The segment's operating profit fell short of the previous year due to strict
price competition, especially in project operations, and the relatively low
level of new building system and industrial investments. The segment's
profitability turned to a slight increase after the challenging first half of
the year, thanks to efficiency improvement measures, but is still considerably
lower than YIT's objectives.
Building Systems Northern Europe's services are being restructured in all
countries. During the review period, decisions were made on the reduction of
approximately 800 employees in total as the result of the restructuring
efforts. The efforts are estimated to result in annual savings of approximately
EUR 40 million from 2013 onwards. The aim is to improve profitability at the
segment level also through rearrangement of the branch office network.
Furthermore, the aim is to improve the segment's profitability through more
selective project acquisition and making procurement more efficient.
The order backlog at the end of September was 19 percent higher than the year
before, and remained at the level of the end of June 2011. The margin level of
the order backlog improved slightly during the third quarter. In some projects
the clearly increased uncertainty of the general macroeconomic development has
delayed the decision-making of clients after the review period.
Service and maintenance revenue continued to increase during the third quarter
YIT's aims to be the leading provider of technical systems and life-cycle
services in the Nordic countries and Central Europe, particularly in
energy-efficient solutions. The target is to increase service and maintenance
operations at a faster rate than other operations. Service and maintenance
operations generated EUR 922.8 million (1-9/2010: EUR 876.4 million), or 62
percent of the segment's total revenue (1-9/2010: 68%).
YIT has improved the offering of service and maintenance operations by
developing a ServiFlex concept where customers can agree on extensive service
entities in a single contract. The iServiflex service was launched in
industrial services during the first quarter. Customers increasingly appreciate
simplicity in purchasing services, and the number of extensive service
agreements is estimated to increase.
New investments still relatively low
New investments in building systems recovered slightly during the review
period, but still remained at a relatively low level. Demand among industrial
customers was also focused on service and maintenance, and the demand for new
investments remained at a low level during the third quarter.
YIT will provide a total technical solution connected with the renovation of
the Norwegian Directorate of Taxes' (Skattedirektoratet) offices, covering the
HVAC engineering, plumbing systems and electrical systems as well as the
automation systems. The value of the agreement concluded in the third quarter
is approximately EUR 12 million with opportunities for additional sales and
service agreements. The renovation work is expected to be complete in September
2013.
During the third quarter, YIT signed a contract for the building systems in the
third expansion phase of the Kannelmäki shopping centre in Helsinki, Finland.
The agreement covers all work related to plumbing, air conditioning, electrical
aspects and building automation. The total value of the agreement is
approximately EUR 11.5 million, and the work is expected to be completed in
August 2013.
During the third quarter, YIT agreed on the delivery of building system
installations at a Scania Trucks paintshop in Sweden. YIT entered into a
two-year framework agreement on the delivery of building system services to 450
Handelsbanken offices in Sweden in the third quarter. In Denmark, YIT will
deliver electrical installation work to Maersk Oil & Gas. The annual value of
the agreement concluded in the third quarter is approximately EUR 2 million. In
accordance with an agreement signed in the third quarter, YIT will be
responsible for the delivery of air conditioning-related services to the new
Foss Innovation research centre in Denmark.
BUILDING SERVICES CENTRAL EUROPE
Key figures
1-9/11 1-9/10 Change 7-9/11 7-9/10 Change
-----------------------------------------------------------------------------
Revenue, EUR million 579.0 291.5 99% 210.8 134.2 57%
-----------------------------------------------------------------------------
Operating profit, EUR million 24.0 7.5 220% 7.9 2.7 193%
-----------------------------------------------------------------------------
Operating profit margin, % 4.2 2.6 3.7 2.0
-----------------------------------------------------------------------------
9/11 9/10 Change 9/11 6/11 Change
----------------------------------------------------------------------
Order backlog, EUR million 523.9 589.1 -11% 523.9 554.1 -5%
----------------------------------------------------------------------
Revenue, EUR million 1-9/11 1-9/10
Change 7-9/11 7-9/10 Change
--------------------------------------------------------------------------------
--------------------------
Germany 470.4 202.8
132% 173.6 100.7 72%
--------------------------------------------------------------------------------
--------------------------
Austria 75.6 71.4
6% 29.0 24.9 16%
--------------------------------------------------------------------------------
--------------------------
Poland, the Czech Republic, Hungary and other countries *) 33.0 17.3
91% 8.2 8.7 -6%
--------------------------------------------------------------------------------
--------------------------
Total 579.0 291.5
99% 210.8 134.3 57%
--------------------------------------------------------------------------------
--------------------------
*) YIT sold its Hungarian operations on the second quarter of 2011.
Building Services Central Europe's revenue increased significantly in
January-September compared to the previous year, mainly as the result of an
acquisition that took effect at the beginning of September 2010. An increase in
new building system investments also contributed to the growth of the revenue
for the review period. Revenue for the third quarter increased by 57 percent to
EUR 210.8 million (7-9/2010: EUR 134.2 million).
In Building Systems Central Europe, operating profit for the review period and
the third quarter more than doubled compared to the previous year, particularly
with the German operations improving their performance. Operating profit for
the review period amounted to EUR 24.0 million (1-9/2010: EUR 7.5 million) and
for the third quarter, EUR 7.9 million (7-9/2010: EUR 2.7 million).
The order backlog at the end of September was slightly lower than the previous
year, amounting to EUR 523.9 million (9/2010: EUR 589.1 million). The margin
level of the order backlog improved slightly during the third quarter.
Acquisition expanded operations in Central Europe
YIT aims to offer building system services, especially those requiring
technical expertise, close to its customers. The goal is to reinforce the local
market position organically and through acquisitions.
An acquisition whereby YIT acquired a company offering technical building
system services in Central Europe was completed at the beginning of September
2010. The profitability of the acquired company was below YIT's average
profitability, and YIT aims to improve the operating profit margin of the
acquired operations by one percentage point per year. The development of the
acquired business has proceeded as planned.
Growth in service and maintenance
Service and maintenance operations generated EUR 139.5 million (1-9/2010: EUR
74.1 million), or 24 percent of the segment's total revenue (1-9/2010: 25%).
During the review period, the share of service and maintenance was
significantly lower in Building Services Central Europe (24%) than in Building
Services Northern Europe (62%), and therefore the opportunities for increasing
it in Building Services Central Europe are good.
YIT made several new agreements, agreement expansions and extensions during the
third quarter. YIT agreed on service deliveries with Commerzbank, among others.
In addition, YIT agreed on the delivery of building system-related work to the
City of Dresden's cooling centre, which provides three historical buildings in
the city with cooling services.
During the third quarter, YIT's ServiFlex concept was in use in all countries
where Building Services Central Europe operates. In Austria in particular, the
volume of service and maintenance agreements pursuant to the concept increased
considerably during the third quarter. ServiFlex agreements were signed with
the Mövenpick hotel and resort chain, the Bernhard-Nocht Institute, Linz AG and
Würth and Vodafone shops, among others, during the third quarter. In Poland,
YIT's agreement with the Panatoni logistics centres in Warsaw and Wroclaw was
extended.
New investments remained at a relatively favourable level in Germany and Austria
Demand for new building system investments remained at a relatively favourable
level in Germany and Austria during the third quarter. In Central Eastern
Europe, the building system investment market is recovering slowly. After the
review period, uncertainty has increased especially in the investment decisions
of large projects.
In Germany, YIT signed several agreements on new investments in the third
quarter. YIT will deliver technical building services totalling approximately
EUR 8 million to the Urban Development and Environment Authority's (BSU) new
building in Hamburg. Also, YIT will deliver the technical solutions to the
Viventis Berlin laboratory and the new pavilions at Berlin airport.
YIT will deliver new ventilation solutions to a nuclear power plant in Stade,
developed and manufactured in YIT's own research and development laboratory in
Aachen. During the third quarter, YIT secured an agreement on the delivery of
building services to a third biogas plant in Baden-Wurttemberg.
In Austria, the third quarter saw YIT enter into agreements on the delivery of
building system services to a hospital located in Zell Am See and the control
centre of the motorway tunnels in Ardning. With an agreement expansion
concluded in the third period, YIT will also deliver automation technology to
the tallest building in Austria, the DC Tower in Vienna. In addition, YIT will
install building systems to the cleanrooms of Infineon Technologies Austria AG
in Villach, Austria.
In Poland, YIT will deliver building services to Danfoss in Southern Poland,
the University of Warsaw and Media Markt.
CONSTRUCTION SERVICES FINLAND
Key figures
1-9/11 1-9/10 Change 7-9/11 7-9/10 Change
-----------------------------------------------------------------------------
Revenue, EUR million 891.2 807.8 10% 269.4 279.7 -4%
-----------------------------------------------------------------------------
Operating profit, EUR million 79.5 78.7 1% 21.1 29.3 -28%
-----------------------------------------------------------------------------
Operating profit margin, % 8.9 9.7 7.8 10.5
-----------------------------------------------------------------------------
9/11 9/10 Change 9/11 6/11 Change
------------------------------------------------------------------------------
Order backlog, EUR million 1,289.3 1,205.2 7% 1,289.3 1,239.5 4%
------------------------------------------------------------------------------
Revenue increased in January-September by 10 percent from the previous year as
the volume of residential and business premises construction was at a good
level. Revenue for the third quarter decreased by 4 percent from the previous
year to EUR 269.4 million (7-9/2010: EUR 279.7 million). Sales of small
residential units continued to be favourable in the third quarter, but sales of
high-value housing were slower than before. The revenue for the third quarter
was weakened by the decrease in the volume of housing production for investors
after projects were completed. The volume of infrastructure services was normal
in the third quarter.
The operating profit for the review period was on par with the previous year.
The operating profit of the segment includes EUR -4.0 million (1-9/2010: EUR
-1.5 million) of borrowing costs according to IAS 23. The operating profit
margin for the review period decreased slightly compared to the previous year.
The operating profit for the third quarter decreased by 28 percent from the
previous year to EUR 21.1 million (7-9/2010: EUR 29.3 million). The operating
profit for the third quarter includes EUR -0.9 million (7-9/2010: EUR -0.7
million) of borrowing costs according to IAS 23. The decrease in the segment's
operating profit was the result of slower sales of high-value housing, the
decrease in the volume of housing production for investors, and lower
profitability of infrastructure services compared to previous year.
The order backlog increased by 7 percent from the previous year, particularly
as a result of new residential and business premises development projects.
Compared to the end of June 2011, the order backlog increased by 4 percent,
amounting to EUR 1,289.3 million (6/2011: EUR 1,239.5 million).
The segment's capital tied into plot reserves totalled EUR 284.8 million
(9/2010: EUR 283.5 million) at the end of September. The plot reserves included
1,405,000 (9/2010: 1,682,000) m2 of floor area of residential plots and 664,000
(9/2010: 904,000) m2 of floor area of plots for business premises.
Residential sales to consumers at a moderate level
YIT's goal is to strengthen its position as the largest housing developer in
Finland. Residential sales continued at a moderate level in the third quarter.
During January-September, YIT sold a total of 1,444 residential units
(1-9/2010: 1,412) directly to consumers, of which 396 were sold in the third
quarter (7-9/2010: 435). In the third quarter, residential sales were
increasingly focused on small residential units. Sales continued at the normal
level in October. Housing prices increased at a moderate rate during the review
period.
The focus of YIT's housing construction is on residential development projects
aimed directly at consumers in accordance with market demand. In
January-September, YIT started the construction of a total of 1,841 (1-9/2010:
2,003) residential units aimed directly at consumers. Of the start-ups, 561
took place in July-September (7-9/2010: 767). YIT has continued to replenish
actively its plot reserves by acquiring plots and making preliminary agreements
on plots in order to ensure good opportunities for residential start-ups also
in the future.
The sales inventory has been strengthened further with new residential
start-ups. At the end of September, YIT had 2,072 (9/2010: 1,624) unsold
residential units. The number of completed, unsold residential units has
remained at a relatively low level, amounting to 237 (9/2010: 116) at the end
of September. Of the residential units under construction, 49 percent (9/2010:
67%) have been sold, which decreases YIT's sales risk.
