2011-04-29 07:00:00 CEST
2011-04-29 07:00:10 CEST
REGULATED INFORMATION
YIT - Interim report (Q1 and Q3)
YIT's Interim Report January 1 - March 31, 2011: Building Services order backlog increased - residential start-ups will increase in 2011
Helsinki, 2011-04-29 07:00 CEST (GLOBE NEWSWIRE) -- YIT CORPORATION INTERIM
REPORT APRIL 29, 2011, at 8:00 a.m.
YIT's Interim Report January 1 - March 31, 2011: Building Services order
backlog increased - residential start-ups will increase in 2011
SEGMENT-LEVEL REPORTING 1-3/2011 (1-3/2010): Strong residential sales to
consumers in Finland
-- The operating profit of the segments was 12 percent higher than in the
previous year, amounting to EUR 50.4 million (1-3/2010: EUR 44.5 million).
Operating profit was higher in International Construction Services,
Building Services Central Europe and Construction Services Finland. The
operating profit of the segments includes EUR -2.0 million (1-3/2010: EUR
-0.3 million) of borrowing costs according to IAS 23.
-- The revenue of the segments was 25 percent higher than in the previous
year, increasing to EUR 1,026.9 million (1-3/2010: EUR 820.8 million). An
acquisition completed in Central Europe during 2010 and solid residential
sales, especially in Finland, contributed to the growth in revenue.
-- The order backlog of the segments was 18 percent higher than the year
before, amounting to EUR 3,355.6 million (3/2010: EUR 2,837.0 million). The
order backlog of Building Services Central Europe increased considerably
compared to the previous year as a result of the acquisition completed at
the beginning of September. The order backlog increased from the end of
2010 in Building Services Northern Europe and Central Europe. The margin of
the order backlog improved during the first quarter, especially in Germany.
GROUP REPORTING 1-3/2011 (1-3/2010): Earnings per share increased by one third
-- Earnings per share increased by 33 percent to EUR 0.20 (1-3/2010: EUR
0.15).
-- The Group's profit before taxes increased by 30 percent from the previous
year to EUR 34.7 million in January-March (1-3/2010: EUR 26.7 million).
GUIDANCE: Profitable growth will continue in 2011
YIT Corporation reiterates its estimate issued in connection with the financial
statements for 2010 and according to which, in 2011, the combined revenue of
the business segments will grow and operating profit will grow clearly compared
to 2010.
YIT estimates residential sales to continue to be good in both Finland and
Russia. In particular, residential construction activity in Russia and
increasing the share of building system service and maintenance provide
opportunities for improving profitability.
The profit outlook is based on the segment-level reporting, i.e. recognition of
income based on the percentage of completion.
KEY FIGURES
Development of segments and the Group
Revenue, EUR million 1-3/11 1-3/10 Change
------------------------------------------------------------
Building Services Northern Europe 476.2 406.8 17%
------------------------------------------------------------
Building Services Central Europe 177.1 70.4 152%
------------------------------------------------------------
Construction Services Finland 289.5 252.9 14%
------------------------------------------------------------
International Construction Services 100.3 106.9 -6%
------------------------------------------------------------
Other items -16.2 -16.2
------------------------------------------------------------
YIT's segments total 1,026.9 820.8 25%
------------------------------------------------------------
IFRIC 15 adjustment -57.2 -55.5
------------------------------------------------------------
YIT Group, total 969.7 765.3 27%
------------------------------------------------------------
Operating profit, EUR million 1-3/11 1-3/10 Change
-----------------------------------------------------------
Building Services Northern Europe 17.1 19.9 -14%
-----------------------------------------------------------
Building Services Central Europe 4.0 1.7 135%
-----------------------------------------------------------
Construction Services Finland 25.6 23.1 11%
-----------------------------------------------------------
International Construction Services 8.4 4.6 83%
-----------------------------------------------------------
Other items -4.7 -4.8
-----------------------------------------------------------
YIT's segments total 50.4 44.5 13%
-----------------------------------------------------------
IFRIC 15 adjustment -11.2 -10.6
-----------------------------------------------------------
YIT Group, total 39.2 33.9 16%
-----------------------------------------------------------
Operating profit margin, % 1-3/11 1-3/10
---------------------------------------------------
Building Services Northern Europe 3.6 4.9
---------------------------------------------------
Building Services Central Europe 2.3 2.4
---------------------------------------------------
Construction Services Finland 8.8 9.1
---------------------------------------------------
International Construction Services 8.4 4.3
---------------------------------------------------
YIT's segments total 4.9 5.4
---------------------------------------------------
YIT Group, total 4.0 4.4
---------------------------------------------------
Order backlog, EUR million 3/11 3/10 Change 3/11 12/10 Change
--------------------------------------------------------------------------------
Building Services Northern 804.9 697.9 15% 804.9 757.4 6%
Europe
--------------------------------------------------------------------------------
Building Services Central 573.2 266.3 115% 573.2 507.0 13%
Europe
--------------------------------------------------------------------------------
Construction Services 1,176.0 905.4 30% 1,176.0 1,173.2 0%
Finland
--------------------------------------------------------------------------------
International Construction 862.7 1,013.2 -15% 862.7 870.8 -1%
Services
--------------------------------------------------------------------------------
Other items -61.2 -45.8 -61.2 -58.3
--------------------------------------------------------------------------------
YIT's segments total 3,355.6 2,837.0 18% 3,355.6 3,250.1 3%
--------------------------------------------------------------------------------
IFRIC 15 adjustment 343.4 315.5 343.4 285.6
--------------------------------------------------------------------------------
YIT Group, total 3,699.0 3,152.5 17% 3,699.0 3,535.7 5%
--------------------------------------------------------------------------------
Key figures of Group reporting (IFRIC 15)
1-3/11 1-3/10 Change
--------------------------------------------------------------------------
Profit before taxes, EUR million 34.7 26.7 30%
--------------------------------------------------------------------------
Profit for the review period, EUR million 24.9 18.9 32%
--------------------------------------------------------------------------
Earnings/share, EUR 0.20 0.15 33%
--------------------------------------------------------------------------
Operating cash flow after investments. EUR million 16.1 33.8 -52%
--------------------------------------------------------------------------
Personnel at end of period 25,748 23,211 11%
--------------------------------------------------------------------------
3/11 3/10 12/10
----------------------------------------------------------
Return on investment (last 12 months) % 14.0 11.3 14.3
----------------------------------------------------------
Equity ratio, % 28.5 30.2 31.9
----------------------------------------------------------
Gearing ratio, % 75.2 65.0 72.6
----------------------------------------------------------
Group reporting (IFRIC 15)
YIT has applied the IFRIC 15 Agreements for the Construction of Real Estate
IFRS interpretation from the start of the financial period that began on
January 1, 2010. Due to the application of the interpretation, Group-level
reporting and segment-level reporting differ. The difference between the
accounting policies is reported as an IFRIC 15 adjustment.
As a result of the accounting policy, Group-level figures can fluctuate greatly
between different quarters. In accordance with the accounting policy,
residential development projects are only recognised in Group-level figures
when a project has been completed, while in segment reporting they are
recognised already as construction progresses.
In YIT's projects involving business premises, the recognition system is on a
case-by-case basis and in accordance with the terms and conditions of each
contract. Sold projects are recognised when the construction work has started
or when the project is complete. The portion of the project's income and
expenses to be recognised is obtained using the principle percentage of
completion multiplied by the percentage of sale multiplied by occupancy rate.
YIT usually sells commercial real estate development projects to investors
either prior to construction or during an early phase.
Strong residential sales to consumers in Finland
YIT's goal is to be a leader in residential construction in all of its market
areas - Finland, Russia, the Baltic countries and Central Eastern Europe. In
January-March, the focus of residential construction was still on residential
development projects sold directly to consumers. In addition to continued
favourable demand, YIT's residential sales in Russia were supported by YIT's
established position as a reliable construction company, YIT's own marketing
and promotion activities and extensive housing loan collaboration with banks.
In January-March, YIT started the construction of a total of 1,891 (1-3/2010:
1,362) residential units aimed directly at consumers, of which 605 (1-3/2010:
453) were in Finland, 1,151 (1-3/2010: 798) were in Russia and 135 (1-3/2010:
111) were in the Baltic countries and the Czech Republic.
The residential start-ups were a response to favourable demand among consumers
and increased the number of residential units for sale. During January-March,
YIT sold a total of 535 residential units directly to consumers in Finland
(1-3/2010: 506). In Russia, YIT sold a total of 675 residential units during
the first quarter of 2011 (1-3/2010: 817).
YIT has also been active in the Finnish business premises market, which is
showing signs of picking up: the decrease in rents stopped in 2010, interest
among foreign investors has increased and investors' yield requirements have
begun to decrease. Leasing of YIT's commercial development projects advanced
well during the first quarter of the year, and negotiations are underway to
sell several projects to investors.
Building Services order backlog developed favourably
As the result of the acquisition agreed in June 2010, the significance of
Central Europe to the Group has increased considerably. YIT's business segment
structure was revised from March 1, 2011, with Building and Industrial Services
being divided into two segments: Building Services Northern Europe and Building
Services Central Europe. From March 1, 2011, YIT's four business segments are:
Building Services Northern Europe, Building Services Central Europe,
Construction Services Finland and International Construction Services. YIT's
comparable figures for 2010, according to the new business segment structure,
were published in a separate stock exchange release on March 24, 2011.
Arne Malonæs (53) continues as the Head of Building Services Northern Europe.
Karl-Walter Schuster (61) was appointed as the head of Building Services
Central Europe and as member of the Group Management Board.
The Group's strategic goal is to increase building system and industrial
service and maintenance operations in the Nordic countries and Central Europe.
Service and maintenance revenue in Building Services Northern Europe was EUR
302.5 million (1 - 3/2010: EUR 272.1 million) and in Building Services Central
Europe EUR 45.3 million (1-3/2010: EUR 18.1 million). The share of service and
maintenance was significantly lower in Building Services Central Europe (26%)
than in Building Services Northern Europe (64%) during the first quarter, and
therefore the opportunities for increasing that in Building Services Central
Europe are good.
The low level of new investments continued to have a negative impact on the
demand for building system and industrial services and, in particular, the
profitability of project operations in Building Systems Northern Europe. Price
competition was tight, especially with regard to project operations. The
profitability of the business operations acquired in Central Europe in 2010 was
below YIT's average profitability, therefore decreasing the operating profit
margin for the first quarter.
The margin of the order backlog improved during the first quarter, especially
in Germany.
Growth objective was raised
In August 2010, the Group's strategic annual revenue growth target was
increased to more than 10 percent on average. In order to ensure growth,
residential start-ups were continued during the first quarter. The focus of
operations in Finland is on projects sold directly to consumers and, following
the recovery of the market, also on business premises development projects. In
Russia, YIT's strong market position and improved operating environment enable
growth, and the number of residential start-ups was increased considerably
towards the end of 2010 as a result, and they continued during the first
quarter of this year.
YIT has a diverse residential offering under construction in both Finland and
Russia, and the number of start-ups will increase during 2011. In Building
Services, the focus of business operations has been shifted to service and
maintenance. The recovery of investments in building systems, especially in
Germany, will also offer opportunities for project operations.
INFORMATION SESSION, WEBCAST AND CONFERENCE CALL
YIT will hold an information session on the interim report on Friday, April 29,
2011, at 10:00 a.m. (Finnish Time, EEST). The information session will be held
in English. The information session will be held at YIT's head office at
Panuntie 11, 00620 Helsinki, Finland. The event is intended for analysts,
portfolio managers and the media.
The information session and the presentation, given by the company's President
and CEO, Juhani Pitkäkoski, can be viewed live on YIT's website at
www.yitgroup.com/webcast. The live webcast will start at 10:00 a.m. The webcast
replay will be available at the same address starting at approximately 12:00
noon.
It is also possible to participate in the event through a conference call.
Participants are requested to call the assigned number +44 (0)207 1620 177 at
least five minutes before the conference call begins, at 9:55 a.m. (Finnish
time, EEST) at the latest.
During the webcast and conference call, questions must be asked in English.
After the session, there will also be an opportunity for the media to ask
questions in Finnish.
Schedule in different time zones:
Interim The investor and analyst event, Recorded
Report conference call and live webcast webcast
published available
--------------------------------------------------------------------------------
EEST 8:00 10:00 12:00
(Helsinki)
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CEST (Paris, 7:00 9:00 11:00
Stockholm)
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BST (London) 6:00 8:00 10:00
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US EDT (New 1:00 3:00 5:00
York)
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Financial reports and other investor information are available at YIT's
website, www.yitgroup.com/investors. The materials may be ordered via the
website, by sending an e-mail to InvestorRelations@yit.fi or by telephone on
+358 20 433 2257.
