2011-02-08 10:45:00 CET
2011-02-08 10:45:37 CET
REGULATED INFORMATION
Pöyry - Company Announcement
CORRECTION: Pöyry PLC's notice concerning annual accounts for 2010
PÖYRY PLC Company Announcement 8 February 2011 at 11.45 a.m.
Pöyry corrects a mistake in the English version of Pöyry PLC's notice concerning
annual accounts for 2010 published today. The statement of comprehensive income
was missing from the tables section. Attached please find the full financial
statement release for 2010.
PÖYRY PLC
Additional information by:
Sanna Päiväniemi, Director, Investor Relations
tel. +358 10 33 23002
Pöyry is a global consulting and engineering company dedicated to balanced
sustainability and responsible business. With quality and integrity at our core,
we deliver best-in-class management consulting, total solutions, and design and
supervision. Our in-depth expertise extends to the fields of energy, industry,
urban & mobility and water & environment. Pöyry has 7000 experts and the local
office network in about 50 countries. Pöyry's net sales in 2010 were EUR 682
million and the company's shares are quoted on NASDAQ OMX Helsinki. (Pöyry PLC:
POY1V).
DISTRIBUTION:
NASDAQ OMX Helsinki
Major media
www.poyry.com
PÖYRY PLC Financial Statement Release 8 February 2011 at 8:30 a.m.
A YEAR OF LOW INVESTMENTS BY CLIENTS AND RESTRUCTURING - OUTLOOK FOR 2011
IMPROVING
KEY FIGURES
+------------------------------------+------+------+-------+-----+-----+-------+
| |10-12/|10-12/|Change,|1-12/|1-12/|Change,|
|Pöyry Group |2010 |2009 |% |2010 |2009 |% |
+------------------------------------+------+------+-------+-----+-----+-------+
|Order stock at end of period, EUR | | | | | | |
|million |526.2 |485.7 |8.3 |526.2|485.7|8.3 |
+------------------------------------+------+------+-------+-----+-----+-------+
|Net sales total, EUR million |186.0 |161.5 |15.2 |681.6|673.5|1.2 |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating profit excl. | | | | | | |
|restructuring costs, | | | | | | |
|EUR million |13.5 |1.8 |n.a. |17.3 |22.5 |-23.1 |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating margin excluding | | | | | | |
|restructuring costs, % |7.3 |1.1 | |2.5 |3.3 | |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating profit, | | | | | | |
|EUR million |6.1 |0.7 |n.a. |5.8 |11.6 |-50.0 |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating margin, % |3.3 |0.4 | |0.9 |1.7 | |
+------------------------------------+------+------+-------+-----+-----+-------+
|Profit before taxes, | | | | | | |
|EUR million |6.4 |1.2 |n.a. |4.3 |12.4 |-65.3 |
+------------------------------------+------+------+-------+-----+-----+-------+
|Earnings per share, basic, EUR |0.08 |0.02 |n.a. |0.00 |0.11 |n.a. |
+------------------------------------+------+------+-------+-----+-----+-------+
|Earnings per share, diluted, EUR |0.08 |0.02 |n.a. |0.00 |0.11 |n.a. |
+------------------------------------+------+------+-------+-----+-----+-------+
|Gearing, % | | | |3.5 |-10.5| |
+------------------------------------+------+------+-------+-----+-----+-------+
|Return on investment, % (R12M) |- |- | |2.6 |5.3 | |
+------------------------------------+------+------+-------+-----+-----+-------+
|Dividend per share (*BoD proposal) |- |- | |0.10 |0.10 | |
+------------------------------------+------+------+-------+-----+-----+-------+
|Dividend pay-out ratio, % (*BoD | | | | | | |
|proposal) |- |- | | |90.9 | |
+------------------------------------+------+------+-------+-----+-----+-------+
|Average number of personnel during | | | | | | |
|period, calculated as full time | | | | | | |
|equivalents (FTE) |- |- | |6,611|7,052|-6.3 |
+------------------------------------+------+------+-------+-----+-----+-------+
JANUARY-DECEMBER 2010 HIGHLIGHTS
Figures in brackets, unless otherwise stated, refer to the same period the
previous year.
- The Group's order stock at the end of the reporting period totalled EUR 526.2
million (485.7) representing growth of 8.3 percent compared with the year
before. The order stock increased especially in the Industry business group.
- The gradual upturn in the world economy during 2010 did not yet turn into
larger implementation projects in Pöyry's key sectors, which was reflected in
the Group's net sales. The consolidated net sales in 2010 were relatively stable
compared with the year before and came in at EUR 681.6 million (673.5). Fourth-
quarter net sales increased by 15.2 percent from the year before and amounted to
EUR 186.0 million (161.5).
- Lack of larger projects and continued low capacity utilisation levels burdened
profitability. In addition to this, the company's operational efficiency program
resulted in significant restructuring costs.
- Operating profit excluding restructuring costs was EUR 17.3 million (22.5)
corresponding to 2.5 percent (3.3) of sales. The improved operating profit in
the fourth quarter mainly relates to profit recognition in a long-running major
project of the Urban & Mobility business group based on certificates issued by
the client confirming the acceptance of the services and the related receivable.
- Restructuring costs during the reporting period totalled EUR 11.5 million. The
bulk of the restructuring costs, EUR 7.4 million, were recorded in the fourth
quarter of 2010 and they related mainly to the efficiency improvement measures
in the Group's Finnish operations.
- The consolidated operating profit for the reporting period, including
restructuring costs, totalled EUR 5.8 million (11.6). The consolidated operating
margin declined to 0.9 percent from 1.7 percent of net sales the year before.
- Net cash before financing activities was EUR -29.2 million (-25.6). The cash
flow includes a net amount of EUR -9.7 million (-10.6) from acquisitions. The
cash flow at EUR 26.6 million (24.7) was strong during the fourth quarter
reflecting the typical seasonal pattern of the business.
- The cash flow reflects the continued delay in some major project payments. The
accounts receivable include receivables of EUR 30.9 million which relates to
certain public sector infrastructure projects in Venezuela, where the client is
a public authority.
- In 2010 Pöyry reinforced its nuclear power segment by acquiring 98.9 percent
of the largest privately owned power sector consulting engineering company in
Hungary, ETV-Eröterv.
- Operational Excellence Programme was announced in October and is proceeding
according to plan. At the year-end 2010 about two thirds of the measures that
aim at the annual operating profit improvement of about EUR 15 million were
completed. The targeted operating profit improvement is expected to be fully
captured by the end of 2011.
PROPOSED DIVIDEND
- Pöyry Group's parent company Pöyry PLC's net profit for
2010 was EUR 12,145,936.80 and retained earnings EUR 89,681,088.17, so
the total amount of distributable earnings was EUR 101,827,024.97.
- The Board of Directors of Pöyry PLC proposes to the Annual General Meeting on
10 March 2011 that a dividend of EUR 0.10 (0.10) per share be paid for the year
2010.
- The number of outstanding shares is 59,011,650 and the total amount of
dividends thus EUR 5,901,165.00.
- The Board of Directors proposes that the dividend be paid on 22 March 2011.
MATERIALS TO THE AGM
The financial statements, the report by the Board of Directors, the Corporate
Governance Statement as well as other documents presented to the Annual General
Meeting will be available on the company's website at www.poyry.com on 17
February at the latest.
OUTLOOK FOR THE FIRST HALF OF 2011
Pöyry's businesses are predominantly driven by clients' new capital investments
and most of the businesses are also inherently late in the cycle. It is
difficult to predict the timing of clients' new investment decisions and project
start-ups. Due to these uncertainties Pöyry makes a forecast only for the first
half of 2011. The Group net sales for the first half of 2011 are expected to
improve from the corresponding period in 2010. The Group's comparable operating
profit in the first half of 2011 is expected to improve significantly from the
operating profit, excluding restructuring costs, in the corresponding period in
2010, taking into consideration the small numbers in the reference period. Pöyry
will update the forecast as soon as more accurate information is available.
Outlook by the business group for the first half of 2011:
The preconditions for net sales growth are strongest in Energy and Management
Consulting business groups. Net sales in the Industry business group are also
expected to improve. The net sales in the Urban & Mobility and Water &
Environment business groups are expected to remain stable. Operating profit in
the Energy, Industry, and Management Consulting business groups is estimated to
improve significantly taking into consideration the small numbers in the
reference period. The operating profit in the Water & Environment business group
is expected to improve, and remain stable in the Urban & Mobility business
group.
COMMENTS FROM HEIKKI MALINEN, PRESIDENT AND CEO:"At the outset of the year 2010 we were cautiously optimistic that investment
recovery in the geographic markets we serve would gradually begin recovering.
Looking back at various events it is clear that many of our clients' projects
were postponed due to near-term uncertainty in demand, unclear regulatory
frameworks or simply lack of competitive financing. The competitive situation in
many markets intensified in 2010 due to overcapacity in engineering. For Pöyry
this meant that we were not able to achieve the targeted activity level. The
outcome of this can be seen in our non-satisfactory financial result which was
further impacted by the need to restructure and incur significant one-time
costs.
Following the launch of the new vision we completed our strategic review in the
summer of 2010. Our aim is to achieve profitable growth through increased focus
on core businesses and geographies, investments in developing our large projects
capabilities and active management of the business portfolio. As part of the
strategy implementation we initiated an Operational Excellence Program in
October. The first major implementation milestone relating to the programme was
reached in December when Pöyry announced decisions to adapt capacity and to
improve its operational model in Finland with targeted annual operating profit
improvement of about EUR 15 million. Therefore, we were forced to reduce our
capacity by approximately 400 persons. Pöyry remains clearly the largest
consulting engineer in the Finnish market with a strong regional office network.
As we start the new fiscal year we are seeing encouraging signs of gradual
recovery, in particular, in industry and energy markets. The first new pulp
investment in Brazil, Eldorado, is moving into implementation phase.
Furthermore, we are pleased to have won an important reference project for MWV
Rigesa Ltda, in Três Barras, Brazil. The assignment consists of contracts for
EPC Open Book of the Balance of Plant (BOP) together with the associated EPCM
services, and Project Management services for the overall project support to the
client. The total value of Pöyry's contracts is about BRL 325 million (about EUR
144 million). The Rigesa project strengthens Pöyry's position as the market
leader in delivering EPCM/EPC-type engineering and project management services
to pulp and paper clients."
PÖYRY PLC
Additional information from:
Heikki Malinen, President and CEO
tel. +358 10 33 21307
Johan Brink, CFO (acting)
tel. +358 10 33 22183
Sanna Päiväniemi, Director, Investor Relations
tel. +358 10 33 23002
INVITATION TO CONFERENCES TODAY 8 FEBRUARY 2011
The full year 2010 result will be presented by CEO Heikki Malinen at the news
conferences today as follows:
- A conference for analysts, investors and press in Finnish will be arranged at
12 p.m. Finnish time at Restaurant Savoy, Eteläesplanadi 14, Helsinki, Finland.
- An international conference call and webcast in English will begin at 5:00
p.m. Finnish time (EET).
10:00 a.m. US EDT (New York)
3:00 p.m. GMT (London)
4:00 p.m. CET (Paris)
5:00 p.m. EET (Helsinki)
The webcast may be followed online on the company's website www.poyry.com. A
replay can be viewed on the same site the following day.
To attend the conference call please dial
US: +1 877 491 0064
Other countries: +44 20 7162 0025
Conference id: 886734
Due to the live webcast, we kindly ask those attending the international
conference call to dial in 5 minutes prior to the start of the event.
Pöyry is a global consulting and engineering company dedicated to balanced
sustainability and responsible business. With quality and integrity at our core,
we deliver best-in-class management consulting, total solutions, and design and
supervision. Our in-depth expertise extends to the fields of energy, industry,
urban & mobility and water & environment. Pöyry has 7,000 experts and the local
office network in about 50 countries. Pöyry's net sales in 2010 were EUR 682
million and the company's shares are quoted on NASDAQ OMX Helsinki. (Pöyry PLC:
POY1V).