YIT aims to keep its residential start-ups in 2011 on par with the previous
year, and 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 amounted to EUR 373.9 million at the end
of September 2011.
Residential construction in Finland, residential units
1-9/11 1-9/10 Change 7-9/11
4-6/11 Change
--------------------------------------------------------------------------------
-----------
Sold 1,803 1,954 -8% 456
755 -40 %
--------------------------------------------------------------------------------
-----------
- of which directly to consumers 1,444 1,412 2% 396
513 -23 %
--------------------------------------------------------------------------------
-----------
Start-ups 2,200 2,545 -14% 621
917 -32 %
--------------------------------------------------------------------------------
-----------
- of which directly to consumers 1,841 2,003 -8% 561
675 -17%
--------------------------------------------------------------------------------
-----------
Completed 3,053 1,776 80% 919
1,254 -16%
--------------------------------------------------------------------------------
-----------
- of which directly to consumers 1,856 559 246% 630
701 1%
--------------------------------------------------------------------------------
-----------
Under construction at the end of the period 3,577 4,543 -20% 3,577
3,875 -6%
--------------------------------------------------------------------------------
-----------
- of which sold at the end of the period 1,742 3,035 -43% 1,742
2,176 -20%
--------------------------------------------------------------------------------
-----------
For sale at the end of the period 2,072 1,624 31% 2,072
1,907 11%
--------------------------------------------------------------------------------
-----------
- of which completed 237 116 104% 237
208 14%
--------------------------------------------------------------------------------
-----------
Continued improvement in the business premises market
The positive development of the business and office premises market continued
also during the third quarter, and the order backlog of YIT's business premises
operations remained at a favourable level. The leasing of business premises
under construction proceeded moderately during the third quarter: lease
agreements were signed on approximately 4,300 m² of premises. Business premises
rents increased slightly in the third quarter, and investors' yield
requirements were on par with the previous quarter. Interest in Finland among
international property investors has increased from the previous year.
During the third quarter, YIT started the construction work for MotorCenter
Avia in Koivuhaka, Vantaa, which is owned by Tapiola Mutual Pension Insurance
Company. According to the contract agreement, YIT will implement the
approximately 2,900-square metre business centre based on the MotorCenter
concept on a plot owned by the investor. The value of the contract is
approximately EUR 5 million, and the premises, which are scheduled for
completion in June 2012, are already mainly leased with long-term lease
agreements.
YIT signed a contract and project agreement during the third quarter with
Fennia Life on the third phase of MotorCenter Konala. The value of the project
agreement is approximately EUR 6.5 million, and the premises, which are
scheduled for completion in June 2012, are already mainly leased with long-term
lease agreements. MotorCenter Konala will be built in four phases and will have
a total rentable area of approximately 15,000 m2. When completed in September
2012, the centre will offer the products and services of nearly twenty
specialty shops in the fields involved. MotorCenter Avia and Konala constitute
a part of the YIT-developed MotorCenter concept, focused on products and
services for motorists, technical specialty shops and the recreational
activities industry.
YIT will realise the Finnish Nature Centre Haltia in Nuuksio, Espoo The project
will feature ecological timber construction, using only massive timber
structures and timber cladding, apart from the underground basement. The value
of the project is approximately EUR 11 million, and the construction work is
expected to be completed in early 2013.
According to an agreement signed during the third quarter, YIT will take
responsibility for the design, construction and maintenance of the Huhtasuo
comprehensive school and day care facility as well as life cycle services until
2033. The value of the project investment is approximately EUR 35 million, and
the total value of the lifecycle project is approximately EUR 55 million. The
day care facility will be constructed in two phases during 2012-2015.
Turn for the better in infrastructure services
Demand for infrastructure construction picked up slightly towards the end of
the review period, but competition in the field continued to be tight.
Investments have decreased in the municipal sector and decision-making has been
postponed. Major road projects are expected to start this year and next year,
including the construction and renovation of the E18 motorway between
Koskenkylä and Kotka. A consortium formed by YIT, Destia and Meridiam
Infrastructure Finance II S.á.r.l. was selected as the preferred bidder for the
project, which will be realised using the lifecycle model. The project has been
granted an order authorisation of EUR 650 million, within which the agreement
negotiations following the tendering process will be held with the Finnish
Transport Agency. The aim is to sign the service agreement in November 2011,
and the construction of the motorway is expected to begin towards the end of
2011. The road section is expected to be completed in full by the end of 2015.
Activity in infrastructure services improved during the third quarter, and the
order backlog of YIT's infrastructure services strengthened. YIT won, among
others, the project for constructing a cover over Motorway 3 in Hämeenlinna,
Finland, with a value of approximately EUR 30 million. The construction of the
cover will begin in September 2011, and the entire project will be completed in
phases during spring 2013. In addition, YIT signed an agreement on an
excavation project for the Niittykumpu station and metro tunnel for Helsinki's
westward metro line. The total value of the project is EUR 21.6 million. The
excavation work began in September 2011 and the contract is due for completion
in December 2013.
In addition, opportunities will open up in road and regional maintenance
contracts, rock engineering and investments in mining operations.
INTERNATIONAL CONSTRUCTION SERVICES
Key figures
1-9/11 1-9/10 Change 7-9/11 7-9/10 Change
-----------------------------------------------------------------------------
Revenue, EUR million 343.3 330.9 4% 122.5 111.9 9%
-----------------------------------------------------------------------------
Operating profit, EUR million 19.8 21.3 -7% -0.9 9.2
-----------------------------------------------------------------------------
Operating profit margin, % 5.8 6.4 -0.7 8.2
-----------------------------------------------------------------------------
9/11 9/10 Change 9/11 6/11 Change
----------------------------------------------------------------------
Order backlog, EUR million 850.1 884.8 -4% 850.1 896.4 -5%
----------------------------------------------------------------------
In International Construction Services, residential demand remained at a good
level in the review period, and the segment's residential sales were strong in
the third quarter. Revenue remained at the level of the previous year during
the review period, and was EUR 343.3 million (1-9/2010: EUR 330.9 million). The
operating profit for the third quarter increased by 9 percent from the previous
year to EUR 122.5 million (7-9/2010: EUR 111.9 million). The segment's
residential sales have also continued at a favourable level in October.
The operating profit for the review period decreased slightly from the previous
year to EUR 19.8 million (1-9/2010: EUR 21.3 million). The operating profit of
the segment includes EUR -2.2 million (1-9/2010: EUR -0.3 million) of borrowing
costs according to IAS 23. The operating profit for the third quarter decreased
from the previous year to EUR -0.7 million (7-9/2010: EUR 9.2 million). The
operating profit for the third quarter includes EUR -0.9 million (7-9/2010: EUR
-0.2 million) of borrowing costs according to IAS 23.
Excessive levels of ammonia have been found in residential units built by the
company in St. Petersburg. The cause for the above-norm ammonia level is an
additive in concrete used by the supplier. The segment's profitability is
weakened by the costs incurred for rectifying the ammonia problem, which the
company currently estimates at EUR 10 million. A cost provision of the said
amount has been made for covering these costs in the third quarter. YIT is
negotiating over compensation with insurance companies and concrete suppliers.
By the end of September 2011, YIT has received 50 complaints from its customers
in connection with the odour problem in the residential units. At the end of
September, YIT redeemed one residential unit and agreed on repairs to eight
other residential units. In addition, YIT has withdrawn 83 completed
residential units from sale.
The sale of projects at an earlier stage of construction than before had an
effect on the recognition of revenue and operating profit: only a limited
amount of revenue is recognised for projects that are sold in their early stage
of construction. The volume of project contracting increased in the Baltic
countries during the third quarter, which impaired the segment's average
profitability.
The order backlog decreased by 4 percent compared to the previous year and 5
percent from the level of June 2011. The segment's order backlog was decreased
by the weakening of the ruble, which had an impact of EUR -42.1 million in
January-September. The order backlog includes two housing projects whose
construction was halted in Russia in October 2008 due to market uncertainties.
At the end of September 2011, the value of projects that were still suspended
amounted to EUR 83 million (9/2009: EUR 161 million). Restarting the suspended
projects will not increase the order backlog.
The costs of completing the current residential and business premises
development projects amounted to EUR 276.0 million at the end of September
2011.
The segment's capital tied into plot reserves totalled EUR 349.8 million
(9/2010: EUR 282.8 million) at the end of September. The plot reserves included
2,453,000 (9/2010: 2,376,000) m2 of floor area of residential plots and 694,000
(9/2010: 699,000) m2 of floor area of plots for business premises in Russia,
the Baltic countries, the Czech Republic and Slovakia.
Strong residential sales volume continued in Russia
Russia generated 82 percent (1-9 /2010: 90%) of the revenue of International
Construction Services for January-September. Revenue decreased by 5 percent in
Russia compared with the previous year, amounting to EUR 280.8 million
(1-9/2010: EUR 297.1 million).
The capital tied into plot reserves in Russia totalled EUR 269.4 million
(9/2010: EUR 208.4 million) at the end of September. The plot reserves included
2,117,000 (9/2010: 2,025,000) m2 of floor area of residential plots and 551,000
(9/2010: 563,000) m2 of floor area of plots for business premises.
In Russia, the focus of operations is on residential development projects in St
Petersburg, Moscow and cities in the Moscow region, Yekaterinburg,
Rostov-on-Don and Kazan. YIT won the plot auction held in the city of
Serpukhov, located 100 kilometres from Moscow, during the third quarter. YIT
estimated that it will start its first residential project in Serpukhov during
the last quarter of 2011.
In September, the Kratovo detached house project constructed by YIT in the
Moscow region won the RREF award for best detached house development project in
September. YIT's Triniti residential building entity in St. Petersburg,
currently under construction, won the best residential project category in the
“Quality leader in construction 2011” competition in St. Petersburg. The
residential building project fared well in all stages of the competition, and
it was chosen the Finnish model project in Northwest Russia.
During January-September, YIT sold a total of 2,414 residential units
(1-9/2010: 2,216) in Russia, of which 957 were sold in the third quarter
(7-9/2010: 717). Residential sales have 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 increased in
Russia, and in the third quarter, the customer has taken out a housing loan in
39 percent of YIT's residential sales.
Residential sales were supported by the piling up of the demand for new housing
and continued moderate interest rates of mortgages. Residential sales focused
increasingly on projects at an early stage of construction in Russia during the
review period, meaning that only a limited amount of revenue is recognised for
the sold residential units.
Housing prices increased at a moderate rate during the review period in Russia,
and YIT slightly increased the prices of its residential units throughout
Russia.
YIT has actively started new residential projects in Russia, and the aim is to
increase the number of residential start-ups during 2011 compared to 2010 in
accordance with the market situation. The number of residential start-ups in
the third quarter remained on par with the previous year, amounting to 665
residential units (7-9/2010: 671). The number of residential units for sale has
been carefully increased during the year, amounting to 4,702 at the end of
September (9/2010: 3,931). The number of completed unsold residential units
decreased from the previous year, amounting to 394 at the end of September
(9/2010: 602). Of the residential units under construction, 33 percent had been
sold (9/2010: 43%).
A total of 882 residential units (1-9/2010: 940) were completed in Russia
during the review period. After the handover of residential projects, YIT
offers its customers service and maintenance. At the end of the review period,
YIT was responsible for the service and maintenance of approximately 9,500
residential units.
Residential construction in Russia, residential units
1-9/11 1-9/10 Change 7-9/11
4-6/11 Change
--------------------------------------------------------------------------------
--------------
Sold 2,414 2,216 9% 957
782 22%
--------------------------------------------------------------------------------
--------------
Start-ups 2,905 2,543 14% 665
1,089 -39%
--------------------------------------------------------------------------------
--------------
Completed 1) 882 940 -6% 539
238 126%
--------------------------------------------------------------------------------
--------------
Under construction at the end of the period 2) 6,472 5,797 12% 6,472
6,346 2%
--------------------------------------------------------------------------------
--------------
- of which sold at the end of the period 2,164 2,468 -12% 2,164
1,762 23%
--------------------------------------------------------------------------------
--------------
For sale at the end of the period 4,702 3,931 20% 4,702
4,993 -6%
--------------------------------------------------------------------------------
--------------
- of which completed 394 602 -35% 394
409 -4%
--------------------------------------------------------------------------------
--------------
1) Completion of the projects requires commissioning by the authorities.