YIT Corporation
Juhani Pitkäkoski
President and CEO
For further information, please contact:
Timo Lehtinen, Chief Financial Officer, +358 45 670 0626, timo.lehtinen@yit.fi
Hanna-Maria Heikkinen, Vice President, Investor Relations, +358 40 826 2172,
hanna-maria.heikkinen@yit.fi
Distribution: NASDAQ OMX Helsinki, principal media, www.yitgroup.com
INTERIM REPORT JANUARY 1 - MARCH 31, 2011
CONTENTS
-- Group's financial development
-- Strategic objectives
-- Development by business segment
-- Personnel
-- Resolutions passed at the Annual General Meeting
-- Shares, share options and shareholders
-- Most significant short-term business risks and risk management
-- Outlook for 2011
-- Tables to the Interim Report
GROUP'S FINANCIAL DEVELOPMENT
Changes in organisational structure and Group management
As a result of the acquisition agreed in June 2010, the significance of Central
Europe to the Group has increased considerably. YIT's business segment
structure was revised from March 1, 2011, with Building and Industrial Services
being divided into two segments: Building Services Northern Europe and Building
Services Central Europe. From March 1, 2011, YIT's four business segments are:
Building Services Northern Europe, Building Services Central Europe,
Construction Services Finland and International Construction Services. YIT's
comparable figures for 2010 according to the new business segment structure
were published in a separate stock exchange release on March 24, 2011.
Arne Malonæs (53) was appointed as the Head of Building Services Northern
Europe. Previously, he acted as the head of the Building and Industrial
Services segment. Malonæs will continue as member of the Group Management
Board. Karl-Walter Schuster (61) was appointed as the head of Building Services
Central Europe and as member of the Group Management Board. Previously, he
acted as the head of the Central Europe division within the Building and
Industrial Services business segment.
Application of IFRIC 15 interpretation
YIT has applied the IFRIC 15 Agreements for the Construction of Real Estate
IFRS interpretation from the start of the financial period that began on
January 1, 2010. Due to the application of the interpretation, Group-level
reporting and segment-level reporting differ. The key difference is that
residential developments are only recognised in Group-level figures when a
project is completed, while in segment reporting they are recognised as
construction progresses. The difference between the accounting policies is
reported as an IFRIC 15 adjustment.
In the case of YIT's commercial real estate development projects, the
recognition practice will be evaluated on a case-by-case basis and in
accordance with the terms and conditions of each contract. Sold projects are
recognised when the construction work has started or when the project is
complete. The share of income and expenses to be recognised is calculated by
multiplying the percentage of completion by the percentage of sale multiplied
by the occupancy rate. YIT usually sells commercial real estate development
projects to investors either prior to construction or during an early phase of
construction.
The Group's financial performance is presented using both figures compliant
with Group-level reporting and figures compliant with segment reporting,
referred to as the performance of the segments or the segments total figure.
Revenue of the segments increased by a quarter
Revenue, EUR million 1-3/11 1-3/10 Change
------------------------------------------------------------
Building Services Northern Europe 476.2 406.8 17%
------------------------------------------------------------
Building Services Central Europe 177.1 70.4 152%
------------------------------------------------------------
Construction Services Finland 289.5 252.9 14%
------------------------------------------------------------
International Construction Services 100.3 106.9 -6%
------------------------------------------------------------
Other items -16.2 -16.2
------------------------------------------------------------
YIT's segments total 1,026.9 820.8 25%
------------------------------------------------------------
IFRIC 15 adjustment -57.2 -55.5
------------------------------------------------------------
YIT Group, total 969.7 765.3 27%
------------------------------------------------------------
The revenue of YIT's segments was 25% higher in January-March compared to the
previous year, amounting to EUR 1,026.9 million (1-3/2010: EUR 820.8 million).
The revenue of Building Services Northern Europe and Central Europe as well as
Construction Services Finland increased. The revenue of Building Services
Central Europe increased compared to the year before mainly as the result of
the acquisition completed in September. Changes in foreign exchange rates
increased the segments' revenue by EUR 24.5 million compared to the previous
year.
Following the IFRIC 15 adjustment, YIT Group's revenue increased by 27 percent
from the previous year and was EUR 969.7 million for January-March (1-3/2010:
EUR 765.3 million). The completion schedules of property development projects
affect the Group's revenue recognition, and therefore Group-level figures may
fluctuate greatly between different quarters. In January-March, the number of
residential units completed in Russia was lower than in January-March 2010,
while in Finland, the Baltic Countries and Central Eastern Europe, more
residential units were completed than the year before.
In January-March 2011, Finland accounted for 39 percent (43%) of the Group's
revenue, Sweden for 17 percent (16%), Germany for 14 percent (6%), Russia for 7
percent (10%), Norway for 13 percent (15%), Denmark for 4 percent (4%), the
Baltic countries for 1 percent (1%) and other countries for 5 percent (5%).
Operating profit of the segments increased
Operating profit, EUR million 1-3/11 1-3/10 Change
-----------------------------------------------------------
Building Services Northern Europe 17.1 19.9 -14%
-----------------------------------------------------------
Building Services Central Europe 4.0 1.7 135%
-----------------------------------------------------------
Construction Services Finland 25.6 23.1 11%
-----------------------------------------------------------
International Construction Services 8.4 4.6 83%
-----------------------------------------------------------
Other items -4.7 -4.8
-----------------------------------------------------------
YIT's segments total 50.4 44.5 13%
-----------------------------------------------------------
IFRIC 15 adjustment -11.2 -10.6
-----------------------------------------------------------
YIT Group, total 39.2 33.9 16%
-----------------------------------------------------------
Operating profit margin, % 1-3/11 1-3/10
---------------------------------------------------
Building Services Northern Europe 3.6 4.9
---------------------------------------------------
Building Services Central Europe 2.3 2.4
---------------------------------------------------
Construction Services Finland 8.8 9.1
---------------------------------------------------
International Construction Services 8.4 4.3
---------------------------------------------------
YIT's segments total 4.9 5.4
---------------------------------------------------
YIT Group, total 4.0 4.4
---------------------------------------------------
The operating profit of YIT's segments increased by 13 percent from the year
before and grew to EUR 50.4 million in January-March (1-3/2010: EUR 44.5
million). The operating profit margin calculated on the basis of the segment
figures was 4.9 percent (1-3/2010: 5.4%). The operating profit of the segments
includes EUR -2.0 million (1-3/2010: EUR -0.3 million) of borrowing costs
according to IAS 23. The IAS 23 standard defines the recording method of
borrowing costs in long-term construction projects.
Profitability was improved by shifting the focus of operations on residential
development projects in Construction Services Finland. The profitability of
International Construction Services improved through growth in residential
sales and increase in sales prices. The operating profit of Building Services
Central Europe increased but the operating profit margin decreased due to the
profitability of the operations acquired in 2010 being lower than the average
profitability of YIT's previous business operations.
In Building Services Northern Europe, the operating profit decreased from the
year before due to the low level of new building system and industrial
investments and tight price competition, especially with regard to project
operations.
In Group reporting, residential development projects are only recognised as
income when a project is completed. After the IFRIC 15 adjustment, the Group's
operating profit increased by 16 percent compared to the previous year,
amounting to EUR 39.2 million (1-3/2010: EUR 33.9 million). The Group's
operating profit margin was 4.0 percent (1-3/2010: 4.4%).
Earnings per share increased by one third
Earnings per share increased by 33 percent to EUR 0.20 (1-3/2010: EUR 0.15).
Financial expenses decreased compared to the previous year, mainly due to the
increasingly lower hedging costs of the ruble.
The Group's profit before taxes increased by 30 percent from the previous year
to EUR 34.7 million in January-March (1-3/2010: EUR 26.7 million).
Growth in the order backlog
Order backlog, EUR million 3/11 3/10 Change 3/11 12/10 Change
--------------------------------------------------------------------------------
Building Services Northern 804.9 697.9 15% 804.9 757.4 6%
Europe
--------------------------------------------------------------------------------
Building Services Central 573.2 266.3 115% 573.2 507.0 13%
Europe
--------------------------------------------------------------------------------
Construction Services 1,176.0 905.4 30% 1,176.0 1,173.2 0%
Finland
--------------------------------------------------------------------------------
International Construction 862.7 1,013.2 -15% 862.7 870.8 -1%
Services
--------------------------------------------------------------------------------
Other items -61.2 -45.8 -61.2 -58.3
--------------------------------------------------------------------------------
YIT's segments total 3,355,6 2,837.0 18% 3,355.6 3,250.1 3%
--------------------------------------------------------------------------------
IFRIC 15 adjustment 343.4 315.5 343.4 285.6
--------------------------------------------------------------------------------
YIT Group, total 3,699.0 3,152.5 17% 3,699.0 3,535.7 5%
--------------------------------------------------------------------------------
The order backlog of YIT's segments was EUR 3,355.6 million at the end of March
(3/2010: EUR 2,837.0 million); approximately 18 percent more than at the end of
March the previous year. The order backlog increased slightly from the end of
December, at which time it stood at EUR 3,250.1 million.
The order backlog of Building Services Central Europe increased considerably
compared to the previous year as a result of the acquisition completed at the
beginning of September. Compared to the end of 2010, the order backlog
increased in both Building Services Northern Europe and Building Services
Central Europe. In Construction Services Finland and International Construction
Services, the order backlog remained at the level of the end of 2010.
After the IFRIC 15 adjustment, YIT Group's order backlog was EUR 3,699.0
million at the end of March (3/2010: EUR 3,152.5 million).
Capital expenditure and acquisitions
Gross capital expenditure on non-current assets included on the balance sheet
totalled EUR 8.7 million (1-3/2010: EUR 9.4 million) during January-March,
representing 0.9 percent (1-3/2010: 1.2%) of revenue. Investments in
construction equipment amounted to EUR 3.8 million (1-3/2010: EUR 1.8 million)
and investments in information technology to EUR 1.8 million (1-3/2010: EUR 1.7
million). Other investments, including acquisitions, amounted to EUR 3.1
million (1-3/2010: EUR 5.9 million).
In Sweden, YIT acquired the clean room contracting operations of NNE Pharmaplan
AB, which transferred to YIT at the beginning of the review period. The
acquired unit has eight employees, and its revenue amounts to approximately EUR
3.3 million. During the review period, YIT announced that it will also acquire
Johnson Controls' Commercial Refrigeration unit in Sweden, which has
approximately 100 employees. The takeover is scheduled for May 1, 2011.
Business acquisitions and companies consolidated into the Group are discussed
in more detail in the tables to the interim report.
Positive cash flow in the first quarter
The Group's operating cash flow after investments amounted to EUR 16.1 million
in January-March (1-3/2010: EUR 33.8 million). Operating cash flow in the first
quarter was affected particularly by growth in development production under
construction and plot investments, while the Building Services segments' strong
invoicing towards the end of the year strengthened it.
At the end of March, the Group's invested capital amounted to EUR 1,726.6
million (12/2010: EUR 1,672.0 million). Of the Group's invested capital, 32
percent (12/2010: 33%), or EUR 558.2 million (12/2010: EUR 544.9 million) was
invested in Russia. Exchange rate changes of the ruble increased the capital
invested in Russia by EUR 7.3 million in January-March.
The Group's capital invested in Russia is primarily accounted for by the
International Construction Services segment. Capital invested in Russia
increased only slightly in spite of an increase in residential production. The
use of capital has been made more efficient by decreasing the average size of
the project, selling the apartments at later construction phase and increasing
the share of mortgage deals.
Return on investment decreased slightly and was 14.0 percent (1-12/2010: 14.3%)
for the last 12 months. Invested capital is calculated by deducting
non-interest bearing liabilities from the balance sheet total. The balance
sheet total at the end of March was EUR 3,274.8 million (12/2010: EUR 3,117.1
million).
The Group's financial position enables the implementation of the growth strategy
YIT has a diverse financing structure and a strong liquidity position. Cash
reserves amounted to EUR 267.6 million (12/2010: EUR 148.3 million) at the end
of March. In addition, committed credit and overdraft facilities amounting to a
total of EUR 244.2 are available. The committed limit agreements do not include
an obligation to maintain financial key ratios, i.e. covenants.
