Lemminkäinen - Quarterly report

Lemminkäinen Interim Report 1 Jan – 30 Sep 2015

LEMMINKÄINEN CORPORATION  STOCK EXCHANGE RELEASE 30 OCTOBER 2015 AT 8:00 A.M.

Lemminkäinen Interim Report 1 Jan - 30 Sep 2015

July-September 2015 (7-9/2014)

  · Order inflow was EUR 312.2 million (389.4)
  · Net sales totalled EUR 568.8 million (646.4)
  · Operating profit was EUR 20.9 million (38.7), or 3.7 % (6.0) of net sales.
    The operating profit includes a EUR 13.2 write-down related to the company's
    decision to withdraw from the planned Ilmatar project in Russia.
  · Profit for the period was EUR 12.0 million (16.2). Profit for the period in
    continuing operations was EUR 12.0 million (16.1).
  · Earnings per share were EUR 0.43 (0.62). Earnings per share in continuing
    operations were EUR 0.43 (0.62).
  · Cash flow from operations totalled EUR 50.1 million (80.9).
  · Equity ratio at the end of the review period was 35.0% (33.0) and gearing
    41.7% (53.7).
  · Interest-bearing net debt at the end of the review period was
    EUR 154.4 million (233.5).

January-September 2015 (1-9/2014)

  · Order inflow was EUR 1,121.5 million (1,404.2)
  · Net sales totalled EUR 1,350.5 million (1,436.2)
  · Operating profit was EUR 18.4 million (36.2) or 1.4% (2.5) of net sales.
  · Profit for the period was EUR -2.7 million (24.4). Profit for the period in
    continuing operations was EUR -2.7 million (1.2).
  · Earnings per share were EUR -0.48 (0.81). Earnings per share in continuing
    operations were EUR -0.48 (-0.26).
  · Cash flow from operations totalled EUR 76.2 million (-47.3).

Profit guidance for 2015

The profit guidance for 2015 is intact. Lemminkäinen estimates that its net
sales in 2015 will not increase as compared to 2014 (EUR 2,044.5 million).
Operating profit (IFRS) in 2015 is expected to improve as compared to 2014 (EUR
36.3 million).

Key figures,        7-9/        7-9/  Change     1-9/     1-9/  Change    1-12/
IFRS                2015        2014             2015     2014             2014

Net sales      M€  568.8       646.4   -77.6  1,350.5  1,436.2   -85.7  2,044.5
   Paving      M€  347.4       367.4   -20.0    670.6    671.3    -0.7    907.5
   Infra       M€   62.5        77.4   -14.9    187.1    212.6   -25.5    286.0
   projects
   Building    M€  103.4       121.9   -18.5    361.7    373.0   -11.3    539.0
   construction,
   Finland
   Russian     M€   30.7        64.0   -33.3     66.8    114.1   -47.3    196.1
   operations
   Other       M€   24.8        15.6     9.2     64.5     65.2    -0.7    115.9
   items
Operating      M€   20.9        38.7   -17.8     18.4     36.2   -17.8     36.3
profit
   Paving      M€   32.1        32.8    -0.7     20.3     27.0    -6.7     32.2
   Infra       M€    3.1         4.1    -1.0      8.2      5.7     2.5      7.2
   projects
   Building    M€   -2.3         0.3    -2.6      1.5     12.3   -10.8      9.3
   construction,
   Finland
   Russian     M€  -10.6        10.6   -21.2     -8.1      9.6   -17.7     19.7
   operations
   Other       M€   -1.3        -9.1     7.8     -3.5    -18.3    14.8    -32.2
   items
Operating      %     3.7         6.0              1.4      2.5              1.8
margin
   Paving      %     9.2         8.9              3.0      4.0              3.5
   Infra       %     4.9         5.3              4.4      2.7              2.5
   projects
   Building    %    -2.2         0.2              0.4      3.3              1.7
   construction,
   Finland
   Russian     %   -34.5        16.6            -12.1      8.4             10.1
   operations
Pre-tax        M€   16.6        23.2    -6.6      2.9      6.1    -3.2     -1.7
profit
Profit from    M€   12.0        16.1    -4.1     -2.7      1.2    -3.9     -5.0
continuing
operations
Profit for     M€   12.0        16.2    -4.2     -2.7     24.4   -27.1     18.1
the period
Earnings per   €    0.43        0.62   -0.19    -0.48    -0.26   -0.22    -0.68
share,
continuing
operations
Earnings per   €    0.43        0.62   -0.19    -0.48     0.81   -1.29     0.40
share for the
period
Cash flow      M€   50.1        80.9   -30.8     76.2    -47.3   123.5    -48.4
from
operations 1)

1) 1-9/2014 and 1-12/2014: Cash flow from operations includes EUR 59.7 million
of damages paid in Q1/2014 related to asphalt cartel.