2) At the end of September 2011, YIT had 365 (9/2010: 928) residential units at
Russian sites whose construction was suspended in the autumn of 2008. These
residential units are not included in the figure for residential units under
construction shown in the table. Changes in the number of residential units may
take place after the start of construction due to the division or combination
of residences.
Construction of business premises still on a low level in Russia
YIT's volume in the Russian business premises market remained at a low level
during the review period. During the third quarter, YIT started the
construction of a small shopping centre at its Pushkino residential area in the
Moscow region. Marketing of the Gorelovo industrial park close to St.
Petersburg has been continued. The competitive advantages of the area are its
good location and completed infrastructure connections. Interest in the area
has increased, and negotiations with potential customers will continue. In some
projects the clearly increased uncertainty of the general macroeconomic
development has delayed the decision-making of clients.
Residential demand improved in the Baltic countries and Central Eastern Europe
YIT's aim is to increase its residential production in the Baltic and Central
Eastern European countries. The volume of YIT's residential production in these
countries continued to grow during the third quarter. Estonia, Latvia,
Lithuania, the Czech Republic and Slovakia accounted for 18 percent (1-9/2010:
10%) of the revenue of International Construction Services for
January-September. Revenue generated in these countries increased by 83 percent
compared to the year before to EUR 61.9 million (1-9/2010: EUR 33.8 million).
The capital tied into plot reserves in the Baltic countries, the Czech Republic
and Slovakia totalled EUR 80.4 million (9/2010: EUR 74.5 million) at the end of
September. The plot reserves included 336,000 (9/2010: 351,000) m2 of floor
area of residential plots and 143,000 (9/2010: 136,000) m2 of floor area of
plots for business premises.
The picking up of project contracting in the Baltic countries increased the
operational volume. The weaker profitability of competitive tendering compared
to residential development projects and its increased share of the segment's
revenue impaired the segment's profitability in the third quarter. YIT aims to
shift the focus of its operations further from project contracting to
residential development projects with new residential start-ups.
The construction of 468 (1-9/2010: 329) residential units was started in
Estonia, Latvia, Lithuania and the Czech Republic during January-September. Of
the start-ups, 152 took place in the third quarter (7-9/2010: 96). At the end
of September, there were 698 (9/2010: 329) residential units under
construction. During the review period, the housing prices remained stable.
YIT's residential sales inventory has improved 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-September, a total of 267
(1-9/2010: 33) residential units were sold in these countries, of which 111
were sold in July-September (7-9 /2010: 13). At the end of September, there
were 645 (9/2010: 336) residential units for sale, of these 130 were (9/2010:
24) completed. The number of residential units completed during the review
period was 141 (1-9/2010: 0).
Residential construction in the Baltic countries and Central Eastern Europe,
residential units
1-9/11 1-9/10 Change 7-9/11
4-6/11 Change
--------------------------------------------------------------------------------
-----------
Sold 267 33 709% 111
99 12%
--------------------------------------------------------------------------------
-----------
Start-ups 468 329 42% 152
181 -16%
--------------------------------------------------------------------------------
-----------
Completed 141 0 60
0
--------------------------------------------------------------------------------
-----------
Under construction at the end of the period 698 329 112% 698
611 14%
--------------------------------------------------------------------------------
-----------
- of which sold at the end of the period 183 17 976% 183
108 69%
--------------------------------------------------------------------------------
-----------
For sale at the end of the period 645 336 92% 645
609 6%
--------------------------------------------------------------------------------
-----------
- of which completed 130 24 442% 130
106 23%
--------------------------------------------------------------------------------
-----------
BUILDINGS AND INDUSTRY NEED ENERGY-SAVING SERVICES
YIT has created a three-part action programme aimed at maintaining its position
as a leader in constructing and maintaining sustainable living environments.
YIT's aim is to construct and maintain future living environments in a manner
that increases the quality factors of life and minimises the use of natural
resources. In addition, YIT continuously develops its leading technological
expertise in implementing energy-efficient and environmentally friendly
building system solutions and renewable energy production solutions for
residential environments.
YIT is also focusing on implementing distributed energy production solutions.
YIT has continued the product development of wind power by developing
foundations for elevated wind power plants, aiming to provide added value
particularly to wind power projects constructed in wooded areas.
Under an agreement with the City of Porvoo, signed in the third quarter, YIT
will deliver four energy-efficient day care centres based on the lifecycle
model. YIT will be responsible for the Aurinkopelto, Omenatarha, Ylä-Haikkoo
and Peiponpesä day care centres' design, construction, energy solutions and
property maintenance services and energy consumption for 20 years. The total
estimated construction cost of the day care centres is EUR 11 million, and the
construction work is expected to be completed in summer 2012. Energy-efficiency
and the utilisation of renewable energies will be implemented through
structural solutions, underfloor heating, the combination of terrestrial heat
and solar collectors, LED technology and motion detectors used in the lighting,
and presence-based ventilation, among other solutions.
In Germany, YIT secured a contract according to which the company will deliver
technical building services totalling EUR 8 million to the Urban Development
and Environment Authority's (BSU) new building in Hamburg, thereby reducing
energy consumption and the use of natural resources. Two heat pumps, each with
an output of 305 kW, will be responsible for heating the building, while
chiller waste heat will be used to heat water. A geothermal system will provide
passive cooling, and highly efficient heat recovery systems and 14 ventilation
and air-conditioning systems will provide a pleasant climate.
In addition, according to an agreement signed during the third quarter, YIT
will deliver energy-saving solutions to the Leibniz-Rechenzentrum in Garching,
Germany, focusing particularly on cooling technology to utilise the heat
produced by one of the world's fastest computers located in the centre for
heating the building.
An energy-saving project realised by YIT for the City of Jyväskylä has achieved
annual savings of 30 percent in electric energy at a training ice rink,
corresponding to savings of approximately EUR 80,000. In addition to reducing
energy consumption, the indoor conditions at the ice rink have improved
considerably. Recently, YIT also realised the renewal of approximately 120
ventilation blowers into more energy-efficient ones in 16 properties belonging
to the City of Jyväskylä through a five-year ESCO saving and financing
agreement.
PERSONNEL
In January-September 2011, the Group employed 26,229 (1-9/2010: 23,796) people
on average. At the end of the review period, the Group employed 26,502 (9/2010:
25,943) people.
The cost effect of YIT's share-based incentive scheme was about EUR 3.1 million
in January-September (1-9/2010: EUR 2.5 million).
Personnel by business segment 9/11 9/10 Change 9/11 6/11
Change
--------------------------------------------------------------------------------
---
Building Services Northern Europe 16,273 15,845 3% 16,273 16,269
0%
--------------------------------------------------------------------------------
---
Building Services Central Europe 3,569 3,849 -7% 3,569 3,597
-1%
--------------------------------------------------------------------------------
---
Construction Services Finland 3,416 3,221 6% 3,416 3,730
-8%
--------------------------------------------------------------------------------
---
International Construction Services 2,837 2,681 6% 2,837 2,785
2%
--------------------------------------------------------------------------------
---
Corporate Services 407 347 17% 407 426
-4%
--------------------------------------------------------------------------------
---
YIT Group total 26,502 25,943 2% 26,502 26,807
-1%
--------------------------------------------------------------------------------
---
Personnel by country/region 9/11 9/10 Change
9/11 6/11 Change
--------------------------------------------------------------------------------
------------------
Finland 9,377 9,333 0%
9,377 10,031 -7%
--------------------------------------------------------------------------------
------------------
Sweden 4,790 4,296 11%
4,790 4,681 2%
--------------------------------------------------------------------------------
------------------
Norway 3,623 3,461 5%
3,623 3,423 6%
--------------------------------------------------------------------------------
------------------
Germany 2,677 2,883 -7%
2,677 2,706 -1%
--------------------------------------------------------------------------------
------------------
Russia 2,516 2,397 5%
2,516 2,465 2%
--------------------------------------------------------------------------------
------------------
Denmark 1,370 1,462 -6%
1,370 1,369 0%
--------------------------------------------------------------------------------
------------------
Baltic countries 1,092 1,131 -3%
1,092 1,074 2%
--------------------------------------------------------------------------------
------------------
Other countries (Central Europe excluding Germany) 1,057 980 8%
1,057 1,058 0%
--------------------------------------------------------------------------------
------------------
YIT Group total 26,502 25,943 2%
26,502 26,807 -1%
--------------------------------------------------------------------------------
------------------
YIT wants to take care of its personnel and be a desired employer in the future
as well. The most important targets for development with regard to its
personnel are YIT's culture, competence management and administration and the
well-being of employees. YIT's culture means, among other things, everyday
operations guided by the Group's strong values and ethical guidelines. All of
these are promoted across different functions and countries in accordance with
each unit's needs and development phases.
For example, this autumn two Finnish universities of applied sciences will
begin a “YIT studies” programme, with the studies taking place with YIT
personnel as instructors and involving several construction site visits, for
example. The aim is to support the availability of competent personnel in the
future. The fourth internal manager training course is about to begin in
Russia, with YIT employees developing as people and business leaders and
becoming familiar with YIT's management practices. In the Nordic countries, on
the other hand, project management and work safety training is underway.
During the third quarter, YIT was awarded the title “Most responsible summer
employer in Finland” in a competition that emphasised, among other things, the
meaningfulness of summer job tasks, induction and the instruction of the summer
employees, equality and fairness.
RESOLUTIONS PASSED AT THE ANNUAL GENERAL MEETING
YIT Corporation's Annual General Meeting was held on March 11, 2011. The Annual
General Meeting adopted the 2010 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, Eino Halonen, Antti Herlin and Satu Huber
were re-elected as Board members. In addition, Michael Rosenlew was elected as
a new Board member.
In its organisational meeting on March 11, 2011, the Board elected the chairmen
and members of the Audit Committee and the Nomination and Rewards 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 11, 2011. 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 2011 (2010: EUR 149,216,748.22), and the
number of shares outstanding was 127,223,422 (2010: 127,223,422).
Treasury shares and authorisations of the Board of Directors
In accordance with the Limited Liability Companies Act, the 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 11, 2011, to authorise the Board of Directors to
decide on purchases of the company's shares and on share issues as proposed by
the Board of Directors. The share issue authorisation also includes an
authorisation to decide on the conveyance of treasury shares.
YIT Corporation held 2,145,000 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.
YIT Corporation's Board of Directors confirmed the rewards for the 2010 earning
period under the share-based incentive scheme for YIT's management on April 28,
2011, which were conveyed as a directed share issue without consideration
during the review period. In the share issue, 196,910 YIT Corporation shares
were issued and conveyed without consideration to the key persons participating
in the Share Ownership Plan according to the terms and conditions of the plan.
By the end of the review period, 3,302 shares had been returned to YIT. At the
end of the review period, the company held 1,951,392 own shares. During the
review period, no shares in the parent company were owned by subsidiaries.
At the end of the period, the parent company's Board of Directors did not have
authorisations to issue convertible bonds or bonds with warrants.
Trading in shares
The price of YIT's share was EUR 18.65 at the beginning of the year (January 1,
2010: EUR 14.44). The closing rate of the share on the last trading day of the
review period was EUR 11.33 (September 30, 2010: EUR 17.39). The share price
decreased by approximately 40 percent during January-September. The highest
price of the share in January-September was EUR 21.92 (1-9/2010: EUR 17.96),
the lowest was EUR 10.10 (1-9/2010: EUR 12.98) and the average price was EUR
17.54 (1-9/2010: EUR 15.98). Share turnover on Nasdaq OMX in January-September
amounted to 101,015,422 shares (1-9/2010: 102,882,735). The value of turnover
was EUR 1,778.2 million (1-9:2010: EUR 1,644.8 million).