DISTRIBUTION:
NASDAQ OMX Helsinki
Major media
www.poyry.com
FINANCIAL STATEMENT RELEASE JANUARY-DECEMBER 2010
Figures in brackets, unless otherwise stated, refer to the same period the
previous year. All figures and sums have been rounded off from the exact figures
which may lead to minor discrepancies upon addition or subtraction.
The annual figures in this financial statement release are audited.
MARKET REVIEW
The growth in exports and industrial production stimulated the gradual upturn in
the world economy during 2010. The growth in Western Europe, especially in
Germany, was even more positive than expected and economic growth in, for
example, China and Brazil was robust. In the US, the industrial production
increased well even though in the second half of the year at a slower pace than
in the first part.
The positive projections on the future recovery in the world economy and
improving industrial activity led to increasing prices in certain commodities
and raw materials. Although the increase in pulp prices eased up during the
third quarter, the price level could still be considered above trend levels. In
2010, the quarterly price of crude oil recovered, supported by the growing oil
demand, especially towards the end of the year. The general price development of
metals and minerals has been robust during the year
Despite these positive signs new investments did not start on a larger scale in
the sectors and geographies primarily served by Pöyry. Compared with the
previous year, demand for various pre-investment and pre-engineering services
did, however, increase.
Growth in demand for energy continues in emerging markets and the ageing power
generation assets in mature markets are expected to lead to future investments
in medium term. Unfortunately, uncertainty regarding the regulatory framework
for low carbon energy created uncertainty and led to investment delays.
Challenges in obtaining financing at favourable terms postponed investment
decisions, in particular, among project developers.
The improving market situation in various industrial sectors, and especially in
the emerging markets, was reflected in increasing investment planning, even
though the actual investment decisions did not materialise during 2010.
Investments in the transportation sector remained strong. The activity in the
construction sector decreased during the year, particularly in the commercial
and industrial sectors, and settled at this lower level towards the end of the
year. The financial stringency has been affecting public investment activity in
the water supply and sanitation segment, especially within Finnish
municipalities. The improving economic environment has started to increase
demand for management consulting services.
ORDER STOCK
+---------------------------------------+-------+-------+-------+
|Order stock, EUR million, end of period|12/2010|12/2009|Change,|
| | | | %|
+---------------------------------------+-------+-------+-------+
|Consulting and engineering | 521.1| 483.6| 7.8|
+---------------------------------------+-------+-------+-------+
|EPC | 5.1| 2.1| n.a.|
+---------------------------------------+-------+-------+-------+
|Total | 526.2| 485.7| 8.3|
+---------------------------------------+-------+-------+-------+
The Group's order stock at the end of the reporting period totalled EUR 526.2
million (485.7) representing growth of 8.3 percent compared with the year
before. The order stock increased especially in the Industry business group. The
breakdown by business group for the order stock at the end of the reporting
period was as follows: Energy EUR 183.2 million (35 percent of the total order
stock), Industry EUR 66,0 million (13 percent), Urban & Mobility EUR 187,6
million (36 percent), Water & Environment EUR 66,5 million (13 percent) and
Management Consulting EUR 22,9 million (4 percent).
ORDER INTAKE
The Group's order intake in January-December 2010 was supported by the gradually
improving economic activity and increased from 2009. However, no major large
projects were booked during the year and the order inflow mainly consisted of
smaller and mid-sized assignments. Orders received during the fourth quarter
increased both from the fourth quarter of 2009 and from the third quarter of
2010.
GROUP NET SALES
+--------------------+------+------+-------+-----+-----+-------+---------------+
| | | | | | | | Share of total|
| | | | | | | | sales,|
|Net sales by | | | | | | | % 1-|
|business group, |10-12/|10-12/|Change,|1-12/|1-12/|Change,| 12/2010|
|EUR million | 2010| 2009| %| 2010| 2009| %| |
+--------------------+------+------+-------+-----+-----+-------+---------------+
|Energy | 43.0| 44.0| -2.3|171.2|173.9| -1.6| 25.1|
+--------------------+------+------+-------+-----+-----+-------+---------------+
|Industry | 46.7| 33.6| 39.0|159.8|162.0| -1.4| 23.4|
+--------------------+------+------+-------+-----+-----+-------+---------------+
|Urban & Mobility | 55.1| 46.7| 18.0|197.2|184.5| 6.9| 28.9|
+--------------------+------+------+-------+-----+-----+-------+---------------+
|Water & Environment | 21.2| 22.9| -7.4| 79.3| 86.5| -8.3| 11.6|
+--------------------+------+------+-------+-----+-----+-------+---------------+
|Management | 19.9| 17.8| 11.8| 73.6| | 7.4| 10.8|
|Consulting | | | | | 68.5| | |
+--------------------+------+------+-------+-----+-----+-------+---------------+
|Unallocated | 0.1| -3.5| n.a.| 0.5| -1.9| n.a.| 0.1|
+--------------------+------+------+-------+-----+-----+-------+---------------+
|Total | 186.0| 161.5| 15.2|681.6|673.5| 1.2| 100.0|
+--------------------+------+------+-------+-----+-----+-------+---------------+
The gradual upturn in the world economy during 2010 did not turn into larger
implementation projects in Pöyry's key sectors, which was reflected in the
Group's net sales. The consolidated net sales in 2010 were relatively stable
compared with the year before and came in at EUR 681.6 million (673.5).
Fourth-quarter net sales increased by 15.2 percent from the year before and
amounted to EUR 186.0 million (161.5). The Group's net sales in the fourth
quarter increased by 15.4 percent from the seasonally low third quarter of 2010.
January-December 2010 net sales were significantly higher in both North and
South America compared with the year before. Net sales in the Nordic countries
and in other European countries were relatively stable but declined in Asia.
Business groups (operating segments)
The business group split is based on the structure which has been effective
since 1 January 2010. All figures for 2009 have been restated (pro forma)
accordingly. All personnel numbers are calculated as full-time equivalents
(FTE).
Energy
+------------------------------------+------+------+-------+-----+-----+-------+
| |10-12/|10-12/|Change,|1-12/|1-12/|Change,|
| | 2010| 2009| %| 2010| 2009| %|
+------------------------------------+------+------+-------+-----+-----+-------+
|Order stock, EUR million | 183.2| 171.0| 7.1|183.2|171.0| 7.1|
+------------------------------------+------+------+-------+-----+-----+-------+
|Net sales, EUR million | 43.0| 44.0| -2.3|171.2|173.9| -1.6|
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating profit excl. restructuring| | | | | | |
|costs, | | | | | | |
|EUR million | 3.6| 1.2| n.a.| 6.4| 7.8| -17.9|
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating margin excl. restructuring| | | | | | |
|costs, % | 8.4| 2.7| | 3.7| 4.5| |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating profit, | | | | | | |
|EUR million | 2.6| 0.8| n.a.| 4.4| 5.9| -25.4|
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating margin, % | 6.0| 1.9| | 2.5| 3.4| |
+------------------------------------+------+------+-------+-----+-----+-------+
|Personnel at end of period | 1,463| 1,402| 4.4|1,463|1,402| 4.4|
+------------------------------------+------+------+-------+-----+-----+-------+
1-12/2010
The order stock at the end of the reporting period increased by 7.1 percent from
the year before and totalled EUR 183.2 million (171.0). The order stock remained
stable also compared with the third quarter of 2010. In March the business group
signed EPC contracts for two renewable energy projects in the Philippines with a
total value of EUR 46 million. The projects were not included in the 2010 order
stock due to the continued postponement of the financial closure of the
projects.
January-December 2010 net sales were fairly stable at EUR 171.2 million (173.9).
The net sales during the reporting period were supported by the solid
development of the order stock especially in the hydropower business area. Pöyry
has also been awarded several smaller assignments in the renewables and power&
fuels business areas. The impacts of the global financial crises have delayed
major investment decisions in the energy sector.
January-December 2010 operating profit before EUR 2.0 million restructuring
costs amounted to EUR 6.4 million (7.8). Operating margin remained at an
unsatisfactory level at 3.7 percent of net sales (4.5). Low profitability in the
oil & gas and renewables segments burdened the overall profitability, but the
actions to adjust capacity to demand and streamline operations have started to
yield results during the fourth quarter of 2010. Operating profit after the
restructuring costs was EUR 4.4 million (5.9) or 2.5 percent of net sales (3.4).
In 2010 Pöyry reinforced its nuclear power segment by acquiring 98.9 percent of
the largest privately owned power sector consulting engineering company in
Hungary, ETV-Eröterv. ETV-Eröterv has been consolidated in Pöyry's reporting as
of 1 July 2010 (balance sheet as at 30 June 2010).
10-12/2010
Order inflow in the fourth quarter increased from the low third quarter of 2010
and was at the same level as in the fourth quarter of 2009. During the fourth
quarter Pöyry was awarded, for example, contracts totalling EUR 15 million for
power plant projects in Thailand. The first projects were started during 2010
and the rest will be commenced during early 2011.
Net sales for the fourth quarter of 2010 at EUR 43.0 million (44.0) were
relatively stable compared with the year before. Net sales decreased slightly
from EUR 44.3 million in the third quarter of 2010.
The fourth quarter 2010 operating profit before EUR 1.0 million restructuring
costs was EUR 3.6 (1.2) and the operating margin was 8.4 percent of net sales
(2.7). The profitability increased among other things due to the successful
restructuring measures in certain poorly performing business areas and segments.
Operating profit after restructuring costs was EUR 2.6 million (0.8) or 6.0
percent of net sales (1.9).
Industry
+------------------------------------+------+------+-------+-----+-----+-------+
| |10-12/|10-12/|Change,|1-12/|1-12/|Change,|
| | 2010| 2009| %| 2010| 2009| %|
+------------------------------------+------+------+-------+-----+-----+-------+
|Order stock, EUR million | 66.0| 39.3| 67.9| 66.0| 39.3| 67.9|
+------------------------------------+------+------+-------+-----+-----+-------+
|Net sales, EUR million | 46.7| 33.6| 39.0|159.8|162.0| -1.4|
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating profit excl. restructuring| | | | | | |
|costs, | | | | | | |
|EUR million | 0.1| -5.3| n.a.| -6.3| -3.5| n.a.|
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating margin excl. restructuring| | | | | | |
|costs, % | 0.2| -15.8| | -3.9| -2.2| |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating profit, | | | | | | |
|EUR million | -5.0| -5.2| n.a.|-11.8|-10.1| n.a.|
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating margin, % | -10.7| -15.5| | -7.4| -6.2| |
+------------------------------------+------+------+-------+-----+-----+-------+
|Personnel at end of period | 2,083| 1,790| 16.4|2,083|1,790| 16.4|
+------------------------------------+------+------+-------+-----+-----+-------+
1-12/2010
The order stock at the end of the reporting period increased by 67.9 percent
from the year before and totalled EUR 66.0 million (39.3). The order stock
decreased 9.0 percent from the end of the third quarter of 2010 reflecting the
lack of larger orders but also high net sales during the fourth quarter.
The January-December 2010 net sales at EUR 159.8 million (162.0) remained fairly
stable compared with the year before. The good development in the order stock
during the first part of the year supported the net sales towards the end of the
year.
The January-December 2010 operating profit before restructuring costs of EUR
5.5 million was EUR -6.3 million (-3.5) and the operating margin was -3.9
percent of net sales (-2.2). The lack of larger projects was reflected in low
activity levels and profitability. The restructuring costs mainly relate to the
major efficiency improvement measures decided on in Finland in late 2010 as part
of the Group's Operational Excellence Programme. The ramp-up of engineering
centres (Finland, Poland, Brazil, China) serving especially larger projects for
industrial clients resulted in the decision to consolidate the Finnish
engineering centre operations in Kouvola. It was also decided to cluster the
office network in Finland under a regional model with wider scope of services
and improved cost efficiency. Operating profit after restructuring costs was EUR
-11.8 million (-10.1) or -7.4 percent of net sales (-6.2).
10-12/2010
Order inflow in the fourth quarter was significantly higher than in the
corresponding period the year before and increased also clearly from the low
third quarter of 2010. The order inflow was mainly supported by smaller
assignments as clients did not launch larger investments during the period.