The gearing ratio increased slightly compared with the end of 2010, amounting
to 75.2 percent at the end of March 2011 (12/2010: 72.6%). The equity ratio was
28.5 percent (12/2010: 31.9%). Net financing debt decreased from the end of
2010 to EUR 626.1 million (12/2010: EUR 640.9 million).
Net financial expenses decreased to EUR 4.5 million (1-3/2010: EUR 7.1
million), or 0.5 percent (1-3/2010: 0.9%) of the Group's revenue. The exchange
rate differences included in the net financial expenses, totalling EUR -1.3
million (1-3/2010: EUR -2.3 million), were comprised almost entirely of costs
of hedging debt investments in Russia. The net financial expenses include EUR
3.1 million (1-3/2010: EUR 0.9 million) of capitalisations in compliance with
IAS 23. At the end of March 2011, EUR 140.3 million (12/2010: EUR 135.6
million) of the capital invested in Russia were comprised of debt investments
and EUR 417.9 million (12/2010: EUR 409.3 million) were equity investments or
similar fixed net investments. In accordance with YIT's hedging policy, the
debt investments are hedged against exchange rate risk, while equity
investments are not hedged due to their permanent nature.
Financial liabilities amounted to EUR 893.8 million (12/2010: EUR 789.1
million) at the end of March, and their average interest rate was 3.2 percent
(12/2010: 3.4%). Fixed-interest loans accounted for 52 percent (12/2010: 60%)
of the Group's financial liabilities. Of the loans, 32 percent (12/2010: 36%)
had been raised directly from the capital and money markets. The maturity
distribution of long-term loans is balanced. A total of EUR 89.4 million of
long-term loans will mature during the last three quarters of 2011.
The total amount of construction-stage contract receivables sold to financial
institutions grew as residential development projects increased, amounting to
EUR 252.4 million (12/2010: EUR 166.7 million). Of this amount, EUR 237.9
million (12/2010: EUR 160.2 million) is included in interest-bearing
liabilities on the balance sheet and the remainder comprises off-balance sheet
items in accordance with IAS 39. Interest expenses on receivables sold to
financing companies amounted to EUR 1.1 million (1-3/2010: EUR 0.4 million)
during the review period and these are fully included in the financial expenses
of the review period.
Participations in the housing corporation loans of unsold completed residential
units amounted to EUR 25.2 million (12/2010: EUR 22.6 million) at the end of
March, and they are included in interest-bearing liabilities. The interest on
the participations, EUR 0.2 million (1-3/2010: EUR 0.3 million), is included in
housing corporation charges and is thus booked in project expenses.
After the end of the review period, the company has paid out dividends of EUR
81.3 million for 2010 in compliance with the resolution of the Annual General
Meeting.
The Group's balanced business structure and solid financial position enable the
implementation of YIT's growth strategy and the acquisitions and plot
investments required by it.
STRATEGIC OBJECTIVES
YIT Corporation's Board of Directors confirmed the Group's strategy for
2011-2013 on August 18, 2010. The key strategic objective is profitable growth.
The Group's annual revenue growth target was increased to more than 10 percent
on average. The prior target was an average annual revenue growth of 5-10
percent. The Group's other strategic target levels remain unchanged: return on
investment of 20 percent, operating cash flow after investments must be
sufficient for dividend payout and the reduction of debt, equity ratio of 35
percent and dividend payout of 40-60 percent of net profit for the period.
In terms of business operations, the focus areas of YIT's growth are building
system service and maintenance operations and residential construction. Growth
will be sought both organically and through acquisitions. YIT seeks growth by
strengthening its local market position and through geographical expansion to
new countries. Building system services are increased in the Nordic countries
and Central Europe and residential construction in Finland, Russia, the Baltic
countries and Central Eastern Europe. The Group's potential new market areas
are the United Kingdom, the Netherlands and Belgium in building system services
and Poland in construction services.
YIT published a stock exchange release on the confirmation of the strategy on
August 19, 2010, and materials for the Capital Market Day focusing on the
strategic focus areas on September 2, 2010.
DEVELOPMENT BY BUSINESS SEGMENT
The development by business segment is presented using figures compliant with
segment reporting.
BUILDING SERVICES NORTHERN EUROPE
Key figures
1-3/11 1-3/10 Change
-----------------------------------------------------
Revenue, EUR million 476.2 406.8 17%
-----------------------------------------------------
Operating profit, EUR million 17.1 19.9 -14%
-----------------------------------------------------
Operating profit margin, % 3.6 4.9
-----------------------------------------------------
3/11 3/10 Change 3/11 12/10 Change
----------------------------------------------------------------------
Order backlog, EUR million 804.9 697.9 15% 804.9 757.4 6%
----------------------------------------------------------------------
Revenue, EUR million 1-3/11 1-3/10 Change
-------------------------------------------------------
Finland 139.8 130.2 7%
-------------------------------------------------------
Sweden 155.7 123.9 26%
-------------------------------------------------------
Norway 127.4 114.2 12%
-------------------------------------------------------
Denmark 41.4 30.2 37%
-------------------------------------------------------
Russia and the Baltic countries 11.9 8.3 43%
-------------------------------------------------------
Total 476.2 406.8 17%
-------------------------------------------------------
Building Services Northern Europe revenue increased by 17% from the previous
year in January-March. Changes in foreign exchange rates increased revenue by
EUR 22 million compared to the previous year. The increase in revenue was
widespread: revenue increased in all countries.
However, the segment's operating profit fell short of the year before due to
the low level of new building system and industrial investments and strict
price competition, especially in project operations. The volume of project
operations was low, especially in Finland, Norway and industrial services.
The profitability of the segment was the highest in Norway during the first
quarter of the year. Increasing the share of service and maintenance operations
has had a positive impact on profitability in Norway. Profitability remained at
a moderate level also in Finland and Sweden during the review period.
Profitability was at a low level in Denmark and industrial services in Finland
during the first quarter, but the market situation is expected to improve
gradually.
The order backlog at the end of March was 15 percent higher than the year
before, and 6 percent higher than at the end of 2010. The order backlog
increased in Sweden and Norway in particular.
During the review period, YIT implemented one acquisition in the Nordic
countries and agreed on another one. The acquisition complement the offering,
competence portfolio and geographical service network provided by YIT.
The annual revenue of the business operations acquired in 2010 in Building
Services Northern Europe is approximately EUR 60 million.
Service and maintenance revenue grew during the first quarter
YIT's goal is to be the leading provider of technical system maintenance in the
Nordic countries and Central Europe. The target is to increase service and
maintenance operations at a faster rate than other operations.
Service and maintenance operations generated EUR 302.5 million (1-3/2010: EUR
272.1 million), or 64 percent (1-3/2010: 67%) of the segment's total revenue.
YIT has improved the offering of service and maintenance operations by
developing a ServiFlex concept where customers can agree on extensive service
entities in a single contract. The iServiflex service was launched in
industrial services during the first quarter. Customers increasingly appreciate
simplicity in purchasing services, and the number of extensive service
agreements is estimated to increase.
During the review period, YIT agreed on a partnership with DNA Oy on services
related to DNA's technical facilities. The agreement covers approximately 120
technical facilities around Finland, and YIT assumes responsibility for the
related maintenance, servicing, construction and expert services.
Borealis Polymers Oy and YIT signed a partnership agreement on the maintenance
of the Borealis Kilpilahti production plant in 2011-2013. Pursuant to the
agreement, the resources provided by YIT will complement Borealis' own
operative maintenance and balance out the periodic resource needs.
YIT entered into a five-year agreement with Teollisuuden Voima concerning
on-power and annual outage maintenance services in nuclear power plants. The
maintenance services provided by YIT focus on the annual outages of nuclear
power plants.
During the review period, YIT signed an agreement with Varma Mutual Pension
Insurance Company on the energy management of office properties owned by Varma.
The agreement covers 71 business and office properties with a total surface
area of approximately 752,000 m2. Pursuant to a prior agreement, YIT is also
responsible for the technical management and maintenance of office properties
owned by Varma.
In Norway, YIT secured a maintenance contract with the Norwegian Armed Forces
during the review period, whereby YIT will supply electrical installations and
their service and maintenance. The agreement is nationwide and covers almost
all of the barracks of the Norwegian Armed Forces. YIT also secured a
nationwide contract for the servicing and maintenance of the fire and alarm
equipment of the Norwegian Armed Forces.
New investments still low
New investments in building systems recovered slightly during the review
period, but still remained at a low level. Demand among industrial customers
was also focused on service and maintenance, and the demand for new investments
remained at a low level as a whole.
In Sweden, YIT signed an agreement with Micasa Fastigheter I Stockholm AB on
electrical, plumbing, ventilation and automation installations. The value of
the agreement is approximately EUR 17 million. The construction of the project
has begun, and it is scheduled for completion in autumn 2011.
YIT agreed on providing electrical, piping system and ventilation work to a new
building of approximately 4,000 m² with the University of Southern Denmark,
scheduled for completion during 2012.
BUILDING SERVICES CENTRAL EUROPE
Key figures
1-3/11 1-3/10 Change
-----------------------------------------------------
Revenue, EUR million 177.1 70.4 152%
-----------------------------------------------------
Operating profit, EUR million 4.0 1.7 135%
-----------------------------------------------------
Operating profit margin, % 2.3 2.4
-----------------------------------------------------
3/11 3/10 Change 3/11 12/10 Change
----------------------------------------------------------------------
Order backlog, EUR million 573.2 266.3 115% 573.2 507.0 13%
----------------------------------------------------------------------
Revenue, EUR million 1-3/11 1-3/10 Change
-----------------------------------------------------------
Germany 141.1 44.1 220%
-----------------------------------------------------------
Austria 21.9 21.5 2%
-----------------------------------------------------------
Poland, the Czech Republic, Hungary 14.1 4.8 194%
-----------------------------------------------------------
Total 177.1 70.4 152%
-----------------------------------------------------------
Building Services Central Europe revenue increased in January-March compared to
the previous year, mainly as the result of an acquisition. An increase in new
building system investments also contributed to the growth of the revenue for
the review period. Changes in foreign exchange rates did not have a substantial
impact on the revenue compared to the year before.
The operating profit of Building Services Central Europe increased but the
operating profit margin decreased due to the profitability of the operations
acquired in 2010 being lower than the average profitability of YIT's previous
business operations. Profitability was at a moderate level in Germany and
Austria.
The order backlog at the end of March was 115 percent higher than the previous
year, amounting to EUR 573.2 million (3/2010: EUR 266.3 million). In
particular, the order backlog increased as a result of the acquisition
completed at the beginning of September 2010. The order backlog increased by 13
percent from the end of 2010 as a result of the improved market situation and
YIT's strengthened market position.
Acquisition expanded operations in Central Europe
YIT aims to offer building system services, especially those requiring
technical expertise, close to its customers. The goal is to reinforce the local
market position organically and through acquisitions.
When assessing acquisitions, YIT's goal is to acquire companies that support
YIT's strategy of becoming the leading building system service provider in the
Nordic countries and Europe. The acquired company's business culture, areas of
competence and payback time of the purchase price of the acquired company are
key criteria.
An acquisition whereby YIT acquired a company offering technical building
system services in Central Europe was completed at the beginning of September
2010. The profitability of the acquired company is below YIT's average
profitability, and YIT aims to improve the operating profit margin of the
acquired operations by one percentage point per year.
The annual revenue of the business operations acquired in 2010 in Building
Services Central Europe is approximately EUR 440 million.
Service and maintenance revenue grew clearly
Service and maintenance operations generated EUR 45.3 million (1-3/2010: EUR
18.1 million), or 26 percent (1-3/2010: 26%) of the segment's total revenue.
The ServiFlex concept is in use in Germany and Austria, and it will be
implemented in Central Eastern Europe during 2011. A service and maintenance
agreement pursuant to the concept was signed on the comprehensive technical
maintenance of the Munich facilities of the online retailer Amazon, among
others. In addition, YIT will provide diverse building system services for the
BMW Munich research and innovation centre with a staff of approximately 5,000.
Growth in new investments, especially in Germany
The demand for new building system investments picked up to a favourable level
in Germany during the review period. The demand remained stable in Austria. In
Central Eastern Europe, the market is recovering slowly.
In Poland, the review period saw YIT agreeing on the delivery of ventilation,
cooling and heating systems to Galeria Leszno City, a shopping centre with a
floor area of approximately 30,000 m². In addition, YIT will deliver the
ventilation, heating, water and sprinkler systems to IKEA's Poznan and Cracow
sites.