YIT Corporation's market capitalisation at the end of the review period was EUR
1,419.3 million (9/2010: EUR 2,175.1 million). The market capitalisation has
been calculated excluding the shares held by the company.
Number of shareholders and flagging notifications
At the end of September 2011, the number of registered shareholders was 33,763
(9/2010: 32,751). At the end of June 2011, the number of shareholders was
32,975. At the end of September, a total of 35.0 percent (9/2010: 36.3%) of the
shares were owned by nominee-registered and non-Finnish investors.
During January-September, 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.
MAJOR SHORT-TERM BUSINESS RISKS AND RISK MANAGEMENT
YIT has specified the major risk factors and their management from the point of
view of the Group as a whole, taking the special characteristics of YIT's
business operations and environment into consideration. Risks are divided into
strategic, operational, financial and event risks.
YIT has developed the Group's business structure to be balanced and tolerant of
economic fluctuations. The share of steadily developing service and maintenance
operations has been increased. Cash flow-generating (building system and
industrial services, contracting) and capital-intensive business operations
(residential and commercial development production) balance the risks related
to business operations and the use of capital and enable better risk management
at the Group level.
Operations have been expanded geographically so that economic fluctuations
impact operations at different times in different markets. Continuous
monitoring and analysis make it possible to react quickly to changes in the
operating environment and also to utilise the business opportunities provided
by the changes.
The Group's aim is to grow profitably, both organically and through
acquisitions. The building services operations in Central Europe have grown as
the result of the acquisition completed at the beginning of September 2010. The
integration and development of the acquired companies has proceeded as planned.
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. A strong increase in interest rates is a
key risk related to the demand for residential units.
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. No write-offs were made to plots in the review period.
Financing and financial risks include liquidity, credit and counterparty,
interest rate and currency risks and risks related to the reporting process.
Financing and financial risks are managed through accounting and financing
policies, internal control as well as internal and external audit.
YIT's most significant currency risk is related to investments in ruble terms.
Capital invested in Russia totalled EUR 472.7 million (6/2011: EUR 531.9
million) at the end of the period. The amount of net equity investments at the
end of the period was EUR 382.1 million (6/2011: EUR 414.4 million). The net
investments in the Russian subsidiaries are unhedged in accordance with the
treasury policy, and a potential devaluation of the ruble would have a negative
impact equal to the amount of equity on the Group's shareholders' equity. Debt
investments amounted to EUR 90.7 million (6/2011: EUR 117.9 million) at the end
of the period, 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 and sudden and unforeseen material damage to premises, project sites
and other property, resulting from, for example, fire, collapse and 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 was published in the Annual Report 2010. Financing risks are
described in more detail in the notes to the financial statements for 2010.
OUTLOOK FOR 2011
YIT Corporation revised its outlook regarding operating profit for 2011 in a
stock exchange release on October 12, 2011. YIT reiterates its estimate issued
on October 12, 2011, according to which the total operating profit of all its
business segments will increase in 2011 compared to 2010. In its outlook issued
in connection with the financial statements for 2010 (February 4, 2011), YIT
estimated that in 2011, the combined operating profit of the business segments
would grow clearly compared to 2010.
Earlier guidance:
YIT estimated that in 2011, the combined revenue of the business segments will
grow and operating profit will grow clearly compared to 2010.
New guidance:
YIT estimates that in 2011, the combined revenue and operating profit of the
business segments will grow compared to 2010.
YIT estimates residential sales to continue to be good in both Finland and
Russia. In the short term, however, the times-to-sale of residential units may
be prolonged. In particular, residential construction activity in Russia,
German building services and Building Services Northern Europe will provide
opportunities for improving profitability.
The clearly increased uncertainty of the general macroeconomic development may
have a negative effect also on decision-making by YIT's customers and thereby
the development and performance of YIT's business operations.
The profit outlook is based on the segment-level reporting, i.e. recognition of
income based on the percentage of completion.
Building Services Northern Europe
In Building Services Northern Europe, the service and maintenance market is
estimated to grow at a faster rate than the project market, which is dependent
on new investments. The opportunities for growth in service and maintenance are
favourable in all Nordic countries. The building system services market is
developing in the Baltic countries and Russia, but it will take some time for
the culture of purchasing services to consolidate itself. New investments in
building systems are expected to begin to increase slightly compared to the low
level of the previous year, and typically a growth in new investments can be
seen in the demand for building system services with a delay. New investments
in building systems are expected to grow by 2-3 percent in business premises
construction and 3-5 percent in residential construction during 2011. Due to
market uncertainty, customer's investment decisions may, however, take longer
than before.
The efficiency enhancement measures of companies and government open up
opportunities for the outsourcing of real estate services. Investments by
industrial customers began to increase in Finland in the previous year, and
their moderate increase is expected to continue. The demand for industrial
maintenance services will continue to be relatively steady.
Building Services Central Europe
In Building Services Central Europe, the service and maintenance market as well
as the project market, which is dependent on new investments, are expected to
grow at the same rate. The opportunities for growth in service and maintenance
are favourable, particularly in Germany. The building system services market in
Central Eastern Europe (Poland, the Czech Republic and Romania) is developing.
New investments in building systems have recovered to a relatively good level
in the countries where YIT operates in Central Europe. In spite of market
uncertainty, new investments in building systems are expected to increase by
2-3 percent in 2011. Investments by industrial customers are at a good level,
and the demand for business premises has also increased in 2011.
YIT has an extensive network of local offices in both the Nordic countries and
the markets where Building Services Central Europe operates, and a strong
market position in building system and industrial service and maintenance
operations, projects and energy-efficiency services. Growth in the demand for
energy-efficiency services is possible in the next few years with high energy
prices and tightening environmental legislation, particularly in Austria and
Germany. There are many small companies operating in the technical building
system market, and the consolidation of the market will provide opportunities
for acquisitions. YIT's strength is its extensive service portfolio and
possibility to guarantee a high level of service to its customers. YIT's goal
is to be the leading provider of technical system maintenance in the Nordic
countries and Central Europe.
During the most recent slump, the building system services market in Central
Eastern Europe decreased significantly due to a decrease in foreign investments
and low domestic demand. In Poland, the market is expected to continue to
recover, but in the Czech Republic the market is expected to improve slowly.
The financial situation in the rest of Europe has a strong effect on the
development of the Central Eastern Europe market.
Construction Services Finland
With regard to Construction Services Finland, housing demand is expected to
continue to be good in the long term. In Finland, residential demand is
supported in the long term by structural factors, such as migration, population
growth and decreasing family sizes. According to the construction industry's
estimates, the construction of 30,500 residential units will start in 2011,
while VTT's long-term estimate of the need for new housing is 35,000
residential units per year. In the short term, the risk of increasing
unemployment rates may slow down consumers' decision-making.
The supply situation of new residential units has normalised, and the supply of
new residential units on the market is higher than in recent years. YIT
actively started new residential projects in 2010 and 2011, which offers the
company a solid starting point for the rest of 2011.
The increase in housing prices has levelled off, and YIT expects stable prices
in the future. Also, the increase in construction costs has levelled off. YIT's
good plot reserves and geographically extensive operations enable continuing a
high level of residential development start-ups and residential production in
2011. YIT aims to keep its residential start-ups in 2011 on par with the
previous year, and YIT is well prepared to adjust its residential production
according to the market situation.
The business premises market has picked up: investors' yield requirements have
stabilised, and business premises rents have turned to an increase during the
third quarter. Vacancy rates are still high, and new investments in office
property is likely to remain at a relatively low level. A number of offices,
especially old and vacant ones, will not return to use as business premises due
to their poor location or condition. The construction of logistics and business
properties is expected to remain stable. Due to market uncertainty, customer's
decision-making may take longer. The need for renovation will rise steadily.
YIT has major road projects underway in infrastructure services, and the
Finnish infrastructure market will see new traffic-related projects being
started in 2011 and 2012. Opportunities will also open up in road and regional
maintenance contracts, rock engineering and investments in mining operations.
The need for stabilising public finance has an impact on the public sector's
investments, and there is an element of uncertainty connected with the project
start-up decisions. The competition in infrastructure construction will remain
tight, but the latter half of 2011 is expected to be brisker than the first two
quarters. YIT has special expertise in infrastructure and a solid position as
the largest private provider of road maintenance services in Finland.
International Construction Services
YIT aims to consolidate its position throughout the business area of the
International Construction Services segment.
There is a great need for new housing in Russia, and therefore the demand
outlook for residential units aimed at YIT's customer segment is strong in the
long term. The demand for housing in Russia is supported by continued
relatively good consumer confidence and continued good availability of housing
loans. However, the interest rates of mortgage loans have slightly increased.
In Russia, housing demand also depends on oil prices and the ruble exchange
rate.
During the review period, housing prices increased at a moderate rate in
Russia. The supply in the residential market has normalised with the start-up
of new residential projects. YIT has strengthened its reputation as a reliable
construction company and developed its sales process. The availability of loans
to customers has been improved through extensive cooperation with banks.
The residential market has also picked up in the Baltic countries and Central
Eastern Europe. Consumers need more room and quality of housing in the long
term in the Baltic countries and Central Eastern Europe. Residential demand has
improved in these countries. The financial situation in the rest of Europe has
a strong effect on the development of the Baltic and Central Eastern Europe
markets.
Residential start-ups will be increased in 2011 in accordance with demand
throughout the area of operations of International Construction Services:
Russia, the Baltic countries, the Czech Republic and Slovakia. YIT aims to
increase the number of residential start-ups in 2011 compared to 2010. So far,
the business premises market has been softer than residential construction in
all of the countries where International Construction Services are present.
Construction of offices is low in Russia, but the demand for industrial and
business premises is increasing. Several business premises projects are being
prepared in the Baltic countries and Central Eastern Europe and will probably
start before the end of the year.
Residential demand and housing prices are expected to increase throughout the
area of operations of International Construction Services, particularly in
Russia, which provides opportunities for improving profitability. Construction
costs are expected to increase in all of the countries in which International
Construction Services operates in 2011.
INTERIM REPORT JAN 1 - SEPT 30, 2011: TABLES
The information presented in the Interim Report has not been audited.
