Lemminkäinen - Interim report (Q1 and Q3)

Lemminkäinen's interim report, 1 January - 30 June 2012

LEMMINKÄINEN CORPORATION            INTERIM REPORT    2 AUGUST 2012 AT 8:00 A.M.


LEMMINKÄINEN'S INTERIM REPORT, 1 JANUARY - 30 JUNE 2012:
Improvement in comparable earnings for the review period. Strong performance in
infrastructure construction in Finland. 

January-June 2012, compared with the corresponding period of 2011:

- Net sales in January-June were up 6% and amounted to EUR 915.0 million
(864.5). 
- The order book grew by 11% and was EUR 1,931.2 million (1,734.8) at the end
of the period. 
- The operating profit was EUR -9.8 million (-7.2). Operating margin was -1.1
(-0.8). The operating profit for the comparison period includes negative
goodwill of EUR 8.1 million recognised from an acquisition. 
- Pre-tax profit amounted to EUR -18.1 million (-13.8). Pre-tax profit for the
comparison period includes negative goodwill of EUR 8.1 million recognised from
an acquisition. 
- Earnings per share were EUR -0.90 (0.03). Earnings per share for the review
period include EUR 0.41 per share in negative goodwill and EUR 0.64 per share
in capital gain from the divestment of the roofing business. 
- Cash flow from operations totalled EUR 9.2 million (-135.0).

April-June 2012, compared with the corresponding period of 2011:

- Net sales in April-June were up 7% and amounted to EUR 587.8 million (548.6).
- The operating profit was EUR 11.4 million (20.7). Operating margin was 1.9
(3.8). The operating profit for the comparison period includes negative
goodwill of EUR 8.1 million recognised from an acquisition. 
- Pre-tax profit amounted to EUR 5.7 million (16.1). Pre-tax profit for the
comparison period includes negative goodwill of EUR 8.1 million recognised from
an acquisition. 
- Earnings per share were EUR 0.12 (0.63). Earnings per share for the review
period include EUR 0.41 per share in negative goodwill. 
- Cash flow from operations totalled EUR -26.4 million (-96.7).

Key figures, IFRS, EUR       1-6/    1-6/  Change   4-6/   4-6/  Change    1-12/
 million                     2012    2011           2012   2011             2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales                   915.0   864.5      6%  587.8  548.6      7%  2,268.5
Operating profit             -9.8    -7.2    -36%   11.4   20.7    -45%     53.9
Operating margin %           -1.1    -0.8            1.9    3.8              2.4
Pre-tax profit              -18.1   -13.8    -31%    5.7   16.1    -65%     35.0
Earnings from discontinued   -0.6    11.1           -0.4    0.0             11.0
 operations                                                                     
Result for the period       -16.5     0.6            3.5   12.3    -72%     35.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR     -0.90    0.03           0.12   0.63    -81%     1.77
Cash flow from business       9.2  -135.0          -26.4  -96.7     73%     -7.1
 operations                                                                     

  1. 1-6/2011 and 4-6/2011: Operating profit, pre-tax profit and the result for
     the period include EUR 8.1 million in negative goodwill recognised from an
     acquisition. Earnings per share include EUR 0.41 per share in negative
     goodwill.
  2. 1-12/2011: Operating profit, pre-tax profit and the result for the period include EUR 11 million in negative goodwill recognised from an acquisition.
     Earnings per share include EUR 0.56 per share in negative goodwill.
  3. 1-6/2011 and 1-12/2011: Capital gain from the divestment of the roofing
     business - EUR 15.3 million - is evident in the result for the period and
     earnings per share (EUR 0.64/share).