Net sales for the fourth quarter of 2010 were EUR 46.7 million (33.6)
representing an increase of 39.0 percent compared with the year before. Net
sales also increased by 25.5 percent from the seasonally low third quarter.
The fourth quarter 2010 operating profit before EUR 5.1 million restructuring
costs was at EUR 0.1 million (-5.3) and the operating margin was 0.2 percent of
net sales (-15.8). The restructuring costs relate to the major restructuring
measures decided in Finland during the quarter. The increased net sales and
increased activity levels improved profitability during the quarter. Operating
profit after restructuring costs was EUR
-5.0 million (-5.2) or -10.7 percent of net sales (-15.5).
Urban & Mobility
+------------------------------------+------+------+-------+-----+-----+-------+
| |10-12/|10-12/|Change,|1-12/|1-12/|Change,|
| | 2010| 2009| %| 2010| 2009| %|
+------------------------------------+------+------+-------+-----+-----+-------+
|Order stock, EUR million | 187.6| 194.8| -3.7|187.6|194.8| -3.7|
+------------------------------------+------+------+-------+-----+-----+-------+
|Net sales, EUR million | 55.1| 46.7| 18.0|197.2|184.5| 6.9|
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating profit excl. restructuring| | | | | | |
|costs, | | | | | | |
|EUR million | 10.0| 4.2| na.| 18.5| 15.5| 19.4|
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating margin excl. restructuring| | | | | | |
|costs, % | 18.1| 9.0| | 9.4| 8.4| |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating profit, | | | | | | |
|EUR million | 9.4| 4.0| na.| 17.8| 14.9| 19.5|
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating margin, % | 17.0| 8.6| | 9.0| 8.1| |
+------------------------------------+------+------+-------+-----+-----+-------+
|Personnel at end of period | 1,724| 1,858| -7.2|1,724|1,858| -7.2|
+------------------------------------+------+------+-------+-----+-----+-------+
1-12/2010
The order stock at the end of the reporting period was somewhat lower than the
year before and the end of the third quarter of 2010 and totalled EUR 187.6
million (194.8).
Supported by the solid order stock and strong net sales during the fourth
quarter, the January-December 2010 net sales increased by 6.9 percent from the
year before and totalled EUR 197.2 million (184.5).
The January-December 2010 operating profit before restructuring costs of EUR
0.7 million was EUR 18.5 million (15.5) and the operating margin was 9.4 percent
of net sales (8.4). The improved operating profit in the fourth quarter mainly
relates to profit recognition in a long-running major project based on
certificates issued by the client confirming the acceptance of the services and
the related receivable. The increased net sales and the profit recognition
mentioned above during the fourth quarter were reflected in the good operating
profit for the full year 2010. Operating profit after restructuring costs was
EUR 17.8 million (14.9) or 9.0 percent of net sales (8.1).
10-12/2010
Order inflow in the fourth quarter increased from the low third quarter of 2010
and was relatively stable compared with the fourth quarter of 2009. During the
fourth quarter Pöyry was awarded , for example, an extension to its existing
railway engineering assignment in Romania. The value of the contract is EUR 6.9
million.
The net sales for the fourth quarter at EUR 55.1 million (46.7) increased
compared with the year before. Net sales also increased clearly from the third
quarter of 2010.
The fourth quarter 2010 operating profit before EUR 0.6 million restructuring
costs was EUR 10.0 million (4.2) and the operating margin was 18.1 percent of
net sales (9.0). The improved operating profit in the fourth quarter mainly
relates to profit recognition in a long-running major project based on
certificates issued by the client confirming the acceptance of the services and
the related receivable. Operating profit after restructuring costs was EUR 9.4
million (4.0) or 17.0 percent of net sales (8.6).
Water & Environment
+------------------------------------+------+------+-------+-----+-----+-------+
| |10-12/|10-12/|Change,|1-12/|1-12/|Change,|
| | 2010| 2009| %| 2010| 2009| %|
+------------------------------------+------+------+-------+-----+-----+-------+
|Order stock, EUR million | 66.5| 62.3| 6.7| 66.5| 62.3| 6.7|
+------------------------------------+------+------+-------+-----+-----+-------+
|Net sales, EUR million | 21.2| 22.9| -7.4| 79.3| 86.5| -8.3|
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating profit excl. restructuring| 0.6| 1.6| -62.5| 1.9| 5.1| -62.7|
|costs, | | | | | | |
|EUR million | | | | | | |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating margin excl. restructuring| 2.8| 7.0| | 2.4| 6.0| |
|costs, % | | | | | | |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating profit, | 0.0| 1.5| n.a.| 1.3| 4.9| -73.5|
|EUR million | | | | | | |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating margin, % | 0.2| 6.7| | 1.7| 5.7| |
+------------------------------------+------+------+-------+-----+-----+-------+
|Personnel at end of period | 891| 908| -1.9| 891| 908| -1.9|
+------------------------------------+------+------+-------+-----+-----+-------+
1-12/2010
The order stock at the end of the reporting period increased by 6.7 percent from
the year before and totalled EUR 66.5 million (62.3). The order stock decreased
by 5.8 percent from the end of the third quarter of 2010 reflecting the
continued challenging market environment.
The January-December 2010 net sales decreased by 8.3 percent from the year
before and totalled EUR 79.3 million (86.5) reflecting the difficult market
environment especially in Finland.
The January-December 2010 operating profit before restructuring costs of EUR
0.6 million was EUR 1.9 million (5.1) and the operating margin was 2.4 percent
of net sales (6.0). Profitability was burdened during the year mainly by the
difficult business environment in the municipal sector and low activity level in
Finland where actions were taken to adjust capacity to demand. Operating profit
after restructuring costs was EUR 1.3 million (4.9) or 1.7 percent of net sales
(5.7).
10-12/2010
Order inflow in the fourth quarter remained at the same level as in the
corresponding period the year before and in the third quarter of 2010. This
reflects the continuing difficult business environment in the main markets.
Net sales for the fourth quarter of 2010 were EUR 21.2 million (22.9)
representing a fall of 7.4 percent compared with the year before. Net sales
increased by 12.2 percent from the third quarter of 2010.
The fourth quarter 2010 operating profit before EUR 0.6 million restructuring
costs was EUR 0.6 million (1.6) and the operating margin was 2.8 percent of net
sales (7.0). Profitability remained low due to the difficult market situation in
Finland.
Management Consulting
+------------------------------------+------+------+-------+-----+-----+-------+
| |10-12/|10-12/|Change,|1-12/|1-12/|Change,|
| | 2010| 2009| %| 2010| 2009| %|
+------------------------------------+------+------+-------+-----+-----+-------+
|Order stock, EUR million | 22.9| 18.0| 27.2| 22.9| 18.0| 27.2|
+------------------------------------+------+------+-------+-----+-----+-------+
|Net sales, EUR million | 19.9| 17.8| 11.8| 73.6| 68.5| 7.4|
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating profit excl. restructuring| 1.6| 1.2| 33.3| 1.7| 1.2| 41.7|
|costs, | | | | | | |
|EUR million | | | | | | |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating margin excl. restructuring| 8.0| 6.7| | 2.3| 1.8| |
|costs, % | | | | | | |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating profit, | 1.8| 0.7| n.a.| -0.5| -0.4| n.a.|
|EUR million | | | | | | |
+------------------------------------+------+------+-------+-----+-----+-------+
|Operating margin, % | 9.2| 3.6| | -0.6| -0.7| |
+------------------------------------+------+------+-------+-----+-----+-------+
|Personnel at end of period | 498| 451| 10.4| 498| 451| 10.4|
+------------------------------------+------+------+-------+-----+-----+-------+
1-12/2010
The order stock at the end of the reporting period increased by 27.2 percent
from the year before and totalled EUR 22.9 million (18.0), reflecting the
improving demand for consulting services. The order stock also increased by 8.5
percent from the end of the seasonally quiet third quarter of 2010.
The January-December 2010 net sales at EUR 73.6 million were 7.4 percent higher
than the year before (68.5) reflecting the gradually improving market situation
as well as the impact of the measures taken to develop the business.
The January-December 2010 operating profit before restructuring costs of EUR
2.2 million was EUR 1.7 million (1.2) and the operating margin was 2.3 percent
of net sales (1.8). In the second quarter, an action programme was started to
reorganise the Management Consulting business group into a more unified and
integrated unit which resulted in notable restructuring costs. The
reorganisation was successfully completed during 2010. Operating profit after
restructuring costs was EUR -0.5 million (-0.4) or -0.6 percent of net sales (-
0.7).
10-12/2010
Order inflow in the fourth quarter was clearly higher than in the corresponding
period the year before and in the third quarter of 2010 reflecting the slightly
improving market environment especially in the energy sector as well as the
internal actions to enhance sales.
The net sales for the fourth quarter of 2010 were EUR 19.9 million (17.8)
representing an increase of 11.8 percent and reflecting the good development in
the order stock. Net sales increased by 10.6 percent compared with the third
quarter of 2010.
The fourth quarter 2010 operating profit amounted to EUR 1.8 million (EUR 1.2
million excluding and
EUR 0.7 million including restructuring costs) and the operating margin was 9.2
percent of net sales (6.7 excluding and 3.6 including restructuring costs).
Group overhead
Unallocated costs in January-December 2010 were EUR 5.4 million (3.6),
representing 0.8 percent of net sales (0.5).
GROUP FINANCIAL RESULT
Lack of larger projects and continued low capacity utilisation levels burdened
profitability and the operating profit was EUR 17.3 million (22.5), excluding
restructuring costs. Operating margin was 2.5 percent (3.3) of sales.
Actions to improve efficiency resulted in significant restructuring costs. The
consolidated operating profit for the reporting period, including restructuring
costs of EUR 11.5 million, totalled EUR 5.8 million (11.6). The consolidated
operating margin declined to 0.9 percent from 1.7 percent of net sales the year
before.
Profitability challenges were high in the business groups that operate mainly in
the investment driven private sector, i.e. the Energy and Industry business
groups. Their low activity levels were caused by, for example, delays in the
start-up of awarded major projects. The Energy and Industry business groups also
recorded substantial restructuring costs during the year. The Urban & Mobility
business group's improved operating profit in the fourth quarter mainly relates
to profit recognition in a long-running major project based on certificates
issued by the client confirming the acceptance of the services and the related
receivable. The business group recorded only minor restructuring costs. The
Water & Environment business group suffered from the poor financial position of
the municipal sector especially in Finland, where actions were taken to
reorganise the business with some related restructuring costs. The Management
Consulting business group's operating profit was slightly negative. The business
group recorded substantial restructuring costs and also made investments in
developing the business model in the very challenging market environment.
Net financial items were EUR -1.5 million (0.8).
Profit before taxes totalled EUR 4.3 million (12.4).
Income taxes were EUR -3.9 million (-4.4).
Net profit was EUR 0.4 (8.0) million.
Earnings per share were EUR 0.00 (0.11).
BALANCE SHEET
The consolidated balance sheet is strong. The consolidated balance sheet
amounted to EUR 532.5 million at the end of the reporting period, which is EUR
17.1 million higher than at year-end 2009 (515.4) and EUR 21.6 million higher
than at the end of September 2010. Total equity at the end of the reporting
period was EUR 187.1 million (184.0). Total equity attributable to equity
holders of the parent company was EUR 179.9 million (176.0) or EUR 3.03 per
share (2.98).
The return on equity (ROE) was 0.2 percent (4.1). The return on investment (ROI)
was 2.6 percent (5.3).
CASH FLOW AND FINANCING
The Group's liquidity is good. At the end of the reporting period, the Group's
cash and cash equivalents and other liquid assets amounted to EUR 99.0 (142.0)
million. In addition to these, the Group had unused long-term overdraft
facilities amounting to EUR 93.9 million.
Net cash from operating activities in the reporting period was EUR -13.1 million
(-10.4), representing EUR -0.22 per share. Net cash before financing activities
was EUR -29.2 million (-25.6). The cash flow includes a net amount of EUR -9.7
million (-10.6) from acquisitions. The cash flow at EUR 26.6 million (24.7) was
strong during the fourth quarter reflecting the typical seasonal pattern of the
business.