1. Key figures of YIT Group
Key figures
YIT Group figures by quarter
Segment information by quarter
2. Consolidated financial statements Jan 1 - Sept 30, 2011
Consolidated income statement January 1 - Sept 30, 2011
Statement of comprehensive income January 1 - Sept 30, 2011
Consolidated income statement July 1 - Sept 30, 2011
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
3. Notes
Accounting principles of the Interim Report, Foreign Exchange Rates
Financial risk management
Segment information
Unusual items affecting operating profit
Business combinations and disposals
Changes in property, plant and equipment
Inventories
Notes on equity
Borrowings
Change in contingent liabilities and assets and commitments
Transactions with associated companies
1. KEY FIGURES OF YIT GROUP
KEY FIGURES
9/11 9/10 Change 12/10
--------------------------------------------------------------------------------
-----------------------------------------
Earnings per share, EUR
0.72 0.47 53% 1.12
--------------------------------------------------------------------------------
-----------------------------------------
Diluted earnings per share, EUR
0.72 0.47 53% 1.12
--------------------------------------------------------------------------------
-----------------------------------------
Equity per share, EUR
6.93 6.30 10% 7.04
--------------------------------------------------------------------------------
-----------------------------------------
Average share price during the period, EUR
17.54 15.98 10% 16.35
--------------------------------------------------------------------------------
-----------------------------------------
Share price at the end of period, EUR
11.33 17.39 -35% 18.65
--------------------------------------------------------------------------------
-----------------------------------------
Market capitalization, MEUR
1,419.3 2,175.1 -35% 2,332.7
--------------------------------------------------------------------------------
-----------------------------------------
Weighted average share-issue adjusted number of shares outstanding, thousands
125,160 125,078 0% 125,078
--------------------------------------------------------------------------------
-----------------------------------------
Weighted average share-issue adjusted number of shares outstanding, thousands,
diluted 125,160 125,078 0% 125,078
--------------------------------------------------------------------------------
-----------------------------------------
Share-issue adjusted number of shares outstanding at end of period, thousands
125,272 125,078 0% 125,078
--------------------------------------------------------------------------------
-----------------------------------------
Net interest-bearing debt at the end of period, MEUR
755.0 636.6 19% 640.9
--------------------------------------------------------------------------------
-----------------------------------------
Return on investment, from the last 12 months, %
15.5 10.6 14.3
--------------------------------------------------------------------------------
-----------------------------------------
Equity ratio, %
29.2 29.2 31.9
--------------------------------------------------------------------------------
-----------------------------------------
Gearing ratio, %
86.8 80.5 72.6
--------------------------------------------------------------------------------
-----------------------------------------
Gross capital expenditures, MEUR
43.9 99.1 - 56% 129.8
--------------------------------------------------------------------------------
-----------------------------------------
% of revenue
1.4 4.0 3.4
--------------------------------------------------------------------------------
-----------------------------------------
Unrecognised order backlog at the end of period, MEUR
3,738.3 3,727.5 0% 3,535.7
--------------------------------------------------------------------------------
-----------------------------------------
of which order backlog outside Finland
1,969.6 2,122.1 - 7% 1,857.7
--------------------------------------------------------------------------------
-----------------------------------------
Average number of personnel
26,229 23,796 10% 24,317
--------------------------------------------------------------------------------
-----------------------------------------
YIT GROUP FIGURES BY QUARTER
7-9/11 4-6/11 1-3/11
10-12/1 7-9/10 4-6/10 1-3/10
0
--------------------------------------------------------------------------------
-----------------------------------
Revenue, MEUR 1 084.8 1.137.2 969.7
1.338.0 829.6 854.8 765.3
--------------------------------------------------------------------------------
-----------------------------------
Operating profit, MEUR 35.4 67.9 39.2
116.4 33.9 35.9 33.9
--------------------------------------------------------------------------------
-----------------------------------
% of revenue 3.3 6.0 4.0
8.7 4.1 4.2 4.4
--------------------------------------------------------------------------------
-----------------------------------
Financial income, MEUR 0.0 0.3 2.4
0.7 1.1 1.1 0.7
--------------------------------------------------------------------------------
-----------------------------------
Exchange rate differences, MEUR 0.0 -0.8 -1.3
-0.8 -2.3 -1.9 -2.3
--------------------------------------------------------------------------------
-----------------------------------
Financial expenses, MEUR -7.8 -4.4 -5.6
-3.1 -5.7 -7.2 -5.6
--------------------------------------------------------------------------------
-----------------------------------
Profit before taxes, MEUR 27.6 63.0 34.7
113.2 27.0 27.9 26.7
--------------------------------------------------------------------------------
-----------------------------------
% of revenue 2.5 5.7 3.6
8.5 3.3 3.3 3.5
--------------------------------------------------------------------------------
-----------------------------------
--------------------------------------------------------------------------------
-----------------------------------
Balance sheet total, MEUR 3 418.6 3 387.4 3 274.8
3 117.1 3 234.6 3.067.9 2.994.8
--------------------------------------------------------------------------------
-----------------------------------
--------------------------------------------------------------------------------
-----------------------------------
Earnings per share, EUR 0.15 0.37 0.20
0.65 0.16 0.16 0.15
--------------------------------------------------------------------------------
-----------------------------------
Equity per share, EUR 1) 6.93 7.00 6.64
7.04 6.30 6.35 6.08
--------------------------------------------------------------------------------
-----------------------------------
Share price at end of period, EUR 11.33 17.24 20.92
18.65 17.39 14.78 17.10
--------------------------------------------------------------------------------
-----------------------------------
Market capitalization, MEUR 1 419.3 2 159.7 2 616.6
2 332.7 2 175.1 1.848.7 2.138.8
--------------------------------------------------------------------------------
-----------------------------------
--------------------------------------------------------------------------------
-----------------------------------
Return on investment, from the last 12 months, % 15.5 15.6 14.0
14.3 10.6 10.7 11.3
--------------------------------------------------------------------------------
-----------------------------------
Equity ratio, % 29.2 29.7 28.5
31.9 29.2 31.8 30.2
--------------------------------------------------------------------------------
-----------------------------------
Net interest-bearing debt at the end of period, MEUR 755.0 702.7 626.1
640.9 636.6 514.8 496.0
--------------------------------------------------------------------------------
-----------------------------------
Gearing ratio, % 86.8 79.9 75.2
72.6 80.5 64.7 65.0
--------------------------------------------------------------------------------
-----------------------------------
--------------------------------------------------------------------------------
-----------------------------------
Gross capital expenditures, MEUR 20.6 14.6 8.7
.30.7 81.0 8.7 9.4
--------------------------------------------------------------------------------
-----------------------------------
Order backlog at the end of period, MEUR 3 738.3 3 796.9 3 699.0
3 535.7 3 727.5 3 329.2 3 152.5
--------------------------------------------------------------------------------
-----------------------------------
Personnel at the end of period 26 502 26.807 25.748
25.832 25.943 23.877 23.211
--------------------------------------------------------------------------------
-----------------------------------
SEGMENT INFORMATION BY QUARTER
Revenue by business segment (EUR million)
7-9/11 4-6/11 1-3/11 10-12/10
7-9/10 4-6/10 1-3/10
--------------------------------------------------------------------------------
----------------
Building Services Northern Europe 511.9 509.4 476.2 519.2
416.8 460.8 406.8
--------------------------------------------------------------------------------
----------------
Building Services Central Europe 210.8 191.1 177.1 258.7
134.2 86.9 70.4
--------------------------------------------------------------------------------
----------------
Construction Services Finland 269.4 332.3 289.5 294.2
279.7 275.2 252.9
--------------------------------------------------------------------------------
----------------
International Construction Services 122.5 120.5 100.3 139.7
111.9 112.1 106.9
--------------------------------------------------------------------------------
----------------
Other items -18.1 -16.4 -16.2 -24.2
-18.4 -20.7 -16.2
--------------------------------------------------------------------------------
----------------
YIT's segments total 1 096.5 1,136.9 1,026.9 1,187.6
924.2 914.3 820.8
--------------------------------------------------------------------------------
----------------
IFRIC 15 adjustments -11.6 0.3 -57.2 150.4
-94.6 -59.6 -55.5
--------------------------------------------------------------------------------
----------------
YIT Group total 1 084.9 1,137.2 969.7 1,338.0
829.6 854.7 765.3
--------------------------------------------------------------------------------
----------------
Operating profit by business segment (EUR million)
7-9/11 4-6/11 1-3/11 10-12/10 7-9/10
4-6/10 1-3/10
--------------------------------------------------------------------------------
-------------
Building Services Northern Europe 19.9 18.8 17.1 23.5 20.2
25.1 19.9
--------------------------------------------------------------------------------
-------------
Building Services Central Europe 7.9 12.1 4.0 8.9 2.7
3.1 1.7
--------------------------------------------------------------------------------
-------------
Construction Services Finland 21.1 32.8 25.6 29.4 29.3
26.4 23.1
--------------------------------------------------------------------------------
-------------
International Construction Services -0.9 12.3 8.4 13.4 9.2
7.6 4.6
--------------------------------------------------------------------------------
-------------
Other items -4.4 -5.7 -4.7 -5.5 -3.4
-5.1 -4.8
--------------------------------------------------------------------------------
-------------
YIT's segments total 43.6 70.3 50.4 69.7 57.9
57.1 44.5
--------------------------------------------------------------------------------
-------------
IFRIC 15 adjustments -8.2 -2.4 -11.2 46.7 -24.0
-21.2 -10.6
--------------------------------------------------------------------------------
-------------
YIT Group total 35.4 67.9 39.2 116.4 33.9
35.9 33.9
--------------------------------------------------------------------------------
-------------
Operating profit margin by business segment (%) 7-9/11 4-6/11 1-3/11 10-12/10 7-9/10
4-6/10 1-3/10
--------------------------------------------------------------------------------
-------------
Building Services Northern Europe 3.9 3.7 3.6 4.5 4.8
5.4 4.9
--------------------------------------------------------------------------------
-------------
Building Services Central Europe 3.7 6.3 2.3 3.4 2.0
3.6 2.4
--------------------------------------------------------------------------------
-------------
Construction Services Finland 7.8 9.9 8.8 10.0 10.5
9.6 9.1
--------------------------------------------------------------------------------
-------------
International Construction Services -0.7 10.2 8.4 9.6 8.2
6.8 4.3
--------------------------------------------------------------------------------
-------------
YIT's segments total 4.0 6.2 4.9 5.9 6.3
6.2 5.4
--------------------------------------------------------------------------------
-------------
YIT Group total 3.3 6.0 4.0 8.7 4.1
4.2 4.4
--------------------------------------------------------------------------------
-------------
International Construction Services segment's operating profit is weakened by a
provision of EUR 10 million related to the rectifying of the ammonia problem
booked in the third quarter of 2011. In the second quarter 2011, a EUR 3.0
million provision booked affects negatively Building Services Northern Europe's
operating profit and a EUR 5.0 million gain on the sale of Hungarian businesses
affects positively Building Services Central Europe's operating profit.
In 2010, the operating profit of Building Systems segment included EUR 6.3
million non- recurring expenses related to acquisitions made during the year.
Of the non-recurring items, EUR 1.4 million was recognised in the third quarter
of the year in Building Services Northern Europe and EUR 1.9 million in
Building Services Central Europe. EUR 3.0 million of non-recurring expenses
were booked in Building Services Central Europe in the fourth quarter.
Order backlog by business segment at end of period (EUR million)
9/11 6/11 3/11 12/10
9/10 6/10 3/10
--------------------------------------------------------------------------------
---------------------
Building Services Northern Europe 886.1 879.5 804.9 757.4
743.0 748.5 697.9
--------------------------------------------------------------------------------
---------------------
Building Services Central Europe 523.9 554.1 573.2 507.0
589.1 276.8 266.3
--------------------------------------------------------------------------------
---------------------
Construction Services Finland 1,289.3 1,239.5 1,176.0 1,173.2
1,205.2 1,154.7 905.4
--------------------------------------------------------------------------------
---------------------
International Construction Services 1) 850.1 896.4 862.7 870.8
884.8 946.8 1,013.2
--------------------------------------------------------------------------------
---------------------
Other items -60.3 -60.2 -61.2 -58.3
-55.2 -59.4 -45.8
--------------------------------------------------------------------------------
---------------------
YIT's segments total 3,489.0 3,509.4 3,355.6 3,250.1
3,366.9 3,067.4 2,837.0
--------------------------------------------------------------------------------
---------------------
IFRIC 15 adjustments 249.3 287.5 343.4 285.6
360.6 261.8 315.5
--------------------------------------------------------------------------------
---------------------
YIT Group total 3,738.3 3,796.9 3,699.0 3,535.7
3,727.5 3,329.2 3,152.5
--------------------------------------------------------------------------------
---------------------
1) At the end of September 2011, the value of projects that were still
suspended amounted to EUR 83 million (9/10: EUR 161 million)
2. CONSOLIDATED FINANCIAL STATEMENTS JAN 1 - SEPT 30, 2011
CONSOLIDATED INCOME STATEMENT JAN 1 - SEPT 30, 2011 (EUR million)
1-9/11 1-9/10 Change 1-12/10
--------------------------------------------------------------------------------
---------------------------------
Revenue
3,191.8 2,449.6 30% 3,787.6
--------------------------------------------------------------------------------
---------------------------------
of which activities outside Finland
1,873.3 1,381.4 36% 2,343.6
--------------------------------------------------------------------------------
---------------------------------
Other operating income and expenses
-3,019.7 -2,319.5 30% -3,531.1
--------------------------------------------------------------------------------
---------------------------------
Share of results of associated companies
-0.1 -0.3 -67% -0.5
--------------------------------------------------------------------------------
---------------------------------
Depreciation and write-downs
-29.5 -26.1 13% -35.9
--------------------------------------------------------------------------------
---------------------------------
Operating profit
142.5 103.7 37% 220.1
--------------------------------------------------------------------------------
---------------------------------
% of revenue
4.5 4.2 5.8
--------------------------------------------------------------------------------
---------------------------------
Financial income
2.7 2.9 -7% 3.7
--------------------------------------------------------------------------------
---------------------------------
Exchange rate differences
-2.1 -6.5 -68% -7.3
--------------------------------------------------------------------------------
---------------------------------
Financial expenses
-17.8 -18.5 -4% -21.7
--------------------------------------------------------------------------------
---------------------------------
Profit before taxes
125.3 81.6 54% 194.8
--------------------------------------------------------------------------------
---------------------------------
% of revenue
3.9 3.3 5.1
--------------------------------------------------------------------------------
---------------------------------
Income taxes 1)
-35.3 -23.6 50% -54.2
--------------------------------------------------------------------------------
---------------------------------
Profit for the report period
90.0 58.0 55% 140.6
--------------------------------------------------------------------------------
---------------------------------
% of revenue
2.8 2.4 3.7
--------------------------------------------------------------------------------
---------------------------------
--------------------------------------------------------------------------------
---------------------------------
Attributable to
--------------------------------------------------------------------------------
---------------------------------
Equity holders of the parent company
89.6 58.8 52% 140.3
--------------------------------------------------------------------------------
---------------------------------
Minority interests
0.4 -0.8 0.3
--------------------------------------------------------------------------------
---------------------------------
--------------------------------------------------------------------------------
---------------------------------
Earnings per share attributable to the equity holders of the parent company
--------------------------------------------------------------------------------
---------------------------------
Earnings per share, EUR
0.72 0.47 53% 1.12
--------------------------------------------------------------------------------
---------------------------------
Diluted earnings per share, EUR
0.72 0.47 53% 1.12
--------------------------------------------------------------------------------
---------------------------------
1) Taxes for the review period are based on the taxes for the whole financial
year.