Key figures, EUR million                30.6.2012  30.6.2011  Change  31.12.2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Order book                                1,931.2    1,734.8     11%     1,400.4
-         of which unsold                   240.7      222.6      8%       206.3
Balance sheet total                       1,386.5    1,396.3     -1%     1,242.8
Interest-bearing net debt                   348.9      501.7    -30%       401.2
Equity ratio, %                              32.0       25.9                30.8
Gearing, %                                   89.5      157.8               114.5
Return on investment (rolling 12              8.3        6.4                10.8
 months), %                                                                     



 President & CEO Timo Kohtamäki:"Lemminkäinen's earnings in the first half of the year improved on the previous
year, when non-recurring items booked in the comparison period are not
recognised. All of our business operations in Finland picked up the pace. In
particular, Infrastructure Construction and the paving business performed well.
Infrastructure Construction's earnings improvement was driven by our new
operating model, which has boosted the efficiency of our operations and
improved customer service. In Building Construction and Technical Building
Services, our profitability improved. In Norway, our earnings performance did
not meet our expectations. Our paving contracts focused mainly on northern
Norway, where the work season starts later in the spring. The impact of
seasonal variations on our earnings is now even more evident in our operations
as our business volume in Norway has grown. That said, competitive contracting
in building construction improved significantly in Russia," says Timo
Kohtamäki, President and CEO of Lemminkäinen. 

Kohtamäki states that Lemminkäinen's order book has become even stronger, with
better margins. In addition, the Group's balance sheet is now stronger. "One of
our strategic goals is to strengthen solvency. Our successful working capital
project and the EUR 70 million hybrid loan that we issued in the first quarter
have a positive effect on our equity ratio and gearing. The divestment of our
concrete business after the end of the review period will also improve our
solvency," adds Kohtamäki. 

On 3 July, Lemminkäinen announced that it will sell its concrete business to
Rudus Oy for EUR 55 million. Lemminkäinen will recognise capital gains of EUR
20 million on the divestment. The transaction still requires the approval of
the Finnish competition authorities, which is expected to be granted in the
third quarter. Lemminkäinen will focus on its strategic key growth areas, which
are infrastructure construction in the Nordic countries and residential
construction in St Petersburg, Russia. Achieving substantial growth in the
concrete business would have required sizeable investments. 

Profit guidance for 2012

Lemminkäinen will keep its profit guidance intact. The company estimates that
its 2012 net sales will remain at the same level as in 2011, and that its
pre-tax profit will improve on 2011. Lemminkäinen's estimate is based on good
performance during the first half of the year, as well as a larger order book
and order book margin than in 2011. 

Market outlook

Due to the debt crisis in the euro zone, the general economic climate has
remained uncertain. The total volume of construction in Finland is expected to
fall in 2012. The greatest downswing will be seen in the construction of new
housing. The market for infrastructure construction is expected to remain
stable in all of the Nordic countries. Demand for infrastructure construction
in Norway and Denmark is increased by large-scale road projects and investments
in energy production. There is still a great need for new housing in St
Petersburg, Russia. Residential construction in Russia is supported by lower
interest rates and the increased availability of consumer mortgages. 

Briefing

A Finnish-language briefing for analysts and the media will be held at 2.00
p.m. on Thursday, 2 August at Lemminkäinen's head office. The street address is
Salmisaarenaukio 2, Helsinki, Finland. The interim report will be presented by
President and CEO Timo Kohtamäki. Presentation material is available in Finnish
and English on the company's website, www.lemminkainen.com. 

2012 financial releases

1 November 2012 - Interim report, January - September 2012


LEMMINKÄINEN CORPORATION
Corporate Communications

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Timo Kohtamäki, President & CEO, tel. +358 2071 53263
Robert Öhman, CFO, tel. +358 2071 53515
Katri Sundström, Vice President, Investor Relations, tel. +358 2071 54813

APPENDICES:
Interim Report, 1 January - 30 June 2012
Tabulated section of the interim report

DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Key media
www.lemminkainen.com

Lemminkäinen Group operates in all areas of the construction sector. The
Group's business sectors are building construction, infrastructure
construction, technical building services and international operations. Net
sales in 2011 were about EUR 2.3 billion, of which international operations
accounted for roughly one third. The Group employs an average of 8,400 people.
Lemminkäinen Corporation's share is quoted on NASDAQ OMX Nordic Exchange
Helsinki. www.lemminkainen.com

Attachments:

Osavuosikatsaus_Q2_2012_ENG.pdf