Several major projects were secured in Germany during the review period. YIT
will deliver ventilation and plumbing work to the Rems-Murr-Klinikum hospital.
YIT will deliver an extensive automation solution to the Robert Koch institute
in Berlin.
CONSTRUCTION SERVICES FINLAND
Key figures
1-3/11 1-3/10 Change
-----------------------------------------------------
Revenue, EUR million 289.5 252.9 14%
-----------------------------------------------------
Operating profit, EUR million 25.6 23.1 11%
-----------------------------------------------------
Operating profit margin, % 8.8 9.1
-----------------------------------------------------
3/11 3/10 Change 3/11 12/10 Change
----------------------------------------------------------------------------
Order backlog, EUR million 1,176.0 905.4 30% 1,176.0 1,173.2 0%
----------------------------------------------------------------------------
Revenue increased in January-March as production volumes remained at a high
level in residential construction and business premises construction picked up.
The volume of infrastructure services was low in the first quarter.
The operating profit increased slightly from the year before, with residential
construction focusing on property development projects in accordance with the
strategy. The operating profit of the segment includes EUR -1.5 million
(1-3/2010: EUR -0.3 million) of borrowing costs according to IAS 23. The low
profitability of the infrastructure services had a negative impact on the
operating profit margin. The order backlog increased considerably from the
previous year as YIT started up new residential and business premises projects.
At the end of March, the segment's capital tied into plot reserves amounted to
EUR 272.5 million (3/2010: EUR 298.4 million). The plot reserves included
1,549,000 (3/2010: 1,582,000) m2 of floor area of residential plots and
1,036,000 (3/2010: 908,000) m2 of floor area of plots for business premises.
Residential sales to consumers at a good level - sales inventory was increased
with new start-ups
YIT's goal is to strengthen its position as the largest housing developer in
Finland. Residential sales were at a good level in the first quarter. The
demand was good for all housing types, including high-value housing. During
January-March, YIT sold a total of 535 (1-3/2010: 506) residential units
directly to consumers. Sales have continued at a favourable level in April as
well. Housing prices increased at a moderate rate during the review period.
The focus of YIT's housing construction has been successfully shifted to
residential development projects aimed directly at consumers in accordance with
market demand. In January-March, YIT started the construction of a total of 605
(453) residential units aimed directly at consumers. YIT has actively
replenished its plot reserves by acquiring plots and making preliminary
agreements in order to ensure good opportunities for residential start-ups also
in the future.
The new residential start-ups have maintained the sales inventory at a
sufficiently high level. At the end of March, YIT had 1,745 (3/2010: 1,011)
unsold residential units. The number of completed, unsold residential units has
remained at a low level, amounting to 152 (3/2010: 168) at the end of March. Of
the residential units under construction, 62 percent have been sold, which
decreases YIT's sales risk.
Residential construction in Finland, number of residential units
1-3/11 1-3/10 Change 4-6/10 7-9/10 10-12/
10
--------------------------------------------------------------------------------
Sold 592 623 -5% 755 576 478
--------------------------------------------------------------------------------
- of which directly to consumers 535 506 6% 471 435 478
--------------------------------------------------------------------------------
Start-ups 662 570 16% 1 067 908 547
--------------------------------------------------------------------------------
- of which directly to consumers 605 453 34% 783 767 547
--------------------------------------------------------------------------------
Completed 880 368 139% 751 657 473
--------------------------------------------------------------------------------
- of which directly to consumers 525 103 410% 272 184 298
--------------------------------------------------------------------------------
Under construction at the end of 4,212 3,975 6% 4,292 4,543 4,360
the period
--------------------------------------------------------------------------------
- of which sold at the end of 2,619 3,132 -16% 3,101 3,035 2,902
the period
--------------------------------------------------------------------------------
For sale at the end of the 1,745 1,011 73% 1,324 1,624 1,570
period
--------------------------------------------------------------------------------
- of which completed 152 168 -10% 133 116 112
--------------------------------------------------------------------------------
Business premises market shows signs of picking up
The development of the business and office premises market continued favourably
during the first quarter. The decrease in business premises rents has stopped,
and investors' yield requirements have somewhat decreased. The order backlog of
YIT's business premises operations increased clearly from the year before. The
leasing of business premises proceeded well during the first quarter: lease and
preliminary agreements were signed on approximately 19,000 m² of premises.
At the beginning of January, YIT started up the construction of DNA Oy's and
Fingrid Oy's new head office in Helsinki. The project, covering approximately
7,500 m², is named Triotto, and it will be completed in summer 2012. During the
review period, YIT signed an agreement on the construction of Forsmanin
Teetalo's production and warehouse premises in Vantaa. The floor area of the
premises is approximately 6 000 m², and they will be completed at the beginning
of 2012.
YIT was selected to conduct the renovation of a facility in Herttoniemi,
Helsinki, and to construct the extension of the property. The floor area of
YIT's overall contract is approximately 8,600 m², divided fifty-fifty between
the renovation of the existing property and the new extension. The facilities
owned by Sveafastigheter and HGR Property Partners will be completed for their
current user, Heltech - Helsinki City College of Technology, in August 2011.
Tiilitie Trade Park West, a property development project of approximately
17,000 m² was begun during the first quarter as a sequel to the previously
started business premises project in Petikko. In addition, YIT and HGR Property
Partners acquired a 6,500 m² property in Ruoholahti, Helsinki, with the aim of
renewing the property to serve the current users even better.
With regard to business premises, YIT's projects on sale include Triotto office
site in Käpylä, Helsinki,and the Tiilitie Trade Park in Petikko, Vantaa,
comprising office, production, warehouse and retail premises. Interest in
Finland among international property investors has also increased.
Number of requests for tenders increased in infrastructure services
The demand for infrastructure construction was relatively low in the review
period. In addition, investments have decreased in the municipal sector and
decision-making has been postponed. Major road projects are expected to start
this year and next year, including the construction and renovation of the E18
motorway between Koskenkylä and Kotka. YIT is participating in the tenders for
the E18 project, which will be implemented using the
Public-Private-Partnership, or PPP, model, in cooperation with Destia. The
order authorisation for the project is EUR 650 million. The implementation of a
rail track between Kokkola and Ylivieska, previously planned as a PPP project,
has been transferred to the budget model upon the decision of the Finnish
Transport Agency, and the rail track will be constructed as part of the
upgrading of the Seinäjoki-Oulu railway section.
In addition, with regard to infrastructure services, opportunities will open
particularly in rock engineering and investments by the mining industry.
During January-March, YIT had large-scale road projects begun in 2009 underway
in infrastructure services, such as the major project related to the
improvement of the Kehä I ring road, a project involving bridge and road work
in Savonlinna, and a tunnel for the Kehärata (Ring line) project in Vantaa. In
addition, YIT secured additional contracts worth approximately EUR 23 million
during the review period in the Helsinki western metro line project, three
other contracts which are currently constructed by YIT. The contracts secured
during the review period will start in 2011 and are scheduled for completion
during 2012.
INTERNATIONAL CONSTRUCTION SERVICES
Key figures
1-3/11 1-3/10 Change
-----------------------------------------------------
Revenue, EUR million 100.3 106.9 -6%
-----------------------------------------------------
Operating profit, EUR million 8.4 4.6 83%
-----------------------------------------------------
Operating profit margin, % 8.4 4.3
-----------------------------------------------------
3/11 3/10 Change 3/11 12/10 Change
------------------------------------------------------------------------
Order backlog, EUR million 862.7 1,013.2 -15% 862.7 870.8 -1%
------------------------------------------------------------------------
Revenue decreased slightly from the previous year, with sales focusing
increasingly on projects that are in their early stage of construction.
Residential sales developed moderately in Russia. Residential sales have
continued at a favourable level in April.
The operating profit increased considerably from the previous year. Operating
profit improved particularly through increased residential selling prices,
successful balancing of sales and pricing, and streamlining measures in YIT's
own cost structure implemented in 2009. The operating profit of the segment
includes EUR -0.5 million (1-3/2010: EUR -0.0 million) of borrowing costs
according to IAS 23. The sale of projects at an earlier stage of construction
than before had an effect on the recognition of revenue and operating profit:
only a limited amount of revenue is recognised for projects that are sold in
their early stage of construction. Profitability in the Baltic countries, the
Czech Republic and Slovakia was low during the first quarter.
The order backlog remained at the level of the end of December. The segment's
order backlog was improved by the strengthening of the ruble, which had an
impact of EUR +9.9 million in January-March. The order backlog includes
residential units whose construction was suspended in Russia in October 2008
due to market uncertainties. At the end of March 2011, the value of projects
that were still suspended amounted to EUR 91 million (3/2010: EUR 235 million).
Restarting the suspended projects will not increase the order backlog.
The segment's capital tied into plot reserves totalled EUR 353.1 million
(3/2010: EUR 283.1 million) at the end of March. The plot reserves included
2,518,000 (3/2010: 2,312,000) m2 of floor area of residential plots and 712,000
(3/2010: 699,000) m2 of floor area of plots for business premises in Russia,
the Baltic countries, the Czech Republic and Slovakia.
Russian residential sales remained on reasonable level
YIT has operated in Russia for 50 years, and the company aims to increase
housing production in Russia according to market demand in the current cities
and to improve its reputation as a reliable housing construction company.
Russia generated 88 percent (1-3 /2010: 96%) of the revenue of International
Construction Services for January-March. Revenue decreased by 14 percent in
Russia compared with the previous year, amounting to EUR 88.0 million
(1-3/2010: EUR 102.2 million). The capital tied into plot reserves in Russia
amounted to EUR 274.9 million (3/2010: EUR 207.2 million) at the end of March.
The plot reserves included 2,162,000 (3/2010: 1,959,000) m2 of floor area of
residential plots and 563,000 (3/2010: 699,000) m2 of floor area of plots for
business premises.
In Russia, the focus of operations is on residential development projects in St
Petersburg, Moscow and cities in the Moscow region, Yekaterinburg,
Rostov-on-Don and Kazan. The production under construction is concentrated on
St. Petersburg and cities in the Moscow region, but start-ups also took place
in Yekaterinburg and Rostov during the first quarter.
In January-March, YIT sold 675 residential units (1-3/2010: 817) in Russia.
Residential sales have been supported by YIT's established position as a
reliable construction company in Russia, YIT's own marketing and promotion
measures and extensive housing loan cooperation with banks. The significance of
loan financing has increased in Russia, and in the first quarter, the customer
has taken out a housing loan in 36 percent of YIT's residential sales.
Residential demand is supported by the gradual improvement of the economy,
consumer confidence remaining at a good level, increased availability of loans
to customers and decreased housing loan interest rates. Residential sales
focused increasingly on projects at an early stage of construction during the
first quarter, meaning that only a limited amount of revenue is recognised for
the sold units.
During the first quarter of 2011, the average price level of new residential
units in Russia increased slightly. Residential demand improved compared to the
previous year, especially in Moscow Oblast.
YIT has actively started new residential projects in Russia, and the aim is to
increase the number of residential start-ups during 2011 compared to the year
before. There is a considerably higher number of projects at an early stage of
construction, i.e. the frame work stage, compared to the situation a year ago.
The number of residential units for sale has increased during the year,
amounting to 4,687 at the end of March (3/2010: 3,585). The number of completed
unsold residential units decreased to 567 at the end of March (3/2010: 900).
A total of 105 residential units (1-3/2010: 321) were completed during the
review period 1-3/2011. After the handover of residential projects, YIT offers
its customers service and maintenance.
Residential construction in Russia, number of residential units
1-3/11 1-3/10 Change 4-6/10 7-9/10 10-12/
10
--------------------------------------------------------------------------------
Sold 675 817 -17% 682 717 857
--------------------------------------------------------------------------------
Start-ups 1,151 798 44% 1,074 671 1,140
--------------------------------------------------------------------------------
Completed 1) 105 321 -67% 320 299 2,486
--------------------------------------------------------------------------------
Under construction at the end of 5,495 4,671 18% 5,425 5,797 4,457
the period 2)
--------------------------------------------------------------------------------
- of which sold at the end of 1,375 1,986 -31% 2,094 2,468 1,051
the period
--------------------------------------------------------------------------------
For sale at the end of the 4,687 3,585 31% 3,977 3,931 4,211
period
--------------------------------------------------------------------------------
- of which completed 567 900 -37% 646 602 805
--------------------------------------------------------------------------------
1) Completion of the projects requires commissioning by the authorities.