STATEMENT OF COMPREHENSIVE INCOME JAN 1 - SEPT 30, 2011 (EUR million)
1-9/11 1-9/10 Change
1-12/10
--------------------------------------------------------------------------------
---
Profit for the report period 90.0 58.0 55%
140.6
--------------------------------------------------------------------------------
---
Other comprehensive income
--------------------------------------------------------------------------------
---
- Change in the fair value of interest derivatives -1.2 -2.3 -48%
-1.0
--------------------------------------------------------------------------------
---
-- Deferred tax 0.3 0.6 -50%
0.3
--------------------------------------------------------------------------------
---
- Change in translation differences -25.3 21.3
29.2
--------------------------------------------------------------------------------
---
- Other change -0.2 0.0
0.0
--------------------------------------------------------------------------------
---
Other comprehensive income. total -26.4 19.6
28.5
--------------------------------------------------------------------------------
---
Total comprehensive income 63.6 77.6 -18%
169.1
--------------------------------------------------------------------------------
---
--------------------------------------------------------------------------------
---
Attributable to
--------------------------------------------------------------------------------
---
Equity holders of the parent company 62.9 78.1 -19%
168.7
--------------------------------------------------------------------------------
---
Minority interests 0.7 -0.5
0.4
--------------------------------------------------------------------------------
---
CONSOLIDATED INCOME STATEMENT JUL 1 - SEPT 30, 2011 (EUR million)
7-9/11 7-9/10 Change
--------------------------------------------------------------------------------
---------------------
Revenue
1,084.8 829.6 31%
--------------------------------------------------------------------------------
---------------------
of which activities outside Finland
653.6 473.4 38%
--------------------------------------------------------------------------------
---------------------
Other operating income and expenses
-1,039.3 -786.7 32%
--------------------------------------------------------------------------------
---------------------
Share of results of associated companies
0.0 0.1
--------------------------------------------------------------------------------
---------------------
Depreciation and write-downs
-10.1 -9.1 11%
--------------------------------------------------------------------------------
---------------------
Operating profit
35.4 33.9 4%
--------------------------------------------------------------------------------
---------------------
% of revenue
3.3 4.1
--------------------------------------------------------------------------------
---------------------
Financial income
0.0 1.1
--------------------------------------------------------------------------------
---------------------
Exchange rate differences
0.0 -2.3
--------------------------------------------------------------------------------
---------------------
Financial expenses
-7.8 -5.7 37%
--------------------------------------------------------------------------------
---------------------
Profit before taxes
27.6 27.0 2%
--------------------------------------------------------------------------------
---------------------
% of revenue
2.5 3.3
--------------------------------------------------------------------------------
---------------------
Income taxes 1)
-8.7 -8.3 5%
--------------------------------------------------------------------------------
---------------------
Profit for the report period
18.9 18.7 1%
--------------------------------------------------------------------------------
---------------------
% of revenue
1.7 2.3
--------------------------------------------------------------------------------
---------------------
--------------------------------------------------------------------------------
---------------------
Attributable to
--------------------------------------------------------------------------------
---------------------
Equity holders of the parent company
18.6 19.8 -6%
--------------------------------------------------------------------------------
---------------------
Minority interests
0.3 -1.1
--------------------------------------------------------------------------------
---------------------
--------------------------------------------------------------------------------
---------------------
Earnings per share attributable to the equity holders of the parent company
--------------------------------------------------------------------------------
---------------------
Earnings per share, EUR
0.15 0.16 - 6%
--------------------------------------------------------------------------------
---------------------
Diluted earnings per share, EUR
0.15 0.16 - 6%
--------------------------------------------------------------------------------
---------------------
CONSOLIDATED BALANCE SHEET (EUR million)
9/11 9/10
Change 12/10
--------------------------------------------------------------------------------
--------------
ASSETS
--------------------------------------------------------------------------------
--------------
--------------------------------------------------------------------------------
--------------
Non-current assets
--------------------------------------------------------------------------------
--------------
Property, plant and equipment 109.7 104.0
5% 106.7
--------------------------------------------------------------------------------
--------------
Goodwill 347.5 351.0
-1% 350.9
--------------------------------------------------------------------------------
--------------
Other intangible assets 53.8 43.9
23% 50.5
--------------------------------------------------------------------------------
--------------
Shares in associated companies 2.6 2.9
-10% 2.7
--------------------------------------------------------------------------------
--------------
Other investments 3.4 2.0
70% 3.4
--------------------------------------------------------------------------------
--------------
Other receivables 15.4 15.7
-2% 15.9
--------------------------------------------------------------------------------
--------------
Deferred tax assets 55.8 59.4
-6% 44.7
--------------------------------------------------------------------------------
--------------
--------------------------------------------------------------------------------
--------------
Current assets
--------------------------------------------------------------------------------
--------------
Inventories 1,571.6 1,566.6
0% 1,484.9
--------------------------------------------------------------------------------
--------------
Trade and other receivables 1,034.7 897.0
15% 889.3
--------------------------------------------------------------------------------
--------------
Cash and cash equivalents 224.1 173.9
29% 148.3
--------------------------------------------------------------------------------
--------------
Assets held for sale 0.0 18.2
19.8
--------------------------------------------------------------------------------
--------------
Total assets 3,418.6 3,234.6
6% 3,117.1
--------------------------------------------------------------------------------
--------------
--------------------------------------------------------------------------------
--------------
EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
--------------
--------------------------------------------------------------------------------
--------------
Equity attributable to equity holders of the parent company
--------------------------------------------------------------------------------
--------------
Share capital 149.2 149.2
149.2
--------------------------------------------------------------------------------
--------------
Other equity 718.9 638.6
13% 730.8
--------------------------------------------------------------------------------
--------------
--------------------------------------------------------------------------------
--------------
Non-controlling interest 2.2 3.2
-31% 2.9
--------------------------------------------------------------------------------
--------------
--------------------------------------------------------------------------------
--------------
Total equity 870.3 791.0
10% 882.9
--------------------------------------------------------------------------------
--------------
--------------------------------------------------------------------------------
--------------
Non-current liabilities
--------------------------------------------------------------------------------
--------------
Deferred tax liabilities 88.3 86.3
2% 77.2
--------------------------------------------------------------------------------
--------------
Pension liabilities 26.6 28.8
-8% 26.9
--------------------------------------------------------------------------------
--------------
Provisions 53.9 49.3
9% 49.5
--------------------------------------------------------------------------------
--------------
Borrowings 536.4 524.2
2% 504.6
--------------------------------------------------------------------------------
--------------
Other liabilities 22.2 9.1
144% 10.3
--------------------------------------------------------------------------------
--------------
--------------------------------------------------------------------------------
--------------
Current liabilities
--------------------------------------------------------------------------------
--------------
Advances received 434.3 528.4
-18% 349.3
--------------------------------------------------------------------------------
--------------
Trade and other payables 895.2 866.8
3% 869.5
--------------------------------------------------------------------------------
--------------
Provisions 48.7 48.8
45.1
--------------------------------------------------------------------------------
--------------
Current borrowings 442.7 286.3
55% 284.6
--------------------------------------------------------------------------------
--------------
Liabilities of assets held for sale 0.0 15.6
17.2
--------------------------------------------------------------------------------
--------------
--------------------------------------------------------------------------------
--------------
Total equity and liabilities 3,418.6 3,234.6
6% 3,117.1
--------------------------------------------------------------------------------
--------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR million)
Attributable to equity
holders of the parent company
--------------------------------------------------------------------------------
-------------------------------------------------
Share Legal Other
Cumula Fair Treasu Retain Total Non-co Total
capita reserv reserv
tive value ry ed ntroll equity
l e e
transl reserv shares earnin ing
ation e gs intere differ st
ences
--------------------------------------------------------------------------------
-------------------------------------------------
Equity on January 1. 2011 149.2 2.0 0.0
-14.2 -2.4 -10.6 756.1 880.1 2.8 882.9
--------------------------------------------------------------------------------
-------------------------------------------------
Comprehensive income
--------------------------------------------------------------------------------
-------------------------------------------------
Profit for the period
89.6 89.6 0.4 90.0
--------------------------------------------------------------------------------
-------------------------------------------------
Other comprehensive income:
--------------------------------------------------------------------------------
-------------------------------------------------
Change in the fair value of
-1.2 -1.2 -1.2
interest derivatives
--------------------------------------------------------------------------------
-------------------------------------------------
- Deferred tax asset
0.3 0.3 0.3
--------------------------------------------------------------------------------
-------------------------------------------------
Change in translation differences
-24.8 -0.8 -25.6 0.3 -25.3
--------------------------------------------------------------------------------
-------------------------------------------------
Other change -0.2
0.0 -0.2 0.0 -0.2
--------------------------------------------------------------------------------
-------------------------------------------------
Comprehensive income, total 0.0 -0.2 0.0
-24.8 -0.9 0.0 88.8 62.9 0.7 63.6
--------------------------------------------------------------------------------
-------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
-------------------------------------------------
Dividend paid
-81.3 -81.3 -0.2 -81.5
--------------------------------------------------------------------------------
-------------------------------------------------
Share-based incentive scheme
--------------------------------------------------------------------------------
-------------------------------------------------
Transfer from retained earnings 0.2 0.0
0.0 0.2 0.2
--------------------------------------------------------------------------------
-------------------------------------------------
Share-based incentive scheme 2.9
0.9 1.3 5.1 5.1
--------------------------------------------------------------------------------
-------------------------------------------------
Transactions with owners, total 0.0 0.0 2.9
0.0 0.0 0.9 -80.0 -76.0 -0.2 -76.2
--------------------------------------------------------------------------------
-------------------------------------------------
Changes in ownership shares in subsidiaries
--------------------------------------------------------------------------------
-------------------------------------------------
Changes in group ownership shares
1.1 1.1 -1.1 0.0
in subsidiaries - no loss of control
--------------------------------------------------------------------------------
-------------------------------------------------
Changes in ownership shares in subsidiaries, total 0.0 0.0 0.0
0.0 0.0 0.0 1.1 1.1 -1.1 0.0
--------------------------------------------------------------------------------
-------------------------------------------------
Equity on September 30, 2011 149.2 2.0 2.9
-39.0 -3.3 -9.7 766.0 868.1 2.2 870.3
--------------------------------------------------------------------------------
-------------------------------------------------
Attributable to equity holders of the
parent company
--------------------------------------------------------------------------------
--------------------------------
Share Legal Other Cumula Fair
Treasu Retain Total Non-co Total
capita reserv reserv tive value
ry ed ntroll equity
l e e transl reserv
shares earnin ing
ation e
gs intere
differ
st
ences
--------------------------------------------------------------------------------
--------------------------------
Equity on January 1. 2010 149.2 1.7 11.6 -42.4 -1.7
-10.6 654.1 761.9 2.2 764.1
--------------------------------------------------------------------------------
--------------------------------