The cash flow reflects the continued delay in some major project payments. The
accounts receivable include receivables of EUR 30.9 million, which relate to
certain public sector infrastructure projects in Venezuela, where the client is
a public authority. The client has certified the debt in full. In December
2010, the Venezuelan Parliament passed the National Debt Law, which approved
external debt for the projects concerned. The client is arranging financing for
the payment of the said project receivables. It is still possible that the
payments will also be made directly from the national budget. Several project
suppliers have significant receivables in these projects. These accounts
receivable contain uncertainties. It is possible that the client is not able to
arrange the financing or even if it materialised, there could be further delays
in the payments or parts of them. During the more than a decade that Pöyry has
participated in public sector projects in Venezuela the country has always met
its payment obligations in spite of delays.
Net debt at the end of the reporting period totalled EUR 6.5 million (-19.3).
The net debt/equity ratio (gearing) was 3.5 percent (-10.5). Net debt was
decreased by EUR 30.7 million after the end of September 2010. The equity ratio
was 40.1 percent (40.9).
Pöyry paid its shareholders dividends amounting to EUR 5.9 million or EUR 0.10
per share in March 2010.
Calculation of key figures is presented on the Calculation of key figures page
of this financial statement release.
CAPITAL EXPENDITURE AND ACQUISITIONS
During the reporting period, the Group's capital expenditure totalled EUR 18.6
million, of which EUR 6.8 million consisted mainly of computer software, systems
and hardware, and EUR 11.8 million was due to acquisitions.
+------------------------------+------+------+-----+-----+
|Capital expenditure, |10-12/|10-12/|1-12/|1-12/|
|EUR million | 2010| 2009| 2010| 2009|
+------------------------------+------+------+-----+-----+
|Capital expenditure, operative| 2.0| 1.0| 6.8| 4.8|
+------------------------------+------+------+-----+-----+
|Capital expenditure, shares | 0.7| 0.8| 11.8| 5.0|
+------------------------------+------+------+-----+-----+
|Capital expenditure, total | 2.7| 1.8| 18.6| 9.8|
+------------------------------+------+------+-----+-----+
HUMAN RESOURCES
+----------------------------------------------------------+-----+-----+-------+
|Personnel (FTE) by business group, at the end of the |1-12/|1-12/|Change,|
|period | 2010| 2009| %|
+----------------------------------------------------------+-----+-----+-------+
|Energy |1,463|1,402| 4.4|
+----------------------------------------------------------+-----+-----+-------+
|Industry |2,083|1,790| 16.4|
+----------------------------------------------------------+-----+-----+-------+
|Urban & Mobility |1,724|1,858| -7.2|
+----------------------------------------------------------+-----+-----+-------+
|Water & Environment | 891| 908| -1.9|
+----------------------------------------------------------+-----+-----+-------+
|Management Consulting | 498| 451| 10.4|
+----------------------------------------------------------+-----+-----+-------+
|Group staff and shared resources | 142| 121| 17.4|
+----------------------------------------------------------+-----+-----+-------+
|Personnel, total |6,801|6,530| 4.2|
+----------------------------------------------------------+-----+-----+-------+
+----------------------------------------------------------+-----+-----+-------+
|Personnel (FTE) by geographic area, at the end of the |1-12/|1-12/|Change,|
|period | 2010| 2009| %|
+----------------------------------------------------------+-----+-----+-------+
|Nordic countries |2,467|2,510| -1.7|
+----------------------------------------------------------+-----+-----+-------+
|Other Europe |2,859|2,826| 1.2|
+----------------------------------------------------------+-----+-----+-------+
|Asia | 538| 529| 1.7|
+----------------------------------------------------------+-----+-----+-------+
|North America | 215| 198| 8.6|
+----------------------------------------------------------+-----+-----+-------+
|South America | 615| 344| 78.8|
+----------------------------------------------------------+-----+-----+-------+
|Other areas | 107| 123| -13.0|
+----------------------------------------------------------+-----+-----+-------+
|Personnel, total |6,801|6,530| 4.2|
+----------------------------------------------------------+-----+-----+-------+
Personnel structure
The Group had an average of 6,611 (7,052) employees (FTEs) during the reporting
period, which is 6.3 percent less than the year before. The number of personnel
at the end of the reporting period was 6,801 (6,530).
To support projected order inflow in the Industry business group, staff have
been recruited in Brazil, Poland and China.
The statutory employee negotiations initiated as part of the Operational
Excellence Programme in October 2010 in Pöyry's Finnish operations resulted in
the decision to reduce capacity by about 400 persons. Including the reductions
mentioned above, the estimate for the total need for capacity reductions in
Finland is 450-500 persons. The improved operational model is expected to be
implemented by the end of the second quarter of 2011.
The Pöyry Way
In 2010 many Pöyry employees contributed to defining the Pöyry way of working.
This process culminated in the renewed value base being captured and launched as
the "Pöyry Way". The key concepts and principles were communicated to the staff
in the autumn of 2010. The Pöyry Way combines the best of the company's past
with its aspirations for the future.
Organisational capabilities
To ensure that Pöyry Group's organisational capabilities will develop in
accordance with changing business needs, the principles and actions for
development are defined as a part of the annual strategy process. The new vision
sets a clear agenda for the development focus areas and will provide exciting
career opportunities for our staff.
Personnel expenses
+------------------------------------+-----+-----+-------+
| |1-12/|1-12/|Change,|
|Personnel expenses, EUR million | 2010| 2009| %|
+------------------------------------+-----+-----+-------+
|Wages and salaries |319.0|319.9| -0.3|
+------------------------------------+-----+-----+-------+
|Bonuses | 10.6| 6.9| 53.2|
+------------------------------------+-----+-----+-------+
|Expenses from share-based incentives| 1.9| 2.2| -15.0|
+------------------------------------+-----+-----+-------+
|Social expenses | 73.0| 72.4| 0.8|
+------------------------------------+-----+-----+-------+
|Personnel expenses, total |404.5|401.5| 0.8|
+------------------------------------+-----+-----+-------+
Wages and salaries as well as bonuses in the Pöyry Group are determined on the
basis of local collective and individual agreements, individual employees'
performances and the required qualification level. Supplementing the base
salary, the Group has implemented bonus schemes which are primarily aimed at the
Group companies' line management, but which will be increasingly directed at
individual experts, such as staff in project work.
Performance share plan 2008-2010
In December 2007, the Board of Directors of Pöyry PLC approved a
share-based incentive plan for the key personnel. The plan comprises three
earning periods, which are the calendar years 2008, 2009 and 2010. The rewards
will be paid partly (50 percent) in the company's shares and partly (50 percent)
in cash in 2009, 2010 and 2011.
For the earning period 2010 the payout will correspond to the value of 263,220
shares. The payout from the plan is based on the Group's earnings per share
before restructuring costs (EPS) and net sales as well as the condition of
service or employment not having been terminated prior to reward payment. If the
service or employment ends prior to vesting 1 January 2013, the received shares
must be returned to the Company gratuitously. The incentive plan included about
300 persons in the year 2010. The payments will be made to the participants in
April 2011, after the AGM has adopted the financial statements.
The total payout for the three earning periods of the performance share plan
2008-2010 correspond to the value of 696,674 shares. This payout is 54 percent
as an average of the target level budget of the whole plan.
More detailed information about the incentive plan has been released in the
Company Announcement of 11 December 2007.
Performance share plan 2011-2013
In February 2011 the Board of Directors of Pöyry PLC approved a new share-based
incentive plan for the Pöyry Group key personnel.
The plan includes earning periods which commence at the beginning of years
2011, 2012 and 2103. The first earning period is calendar years 2011-2013. The
Board of Directors will annually decide on the details of the earning periods
commencing in 2012 and 2013.
The potential reward from the plan for the earning period 2011-2013 will be
based on the Group's Earnings per Share before restructuring costs (EPS) and Net
Sales, as well as on the continuance of employment or service. The rewards
earned on the basis of earnings period 2011-2013 will be paid partly in the
Company's shares and partly in cash in 2014.
The incentive plan is directed to approximately 300 people. The rewards to be
paid on the basis of the earnings period 2011-2013 will correspond to a maximum
total of 475,000 Pöyry PLC shares if the target performance set by the Board of
Directors is met. If the Company's performance exceeds the target and reaches
maximum performance, as defined by the Board of Directors, the rewards to be
paid on the basis of the earning period 2011-2013 will correspond to a maximum
total of 950,000 Pöyry PLC shares. These numbers of shares include also the
proportion of reward to be paid in cash.
RESEARCH AND DEVELOPMENT
The key cornerstone in Pöyry's business is the ability to provide clients with a
full range of innovative and value-adding consulting engineering services
covering the entire lifecycle of their investment projects.
To be able to help clients truly improve their businesses, Pöyry is continuously
engaged in numerous research and development projects. The projects are
conducted both on Pöyry's own initiative and in partnership with clients and
research institutions. In 2010 Pöyry was involved in a number of development
projects that are related to climate change, the development of new products and
services, operations improvement and methodology and software. As the R&D
expenses are mainly embedded in client projects, they have not been accounted
for separately.
When approaching the end of its Vision period in 2020 Pöyry's aim is to be able
to offer increasingly sophisticated services and comprehensive management
consulting. To enable this Pöyry has defined four key Growth Enablers: Thought
Leadership, Large Projects, Way of Working and Marketing & Sales. Internal
development programmes to improve the company's execution capabilities in these
areas have been launched. In 2010 Pöyry appointed the core team for the Large
Project Function and proceeded with the Marketing & Sales programme. The renewed
value base "Pöyry Way" was launched and the operational mode and process
development has started as part of the Operational Excellence Programme.
GOVERNANCE
Annual General Meeting 2010
The Annual General Meeting of Pöyry PLC was held on 11 March 2010. The AGM
adopted Pöyry PLC's financial statements and consolidated statements and granted
the members of the Board of Directors, the company's President and CEO, and the
Deputy to the President and CEO discharge from liability for the financial
period 1 January to 31 December 2009.
The AGM resolved that a dividend of EUR 0.10 be distributed per outstanding
share for the financial year 2009. The dividend was paid on 23 March 2010.
The AGM resolved that the Board of Directors consist of seven (7) ordinary
members. The AGM re-elected the following members to the Board of Directors:
Henrik Ehrnrooth, Pekka Ala-Pietilä, Alexis Fries, Heikki Lehtonen, Michael
Obermayer and Karen de Segundo. The AGM elected Georg Ehrnrooth as a new member
of the Board. Harry Piehl gave notice that he was not available for re-election.
The AGM resolved that the annual fees of the members of the Board of Directors
be EUR 40,000 for a member, EUR 50,000 for the Vice Chairman and EUR 60,000 for
the Chairman of the Board, and that the annual fee of the members of the
committees of the Board of Directors be EUR 15,000. In addition, the AGM
authorised the Board of Directors to decide about an additional fee of not more
than EUR 15,000 per annum for each of the foreign residents of the Board of
Directors and an additional fee of not more than EUR 5,000 per annum for each of
the foreign residents of the committees. The authorisation shall be in force
until the next AGM.
In its assembly meeting immediately following the AGM, the Board of Directors
elected Henrik Ehrnrooth as Chairman and Heikki Lehtonen as Vice Chairman.
Heikki Lehtonen, Alexis Fries and Georg Ehrnrooth were elected members of the
Audit Committee. Henrik Ehrnrooth, Heikki Lehtonen, Karen de Segundo and
Pekka Ala-Pietilä were elected members of the Nomination and Compensation
Committee. In accordance with the authorisation by the AGM the Board resolved to
pay an additional fee of EUR 15,000 per annum to the foreign residents of the
Board of Directors and an additional fee of EUR 5,000 per annum to the foreign
residents of the committees.
KPMG Oy Ab, Authorised Public Accountants, continues as Pöyry PLC's auditors
based on the resolution made in the AGM on 6 March 2002. Sixten Nyman,
Authorised Public Accountant, continues as responsible auditor.