Key figures,           30 Sep   30 Sep     Change  30 June     Change   31 Dec
IFRS                     2015     2014  Q3/15 vs.  2015 3)  Q3/15 vs.     2014
                                            Q3/14               Q2/15

Order book,       M€  1,268.5  1,910.9     -642.4  1,667.1     -398,6  1,456.1
continuing
operations
Operating         M€    486.1    627.9     -141.8    547.0      -60,9    590.4
capital
Balance sheet     M€  1,235.6  1,543.7     -308.1  1,292.3      -56,7  1,257.8
total
Interest-bearing  M€    154.4    233.5      -79.1    211.7      -57,3    213.6
net debt
Equity ratio 1)   %      35.0     33.0                33.1                37.1
Gearing 2)        %      41.7     53.7                57.2                51.8
Return on         %       9.2     -2.3                10.9                13.5
investment,
rolling 12
months

1) Equity ratio, if hybrid bond was treated as debt: 9/2015: 24.5%, 9/2014:
22.5% and 12/2014: 24.6%.

2) Gearing, if hybrid bond was treated as debt: 9/2015: 102.8%, 9/2014: 125.5%
and 12/2014: 128.4%.

3) The figures include assets held for sale.

President and CEO Casimir Lindholm:

“Lemminkäinen's financial position has improved clearly year-on-year,” says
Casimir Lindholm, President and CEO. “Our operating capital has decreased from
EUR 630 million to EUR 485 million during the last 12 months. We have reduced
investments and decreased our net working capital by improving invoicing
efficiency, divesting non-strategic plots and assets and by maintaining a good
level of housing sales in Russia. Our interest-bearing net debt has decreased
from EUR 235 million to EUR 155 million despite the partial repurchase of the
first hybrid bond (EUR 27 million). In addition, our cash flow in
January-September was significantly better than in the corresponding period last
year.”

“During the review period, we completed the divestments of the building
construction business in Sweden and the road maintenance business in Norway. In
addition, we decided to withdraw from the Ilmatar project in Russia. Our
decision was influenced by the uncertainties in the operating environment and
weakened economic situation in the country as well as the risk level of the
project for Lemminkäinen. The streamlining of our portfolio has had a negative
impact of more than EUR 20 million on our 2015 result, which is more than we
originally estimated. However, these measures are in line with our strategy and
they will improve our competitiveness over the long term and enable us to focus
on our core businesses. Overall we are proceeding as planned.”

“Lemminkäinen's result in the third quarter was weaker than in the comparison
period. In Paving, the result was on a par with the comparison period. In Infra
projects, the year-on-year result was weaker, but the market situation is still
favourable. In Building construction, Finland, the lower number of sold units
decreased the result. In Russian operations, the result is weakened by a EUR
13.2 million write-down related to our decision to withdraw from the planned
Ilmatar project. The cuts in fixed costs carried out in 2014 can be seen in the
other operations' result.”

“Infra projects' order inflow improved by EUR 96 million. In August, Building
construction, Finland, signed an agreement on Finavia's terminal contract, with
a total value of EUR 170 million. This project is only partially recorded in our
order book. In Russia, we have not started any new residential projects. There
is still room for growth in our order book; and we see the market situation for
infra projects positive especially in Sweden and Norway.”

Market outlook

The total volume of construction in Finland in 2015 declines year-on-year, but
is expected to increase slightly in 2016. The completion of major infrastructure
projects creates uncertainty in infrastructure construction. Renovation in
building construction grows, but new construction is expected to remain at the
current level. Paving volumes are growing, but the falling price of bitumen
impacts the growth in net sales. In Sweden and Norway, infrastructure
construction is supported by major road projects and investments in energy
production infrastructure. In Russia, housing demand in comfort class has
decreased somewhat compared to the previous year. In the Baltic countries, the
demand for infrastructure construction has remained stable. (Sources: The
economic outlook of the Confederation of Finnish Construction Industries RT /
autumn 2015, Euroconstruct June/2015)

Briefing

A Finnish-language briefing for analysts and the media will be held at 10:00
a.m. on Friday, 30 October at Lemminkäinen's head office. The street address is
Salmisaarenaukio 2, Helsinki, Finland. Lemminkäinen's President and CEO Casimir
Lindholm will present the Interim report. Presentation material can be found in
Finnish and English at the company's website, www.lemminkainen.com/investors.

Financial reporting in 2015

In 2015 the Interim Reports will be published as follows:

5 February 2015            Financial statements bulletin 2014
29 April 2015              Interim Report 1 Jan - 31 March 2015
29 July 2015               Interim Report 1 Jan - 30 June 2015
30 October 2015            Interim Report 1 Jan - 30 Sep 2015

LEMMINKÄINEN CORPORATION
Corporate Communications

ADDITIONAL INFORMATION:
Casimir Lindholm, President and CEO, tel. +358 2071 53304
Ilkka Salonen, CFO, tel. +358 2071 53304

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

Together with our customers we create conditions that make living, working and
travelling functional, safe and healthy. We operate in Northern Europe and
employ about 5,600 professionals. In 2014, our net sales were about EUR 2.0
billion. Lemminkäinen Corporation's share is quoted on NASDAQ OMX Nordic
Exchange Helsinki. www.lemminkainen.com

Viðhengi:

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