Comprehensive income
--------------------------------------------------------------------------------
--------------------------------
Profit for the period
58.8 58.8 -0.8 58.0
--------------------------------------------------------------------------------
--------------------------------
Other comprehensive income:
--------------------------------------------------------------------------------
--------------------------------
Change in the fair value of -2.3
-2.3 -2.3
interest derivatives
--------------------------------------------------------------------------------
--------------------------------
- Deferred tax asset 0.6
0.6 0.6
--------------------------------------------------------------------------------
--------------------------------
Change in translation differences 20.0
1.0 21.0 0.3 21.3
--------------------------------------------------------------------------------
--------------------------------
Other change
-2.3 -2.3 2.3 0.0
--------------------------------------------------------------------------------
--------------------------------
Comprehensive income, total 20.0 -1.7
57.5 75.8 1.8 77.6
--------------------------------------------------------------------------------
--------------------------------
Transactions with owners
--------------------------------------------------------------------------------
--------------------------------
--------------------------------------------------------------------------------
--------------------------------
Dividend paid
-50.5 -50.5 -0.8 -51.3
--------------------------------------------------------------------------------
--------------------------------
Transfer from retained earnings 0.3
-0.3 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------
Share-based incentive scheme
0.6 0.6 0.6
--------------------------------------------------------------------------------
--------------------------------
Transactions with owners, total 0.3
-50.2 -49.9 -0.8 -50.7
--------------------------------------------------------------------------------
--------------------------------
Equity on September 30, 2010 149.2 2.0 11.6 -22.4 -3.4
-10.6 661.4 787.8 3.2 791.0
--------------------------------------------------------------------------------
--------------------------------
CONSOLIDATED CASH FLOW STATEMENT (EUR million)
1-9/11 1-9/10
Change 1-12/10
--------------------------------------------------------------------------------
---------
Cash flows from operating activities
--------------------------------------------------------------------------------
---------
Net profit for the period 90.0 58.0
55% 140.6
--------------------------------------------------------------------------------
---------
Reversal of accrual-based items 91.6 87.3
5% 130.3
--------------------------------------------------------------------------------
---------
Change in working capital
--------------------------------------------------------------------------------
---------
Change in trade and other receivables -130.1 -73.7
76% -77.3
--------------------------------------------------------------------------------
---------
Change in inventories -117.3 -50.7
131% 60.3
--------------------------------------------------------------------------------
---------
Change in current liabilities 133.8 71.8
86% -135.4
--------------------------------------------------------------------------------
---------
Change in working capital, total -113.6 -52.6
116% -152.4
--------------------------------------------------------------------------------
---------
Interest paid -26.7 -21.3
25% -27.5
--------------------------------------------------------------------------------
---------
Other financial items, net 0.4 -41.5
-37.2
--------------------------------------------------------------------------------
---------
Interest received 2.8 2.7
4% 3.5
--------------------------------------------------------------------------------
---------
Taxes paid -49.7 -42.5
17% -50.5
--------------------------------------------------------------------------------
---------
Net cash generated from operating activities -5.0 -9.9
-49% 6.8
--------------------------------------------------------------------------------
---------
--------------------------------------------------------------------------------
---------
Cash flows from investing activities
--------------------------------------------------------------------------------
---------
Acquisition of subsidiaries, net of cash -8.9 -31.8
-72% -45.4
--------------------------------------------------------------------------------
---------
Purchase of property, plant and equipment -25.3 -12.4
104% -19.9
--------------------------------------------------------------------------------
---------
Purchase of intangible assets -6.0 -5.6
7% -8.4
--------------------------------------------------------------------------------
---------
Increases in other investments 0.0 0.0
-1.3
--------------------------------------------------------------------------------
---------
Proceeds from sale of subsidiaries, net of cash 5.9
--------------------------------------------------------------------------------
---------
Proceeds from sale of tangible and intangible assets 5.5 3.6
44% 6.5
--------------------------------------------------------------------------------
---------
Proceeds from sale of other investments 2.6 0.0
0.0
--------------------------------------------------------------------------------
---------
Net cash used in investing activities -26.2 -46.2
-43% -68.5
--------------------------------------------------------------------------------
---------
--------------------------------------------------------------------------------
---------
Operating cash flow after investments -31.4 -56.1
-44% -61.7
--------------------------------------------------------------------------------
---------
--------------------------------------------------------------------------------
---------
Cash flow from financing activities
--------------------------------------------------------------------------------
---------
Change in current liabilities 159.0 35.5
34.2
--------------------------------------------------------------------------------
---------
Proceeds from borrowings 175.0 100.0
75% 100.0
--------------------------------------------------------------------------------
---------
Repayments of borrowings -141.9 -32.9
-50.4
--------------------------------------------------------------------------------
---------
Payments of financial leasing debts -1.4 1.1
-0.1
--------------------------------------------------------------------------------
---------
Dividends paid and other distribution of assets -81.5 -51.3
59% -51.2
--------------------------------------------------------------------------------
---------
Net cash used in financing activities 109.2 52.3
32.5
--------------------------------------------------------------------------------
---------
--------------------------------------------------------------------------------
---------
Net change in cash and cash equivalents 77.8 -3.8
-29.3
--------------------------------------------------------------------------------
---------
Cash and cash equivalents at the beginning of the period 147.6 173.1
173.1
--------------------------------------------------------------------------------
---------
Change in the fair value of the cash equivalents -1.3 3.0
3.8
--------------------------------------------------------------------------------
---------
Cash and cash equivalents at the end of the period 224.1 172.3
30% 147.6
--------------------------------------------------------------------------------
---------
3. NOTES
ACCOUNTING PRINCIPLES OF THE INTERIM REPORT
YIT Corporation's Interim Report for January 1 - September 30, 2011 has been
drawn up in line with IAS 34: Interim Financial Reporting. The information
presented in the Interim Report has not been audited. YIT has applied the same
accounting policy and IFRS standards and interpretations in the drafting of the
Interim Report as in its annual financial statements for 2010. However, the
following new standards, interpretations and amendments on current standards
that have been approved by EU have been applied as of January 1. 2011:
-- IAS 24 (revised): Related party disclosures
-- IFRIC 14 (amendment): Prepayments of a minimum funding requirement
-- IFRIC 19: Extinguishing financial liabilities with Equity instruments
-- IAS 32 (amendment): Classification of Rights Issues
-- Improvements to IFRSs, issued in July 2010
Currency exchange rates used in the Interim Report
Average Balance sheet rate Average Balance sheet rate
rate Sept 30, 2011 rate Sept 30, 2010
1-9/11 1-9/10
--------------------------------------------------------------------------------
1 EUR = CZK 24.3610 24.7540 25.4620 24.6000
--------------------------------------------------------------------------------
DKK 7.4543 7.4417 7.4445 7.4519
--------------------------------------------------------------------------------
EEK 15.6466 15.6466 15.6466 15.6466
--------------------------------------------------------------------------------
HUF 271.2800 292.5500 275.2700 275.7500
--------------------------------------------------------------------------------
MYR 4.2591 4.3112 4.0570 4.2101
--------------------------------------------------------------------------------
NOK 7.8041 7.8880 7.9900 7.9680
--------------------------------------------------------------------------------
PLN 4.0183 4.4050 4.0048 3.9847
--------------------------------------------------------------------------------
RUB 40.4800 43.3500 39.7807 41.6923
--------------------------------------------------------------------------------
SEK 9.0084 9.2580 9.6555 9.1421
--------------------------------------------------------------------------------
SGD 1.7539 1.7589 1.7439 1.7942
--------------------------------------------------------------------------------
USD 1.4066 1.3503 1.3067 1.3648
--------------------------------------------------------------------------------
LTL 3.4528 3.4528 3.4528 3.4528
--------------------------------------------------------------------------------
LVL 0.7028 0.7028 0.7028 0.7028
--------------------------------------------------------------------------------
FINANCIAL RISK MANAGEMENT
Financial risks include liquidity, interest rate, currency and credit risk, and
their management is a part of the Group's financing policy. The Board of
Directors has approved the Corporate Finance Policy. The Group's Finance
Department 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 the 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 2010.
SEGMENT INFORMATION
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.
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. Construction Sevices Finland and International
Construction Services segments' reporting to the Management board do not apply
Group's accounting principles in revenue recognition of own residential and
commercial real estate development projects. 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. According to Group's 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
Revenue by business segment (EUR million)
1-9/11 1-9/10 Change 1-12/10
----------------------------------------------------------------------
Building Services Northern Europe 1,497.5 1,284.4 17% 1,803.6
----------------------------------------------------------------------
- Group internal -46.3 -49.7 -7% -71.0
----------------------------------------------------------------------
- external 1,451.2 1,234.7 18% 1,732.6
----------------------------------------------------------------------
Building Services Central Europe 579.0 291.5 99% 550.2
----------------------------------------------------------------------
- Group internal -0.2 -0.3 -33% -0.5
----------------------------------------------------------------------
- external 578.8 291.2 99% 549.6
----------------------------------------------------------------------
Construction Services Finland 891.2 807.8 10% 1,102.0
----------------------------------------------------------------------
- Group internal -1.1 -1.3 -15% -1.9
----------------------------------------------------------------------
- external 890.1 806.5 10% 1,100.1
----------------------------------------------------------------------
International Construction Services 343.3 330.9 4% 470.6
----------------------------------------------------------------------
- Group internal -4.3 -4.7 -9% -7.1
----------------------------------------------------------------------
- external 339.0 326.2 4% 463.5
----------------------------------------------------------------------
Other items 1.1 0.8 38% 1.2
----------------------------------------------------------------------
YIT's segments total 3,260.3 2,659.4 23% 3,847.0
----------------------------------------------------------------------
IFRIC 15 adjustments -68.5 -209.8 -67% -59.4
----------------------------------------------------------------------
YIT Group total - external 3,191.8 2,449.6 30% 3,787.6
----------------------------------------------------------------------
Operating profit by business segment (EUR million)
1-9/11 1-9/10 Change 1-12/10
---------------------------------------------------------------------
Building Services Northern Europe 1) 55.8 65.2 -14% 88.7
---------------------------------------------------------------------
Building Services Central Europe 2) 24.0 7.5 220% 16.4
---------------------------------------------------------------------
Construction Services Finland 79.5 78.7 1% 108.1
---------------------------------------------------------------------
International Construction Services 19.8 21.3 -7% 34.7
---------------------------------------------------------------------
Other items -14.8 -13.3 -18.8
---------------------------------------------------------------------
YIT's segments total 164.3 159.4 3% 229.1
---------------------------------------------------------------------
IFRIC 15 adjustments -21.8 -55.7 -9.0
---------------------------------------------------------------------
YIT Group total 142.5 103.7 37% 220.1
---------------------------------------------------------------------
International Construction Services segment's operating profit is weakened by a
provision of EUR 10 million related to the rectifying of the ammonia problem
booked in the third quarter of 2011. In the second quarter 2011, a EUR 3.0
million provision booked affects negatively Building Services Northern Europe's
operating profit and a EUR 5.0 million gain on the sale of Hungarian businesses
affects positively Building Services Central Europe's operating profit.
In 2010, the operating profit of Building Systems segment included EUR 6.3
million non- recurring expenses related to acquisitions made during the year.
Of the non-recurring items, EUR 1.4 million was recognised in the third quarter
of the year in Building Services Northern Europe and EUR 1.9 million in
Building Services Central Europe. EUR 3.0 milliom of non-recurring expenses
were booked in Building Services Central Europe in the fourth quarter.