Authorisations
Pöyry PLC's Annual General Meeting on 11 March 2010 authorised the Board of
Directors to decide on the acquisition of the company's own shares with
distributable funds. A maximum of 5,800,000 shares can be acquired. This
authorisation was not used by the end of the reporting period.
The AGM also authorised the Board of Directors to decide on making a donation of
a maximum of EUR 300,000 to the Aalto University in Finland. In December 2010
Pöyry signed a cooperation agreement with Aalto University. As part of the
agreement and in accordance with the decision made at the 2010 Annual General
Meeting, Pöyry has approved EUR 300,000 to be donated to Aalto University's
foundation.
Group executive management
The Group Executive Committee consisted of nine (9) members at the end of 2010:
Heikki Malinen, President and Chief Executive Officer
Ari Asikainen, Executive Vice President (EVP) and President, Energy business
group
Martin Kuzaj, EVP and President, Industry business group
Andy Goodwin, EVP and President, Urban & Mobility business group
Martin Bachmann, EVP and President, Water & Environment business group (from 1
February 2010)
Norbert Gorny, EVP and President, Management Consulting business group (from 1
February until 31 December 2010)
Richard Pinnock, EVP, Group Strategic Growth
Camilla Grönholm, EVP, Human Resources
Anne Viitala, EVP, Legal and Commercial
Johan Brink, acting CFO since 23 April 2010, has participated in the work and
meetings of the Group Executive Committee.
On 15 December 2010 Jarkko Sairanen was appointed EVP and President of the
Management Consulting business group, and a member of the Group Executive
Committee. He will take over his new duties on 1 April 2011 at the latest.
On 21 December 2010 Jukka Pahta was appointed EVP and Chief Financial Officer,
and a member of the Group Executive Committee. He will take over his new duties
on 1 March 2011 at the latest.
SHARE CAPITAL AND SHARES
The share capital of Pöyry PLC on 31 December 2010 totalled EUR 14,588,478. The
total number of shares including treasury shares totalled 59,413,798 at the end
of the reporting period.
On 31 December 2010, Pöyry held a total of 401,967 treasury shares, which
corresponds to 0.7 percent of the total number of shares and which at that date
had a market value of EUR 3.7 million.
SHARES SUBSCRIBED FOR UNDER THE OPTION PROGRAMME 2004
Pursuant to Pöyry's stock option programme 2004, a total of 442,400 new shares
were subscribed in 2010. As a result of these subscriptions, the total number of
Pöyry's shares including treasury shares will increase to 59,413,798. At the end
of the reporting period, the stock options issued under Pöyry PLC's ongoing
stock option programme 2004 entitle holders to subscribe for a total of
1,253,028 shares, which would increase the total number of Pöyry's shares to
60,666,826. The option programme includes approximately 40 key persons.
All shares carry one vote per share and equal rights to dividends. The terms and
conditions of the stock option programme are available on Pöyry's website at
www.poyry.com.
MARKET CAP AND TRADING
The closing price of Pöyry's shares on 31 December 2010 was EUR 9.15. The volume
weighted average share price during the reporting period was EUR 9.99, the
highest quotation being EUR 12.30 and the lowest EUR 8.23. The share price
decreased 18 per cent from the year-end 2009. During the reporting period
approximately 22.7 million Pöyry shares were traded on NASDAQ OMX Helsinki,
corresponding to a turnover of approximately EUR 226.9 million. The average
daily trading volume was about 90,062 shares or approximately EUR 0.9 million.
On 31 December 2010, the total market value of Pöyry's shares was EUR 539.9
million excluding treasury shares held by the company and EUR 543.6 million
including treasury shares.
OWNERSHIP STRUCTURE
The number of registered shareholders increased from 6,933 at the end of 2009 to
7,954 at the end of the reporting period, representing a growth of 10 percent.
Corbis S.A. continued to be the largest shareholder with 31.14 percent of the
shares. The Chairman of the Board of Directors of Pöyry, Henrik Ehrnrooth, holds
indirectly with his brothers Georg Ehrnrooth, member of the Board of Directors
of Pöyry, and Carl-Gustaf Ehrnrooth a controlling interest in Corbis S.A.
At the end of the reporting period a total of 12.73 percent of the shares were
owned by nominee registered shareholders. Total ownership outside Finland,
including Corbis S.A. together with nominee registered shareholders was in total
44.81 percent of the shares.
FLAGGINGS IN 2010
Pöyry PLC received on 5 February 2010 a disclosure under Chapter 2, Section 9 of
the Securities Market Act, according to which, as a result of share transactions
concluded on 3 February 2010, the holdings of mutual funds managed by I.G
International Management Limited (Corporate Number 201041), Ireland, decreased
to less than 5 percent of Pöyry PLC's shares and votes. According to the
disclosure, I.G International Management Limited on that date held 2 934 342
shares which is 4.97 percent of Pöyry PLC's shares.
STRATEGY
On 14 October, Pöyry released its key strategic priorities and announced that as
part of strategy implementation the Group will launch an Operational Excellence
Programme. In this conjunction Pöyry announced it will initiate statutory
employee negotiation in all its Finnish operations.
On 28 October Pöyry announced further details about the implementation of the
efficiency improvement measures in Finland relating to the Operational
Excellence Programme. The planned reduction in capacity was then estimated to
correspond to 450-550 persons and the targeted annualised cost savings at EUR
10-15 million. The related restructuring costs were estimated to be in the range
of EUR 6-10 million
On 8 December Pöyry announced decisions to reduce capacity by about 400 persons
in accordance with the Operational Excellence Programme. Including the reduction
mentioned above, the estimate for the total need for capacity reductions in
Finland is 450-500 persons. The improved operational model is expected to be
implemented by the end of the second quarter of 2011. These measures will lead
to an annual operating profit improvement of about EUR 15 million.
At the year-end 2010 about two thirds of the measures that aim at the annual
operating profit improvement of about EUR 15 million were completed. The
targeted operating profit improvement is expected to be fully achieved by the
end of year 2011. Restructuring costs of EUR 7.4 million were recorded in the
fourth quarter of 2010.
IMPORTANT EVENTS AFTER THE END OF THE REPORTING PERIOD
In January 2011Pöyry's Industry Business Group was awarded a basic and detailed
engineering contract by Eldorado Celulose e Papel Ltda for the Balance of Plant
(BOP) of the 1.5 million t/a bleached eucalyptus market pulp mill to be built in
Mato Grosso do Sul state, Brazil. The EUR 8.4 million contract is a continuation
of the pre-engineering and preparatory work for the mill infrastructure that
Pöyry was awarded in early 2010 (see Company Announcements of 31 March, 2010 and
13 January, 2011).
Pöyry PLC received on 12 January 2011 a disclosure under Chapter 2, Section 9 of
the Securities Market Act, according to which, as a result of share transactions
concluded on 11 January 2011, the holdings of Ilmarinen Mutual Pension Insurance
Company (business ID 0107638-1), Finland, exceeded 5 percent of Pöyry PLC's
shares and votes. According to the disclosure, Ilmarinen Mutual Pension
Insurance Company held on 11 January 2011 total of 2,980,389 shares which is
5.02 percent of Pöyry PLC's shares and votes.
No other disclosures of changes in holdings were received by the time of the
release of this report.
On 7 February 2011 Pöyry's Industry business group was awarded an assignment by
MWV Rigesa Ltda., Brazil for the expansion of its paperboard mill in Três
Barras, Santa Catarina State, Brazil. The assignment consists of contracts for
EPC Open Book of the Balance of Plant (BOP) together with the associated EPCM
services, and Project Management services for the overall project management
support to the client. The total value of Pöyry's contracts is about BRL 325
million (about EUR 144 million) of which a majority consists of the EPC Open
Book BOP contract. The contracts have been signed on 7 February 2011. A notice
to proceed for the EPC Open book contract is expected to be received during the
first quarter of 2011 after which the value will be booked into the order stock.
The new machine is expected to be completed in mid-2012. Due to the nature of
the contracts, profit recognition will occur towards the latter part of the
project. (see Company Announcement of 8 February 2011).
In February 2011 the Board of Directors of Pöyry PLC approved a new share-based
incentive plan for key personnel of Pöyry. More detailed information about the
incentive plan under the Human Resources section of this report and in the
Company Announcement of 8 February 2011.
MOST SIGNIFICANT RISKS AND BUSINESS UNCERTAINTIES
Despite the gradual upturn in the world economy during 2010, there is still a
risk of new economic downturn. This can create some continued uncertainty and
delays in clients' decision making.
The size and complexity of large projects typically require thorough and lengthy
development work. There are uncertainties about the availability of financing,
the selected implementation concept as well as the timing of investment
decisions and project start-ups which all are beyond Pöyry's control. This may
have an adverse impact on Pöyry's net sales and profitability.
An important part of Pöyry's business comes from municipal and other public
sector clients. The increased indebtedness of various economies has led the EU
and an increasing number of governments to decide on austerity and cost-
reduction measures. These are expected to impact infrastructure investments
negatively at some stage. The magnitude and timing, and particularly impact on
the type of services provided by Pöyry's is, however, unclear. With respect to
municipal clients there is a risk that reduced tax revenues of local governments
may impact negatively the funding of infrastructure projects or delay them.
Part of Pöyry's net sales originates from emerging and developing countries,
some of which face political and economic challenges. There is a risk that in
projects in these countries payment of invoices may be delayed excessively or
the Pöyry Group may experience credit losses. The most notable risk in this area
is the accounts receivables in the Venezuelan infrastructure projects as
detailed under section 'Cash flow and financing'. To manage this risk, the
company maintains systematic processes for the follow-up and collection of
receivables. Pöyry's financial position is solid and the balance sheet is
strong.
MARKET OUTLOOK 2011
Various leading indicators signal that the world economy is returning to a
growth track after the lengthy downturn. However, for example, in Europe there
are significant differences in economic prospects between countries. The
economic growth has been partly stimulated by increasing industrial production.
However, operating rates are only gradually reaching levels which trigger
clients to invest in new capacity. In the developed regions of the world
economic growth may be considered relatively self-sustained and emerging regions
are projected to continue on a dynamic growth track. The positive projections on
the future development have led to, for example, increasing prices in
commodities and raw materials, which may gradually support improving investment
activity.
In the energy and the industrial sectors relevant to Pöyry's businesses the
long-term fundamentals behind the future demand remain solid. In the industrial
sectors demand is increasingly geared to emerging markets. The financial crisis
and regulatory uncertainty have prolonged the investment decision processes but
the improving economic environment is expected to gradually have a positive
impact on the sectors' investment activity.
Several global megatrends support transportation and real estate investments in
markets where Pöyry has exposure and investment activity in general is expected
to continue stable or growing. Within the water supply and sanitation segment
public sector investment activity is expected to continue modest in Europe.
However, the fundamental need for water sector and environmental expertise is
expected to create demand for services within Pöyry's scope. In the
transportation area public sector or public-private partnerships investments are
expected to continue mid-term.
The improving economic environment is expected to increase demand for management
consulting services.
OUTLOOK FOR THE FIRST HALF OF 2011
Pöyry's businesses are predominantly driven by clients' new capital investments
and most of the businesses are also inherently late in the cycle. It is
difficult to predict the timing of clients' new investment decisions and project
start-ups. Due to these uncertainties Pöyry makes a forecast only for the first
half of 2011. The Group net sales for the first half of 2011 are expected to
improve from the corresponding period in 2010. The Group's comparable operating
profit in the first half of 2011 is expected to improve significantly from the
operating profit, excluding restructuring costs, in the corresponding period in
2010, taking into consideration the small numbers in the reference period. Pöyry
will update the forecast as soon as more accurate information is available.
Outlook by the business group for the first half of 2011:
The preconditions for net sales growth are strongest in Energy and Management
Consulting business groups. Net sales in the Industry business group are also
expected to improve. The net sales in the Urban & Mobility and Water &
Environment business groups are expected to remain stable. Operating profit in
the Energy, Industry, and Management Consulting business groups is estimated to
improve significantly taking into consideration the small numbers in the
reference period. The operating profit in the Water & Environment business group
is expected to improve, and remain stable in the Urban & Mobility business
group.