2) At the end of March 2011, YIT had 365 (3/2010: 1,467) residential units at
Russian sites whose construction was suspended in the autumn of 2008. These
residential units are not included in the figure for residential units under
construction shown in the table. Changes in the number of residential units may
take place after the start of construction due to the division or combination
of residences.
Construction of business premises is picking up slowly in Russia
YIT's volume in the Russian business premises market remained at a low level
during the first quarter of the year. Marketing of the Gorelovo industrial park
close to St. Petersburg has been continued. The competitive advantages of the
area are its good location and completed infrastructure connections. The demand
for the area is good, and negotiations with potential customers will continue.
The residential market is picking up in the Baltic countries and Central
Eastern Europe
YIT's aim is to increase its residential production in the Baltic and Central
Eastern European countries. Estonia, Latvia, Lithuania, the Czech Republic and
Slovakia accounted for 12 percent (1-3/2010: 4%) of the revenue of
International Construction Services for January-March. Revenue generated in
these countries increased by 162 percent compared to the year before to EUR
12.3 million (1-3/2010: EUR 4.7 million). The capital tied into plot reserves
in the Baltic countries, the Czech Republic and Slovakia totalled EUR 78.2
million (3/2010: EUR 75.8 million) at the end of March. The plot reserves
included 356,000 (3/2010: 353,000) m2 of floor area of residential plots and
149,000 (3/2010: 136,000) m2 of floor area of plots for business premises.
The focus of YIT's operations has been shifted from contract production to
residential construction with new residential start-ups. The construction of
135 (1-3/2010: 111) residential units was started in Estonia, Latvia, Lithuania
and the Czech Republic during January-March. At the end of March, there were
430 (3/2010: 111) residential units under construction.
YIT's residential inventory is still low in the Baltic countries, the Czech
Republic and Slovakia. In January-March, a total of 57 (1-3/2009: 5)
residential sales were sold in these countries. At the end of March, there were
527 (3/2010: 146) residential units for sale, of these 144 were (3/2010: 35)
completed. The number of residential units completed during the first quarter
was 81 (1-3/2010: 0).
Residential demand has turned to moderate growth in the Baltic countries, the
Czech Republic and Slovakia. The prices were on a par with the level of the end
of 2010 during the first quarter. The demand for new residential units has
picked up with the upswing of the economy, especially with regard to
residential units in central locations.
Residential construction in the Baltic countries and Central Eastern Europe,
number of residential units
1-3/11 1-3/10 Change 4-6/10 7-9/10 10-12/
10
--------------------------------------------------------------------------------
Sold 57 5 over 15 13 40
thousand
--------------------------------------------------------------------------------
Start-ups 135 111 22% 122 96 153
--------------------------------------------------------------------------------
Completed 81 0 over 0 0 106
thousand
--------------------------------------------------------------------------------
Under construction at the end 430 111 287% 233 329 376
of the period
--------------------------------------------------------------------------------
- of which sold at the end of 47 0 over 6 17 43
the period thousand
--------------------------------------------------------------------------------
For sale at the end of the 527 146 261% 253 336 449
period
--------------------------------------------------------------------------------
- of which completed 144 35 311% 26 24 116
--------------------------------------------------------------------------------
BUILDINGS AND INDUSTRY NEED ENERGY-SAVING SERVICES
YIT aims to be a leader in energy-saving services for buildings and industry,
where demand is expected to increase in the next few years. The demand for
energy efficiency services is supported by the tightening of legislation and
the increase in energy prices: customers increasingly pay attention to energy
consumption and savings potential. Energy-saving may be part of both new
construction and renovation projects as well as maintenance agreements.
Energy-saving is an essential part of business in all of YIT's segments.
YIT signed an agreement on the production of building system services at the
new DC Tower 1 in Vienna, Austria, during the review period. The floor area of
the building is approximately 200,000 m², and once complete, it will be the
highest building in Austria (220 metres). The premises will include offices, a
hotel, shopping centre and residential units. In the project, energy efficiency
and renewable energy were important to the customer, and the project will
probably be certified according to the LEED certificate.
YIT also provides energy-saving services as a separate entity in Central
Europe, where the public sector is among the most active customer segments.
During the review period, YIT signed an agreement on the delivery of
energy-saving services to Landesamt für Vermessung und Geoinformation Bayern in
Munich. In addition, the energy-saving project at Germany's Foreign Office
premises in Berlin agreed upon previously was continued.
In Construction Services Finland, all of YIT's property development projects
are built as low-energy buildings that consume 30 percent less energy on
average. The construction of the first Finnish remote-supervised small house
area will begin in summer 2011 in Espoo: the aim is to cut energy consumption
during the use of the building by 30 percent. The first experiences of
renewable energy projects based on ground heat have also been obtained. Also,
the first residential multi-storey building based on heating as necessary is
complete and in use.
Interest in energy-saving services is also increasing in Russia.
PERSONNEL
In January-March 2011, the Group employed 25,754 (1-3/2010: 23,199) people on
average. At the end of the period, the Group employed 25,748 (3/2010: 23,211)
people. In connection with the acquisition made in Central Europe,
approximately 2,000 employees were transferred to YIT's Building Services
Central Europe at the beginning of September 2010.
During 2010, it was decided to adopt a new share-based incentive scheme, aimed
at supporting the company's strategy of profitable growth and supplementing the
already available incentive schemes. The incentive scheme covers about 250
people in 2011. The cost effect of the incentive scheme was about EUR 1.4
million in January-March (1-3/2010: EUR 0.0 million).
Personnel by business segment
The largest segment by personnel was Building Services Northern Europe,
employing 61 percent (3/2010: 66%) of YIT's personnel. Building Services
Central Europe employed 14 percent (3/2010: 9%), Construction Services Finland
13 percent (3/2010: 13%), International Construction Services 10 percent
(3/2010: 11%) and Corporate Services 2 percent (3/2010: 1%) of the personnel.
Personnel by business segment 3/11 3/10 Change 3/11 12/10 Change
--------------------------------------------------------------------------------
Building Services Northern 15,712 15,310 3% 15,712 15,844 -1%
Europe
--------------------------------------------------------------------------------
Building Services Central Europe 3,712 2,045 82% 3,712 3,767 -1%
--------------------------------------------------------------------------------
Construction Services Finland 3,253 3,014 8% 3,253 3,209 1%
--------------------------------------------------------------------------------
International Construction 2,677 2,498 7% 2,677 2,656 1%
Services
--------------------------------------------------------------------------------
Corporate Services 394 344 15% 394 356 11%
--------------------------------------------------------------------------------
YIT Group, total 25,748 23,211 11% 25,748 25,832 -
--------------------------------------------------------------------------------
Personnel by country/region
Of YIT's employees, 36 percent worked in Finland (3/2010: 39%), 36 percent
(3/2010: 37%) in the other Nordic countries, 11 percent (3/2010: 9%) in
Germany, 9 percent (3/2010: 11%) in Russia, 4 percent (3/2010: 4%) in the
Baltic countries and 4 percent (3/2010: 4%) in other countries.
Personnel by country/region 3/11 3/10 Change 3/11 9/10 Change
--------------------------------------------------------------------------------
Finland 9,144 9,160 0% 9,144 9,209 -1%
--------------------------------------------------------------------------------
Sweden 4,484 4,149 8% 4,484 4,429 1%
--------------------------------------------------------------------------------
Germany 3,462 3,246 7% 3,462 3,505 -1%
--------------------------------------------------------------------------------
Norway 2,771 1,050 164% 2,771 2,816 -2%
--------------------------------------------------------------------------------
Russia 2,410 2,448 -2% 2,410 2,390 1%
--------------------------------------------------------------------------------
Denmark 1,357 1,224 11% 1,357 1,386 -2%
--------------------------------------------------------------------------------
Baltic countries 1,013 925 10% 1,013 983 3%
--------------------------------------------------------------------------------
Other countries (Central Europe 1,107 1,009 10% 1,107 1,114 -1%
excluding Germany)
--------------------------------------------------------------------------------
YIT Group, total 25,748 23,211 11% 25,748 25,832 0%
--------------------------------------------------------------------------------
RESOLUTIONS PASSED AT THE ANNUAL GENERAL MEETING
YIT Corporation's Annual General Meeting was held on March 11, 2011. The Annual
General Meeting adopted the 2010 financial statements, discharged the members
of the Board of Directors and the President and CEO from liability, confirmed
the dividend as proposed by the Board of Directors, decided on the Board of
Directors' fees and elected the auditor. The Annual General Meeting confirmed
the composition of the Board of Directors: Henrik Ehrnrooth (Chairman), Reino
Hanhinen (Vice Chairman), Eino Halonen, Kim Gran, Eino Halonen, Antti Herlin
and Satu Huber were re-elected as Board members. In addition, Michael Rosenlew
was elected as a new Board member.
In its organisational meeting on March 11, 2011, the Board elected the chairmen
and members of the Audit Committee and the Nomination and Rewards Committee
from among its members.
YIT Corporation published stock exchange releases on the resolutions passed at
the Annual General Meeting and the organisation of the Board of Directors on
March 11, 2011. The stock exchange releases and a presentation of the members
of the Board of Directors are available at YIT's website, www.yitgroup.com.
SHARES, SHARE OPTIONS AND SHAREHOLDERS
The company has one series of shares. Each share carries one vote and confers
an equal right to a dividend.
The company has no outstanding share option programmes.
Share capital and number of shares
YIT Corporation's share capital and the number of shares outstanding did not
change during the review period. YIT Corporation's share capital was EUR
149,216,748.22 at the beginning of 2011 (2010: EUR 149,216,748.22), and the
number of shares outstanding was 127,223,422 (2010: 127,223,422).
Treasury shares and authorisations of the Board of Directors
In accordance with the Limited Liability Companies Act, the General Meeting
decides on the buyback and conveyance of shares, as well as any decisions
leading to changes in the share capital. The Annual General Meeting of YIT
Corporation resolved on March 11, 2011, to authorise the Board of Directors to
decide on purchases of the company's shares and on share issues as proposed by
the Board of Directors. The share issue authorisation also includes an
authorisation to decide on the conveyance of treasury shares.
YIT Corporation held 2,145,000 treasury shares at the beginning of the review
period, purchased on the basis of the authorisation given by the General
Meeting of October 6, 2008. The number of shares held by the company did not
change during the review period. During the period, no shares in the parent
company were owned by subsidiaries.
There were no share issues during the period and the company did not float
convertible bonds or bonds with warrants. At the end of the period, the parent
company's Board of Directors did not have authorisations to issue convertible
bonds or bonds with warrants.
Trading in shares
The price of YIT's share was EUR 18.65 at the beginning of the year (January 1,
2010: EUR 14.44). The closing rate of the share on the last trading day of the
review period was EUR 20.92 (March 31, 2010: EUR 17.10). The share price
increased by 12 percent during January-March. The highest price of the share in
January-March was EUR 21.92 (1-3/2010: EUR 17.80), the lowest was EUR 17.75
(1-3/2010: EUR 14.44) and the average price was EUR 20.02 (1-3/2010: EUR
16.32). Share turnover on Nasdaq OMX in January-March amounted to 30,004,381
shares (1-3/2010: 36,277,021). The value of turnover was EUR 601.4 million
(1-3:2010: EUR 593.0 million).
YIT Corporation's market capitalisation at the end of the review period was EUR
2,616.6 million (3/2010: EUR 2,138.8 million). The market capitalisation has
been calculated excluding the shares held by the company.
Number of shareholders and flagging notifications
At the end of March, the number of registered shareholders was 32,278 (3/2010:
30,187). The number of private investors increased by approximately 1,800
compared to the end of March 2010. At the end of March, a total of 39.7 percent
(3/2010: 38.3%) of the shares were owned by nominee-registered and non-Finnish
investors.
During January-March, the company received no "flagging notifications" of
change in ownership in YIT Corporation in accordance with Chapter 2, section 9
of the Securities Market Act.
MAJOR SHORT-TERM BUSINESS RISKS AND RISK MANAGEMENT
YIT has specified the major risk factors and their management from the point of
view of the Group as a whole, taking the special characteristics of YIT's
business operations and environment into consideration. Risks are divided into
strategic, operational, financial and event risks.
YIT has developed the Group's business structure to be balanced and tolerant of
economic fluctuations. The share of steadily developing service and maintenance
operations has been increased. Cash flow-generating (building system and
industrial services, contracting) and capital-intensive business operations
(residential and commercial development production) balance the risks related
to business operations and the use of capital and enable better risk management
at the Group level.