Order backlog by business segment at end of period (EUR million)
1-9/11 1-9/10 Change 1-12/10
-------------------------------------------------------------------------
Building Services Northern Europe 886.1 743.0 19% 757.4
-------------------------------------------------------------------------
Building Services Central Europe 523.9 589.1 -11% 507.0
-------------------------------------------------------------------------
Construction Services Finland 1,289.3 1,205.2 7% 1,173.2
-------------------------------------------------------------------------
International Construction Services 1) 850.1 884.8 -4% 870.8
-------------------------------------------------------------------------
Other items -60.3 -55.2 -58.3
-------------------------------------------------------------------------
YIT's segments total 3,489.0 3,366.9 4% 3,250.1
-------------------------------------------------------------------------
IFRIC 15 adjustments 249.3 360.6 285.6
-------------------------------------------------------------------------
YIT Group total 3,738.3 3,727.5 0% 3,535.7
-------------------------------------------------------------------------
1) At the end of September 2011, the value of projects that were still
suspended amounted to EUR 83 million (9/10: EUR 161 million)
UNUSUAL ITEMS AFFECTING OPERATING PROFIT (EUR million)
1-9/11 1-9/10 1-12/10
------------------------------------------------------------
Building Services Northern Europe -3.0 -1.4 -1.4
------------------------------------------------------------
Building Services Central Europe 5.0 -1.9 -4.9
------------------------------------------------------------
International Construction Services -10.0
------------------------------------------------------------
YIT Group total -8.0 -3.3 -6.3
------------------------------------------------------------
International Construction Services segment's operating profit is weakened by a
provision of EUR 10 million related to the rectifying of the ammonia problem
booked in the third quarter of 2011.. In the second quarter 2011, a EUR 3.0
million provision booked affects negatively Building Services Northern Europe's
operating profit and a EUR 5.0 million gain on the sale of Hungarian businesses
affects positively Building Services Central Europe's operating profit.
In 2010, the operating profit of Building Systems segment included EUR 6.3
million non-recurring expenses related to acquisitions made during the year. Of
the non-recurring items, EUR 1.4 million was recognised in the third quarter of
the year in Building Services Northern Europe and EUR 1.9 million in Building
Services Central Europe. EUR 3.0 milliom of non-recurring expenses were booked
in Building Services Central Europe in the fourth quarter.
BUSINESS COMBINATIONS AND DISPOSALS (EUR million)
Building Services Nothern Europe - segment acquired during the review period in
Sweden NNE Pharmaplan AB in January, Orab I Sydost AB specialising in
industrial pipe works in April and Johnson Control's Commercial Refridgeration
- businesses, Frisk Ventilation AB a supplier of ventilation - related services
in May, MISAB Sprinkler & VVS AB and Sakari Timonen business operations in
Julyand Mercur VVS group in September. Total acquisition price amounted to EUR
10.4 million. With these local acquisitions YIT strengthen the market share and
the acquisition price over the net assets acquired will be allocated to
customer base.
Composition of acquired net assets and goodwill (EUR million)
1-9/11
--------------------------------------------------------------------------------
--
Consideration
--------------------------------------------------------------------------------
--
Cash
9.5
--------------------------------------------------------------------------------
--
Contingent consideration
0.9
--------------------------------------------------------------------------------
--
Total consideration
10.4
--------------------------------------------------------------------------------
--
--------------------------------------------------------------------------------
--
Acquisition -related costs ( recognised as expenses)
0.2
--------------------------------------------------------------------------------
--
--------------------------------------------------------------------------------
--
Recognised amounts of identifiable assets acquired and liabilities assumed
--------------------------------------------------------------------------------
--
9/11
--------------------------------------------------------------------------------
--
Cash and cash equivalents
0.5
--------------------------------------------------------------------------------
--
Property, plant and equipment
0.8
--------------------------------------------------------------------------------
--
Intangible rights
9.6
--------------------------------------------------------------------------------
--
Inventories
0.3
--------------------------------------------------------------------------------
--
Trade and other receivables
9.9
--------------------------------------------------------------------------------
--
Current liabilities
-10.7
--------------------------------------------------------------------------------
--
Total identifiable net assets
10.4
--------------------------------------------------------------------------------
--
Non-controlling interest
0.0
--------------------------------------------------------------------------------
--
Goodwill
0.0
--------------------------------------------------------------------------------
--
Total entity value
10.4
--------------------------------------------------------------------------------
--
Building Services Central Europe - segment disposed it's businesses in Hungary
by selling three subsidiaries in Hungary at May 31, 2011. The companies were
included in the acquisitions in years 2008 and 2010 in Central Europe. The
goodwill related to Central Europe were reduced by EUR 1,4 million in Hungarian
business divestment.
Disposals (milj. e)
Effect on revenue and net profit: 1-9/11
-------------------------------------------------------
Revenue 4.7
-------------------------------------------------------
Operating expenses -4.1
-------------------------------------------------------
Profit before taxes 0.6
-------------------------------------------------------
Taxes -0.1
-------------------------------------------------------
Net profit 0.5
-------------------------------------------------------
-------------------------------------------------------
Effect on balance sheet assets and liabilities: 9/11
-------------------------------------------------------
Property, plant and equipment 0.1
-------------------------------------------------------
Goodwill 1.4
-------------------------------------------------------
Inventories 0.2
-------------------------------------------------------
Trade receivables 3.4
-------------------------------------------------------
Cash and cash equivalents 5.7
-------------------------------------------------------
Trade and other liabilities -4.2
-------------------------------------------------------
Interest bearing liabilities 0.0
-------------------------------------------------------
Net assets 6.6
-------------------------------------------------------
-------------------------------------------------------
Effect on cash flow: 9/11
-------------------------------------------------------
Received in cash 12.2
-------------------------------------------------------
Direct costs related to disposals -0.6
-------------------------------------------------------
Cash and cash equivalents in disposed entity -5.7
-------------------------------------------------------
Cash flow on disposals 5.9
-------------------------------------------------------
CHANGES IN PROPERTY, PLANT AND EQUIPMENT (EUR million)
1-9/11 1-9/10 Change 1-12/10
--------------------------------------------------------------------------
Carrying value at the beginning of period 106.7 99.8 7% 99.8
--------------------------------------------------------------------------
Increase 25.6 12.3 92% 24.4
--------------------------------------------------------------------------
Increase through acquisitions 0.8 10.3 - 92% 12.4
--------------------------------------------------------------------------
Decrease -4.9 -3.1 55% -6.1
--------------------------------------------------------------------------
Decrease through disposals -0.1
--------------------------------------------------------------------------
Depreciation and value adjustments -17.9 -17.5 2% -23.9
--------------------------------------------------------------------------
Other changes -0.5 2.2 0.1
--------------------------------------------------------------------------
Carrying value at the end of period 109.7 104.0 5% 106.7
--------------------------------------------------------------------------
INVENTORIES (EUR million)
1-9/11 1-9/10 Change
1-12/10
--------------------------------------------------------------------------------
--------
Raw materials and consumables 27.5 25.2 9%
26.4
--------------------------------------------------------------------------------
--------
Work in progress 725.6 794.4 -9%
639.0
--------------------------------------------------------------------------------
--------
Land areas and plot owing companies 634.6 566.0 12%
589.3
--------------------------------------------------------------------------------
--------
Shares in completed housing and real estate companies 142.6 134.9 6%
181.2
--------------------------------------------------------------------------------
--------
Advance payments 40.5 45.1 -10%
48.2
--------------------------------------------------------------------------------
--------
Other inventories 0.8 1.0 -10%
0.9
--------------------------------------------------------------------------------
--------
Total inventories 1,571.6 1,566.6 0%
1,484.9
--------------------------------------------------------------------------------
--------
NOTES ON EQUITY (EUR million)
Share capital and share premium reserve Number of Share capital Treasury
shares (EUR million) shares
(EUR
million)
--------------------------------------------------------------------------------
Shares outstanding on January 1, 2011 125,078,422 149.2 -10.6
--------------------------------------------------------------------------------
Transfer of treasury shares 27.5.2011 196,910 0.9
--------------------------------------------------------------------------------
Return of treasury shares 30.6.2011 -1,524 0.0
--------------------------------------------------------------------------------
Return of treasury shares 30.9.2011 -1,778
--------------------------------------------------------------------------------
Shares outstanding on September 30, 2011 125,272,030 149.2 -9.7
--------------------------------------------------------------------------------
BORROWINGS (EUR million)
Fair value Carrying
value Nominal value
--------------------------------------------------------------------------------
------------------
Bonds in financial statements December 31, 2010 285.4
292.6 292.9
--------------------------------------------------------------------------------
------------------
--------------------------------------------------------------------------------
------------------
Valuation of the above bonds on September 30, 2011 228.4
235.5 235.7
--------------------------------------------------------------------------------
------------------
--------------------------------------------------------------------------------
------------------
Bonds raised during the review period:
--------------------------------------------------------------------------------
------------------
Fixed-rate bonds
--------------------------------------------------------------------------------
------------------
1/2011 -2016, interest rate 4,75 % 1) EUR 98.5
99.6 100.0
--------------------------------------------------------------------------------
------------------
Total bonds on September 30, 2011 326.9
335.1 335.7
--------------------------------------------------------------------------------
------------------
Terms of the bonds raised during the revenue period in brief:
1) Loan period June 20, 2011 - June 20, 2016, interest payments in arrear at
June 20. The bond is unsecured. ISIN code FI4000026653.
CHANGE IN CONTINGENT LIABILITIES, ASSETS AND COMMITMENTS (EUR million)
9/11 9/10
Change 12/10
--------------------------------------------------------------------------------
-------------
Collateral given for own commitments
--------------------------------------------------------------------------------
-------------
- Corporate mortgages 29.3 29,3
0% 29.8
--------------------------------------------------------------------------------
-------------
- Other mortgages 0.0 0,0
0.6
--------------------------------------------------------------------------------
-------------
Other commitments
--------------------------------------------------------------------------------
-------------
- Repurchase commitments 232.9 142,9
63% 141.0
--------------------------------------------------------------------------------
-------------
- Operating leases 314.6 327,4
-4% 322.5
--------------------------------------------------------------------------------
-------------
- Rental guarantees for clients 3.3 10,3
-68% 8.0
--------------------------------------------------------------------------------
-------------
- Other contingent liabilities 3.2 4,3
-26% 4.2
--------------------------------------------------------------------------------
-------------
- Other guarantees 5.2 5,2
0% 5.2
--------------------------------------------------------------------------------
-------------
Liability under derivative contracts
--------------------------------------------------------------------------------
-------------
- Value of underlying instruments
--------------------------------------------------------------------------------
-------------
-- Interest rate derivatives 332.2 304,7
9% 304.6
--------------------------------------------------------------------------------
-------------
-- Currency derivatives 205.6 247,0
-17% 203.2
--------------------------------------------------------------------------------
-------------
-- Commodity derivatives 0.0 0,5
-100% 0.5
--------------------------------------------------------------------------------
-------------
- Market value
--------------------------------------------------------------------------------
-------------
-- Interest rate derivatives -10.6 -10,6
0% -10.6
--------------------------------------------------------------------------------
-------------
-- Currency derivatives 6.8 9,2
-26% 0.3
--------------------------------------------------------------------------------
-------------
-- Commodity derivatives 0.0 0,0
0.1
--------------------------------------------------------------------------------
-------------
YIT Corporation's guarantees on behalf of its subsidiaries 1,270.4 1,191,2
7% 1,202.5
--------------------------------------------------------------------------------
-------------
TRANSACTIONS WITH ASSOCIATED COMPANIES (EUR million)
1-9/11 1-9/10 Change 1-12/10
--------------------------------------------------------------------
Sales to associated companies 1.1 1.2 -8% 1.5
--------------------------------------------------------------------
Purchases from associated companies 0.1 0.2 -50% 0.2
--------------------------------------------------------------------
Trade and other receivables 0.0 0.0 0.0
--------------------------------------------------------------------
Trade and other liabilities 0.0 0.1 0.0
--------------------------------------------------------------------
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