BOARD OF DIRECTORS' PROPOSAL FOR DISPOSAL OF DISTRIBUTABLE FUNDS
Pöyry Group's parent company Pöyry PLC's net profit for 2010
was EUR 12,145,936.80 and retained earnings were EUR 89,681,088.17, so
the total amount distributable as dividend was EUR 101,827,024.97. The Board
of Directors of Pöyry PLC proposes to the Annual General Meeting on 10 March
2011 that a dividend of EUR 0.10 (0.10) per share be paid for the year 2010. The
number of outstanding shares is 59,011,650 and the total amount of dividends
thus EUR 5,901,165.00. The Board of Directors proposes that the dividend be paid
on 22 March 2011.
The Auditor's report is dated 7 February 2011.
Vantaa, 7 February 2011
Pöyry PLC
Board of Directors
THE FINANCIAL STATEMENT RELEASE 2010
This financial statement release has been prepared in accordance with IAS 34
following the same accounting principles as in the annual financial statement
for 2009. All figures in the accounts have been rounded and consequently the sum
of individual figures can deviate from the presented sum figure.
From the beginning of 2010, the Group has adopted the revised IFRS 3 Business
Combinations standard and the amended IAS 27 Consolidated and Separate Financial
Statements standard. The adoption of the revised standards and interpretations
does not have any material effect on the interim report. The Group records from
the beginning of 2010 the consulting fees due to acquisitions as other operating
expenses. The non-controlling interests are valued as proportionate share of the
identifiable net assets.
The annual figures in this financial statement release are audited. The
auditors' report is dated 7 February 2011.
PÖYRY GROUP
STATEMENT OF COMPREHENSIVE INCOME
EUR million 10-12/2010 10-12/2009 1-12/2010 1-12/2009
-------------------------------------------------------------------------------
NET SALES 186.0 161.5 681.6 673.5
-------------------------------------------------------------------------------
Other operating income 0.4 0.3 1.0 0.8
Share of associated
companies' results 0.4 -0.1 0.7 0.5
Materials and supplies -2.9 -2.2 -10.6 -7.0
External charges,
subconsulting -31.1 -26.8 -101.8 -90.6
Personnel expenses -108.2 -93.3 -404.5 -401.5
Depreciation -2.2 -2.0 -8.1 -8.2
Other operating expenses -36.3 -36.7 -152.5 -155.9
OPERATING PROFIT 6.1 0.7 5.8 11.6
-------------------------------------------------------------------------------
Proportion of net sales, % 3.3 0.4 0.9 1.7
Financial income 0.5 0.8 1.9 5.0
Financial expenses -1.3 -1.3 -5.4 -5.6
Exchange rate differences 1.1 1.0 2.0 1.4
PROFIT BEFORE TAXES 6.4 1.2 4.3 12.4
-------------------------------------------------------------------------------
Proportion of net sales, % 3.4 0.7 0.6 1.8
Income taxes -1.3 0.2 -3.9 -4.4
NET PROFIT FOR THE PERIOD 5.1 1.4 0.4 8.0
-------------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME
Translation differences 1.8 2.2 7.2 4.2
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD 6.9 3.6 7.6 12.2
-------------------------------------------------------------------------------
Net profit attributable to:
Equity holders of
the parent company 5.0 1.0 0.1 6.5
Non-controlling interest 0.1 0.4 0.3 1.5
Total comprehensive
income attributable to:
Equity holders of
the parent company 6.6 3.2 7.2 10.7
Non-controlling interest 0.3 0.4 0.4 1.5
Earnings/share,
attributable to the equity
holders of the parent
company, EUR 0.08 0.02 0.00 0.11
Corrected with dilution effect 0.08 0.02 0.00 0.11
-------------------------------------------------------------------------------
STATEMENT OF FINANCIAL POSITION
EUR million 31 Dec. 2010 31 Dec. 2009
--------------------------------------------------------------------------
ASSETS
NON-CURRENT ASSETS
Goodwill 116.7 101.3
Intangible assets 5.2 5.4
Tangible assets 16.2 16.6
Shares in associated companies 6.1 5.5
Other shares 2.1 1.9
Loans receivable 1.7 1.5
Deferred tax receivables 11.5 9.5
Pension receivables 0.6 0.3
Other 8.4 7.5
--------------------------------------------------------------------------
Total 168.5 149.5
CURRENT ASSETS
Work in progress 81.6 78.8
Accounts receivable 161.4 127.3
Loans receivable 0.1 0.1
Other receivables 7.8 7.5
Prepaid expenses and accrued income 14.1 10.2
Financial assets at fair value
through profit and loss 11.4 27.9
Cash and cash equivalents 87.6 114.1
--------------------------------------------------------------------------
Total 364.0 365.9
TOTAL 532.5 515.4
--------------------------------------------------------------------------
EQUITY AND LIABILITIES
EQUITY
EQUITY ATTRIBUTABLE TO THE EQUITY HOLDERS
OF THE PARENT COMPANY
Share capital 14.6 14.6
Legal reserve 3.4 2.9
Invested free equity reserve 58.5 56.6
Translation difference -11.6 -18.2
Retained earnings 115.0 120.2
--------------------------------------------------------------------------
Total 179.9 176.0
Non-controlling interest interest 7.2 8.0
--------------------------------------------------------------------------
Total 187.1 184.0
LIABILITIES
NON-CURRENT LIABILITIES
Interest bearing non-current liabilities 85.3 101.3
Pension obligations 8.2 7.4
Deferred tax liability 2.9 1.7
Other non-current liabilities 3.1 2.3
--------------------------------------------------------------------------
Total 99.5 112.7
CURRENT LIABILITIES
Amortisations of interest bearing
non-current liabilities 19.6 19.8
Interest bearing current liabilities 0.6 1.7
Provisions 16.6 8.3
Project advances 66.2 66.0
Accounts payable 30.0 21.5
Other current liabilities 31.3 29.3
Current tax payable 3.9 4.2
Accrued expenses and deferred income 77.7 68.0
--------------------------------------------------------------------------
Total 245.9 218.8
TOTAL 532.5 515.4
--------------------------------------------------------------------------
STATEMENT OF CASH FLOWS 10-12/ 10-12/ 1-12/ 1-12/
EUR million 2010 2009 2010 2009
FROM OPERATING ACTIVITIES
Net profit for the period 5,1 1,4 0,4 8
Expenses from share-based
incentive programmes 0 0,2 1,9 1,2
Depreciation and
value decrease 2,2 2 8,1 8,2
Gain on sale of fixed assets -0,1 0 -0,1 0
Share of associated
companies' results 0 0,8 -0,3 0,2
Financial income and expenses -3,3 -0,5 -1,5 -0,8
Income taxes 1,3 -0,2 3,9 4,4
Change in work in progress 32,7 7,7 -2,9 -9,5
Change in accounts
and other receivables -29,4 8,3 -39,6 18,3
Change in advances received 6,7 6,8 0,2 -7,6
Change in payables
and other liabilities 17,9 -0,1 28,7 -16,9
Received financial income 0,7 1,8 2,1 5
Paid financial expenses -1,7 -2,7 -5,4 -5,7
Paid income taxes -3,1 0,8 -8,7 -15,2
Total from operating activities 29,1 26,3 -13,1 -10,4
CAPITAL EXPENDITURE
Investments in shares
in subsidiaries
deducted with cash acquired -0,7 -0,4 -9,7 -10,6
Investments in other shares 0 -0,2 0 -0,2
Investments in fixed assets -2 -0,9 -6,8 -4,7
Sales of other shares 0 0 0 0
Sales of fixed assets 0,2 -0,1 0,4 0,3
Capital expenditure total, net -2,5 -1,6 -16,1 -15,2
Net cash before financing 26,6 24,7 -29,2 -25,6
FINANCING
New loans -0,2 0 0 20
Repayments of loans -10,1 -9,4 -19,9 -20,5
Change in current financing 0,2 -0,5 -0,7 0,7
Dividends 0 -0,3 -6,7 -39
Acquisitions of own shares 0 0 0 -1,9
Share subscription 0,4 0,3 1,9 0,4
Net cash from financing -9,7 -9,9 -25,4 -40,3
Change in cash and cash equivalents
and in other liquid assets 16,9 14,8 -54,6 -65,9
Cash and cash equivalents
and other liquid assets
at the beginning of the period 77,6 128,9 142 203,7
Change in the fair value
of financial assets -0,1 -0,5 -0,1 0,1
Impact of translation differences
in exchange rates 4,6 -1,2 11,7 4,1
Cash and cash equivalents and
other liquid assets 31 December 99 142 99 142
Financial assets at fair value
through profit and loss 11,4 27,9 11,4 27,9
Cash and cash equivalents 87,6 114,1 87,6 114,1
Cash and cash equivalents
and other liquid assets 99 142 99 142
CHANGES
IN EQUITY Invested Trans-
Share free lation
Share premium Legal equity diffe-
EUR million capital reserve reserve reserve rences
Equity 1
October 2009 14.6 0 2.8 56.3 -20.5
Shares
subscribed with
stock options 0.3
Payment of dividend
Expenses from share-based
incentive programmes
Non-controlling interest
Comprehensive income
for the period 2.2
Changes for the period 0 0 0 0.3 2.2
Equity 31 December 2009 14.6 0 2.9 56.6 -18.2
Equity 1 January 2009 14.6 32.4 20.5 5.8 -22.4
Shares subscribed
with stock options 0.4
Payment of dividend
Acquisition of own shares
Transfer to invested
free equity reserve -32.4 -18 50.4
Transfer, retained earnings 0.3
Expenses from share-based
incentive programmes
Non-controlling interest
Comprehensive income
for the period 4.2
Changes for the period 0 -32.4 -17.7 50.8 4.2
Equity 31 December 2009 14.6 0 2.9 56.6 -18.2
Equity 1 October 2010 14.6 0 3.2 58.1 -12.8
Shares subscribed
with stock options 0.4
Payment of dividend
Expenses from share-based
incentive programmes
Comprehensive income
for the period 0.2 1.2
Changes for the period 0 0 0.2 0.4 1.2
Equity 31 December 2010 14.6 0 3.4 58.5 -11.6
Equity 1 January 2010 14.6 0 2.9 56.6 -18.2
Shares subscribed
with stock options 1.9
Payment of dividend
Expenses from share-based
incentive programmes
Comprehensive income
for the period 0.5 6.6
Changes for the period 0 0 0.5 1.9 6.6
Equity 31 December 2010 14.6 0 3.4 58.5 -11.6
Non-
controlling
Retained inte- Total
EUR million earnings Total rest equity
Equity 1
October 2009 118.8 172 7.6 179.6
Shares
subscribed with
stock options 0 0.3 0.3
Payment of dividend 0 0 0.1
Expenses from share-based
incentive programmes 0.2 0.2 0.2
Non-controlling interest 0.1 0.1 0.1
Comprehensive income
for the period 1 3.2 0.4 3.6
Changes for the period 1.3 3.8 0.4 4.3
Equity 31 December 2009 120.2 176 8 184
Equity 1 January 2009 152.5 203.4 7.7 211.1
Shares subscribed
with stock options 0.4 0.4
Payment of dividend -37.9 -37.9 -1.1 -39
Acquisition of own shares -1.9 -1.9 -1.9
Transfer to invested
free equity reserve 0 0
Transfer, retained earnings -0.3 0 0
Expenses from share-based
incentive programmes 1.2 1.2 1.2
Non-controlling interest 0.1 0.1 -0.1 0
Comprehensive income
for the period 6.5 10.7 1.5 12.2
Changes for the period -32.3 -27.4 0.3 -27.1
Equity 31 December 2009 120.2 176 8 184
Equity 1 October 2010 110.2 173.3 7 180.3
Shares subscribed
with stock options 0.4 0.4
Payment of dividend 0 0 0
Expenses from share-based
incentive programmes -0.4 -0.4 -0.4
Comprehensive income
for the period 5.2 6.6 0.2 6.8
Changes for the period 4.8 6.6 0.2 6.8
Equity 31 December 2010 115 179.9 7.2 187.1
Equity 1 January 2010 120.2 176 8 184
Shares subscribed
with stock options 1.9 1.9
Payment of dividend -5.9 -5.9 -1.2 -7.1
Expenses from share-based
incentive programmes 0.6 0.6 0.6
Comprehensive income
for the period 0.1 7.2 0.4 7.6
Changes for the period -5.2 3.9 -0.7 3.1
Equity 31 December 2010 115 179.9 7.2 187.1
PROFITABILITY AND OTHER
KEY FIGURES 10-12/2010 10-12/2009 1-12/2010 1-12/2009
--------------------------------------------------------------------------------
Return on investment, % 2.6 5.3
Return on equity, % 0.2 4.1
Equity ratio, % 40.1 40.9
Net debt/equity ratio
(gearing), % 3.5 -10.5
Net debt, EUR million 6.5 -19.3
Current ratio 1.5 1.7
Consulting and
engineering, EUR million 521.1 483.6
EPC, EUR million 5.1 2.1
Order stock total, EUR
million 526.2 485.7
Capital expenditure,
operating
EUR million 2.0 1.0 6.8 4.8
Proportion of net sales,
% 1.1 0.6 1.0 0.7
Capital expenditure in
shares,
EUR million 0.7 0.8 11.8 5.0
Proportion of net sales,
% 0.4 0.5 1.8 0.7
Personnel in group
companies
on average 6611 7052
Personnel in associated
companies
on average 138 142
Personnel in group
companies
at year-end 6801 6530
Personnel in associated
companies
at year-end 136 141
--------------------------------------------------------------------------------
KEY FIGURES FOR THE
SHARES 10-12/2010 10-12/2009 1-12/2010 1-12/2009
--------------------------------------------------------------------------------
Earnings/share, EUR 0.08 0.02 0.00 0.11
Diluted 0.08 0.02 0.00 0.11
Shareholders'
equity/share, EUR 3.03 2.98
Dividend, EUR million 0.0 1) 5.9
Dividend/share, EUR 0.10 1) 0.10
Dividend/earnings, % 0.0 1) 90.9
Effective return on
dividend, % 0.0 1) 0.9
Price/earnings multiple n/a 101.5
Issue-adjusted trading
prices, EUR
Average trading price 9.99 9.78
Highest trading price 12.30 13.17
Lowest trading price 8.23 7.55
Closing price at year-
end 9.15 11.17
Total market value of
shares,
outstanding shares, EUR
million 539.9 654.5
own shares, EUR million 3.7 4.2
Trading volume of shares
Shares, 1000 22 696 20 556
Proportion of total
volume, % 38.3 35.1
Issue-adjusted number of
shares, 1000
On average 59 221 58 509
At year-end 59 414 58 971
1) Board of Directors'
proposal.