Operations have been expanded geographically so that economic fluctuations
impact operations at different times in different markets. Continuous
monitoring and analysis make it possible to react quickly to changes in the
operating environment and also to utilise the business opportunities provided
by the changes.
The Group's aim is to grow profitably, both organically and through
acquisitions. The Building Services business has grown in Central Europe as a
result of an acquisition completed at the end of August 2010, and the
integration and business development of the acquired companies has started
according to plans.
YIT's typical operational risks include risks related to plot investments,
sales risk of residential and commercial development projects and risks related
to contract tenders, service agreements, project management and personnel. YIT
manages sales risk by matching the number of housing start-ups with the
estimated residential demand and the number of unsold residential units (the
figures for residential production are presented under Development by business
segment) and by normally securing key tenants and/or the investor prior to
starting a business premises project. A strong increase in interest rates is a
key risk related to the demand for residential units.
YIT tests the value of its plots as required by the IFRS accounting principles.
Plot reserves are measured at acquisition cost and the plot value is impaired
when it is estimated that the building being constructed on the plot will be
sold at a price lower than the sum of the price of the plot and the
construction costs. No write-offs were made to plots in the review period.
Financing and financial risks include liquidity, credit and counterparty,
interest rate and currency risks and risks related to the reporting process.
Financing and financial risks are managed through accounting and financing
policies, internal control as well as internal and external audit.
YIT's most significant currency risk is related to investments in ruble terms.
Capital invested in Russia totalled EUR 558.2 million (12/2010: EUR 544.9
million) at the end of the period. The amount of net equity investments at the
end of the period was EUR 417.9 million (12/2010: EUR 409.3 million). The net
investments in the Russian subsidiaries are unhedged in accordance with the
treasury policy, and a potential devaluation of the ruble would have a negative
impact equal to the amount of equity on the Group's shareholders' equity. Debt
investments amounted to EUR 140.3 million (12/2010: EUR 135.6 million) at the
end of the period, and this exposure was hedged in full. The difference in the
interest rates between the euro and ruble have an effect on hedging costs and
therefore net financial expenses.
Possible event risks include accidents related to personal or information
security and sudden and unforeseen material damage to premises, project sites
and other property, such as due to fire, collapse and theft. YIT complies with
a group-wide security policy covering the different areas of security.
A more detailed account of YIT's risk management policy and the most
significant risks was published in the Annual Report 2010. Financing risks are
described in more detail in the notes to the financial statements for 2010.
OUTLOOK FOR 2011
YIT corporation reiterates its estimate issued in connection with the financial
statements for 2010 and according to which, in 2011, the combined revenue of
the business segments will grow and operating profit will grow clearly compared
to 2010.
YIT estimates residential sales to continue to be good in both Finland and
Russia. In particular, residential construction activity in Russia and
increasing the share of building system service and maintenance provide
opportunities for improving profitability.
The profit outlook is based on the segment-level reporting, i.e. recognition of
income based on the percentage of completion.
Building Services Northern Europe
In Building Services Northern Europe, the service and maintenance market is
estimated to grow at a faster rate than the project market, which is dependent
on new investments. The opportunities for growth in service and maintenance are
favourable in all Nordic countries. The building system services market is
developing in the Baltic countries and Russia, but it will take some time for
the culture of purchasing services to consolidate itself. New investments in
building systems are expected to begin to increase slightly compared to the low
level of the previous year, and typically a growth in new investments can be
seen in the demand for building system services with a delay. New investments
in building systems are expected to grow by 2-3 percent in business premises
construction and 3-5 percent in residential construction during 2011.
Streamlining measures in the private sector and public administration open
opportunities for outsourcing of facility services. Investments by industrial
customers began to increase in Finland in the previous year, and their increase
is expected to continue. The demand for industrial maintenance services will
continue to be relatively steady.
Building Services Central Europe
In Building Services Central Europe, the service and maintenance market as well
as the project market, which is dependent on new investments, are expected to
grow. The opportunities for growth in service and maintenance are favourable in
all countries, the German and Austrian markets in particular offer good growth
opportunities. The building system services market in Central Eastern Europe
(Poland, the Czech Republic, Hungary and Romania) is developing.
New investments in building systems are expected to return to a relatively good
level in Central Europe, and the outlook for the project business is moderately
good, especially in Germany and Austria. New investments in building systems
are expected to increase by 2%-4% in 2011. Investments by industrial customers
are expected to continue to increase.
YIT has an extensive network of local offices in both the Nordic countries and
the markets where Building Services Central Europe operates, and a strong
market position in building system and industrial service and maintenance
operations, projects and energy-efficiency services. Growth in the demand for
energy-efficiency services is possible in the next few years with high energy
prices and tightening environmental legislation. There are many small companies
operating in the technical building system market, and the consolidation of the
market will provide opportunities for acquisitions. YIT's strength is its
extensive service portfolio and possibility to guarantee a high level of
service to its customers. YIT's goal is to be the leading provider of technical
system maintenance in the Nordic countries and Central Europe.
Construction Services Finland
With regard to Construction Services Finland, housing demand is expected to
continue to be good. In Finland, the demand is supported by relatively low
interest rates, strong consumer confidence in personal finances and structural
factors, such as migration, population growth and decreasing family sizes.
According to the construction industry's estimates, the construction of 30,500
residential units will start in 2011, while the VTT's long-term estimate of the
need for new housing is 35,000 residential units per year.
The supply situation of new residential units has normalised, and the supply of
new residential units on the market is higher than in recent years. YIT
actively started new residential projects in 2010 and the first quarter of
2011, which offers the company a solid starting point for the rest of 2011.
The increase in housing prices has levelled off, and YIT expects moderate
growth in prices in the future. Construction costs have begun to increase
moderately. YIT's good plot reserves and geographically extensive operations
make it possible to continue residential development start-ups and residential
production at a high level in 2011. YIT aims to increase the number of
residential start-ups in 2011 compared to 2010.
The business premises market shows signs of picking up: investors' yield
requirements have decreased and rents of business premises are expected to
begin rising. Vacancy rates are still high, and new investments in office
property is likely to remain at a relatively low level. A number of offices,
especially old and vacant ones, will not return into use as business premises
due to their poor location or condition. The demand for the construction of
logistics and business premises is moderate. The need for renovation will rise
steadily.
YIT has major road projects underway in infrastructure services, and the
Finnish infrastructure market will see new traffic-related projects being
started in 2011 and 2012. Opportunities will also open up in road and regional
maintenance contracts and investments in mining operations. The need for
stabilising public finance has an impact on the public sector's investments,
and there is an element of uncertainty connected with the project start-up
decisions. The competition in infrastructure construction will remain tight,
and the first two quarters of 2011 are expected to be quieter than the last two
quarters. YIT has special expertise in infrastructure and a solid position as
the largest private provider of road maintenance services in Finland.
International Construction Services
YIT aims to consolidate its position throughout the business area of the
International Construction Services segment.
There is a great need for new housing in Russia, and therefore the demand
outlook for residential units aimed at YIT's customer segment is strong in the
long term. The demand for housing in Russia is supported by continued good
consumer confidence and improved availability of housing loans. In Russia,
housing demand also depends on oil prices and the ruble exchange rate.
Housing prices have increased at a moderate rate during the first quarter. The
supply in the residential market has normalised with the start-up of new
residential projects. YIT has strengthened its reputation as a reliable
construction company and developed its sales process. The availability of loans
to customers has been improved through extensive cooperation with banks.
The residential market is showing signs of picking up in the Baltic countries
and Central Eastern Europe as well. Consumers need more room and quality of
housing in the long term in the Baltic countries and Central Eastern Europe. In
these countries, the average housing prices have begun to increase at a
moderate rate. In particular, demand has improved in city centres.
Residential start-ups will be increased in 2011 in accordance with the demand
throughout the area of operations of International Construction Services:
Russia, the Baltic countries, the Czech Republic and Slovakia. YIT aims to
increase the number of residential start-ups in 2011 compared to 2010. So far,
the business premises market has been softer than residential construction in
all of the countries where International Construction Services are present.
Construction of offices is low in Russia, but the demand for industrial and
business premises is increasing. Several business premises projects are being
prepared in the Baltic countries and Central Eastern Europe and will probably
be started before the end of the year.
Residential demand and housing prices are expected to increase throughout the
area of operations of International Construction Services, which provides
opportunities for improving profitability, particularly in Russia, which
provides opportunities for improving profitability. Accelerating inflation in
Russia will also be translated into increasing production costs.
INTERIM REPORT JAN 1 - MAR 31, 2011: TABLES
The information presented in the Interim Report has not been audited.
1. Key figures of YIT Group
Key figures
YIT Group figures by quarter
Segment information by quarter
2. Consolidated financial statements Jan 1 - Mar 31, 2011
Consolidated income statement January 1 - March 31, 2011
Statement of comprehensive income January 1 - March 31, 2011
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
3. Notes
Accounting principles of the Interim Report
Financial risk management
Segment information
Unusual items affecting operating profit
Business combinations and disposals
Changes in property, plant and equipment
Inventories
Notes on equity
Borrowings
Change in contingent liabilities and assets and commitments
Transactions with associated companies
1. KEY FIGURES OF YIT GROUP
KEY FIGURES
3/11 3/10 Change 12/10
, %
--------------------------------------------------------------------------------
Earnings per share, EUR 0.20 0.15 33 1.12
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 0.20 0.15 33 1.12
--------------------------------------------------------------------------------
Equity per share, EUR 6.64 6.08 9 7.04
--------------------------------------------------------------------------------
Average share price during the period, EUR 20.02 16.32 23 16.35
--------------------------------------------------------------------------------
Share price at end of period, EUR 20.92 17.10 22 18.65
--------------------------------------------------------------------------------
Market capitalization at end of period, MEUR 2,616.6 2,138.8 22 2,332.7
--------------------------------------------------------------------------------
Weighted average share-issue adjusted number 125,078 125,078 0 125,078
of shares outstanding, thousands
--------------------------------------------------------------------------------
Weighted average share-issue adjusted number 125,078 125,078 0 125,078
of shares outstanding, thousands, diluted
--------------------------------------------------------------------------------
Share-issue adjusted number of shares 125,078 125,078 0 125,078
outstanding at end of period, thousands
--------------------------------------------------------------------------------
Net interest-bearing debt at end of period, 626,1 496.0 26 640.9
MEUR
--------------------------------------------------------------------------------
Return on investment, from the last 12 14.0 11.3 24 14.3
months, %
--------------------------------------------------------------------------------
Equity ratio, % 28.5 30.2 -6 31.9
--------------------------------------------------------------------------------
Gearing ratio, % 75.2 65.0 16 72.6
--------------------------------------------------------------------------------
Gross capital expenditures, MEUR 8.7 9.4 -7 129.8
--------------------------------------------------------------------------------
% of revenue 0.9 1.2 -29 3.4
--------------------------------------------------------------------------------
Unrecognised order backlog at end of period, 3,699.0 3,152.5 17 3,535.7
MEUR
--------------------------------------------------------------------------------
of which order backlog outside Finland 1,976.7 1,637.1 21 1,857.7
--------------------------------------------------------------------------------
Average number of personnel 25,754 23,199 11 24,317
--------------------------------------------------------------------------------
YIT GROUP FIGURES BY QUARTER