--------------------------------------------------------------------------------
CHANGE IN INTANGIBLE
ASSETS
EUR million 10-12/2010 10-12/2009 1-12/2010 1-12/2009
--------------------------------------------------------------------------------
Book value at beginning
of period 5.4 5.3 5.4 6.2
Acquired companies 0.0 0.0 0.5 0.0
Capital expenditure 0.3 0.5 1.5 1.2
Decreases 0.0 0.0 0.0 0.0
Depreciation -0.7 -0.5 -2.3 -2.2
Translation difference 0.4 0.1 0.3 0.2
Book value at end of
period 5.2 5.4 5.2 5.4
Change in tangible
assets
Book value at beginning
of period 16.4 17.3 16.6 18.8
Acquired companies 0.0 0.0 0.2 0.0
Capital expenditure 0.9 0.3 4.5 3.4
Decreases -0.1 0.0 -0.3 -0.4
Depreciation -1.3 -1.5 -5.6 -6.0
Translation difference 0.3 0.5 0.8 0.8
Book value at end of
period 16.2 16.6 16.2 16.6
CONTINGENT LIABILITIES
EUR million 1-12/2010 1-12/2009
--------------------------------------------------------------------------------
Other obligations
Pledged assets 1.4 2.0
Project and other
guarantees 55.1 55.0
Claims and litigations 0.0 3.0
-----------------------
Total 56.5 60.0
For others
Pledged assets 0.2 0.0
Other obligations 0.0 0.1
-----------------------
Total 0.2 0.1
Rent and lease
obligations 100.7 111.0
Project guarantees are normal undertakings
related to project business, for example
bid bonds or performance guarantees.
During the previous financial year one material tax
claim had been
raised against a Group company, which related to events
prior to Pöyry's
ownership. This claim has during the financial year
been covered by an
undertaking of a third party being equivalent to the
amount of the claim,
secured by a deposit on an escrow account in a bank
with the Group
company involved as a beneficiary. As a result of the
arrangement, the
Group company's risk related to the claims is
effectively removed.
--------------------------------------------------------------------------------
RELATED PARTY TRANSACTIONS 1-12/2010 1-12/2009
To the related parties of Pöyry Group belong the
subsidiaries and
the associated companies, the Board of Directors, the
President and
CEO (the Deputy to the President and CEO 2009) and the
members of the
Group Executive Committee. Furthermore Corbis S.A. belongs
to the related
parties.
Employee benefits for the Board of Directors, the
President and
CEO (the Deputy to the President and CEO 2009) and the
members of the
Group Executive Committee
Salaries, bonuses and other short-term
employee benefits 5.2 3.4
Shareholding and option rights of related parties, option
programme 2004
The members of the Board of Directors, the President and CEO and
the members
of the Group Executive Committee owned on 31 December
2010 a total of
165 418 shares and 48 450 stock options (on 31
December 2009
a total of 179 676 shares, and 108 227 stock
options 2004).
With the stock options the shareholding can
be increased
by 193 800 shares equalling 0.3 per
cent of the total
number of shares and votes.
Performance share plan 2008-2010
In December 2007 the Board of Directors of Pöyry
PLC approved
a share-based incentive plan for
key personnel.
The plan includes three earning periods which are
the calendar
years 2008, 2009 and 2010.
The option programme 2004 and the performance
share plan
2008-2010 are described in the Board of
Directors' report.
Own shares
Pöyry PLC holds on 31 December 2010 a total of
401 967 own
share corresponding to 0.7 per cent of the total number of
shares.
Transactions with the associated
companies
The transactions with the associated
companies
are determined on an arm's
length basis.
Sales to associated companies 0.2 0.1
Loans receivable from associated
companies 0.1 0.1
Accounts receivable from associated
companies 0.2 0.0
---------------------------------------------------------------------------
OPERATING SEGMENTS
EUR million 1-12/2010 1-12/2009
-------------------------------------------------------------------------------
NET SALES
Energy 171.2 173.9
Industry 159.8 162.0
Urban & Mobility 197.2 184.5
Water & Environment 79.3 86.5
Management Consulting 73.6 68.5
Unallocated 0.5 -1.9
-------------------------------
Total 681.6 673.5
OPERATING PROFIT AND NET PROFIT FOR THE PERIOD
EUR million, proportion of net sales
% % %
Energy 4.4 2.5 5.9 3.4
Industry -11.8 -7.4 -10.1 -6.2
Urban & Mobility 17.8 9.0 14.9 8.1
Water & Environment 1.3 1.7 4.9 5.7
Management Consulting -0.5 -0.6 -0.4 -0.7
Unallocated -5.4 -3.6
-------------------------------
OPERATING PROFIT TOTAL 5.8 0.9 11.6 1.7
Financial income and expenses -1.5 0.8
-------------------------------
PROFIT BEFORE TAXES 4.3 12.4
Income taxes -3.9 -4.4
-------------------------------
NET PROFIT FOR THE PERIOD 0.4 8.0
Attributable to:
Equity holders of the parent company 0.1 6.5
Non-controlling interest interest 0.3 1.5
OPERATING PROFIT, EXCLUDING RESTRUCTURING COSTS
Energy 6.4 3.7 7.8 4.5
Industry -6.3 -3.9 -3.5 -2.2
Urban & Mobility 18.5 9.4 15.5 8.4
Water & Environment 1.9 2.4 5.1 6.0
Management Consulting 1.7 2.3 1.2 1.8
Unallocated -4.9 -3.6
-------------------------------
Operating profit total 17.3 2.5 22.5 3.3
ORDER STOCK
Energy 183.2 171.0
Industry 66.0 39.3
Urban & Mobility 187.6 194.8
Water & Environment 66.5 62.3
Management Consulting 22.9 18.0
Unallocated 0.0 0.3
-------------------------------
Total 526.2 485.7
Consulting and engineering 521.1 483.6
EPC 5.1 2.1
-------------------------------
Total 526.2 485.7
GEOGRAPHICAL SEGMENTS
The Nordic countries 194.1 194.4
Other Europe 304.5 323.7
Asia 44.6 54.7
North America 28.6 20.0
South America 73.9 50.3
Other 35.9 30.4
-------------------------------
Total 681.6 673.5
PERSONNEL
Energy 1 463 1 402
Industry 2 083 1 790
Urban & Mobility 1 724 1 858
Water & Environment 891 908
Management Consulting 498 451
Unallocated 142 121
-------------------------------
Total 6 801 6 530
OPERATING SEGMENTS
EUR million 1-3/10 4-6/10 7-9/10 10-12/10
--------------------------------------------------------------------------------
NET SALES
Energy 42.8 41.1 44.3 43.0
Industry 35.8 40.1 37.2 46.7
Urban & Mobility 47.5 52.0 42.6 55.1
Water & Environment 19.3 19.9 18.9 21.2
Management Consulting 17.2 18.5 18.0 19.9
Unallocated 0.1 0.1 0.2 0.1
------------------------------------
Total 162.7 171.7 161.2 186.0
OPERATING PROFIT
Energy 0.4 0.4 1.0 2.6
Industry -4.3 -1.7 -0.8 -5.0
Urban & Mobility 3.6 3.2 1.6 9.4
Water & Environment 0.5 0.8 0.0 0.0
Management Consulting 0.3 -1.6 -1.0 1.8
Unallocated -1.0 -1.0 -0.6 -2.8
------------------------------------
OPERATING PROFIT TOTAL -0.4 0.0 0.1 6.1
Financial income and
expenses -0.2 -0.7 -0.9 0.3
------------------------------------
PROFIT BEFORE TAXES -0.6 -0.7 -0.8 6.4
Income taxes -0.5 -0.8 -1.3 -1.3
------------------------------------
NET PROFIT FOR THE PERIOD -1.1 -1.5 -2.1 5.1
Attributable to:
Equity holders of the
parent company -0.9 -1.7 -2.3 5.0
Non-controlling interest
interest -0.2 0.2 0.2 0.1
OPERATING PROFIT %
Energy 1.0 1.0 2.3 6.0
Industry -12.0 -4.2 -2.2 -10.7
Urban & Mobility 7.6 6.2 3.8 17.0
Water & Environment 2.6 4.0 0.0 0.2
Management Consulting 1.7 -8.6 -5.6 9.2
------------------------------------
Group -0.2 0.0 0.1 3.3
OPERATING PROFIT, EXCLUDING RESTRUCTURING COSTS
Energy 1.4 0.6 0.8 3.6
Industry -4.1 -1.3 -1.0 0.1
Urban & Mobility 3.6 3.3 1.6 10.0
Water & Environment 0.5 0.8 0.0 0.6
Management Consulting 0.3 0.6 -0.8 1.6
Unallocated -1.0 -1.0 -0.6 -2.3
------------------------------------
Operating profit, excluding restructuring
costs, total 0.9 2.8 0.1 13.5
OPERATING PROFIT, EXCLUDING RESTRUCTURING COSTS %
Energy 3.4 1.5 1.8 8.4
Industry -11.5 -3.2 -2.7 0.2
Urban & Mobility 7.6 6.3 3.8 18.1
Water & Environment 2.6 4.0 0.0 2.8
Management Consulting 1.7 3.2 -4.4 8.0
------------------------------------
Group 0.6 1.6 0.1 7.3
ORDER STOCK
Energy 175.5 191.2 183.4 183.2
Industry 69.6 82.5 72.5 66.0
Urban & Mobility 193.6 199.6 196.1 187.6
Water & Environment 70.5 72.5 70.6 66.5
Management Consulting 20.5 23.8 21.1 22.9
Unallocated 0.0 0.0 0.0 0.0
------------------------------------
Total 529.7 569.6 543.7 526.2
Consulting and engineering 527.9 564.3 538.5 521.1
EPC 1.8 5.3 5.2 5.1
------------------------------------
Total 529.7 569.6 543.7 526.2
OPERATING SEGMENTS
EUR million 1-3/09 4-6/09 7-9/09 10-12/09
--------------------------------------------------------------------------------
NET SALES
Energy 48.3 41.6 40.0 44.0
Industry 51.3 45.6 31.5 33.6
Urban & Mobility 48.9 46.3 42.6 46.7
Water & Environment 21.0 22.0 20.6 22.9
Management Consulting 17.8 17.8 15.1 17.8
Unallocated 0.5 0.7 0.4 -3.5
------------------------------------
Total 187.8 174.0 150.2 161.5
OPERATING PROFIT
Energy 3.2 1.3 0.6 0.8
Industry -0.9 -0.4 -3.6 -5.2
Urban & Mobility 3.8 3.4 3.7 4.0
Water & Environment 0.8 1.5 1.1 1.5
Management Consulting -0.6 -0.4 -0.1 0.7
Unallocated -1.1 -0.8 -0.6 -1.1
------------------------------------
OPERATING PROFIT TOTAL 5.2 4.6 1.1 0.7
Financial income and
expenses 1.1 -0.5 -0.3 0.5
------------------------------------
PROFIT BEFORE TAXES 6.3 4.1 0.8 1.2
Income taxes -2.0 -1.8 -0.8 0.2
------------------------------------
NET PROFIT FOR THE PERIOD 4.3 2.3 0.0 1.4
Attributable to:
Equity holders of the
parent company 3.8 2.1 -0.4 1.0
Non-controlling interest
interest 0.5 0.2 0.4 0.4
OPERATING PROFIT %
Energy 6.6 3.1 1.5 1.9
Industry -1.8 -0.9 -11.4 -15.5
Urban & Mobility 7.8 7.3 8.7 8.6
Water & Environment 3.8 6.8 5.3 6.7
Management Consulting -3.4 -2.2 -0.7 3.6
------------------------------------
OPERATING PROFIT TOTAL 2.8 2.6 0.7 0.4
OPERATING PROFIT, EXCLUDING RESTRUCTURING COSTS
Energy 3.2 2.1 1.3 1.2
Industry 1.5 2.5 -2.2 -5.3