1-3/11 1-3/10 4-6/10 7-9/10 10-12/1
0
--------------------------------------------------------------------------------
Revenue, MEUR 969.7 765.3 854.8 829.6 1,338.0
--------------------------------------------------------------------------------
Operating profit, MEUR 39.2 33.9 35.9 33.9 116.4
--------------------------------------------------------------------------------
% of revenue 4.0 4.4 4.2 4.1 8.7
--------------------------------------------------------------------------------
Financial income, MEUR 2.4 0.7 1.1 1.1 0.7
--------------------------------------------------------------------------------
Exchange rate differences, MEUR -1.3 -2.3 -1.9 -2.3 -0.8
--------------------------------------------------------------------------------
Financial expenses, MEUR -5.6 -5.6 -7.2 -5.7 -3.1
--------------------------------------------------------------------------------
Profit before taxes, MEUR 34.7 26.7 27.9 27.0 113.2
--------------------------------------------------------------------------------
% of revenue 3.6 3.5 3.3 3.3 8.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Balance sheet total, MEUR 3,274.8 2,994.8 3,067.9 3,234.6 3,117.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.20 0.15 0.16 0.16 0.65
--------------------------------------------------------------------------------
Equity per share, EUR 1) 6.64 6.08 6.35 6.30 7.04
--------------------------------------------------------------------------------
Share price at end of period, EUR 20.92 17.10 14.78 17.39 18.65
--------------------------------------------------------------------------------
Market capitalization at end of 2,616.6 2,138.8 1,848.7 2,175.1 2,332.7
period, MEUR
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return on investment, from the last 14.0 11.3 10.7 10.6 14.3
12 months, %
--------------------------------------------------------------------------------
Equity ratio, % 28.5 30.2 31.8 29.2 31.9
--------------------------------------------------------------------------------
Net interest-bearing debt at end of 626.1 496.0 514.8 636.6 640.9
period, MEUR
--------------------------------------------------------------------------------
Gearing ratio, % 75.2 65.0 64.7 80.5 72.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gross capital expenditures, MEUR 8.7 9.4 8.7 81.0 30.7
--------------------------------------------------------------------------------
Order backlog at end of period, 3,699.0 3,152.5 3,329.2 3,727.5 3,535.7
MEUR
--------------------------------------------------------------------------------
Personnel at end of period 25,748 23,211 23,877 25,943 25,832
--------------------------------------------------------------------------------
SEGMENT INFORMATION BY QUARTER
Revenue by business segment (EUR million)
1-3/11 1-3/10 4-6/10 7-9/10 10-12/10
------------------------------------------------------------------------------
Building Services Northern Europe 476.2 406.8 460.8 416.8 519.2
------------------------------------------------------------------------------
Building Services Central Europe 177.1 70.4 86.9 134.2 258.7
------------------------------------------------------------------------------
Construction Services Finland 289.5 252.9 275.2 279.7 294.2
------------------------------------------------------------------------------
International Construction Services 100.3 106.9 112.1 111.9 139.7
------------------------------------------------------------------------------
Other items -16.2 -16.2 -20.7 -18.4 -24.2
------------------------------------------------------------------------------
YIT's segments total 1,026.9 820.8 914.3 924.2 1,187.6
------------------------------------------------------------------------------
IFRIC 15 adjustments -57.2 -55.5 -59.6 -94.6 150.4
------------------------------------------------------------------------------
YIT Group, total 969.7 765.3 854.7 829.6 1,338.0
------------------------------------------------------------------------------
Operating profit by business segment (EUR million)
1-3/11 1-3/10 4-6/10 7-9/10 10-12/10
-----------------------------------------------------------------------------
Building Services Northern Europe 17.1 19.9 25.1 20.2 23.5
-----------------------------------------------------------------------------
Building Services Central Europe 4.0 1.7 3.1 2.7 8.9
-----------------------------------------------------------------------------
Construction Services Finland 25.6 23.1 26.4 29.3 29.4
-----------------------------------------------------------------------------
International Construction Services 8.4 4.6 7.6 9.2 13.4
-----------------------------------------------------------------------------
Other items -4.7 -4.8 -5.1 -3.4 -5.5
-----------------------------------------------------------------------------
YIT's segments total 50.4 44.5 57.1 57.9 69.7
-----------------------------------------------------------------------------
IFRIC 15 adjustments -11.2 -10.6 -21.2 -24.0 46.7
-----------------------------------------------------------------------------
YIT Group, total 39.2 33.9 35.9 33.9 116.4
-----------------------------------------------------------------------------
Operating profit margin by business segment (%)
1-3/11 1-3/10 4-6/10 7-9/10 10-12/10
-----------------------------------------------------------------------------
Building Services Northern Europe 3,6% 4,9% 5,4% 4,8% 4,5%
-----------------------------------------------------------------------------
Building Services Central Europe 2,3% 2,4% 3,6% 2,0% 3,4%
-----------------------------------------------------------------------------
Construction Services Finland 8,8% 9,1% 9,6% 10,5% 10,0%
-----------------------------------------------------------------------------
International Construction Services 8,4% 4,3% 6,8% 8,2% 9,6%
-----------------------------------------------------------------------------
YIT's segments total 4,9% 5,4% 6,2% 6,3% 5,9%
-----------------------------------------------------------------------------
YIT Group. total 4,0% 4,4% 4,2% 4,1% 8,7%
-----------------------------------------------------------------------------
In 2010, the operating profit of Building Systems segment included EUR 6.3
million non- recurring expenses related to acquisitions made during the year.
Of the non-recurring items, EUR 1.4 million was recognised in the third quarter
of the year in Building Services Northern Europe and EUR 1.9 million in
Building Services Central Europe. EUR 3.0 milliom of non-recurring expenses
were booked in Building Services Central Europe in the fourth quarter.
Order backlog by business segment at end of period (EUR million)
3/11 3/10 6/10 9/10 12/10
--------------------------------------------------------------------------------
Building Services Northern Europe 804.9 697.9 748.5 743.0 757.4
--------------------------------------------------------------------------------
Building Services Central Europe 573.2 266.3 276.8 589.1 507.0
--------------------------------------------------------------------------------
Construction Services Finland 1,176.0 905.4 1,154.7 1,205.2 1,173.2
--------------------------------------------------------------------------------
International Construction Services 862.7 1,013.2 946.8 884.8 870.8
1)
--------------------------------------------------------------------------------
Other items -61.2 -45.8 -59.4 -55.2 -58.3
--------------------------------------------------------------------------------
YIT's segments total 3,355.6 2,837.0 3,067.4 3,366.9 3,250.1
--------------------------------------------------------------------------------
IFRIC 15 adjustments 343.4 315.5 261.8 360.6 285.6
--------------------------------------------------------------------------------
YIT Group, total 3,699.0 3,152.5 3,329.2 3,727.5 3,535.7
--------------------------------------------------------------------------------
1) At the end of March 2011, the value of projects that were still suspended
amounted to EUR 91 million (12/2010: 235 million)
2. CONSOLIDATED FINANCIAL STATEMENTS JAN 1 - MAR 31, 2011
CONSOLIDATED INCOME STATEMENT JAN 1 - MAR 31, 2011 (EUR million)
1-3/11 1-3/10 Change 1-12/10
, %
--------------------------------------------------------------------------------
Revenue 969.7 765.3 27 3,787.6
--------------------------------------------------------------------------------
of which activities outside Finland 591.5 436.9 35 2,343.6
--------------------------------------------------------------------------------
Operating income and expenses -920.7 -722.5 27 -3,531.1
--------------------------------------------------------------------------------
Share of results of associated companies -0.2 -0.4 -50 -0.5
--------------------------------------------------------------------------------
Depreciation and write-downs -9.6 -8.5 13 -35.9
--------------------------------------------------------------------------------
Operating profit 39.2 33.9 16 220.1
--------------------------------------------------------------------------------
% of revenue 4.0 4.4 5.8
--------------------------------------------------------------------------------
Financial income 2.4 0.7 243 3.7
--------------------------------------------------------------------------------
Exchange rate differences -1.3 -2.3 -43 -7.3
--------------------------------------------------------------------------------
Financial expenses -5.6 -5.6 0 -21.7
--------------------------------------------------------------------------------
Profit before taxes 34.7 26.7 30 194.8
--------------------------------------------------------------------------------
% of revenue 3.6 3.5 5.1
--------------------------------------------------------------------------------
Income taxes 1) -9.8 -7.8 26 -54.2
--------------------------------------------------------------------------------
Profit for the report period 24.9 18.9 32 140.6
--------------------------------------------------------------------------------
% of revenue 2.6 2.5 3.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 24.8 18.8 32 140.3
--------------------------------------------------------------------------------
Minority interests 0.1 0.1 0.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share attributable to the equity
holders of the parent company
--------------------------------------------------------------------------------
Earnings per share, EUR 0.20 0.15 33 1.12
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 0.20 0.15 33 1.12
--------------------------------------------------------------------------------
1) Taxes for the review period are based on the taxes for the whole financial
year.
STATEMENT OF COMPREHENSIVE INCOME JAN 1 - MAR 31, 2011 (EUR million)
1-3/11 1-3/10 Change, % 1-12/10
--------------------------------------------------------------------------------
Profit for the report period 24.9 18.9 32 140.6
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
- Change in the fair value of interest 2.6 -2.6 -1.0
derivatives
--------------------------------------------------------------------------------
-- Deferred tax -0.7 0.7 0.3
--------------------------------------------------------------------------------
- Change in translation differences 4.5 32.9 -86 29.2
--------------------------------------------------------------------------------
- Other change -0.4 0.0 0.0
--------------------------------------------------------------------------------
Other comprehensive income. total 6.0 31.0 -81 28.5
--------------------------------------------------------------------------------
Total comprehensive income 30.9 49.9 -38 169.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 30.7 49.4 -38 168.7
--------------------------------------------------------------------------------
Minority interests 0.2 0.5 -60 0.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET (EUR million)
3/11 3/10 Change , 12/10
%
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Property, plant and equipment 107.1 98.8 8 106.7
--------------------------------------------------------------------------------
Goodwill 350.9 291.0 21 350.9
--------------------------------------------------------------------------------
Other intangible assets 48.8 34.6 41 50.5
--------------------------------------------------------------------------------
Shares in associated companies 2.5 2.8 -11 2.7
--------------------------------------------------------------------------------
Other investments 3.4 2.0 70 3.4
--------------------------------------------------------------------------------
Other receivables 18.3 14.1 30 15.9
--------------------------------------------------------------------------------
Deferred tax assets 52.2 50.5 3 44.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Inventories 1,552.2 1,527.4 2 1,484.9
--------------------------------------------------------------------------------Trade and other receivables 852.0 650.1 31 889.3
--------------------------------------------------------------------------------
Cash and cash equivalents 267.6 323.5 -17 148.3
--------------------------------------------------------------------------------
Assets held for sale 19.8 over 19.8
1000
--------------------------------------------------------------------------------
Total assets 3,274.8 2,994.8 9 3,117.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders of
the parent company
--------------------------------------------------------------------------------
Share capital 149.2 149.2 0 149.2
--------------------------------------------------------------------------------
Other equity 681.0 611.5 11 730.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-controlling interest 2.7 2.7 0 2.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity 832.9 763.4 9 882.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 88.6 73.7 20 77.2
--------------------------------------------------------------------------------
Pension liabilities 26.9 17.2 56 26.9
--------------------------------------------------------------------------------
Provisions 49.2 49.8 -1 49.5
--------------------------------------------------------------------------------
Interest-bearing liabilities 477.1 595.8 -20 504.6
--------------------------------------------------------------------------------
Other liabilities 7.8 6.1 28 10.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Trade and other payables 1,312.8 1,224.6 7 1,218.8
--------------------------------------------------------------------------------
Provisions 45.7 40.4 13 45.1
--------------------------------------------------------------------------------
Interest-bearing current liabilities 416.6 223.8 86 284.6
--------------------------------------------------------------------------------
Liabilities of assets held for sale 17.2 17.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 3,274.8 2,994.8 9 3,117.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR million)
Attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-----
Share Legal Other Cumula Fair Treasu Retain Total Non-co
Total
capita reserv reserv tive value ry ed ntroll
equity
l e e transl reserv shares earnin ing
ation e gs intere
differ st
ences
--------------------------------------------------------------------------------
-----
Balanc 149.2 2.0 0.0 -14.2 -2.4 -10.6 756.1 880.1 2.8
882.9
e at
Janua
ry 1.