Urban & Mobility 4.1 3.5 3.7 4.2
Water & Environment 0.8 1.6 1.2 1.6
Management Consulting -0.2 0.3 -0.1 1.2
Unallocated -1.1 -0.8 -0.6 -1.1
------------------------------------
Operating profit, excluding restructuring
costs, total 8.3 9.2 3.3 1.8
OPERATING PROFIT, EXCLUDING RESTRUCTURING COSTS %
Energy 6.6 5.0 3.3 2.7
Industry 2.9 5.5 -7.0 -15.8
Urban & Mobility 8.4 7.6 8.7 9.0
Water & Environment 3.8 7.3 5.8 7.0
Management Consulting -1.1 1.7 -0.7 6.7
------------------------------------
Group 4.4 5.3 2.2 1.1
ORDER STOCK
Energy 180.4 178.5 173.6 171.0
Industry 66.8 57.5 48.7 39.3
Urban & Mobility 198.2 202.0 202.4 194.8
Water & Environment 78.8 75.5 69.0 62.3
Management Consulting 21.6 19.3 20.1 18.0
Unallocated 0.6 1.3 0.1 0.3
------------------------------------
Total 546.4 534.1 513.9 485.7
Consulting and engineering 539.8 530.7 510.8 483.6
EPC 6.6 3.4 3.1 2.1
------------------------------------
Total 546.4 534.1 513.9 485.7
--------------------------------------------------------------------------------
ACQUISITIONS
ACQUISITIONS DURING 2010
Acquisition Acquired
Name and business date interest %
--------------------------------------------------------------------------------
Silviconsult Engenharia Ltda 9 November 2010 60
The company provides solutions for forest
businesses
and socioenvironmental management.
The company is based in the city of
Curitiba,
State of Paraná in Brazil, employing 23
persons.
Brennus Ingénieurs Conseils SA 1 July 2010 100
The company runs NUMEX which
is Europe's leading platform for
operators
for exchanging maintenance experience
and best-practice maintenance
procedures. The company is based in
France and has no personnel.
ETV-Eröterv Zrt
The company's product range comprises
nuclear and conventional 14 June 2010 98.9
power plant engineering, services for
radioactive
waste related projects
as well as full scale designing
services
in the area of transmission and
distribution. The company is based
in Budapest, Hungary, and has a staff
of 170.
PRG-Tec Oy 1 February 2010 100
The company specialises in hydrological
and geophysical measurements.
The clientele comprises of nuclear
waste
management companies in Finland and Sweden.
The company is based in Espoo, Finland,
employing eight persons.
The company has been merged with Pöyry
Finland Oy 31 December 2010.
--------------------------------------------------------------------------------
ACQUISITIONS DURING 2009
Aquarius International
Consultants Pty Ltd 14 May 2009 100
The company is one of Australia's leading independent offshore
engineering
and marine consulting firm and is highly respected in the offshore oil
and gas
industry. The company is based in Perth, Australia, employing ten
persons.
Shanghai Kang Dao Construction Company
Ltd 1 March 2009 100
The company is primarily engaged in project management for industrial
and commercial real estate development and construction projects.
The company is based in Shanghai, China and has a staff of
27.
Aggregate figures for the above
acquisitions
EUR million 2010 2009
--------------------------------------------------------------------------------
Purchase price
Fixed price, paid 11.8 4.2
Earnout estimate 0.5 0.0
Total 12.3 4.2
Price allocation
Equity 1.7 0.2
Non-controlling interest 0.0 0.0
Total 1.7 0.2
Remaining 10.6 4.0
Intangible rights
Goodwill 0.5
Yhteensä 10.1
10.6
Market leadership, experienced management and staff, and earnings
expectations are factors contributing to the amount booked as goodwill.
The goodwill value from the acquistion of ETV-Eröterv Zrt in 2010, was
especially due to the company's profound knowledge of the Russian
nuclear power plants.
Initial accounting for ETV-Erötev Zrt, which was acquired
during the financial year, has been adjusted at the end of
the reporting period. The Company has increased the values
of work in progress and project advances recognized
earlier as a result of changing the revenue recognition
principles applied by the acquiree to correspond with the
Groups' revenue recognition principles. Consequently, the
value of goodwill increased by EUR 0.9 million.
The company has acquired 60 per cent stake in Silviconsult
Engenharia Ltda during the financial year. The terms and
conditions of the sale and purchase agreement include a
call option of the Company and a put option of the non-
controlling interest. The put and call options with an
exercise date in January 2014, have been treated as a
contingent consideration. The acquired business is
consolidated 100 per cent. The contingent consideration of
the sale and purchase agreement is based on management's
estimate of the average operating profit of the business
in coming three years. The fair value of contingent
consideration is EUR 0.5 million at the end of the
reporting period.
Non-controlling interest
The non-controlling interest is measured at the
proportionate interest of the net asset of the acquired
company (in 2010 ETV).
Acquisition related costs
The costs are included in other
operating expenses 0.2
Impact on the Pöyry Group's comprehensive income statement
Operating profit from
acquisition date to
31 December 2010/2009 0.9 0.0
Sales volume on a 12-month calendar
year basis 14.7 3.0
Operating profit on 12-month
calendar year basis 1.6 0.7
Impact on the Pöyry Group's number
of personnel 201 37
Impact on the Pöyry Group's assets and
liabilities
EUR million 2010 2009
--------------------------------------------------------------------------------
Book Book Fair
values Fair value Adjusted values value Adjusted
at
at acqui- adjust- IFRS acqui- adjust- IFRS
sition sition
date ments values date ments values
Intangible
assets 0.0 0.0 0.0 0.0 0.0
Tangible
assets 0.2 0.0 0.2 0.0 0.0 0.0
Deferred tax
receivables 0.1 0.0 0.1
Work in
progress 0.6 0.0 0.6 0.0 0.0 0.0
Accounts
receivable 1.4 0.0 1.4 0.2 0.2
Other
receivables 0.4 0.0 0.4 0.0 0.0 0.0
Cash and cash
equivalents 2.1 0.0 2.1 0.2 0.2
Assets total 4.8 0.0 4.8 0.4 0.0 0.4
Interest
bearing
liabilities 0.0 0.0 0.0 0.0
Project
advances 1.1 1.1 0.0 0.0
Accounts
payable 0.2 0.2 0.0 0.0
Other current
liabilities 1.8 0.0 1.8 0.2 0.0 0.2
Liabilities
total 3.1 0.0 3.1 0.2 0.0 0.2
Net identifiable
assets and liabilities 1.7 0.0 1.7 0.2 0.0 0.2
Non-
controlling
interest 0.0
Total cost of business
combinations 12.3 4.2
Intangible
rights 0.5 0.0
Goodwill 10.1 4.0
Consideration paid,
satisfied in cash 12.3 4.2
Unpaid share 0.6 0.0
Acquisition
related costs 0.2 0.0
Cash acquired 2.1 0.2
Net cash
outflow 9.7 4.0
Based on the purchase agreements the
companies
acquired during the year are consolidated
100% into
the Pöyry
Group as of
the end of the month when
acquired.
As the acquisitions
are individually
immaterial, the above information is
disclosed in aggregate.
--------------------------------------------------------------------------------
CHANGES IN GOODWILL AND INTANGIBLE RIGHTS
EUR million 10-12/2010 10-12/2009 1-12/2010 1-12/2009
--------------------------------------------------------------------------------
Book value at beginning of
period, goodwill 113.1 100.4 101.3 95.9
Book value at beginning of
period, intangible rights 1.4 0.9 0.9 0.9
Increase in
goodwill 1.8 0.1 10.2 4.4
Increase in
intangible rights 0.0 0.0 0.5 0.0
Decrease in
goodwill -0.1 -0.2 -0.7 -2.1
Depreciation of
intangible rights -0.1 0.0 -0.1 0.0
Value decrease -0.2 0.0 -0.2 0.0
Exchange
differences,
goodwill 1.9 1.0 5.9 3.1
Exchange differences,
intangible rights 0.1 0.0 0.1 0.0
------------------------------------------------
Book value at end
of period 117.9 102.2 117.9 102.2
Goodwill 116.7 100.3 116.7 98.2
Intangible rights 1.2 0.9 1.2 0.9
The decrease of EUR 0.7
million in the
goodwill 2010 (EUR 2.1 million in 2009) is due to earn-out
payment,
which was less
than provided
for at the
acquisition in
2007.
Purchase price from business
acquisitions
allocated to intangible rights, which are subject to annual
impairment test.
In 2005 EUR 1.0 million was allocated to client
relationships. An impairment of EUR 0.2 million was made in
2010 due to decrease of sales to the client.
Calculation of key figures
Return on investment, ROI %
profit before taxes + interest and other financial expenses
_____________________________________________________ x 100
balance sheet total - non-interest bearing liabilities (quarterly average)
Return on equity, ROE %
net profit
_____________________________________________________ x 100
equity (quarterly average)
Equity ratio %
equity
_____________________________________________________ x 100
balance sheet total - advance payments received
Net debt/equity ratio,
gearing %
interest-bearing liabilities - cash and cash equivalents
______________________________________________________ x 100
equity
Earnings/share, EPS
net profit attributable to the equity holders of the parent company
issue-adjusted average number of shares for the fiscal year
Equity attributable to the equity holders of the parent company/share
equity attributable to the equity holders of the parent company
_______________________________________________________
issue-adjusted number of shares at the end of the fiscal year
Dividend/share
dividend
_______________________________________________________
issue-adjusted number of shares at the end of the fiscal year
Dividend/earnings %
dividend for the fiscal year
___________________________________________________________ x 100
net profit attributable to the equity holders of the parent company
Market value of share capital
number of shares at the end of the fiscal year x closing price at the end of
the fiscal year
[HUG#1486480]
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