2011
--------------------------------------------------------------------------------
-----
Compre
hensiv
e
incom
e
--------------------------------------------------------------------------------
-----
Profit 24.8 24.8 0.1
24.9
for
the
perio
d
--------------------------------------------------------------------------------
-----
Other
compr
ehensi
ve
incom
e:
--------------------------------------------------------------------------------
-----
Change 2.6 2.6
2.6
in
the
fair
value
of
intere
st
deriv
atives
--------------------------------------------------------------------------------
-----
- -0.7 -0.7
-0.7
Defer
red
tax
asset
--------------------------------------------------------------------------------
-----
Change 4.4 4.4 0.1
4.5
in
trans
lation
diffe
rences
--------------------------------------------------------------------------------
-----
Other -0.4 -0.4
-0.4
chang
e
--------------------------------------------------------------------------------
-----
Compre 0.0 0.0 0.0 4.4 1.9 0.0 24.4 30.7 0.2
30.9
hensiv
e
incom
e,
total
--------------------------------------------------------------------------------
-----
Transa
ctions
with
owner
s
--------------------------------------------------------------------------------
-----
Divide -81.3 -81.3
-81.3
nd
paid
--------------------------------------------------------------------------------
-----
Share- 0.4 0.4
0.4
based
incen
tive
schem
e
--------------------------------------------------------------------------------
-----
Transa 0.0 0.0 0.0 0.0 0.0 0.0 -80.9 -80.9 0.0
-80.9
ctions
with
owner
s,
total
--------------------------------------------------------------------------------
-----
Change
s in
owner
ship
share
s in
subsid
iaries
--------------------------------------------------------------------------------
-----
Change 0.3 0.3 -0.3
0.0
s in
group
owner
ship
share
s
in
subsi
diarie
s - no
loss
of
contr
ol
--------------------------------------------------------------------------------
-----
Change 0.0
0.0
s from
busin
ess
combin
ations
--------------------------------------------------------------------------------
-----
Change 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 -0.3
0.0
s in
owner
ship
share
s in
subsi
diarie
s,
total
--------------------------------------------------------------------------------
-----
Balanc 149.2 2.0 0.0 -9.8 -0.5 -10.6 699.9 830.2 2.7
832.9
e at
March
31,
2011
--------------------------------------------------------------------------------
-----
--------------------------------------------------------------------------------
-----
Attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-----
Share Legal Other Cumula Fair Treasu Retain Total Non-co
Total
capita reserv reserv tive value ry ed ntroll
equity
l e e transl reserv shares earnin ing
ation e gs intere
differ st
ences
--------------------------------------------------------------------------------
-----
Balanc 149.2 1.7 11.6 -42.4 -1.7 -10.6 654.1 761.9 2.2
764.1
e at
Janua
ry 1.
2010
--------------------------------------------------------------------------------
-----
Compre
hensiv
e
incom
e
--------------------------------------------------------------------------------
-----
Profit 18.8 18.8 0.1
18.9
for
the
perio
d
--------------------------------------------------------------------------------
-----
Other
compr
ehensi
ve
incom
e:
--------------------------------------------------------------------------------
-----
Change -2.6 -2.6
-2.6
in
the
fair
value
of
intere
st
deriv
atives
--------------------------------------------------------------------------------
-----
- 0.7 0.7
0.7
Defer
red
tax
asset
--------------------------------------------------------------------------------
-----
Change 31.1 1.4 32.5 0.4
32.9
in
trans
lation
diffe
rences
--------------------------------------------------------------------------------
-----
Compre 31.1 -1.9 20.2 49.4 0.5
49.9
hensiv
e
incom
e,
total
--------------------------------------------------------------------------------
-----
Transa
0.0
ctions
with
owner
s
--------------------------------------------------------------------------------
-----
Divide -50.5 -50.5
-50.5
nd
paid
--------------------------------------------------------------------------------
-----
Transa -50.5 -50.5
-50.5
ctions
with
owner
s,
total
--------------------------------------------------------------------------------
-----
Balanc 149.2 1.7 11.6 -11.3 -3.6 -10.6 623.8 760.8 2.7
763.5
e at
March
31,
2010
--------------------------------------------------------------------------------
-----
CONSOLIDATED CASH FLOW STATEMENT (EUR million)
1-3/11 1-3/10 Change, 1-12/1
% 0
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
Net profit for the period 24.9 18.9 32 140.6
--------------------------------------------------------------------------------
Reversal of accrual-based items 23.8 24.6 -3 130.3
--------------------------------------------------------------------------------
Change in working capital
--------------------------------------------------------------------------------
Change in trade and other receivables 45.5 15.1 201 -77.3
--------------------------------------------------------------------------------
Change in inventories -57.3 15.0 60.3
--------------------------------------------------------------------------------
Change in current liabilities 16.6 0.0 -135.4
--------------------------------------------------------------------------------
Change in working capital. total 4.8 30.1 -84 -152.4
--------------------------------------------------------------------------------
Interest paid -12.8 -6.7 91 -27.5
--------------------------------------------------------------------------------
Other financial items, net -2.3 -15.1 -85 -37.2
--------------------------------------------------------------------------------
Interest received 0.9 0.7 29 3.5
--------------------------------------------------------------------------------
Taxes paid -15.2 -11.8 29 -50.5
--------------------------------------------------------------------------------
Net cash generated from operating activities 24.1 40.8 -41 6.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------
Acquisition of subsidiaries. net of cash -0.3 -2.9 90 -45.4
--------------------------------------------------------------------------------
Purchase of property. plant and equipment -6.6 -3.9 69 -19.9
--------------------------------------------------------------------------------
Purchase of intangible assets -1.8 -1.7 6 -8.4
--------------------------------------------------------------------------------
Increases in other investments 0.0 -1.3
--------------------------------------------------------------------------------
Proceeds from sale of tangible and intangible 0.7 1.6 -56 6.5
assets
--------------------------------------------------------------------------------
Proceeds from sale of other investments 0.0 -0.1 100 0.0
--------------------------------------------------------------------------------
Net cash used in investing activities -8.0 -7.0 14 -68.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating cash flow after investments 16.1 33.8 -52 -61.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing activities
--------------------------------------------------------------------------------
Change in current liabilities 80.5 23.1 248 34.2
--------------------------------------------------------------------------------
Proceeds from borrowings 75.0 100.0 -25 100.0
--------------------------------------------------------------------------------
Repayments of borrowings -52.5 -8.8 497 -50.4
--------------------------------------------------------------------------------
Payments of financial leasing debts -0.6 -0.1 500 -0.1
--------------------------------------------------------------------------------
Dividends paid -51.2
--------------------------------------------------------------------------------
Net cash used in financing activities 102.4 114.2 -10 32.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents 118.5 148.0 -20 -29.3
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of 147.6 173.1 -15 173.1
the period
--------------------------------------------------------------------------------
Change in the fair value of the cash 0.1 2.4 -96 3.8
equivalents
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the 266.2 323.5 -18 147.6
period
--------------------------------------------------------------------------------
3. NOTES
ACCOUNTING PRINCIPLES OF THE INTERIM REPORT
Y YIT Corporation's Interim Report for January 1 - March 31, 2011 has been
drawn up in line with IAS 34: Interim Financial Reporting. The information
presented in the Interim Report has not been audited. YIT has applied the same
accounting policy and IFRS standards and interpretations in the drafting of the
Interim Report as in its annual financial statements for 2010. However, the
following new standards, interpretations and amendments on current standards
that have been approved by EU have been applied as of January 1. 2011:
-- IAS 24 (revised): Related party disclosures
-- IFRIC 14 (amendment): Prepayments of a minimum funding requirement
-- IFRIC 19: Extinguishing financial liabilities with Equity instruments
-- IAS 32 (amendment): Classification of Rights Issues
-- Improvements to IFRSs, issued in July 2010
Currency exchange rates used in the Interim Report
Average rate Balance sheet rate Average rate Balance sheet rate
1-3/11 March 31, 2011 1-3/10 March 31, 2010
--------------------------------------------------------------------------------
1 EUR = CZK 24.3760 24.5430 25.8810 25.4400
--------------------------------------------------------------------------------
DKK 7.4549 7.4567 7.4426 7.4447
-------------------------------------------------------------------------------- EEK - - 15.6466 15.6466
--------------------------------------------------------------------------------
HUF 272.5000 265.7200 268.6000 265.7500
--------------------------------------------------------------------------------
MYR 4.1643 4.2983 - -
--------------------------------------------------------------------------------
NOK 7.8234 7.8330 8.1055 8.0135
--------------------------------------------------------------------------------
PLN 3.9441 4.0106 3.9910 3.8673
--------------------------------------------------------------------------------
RUB 40.0048 40.2850 41.3285 39.6950
--------------------------------------------------------------------------------
SEK 8.8647 8.9329 9.9576 9.7135
--------------------------------------------------------------------------------
SGD 1.7458 1.7902 - -
--------------------------------------------------------------------------------
USD 1.3670 1.4207 - -
--------------------------------------------------------------------------------
LVL 0.7028 0.7028 0.7028 0.7028
--------------------------------------------------------------------------------
LTL 3.4528 3.4528 3.4528 3.4528
--------------------------------------------------------------------------------
FINANCIAL RISK MANAGEMENT
Financial risks include liquidity, interest rate, currency and credit risk, and
their management is a part of the Group's financing policy. The Board of
Directors has approved the Corporate Finance Policy. The Group's Finance
Department is responsible for the practical implementation of the policy in
association with the business segments and units.
The Group's strategic financial targets guide the use and management of the
Group's capital. Achieving the strategic targets is supported by maintaining an
optimum Group capital structure. Capital structure is mainly influenced by
controlling the investments and the amount of working capital tied to business
operations.
A more detailed account of financial risks has been published in the notes to
the financial statements for 2010.
SEGMENT INFORMATION
The chief operating decision-maker has been identified as the YIT Group's
Management Board, which review the Group's internal reporting in order to
assess performance and allocate resources to the segments.
Building Services Northern Europe and Building Services Central Europe
segments' reporting to YIT Group's management board is based on YIT Group's
accounting principles. Construction Sevices Finland and International
Construction Services segments' reporting to the Management board do not apply
Group's accounting principles in revenue recognition of own residential and
commercial real estate development projects. The revenue from own residential
and commercial development projects is recognised on the basis of the
percentage of degree of completion and the degree of sale, using percentage of
completion method.
According to Group's accounting principles revenue from own residential and
commercial development projects is recognised at the completion. The impact on
revenue and operating profit of two revenue recognition principles is shown in
the line IFRIC 15 - adjustment.
Revenue by business segment (EUR million)
1-3/11 1-3/10 Change, % 1-12/10
------------------------------------------------------------------------
Building Services Northern Europe 476.2 406.8 17 1,803.6
------------------------------------------------------------------------
- Group internal -14.3 -15.2 -6 -71.0
------------------------------------------------------------------------
- external 461.9 391.6 18 1,732.6
------------------------------------------------------------------------
Building Services Central Europe 177.1 70.4 152 550.2
------------------------------------------------------------------------
- Group internal 0.0 -0.0 0 -0.5
------------------------------------------------------------------------
- external 177.1 70.4 152 549.6
------------------------------------------------------------------------
Construction Services Finland 289.5 252.9 14 1,102.0
------------------------------------------------------------------------
- Group internal -0.3 -0.3 0 -1.9
------------------------------------------------------------------------
- external 289.2 252.6 14 1,100.1
------------------------------------------------------------------------
International Construction Services 100.3 106.9 -6 470.6
------------------------------------------------------------------------
- Group internal -1.8 -0.8 125 -7.1
------------------------------------------------------------------------
- external 98.5 106.1 -7 463.5
------------------------------------------------------------------------
Other items 0.3 0.1 1.2
------------------------------------------------------------------------
YIT's segments total 1,026.9 820.8 25 3,847.0
------------------------------------------------------------------------
IFRIC 15 adjustments -57.2 -55.5 -59.4
------------------------------------------------------------------------
YIT Group, total - external 969.7 765.3 27 3,787.6
------------------------------------------------------------------------
Operating profit by business segment (EUR million)
1-3/11 1-3/10 Change, % 1-12/10
------------------------------------------------------------------------
Building Services Northern Europe 1) 17.1 19.9 -14 88.7
------------------------------------------------------------------------
Building Services Central Europe 2) 4.0 1.7 135 16.4
------------------------------------------------------------------------
Construction Services Finland 25.6 23.1 11 108.1
------------------------------------------------------------------------
International Construction Services 8.4 4.6 83 34.7
------------------------------------------------------------------------
Other items -4.7 -4.8 -18.8
------------------------------------------------------------------------
YIT's segments total 50.4 44.5 13 229.1
------------------------------------------------------------------------
IFRIC 15 adjustments -11.2 -10.6 -9.0
------------------------------------------------------------------------
YIT Group, total 39.2 33.9 16 229.1
------------------------------------------------------------------------
In 2010, the operating profit of Building Systems segment included EUR 6.3
million non- recurring expenses related to acquisitions made during the year.
Of the non-recurring items, EUR 1.4 million was recognised in the third quarter
of the year in Building Services Northern Europe and EUR 1.9 million in
Building Services Central Europe. EUR 3.0 milliom of non-recurring expenses
were booked in Building Services Central Europe in the fourth quarter.
Order backlog by business segment at end of period (EUR million) 3/11 3/10 Change, % 12/10
----------------------------------------------------------------------------
Building Services Northern Europe 804.9 697.9 15 757.4
----------------------------------------------------------------------------
Building Services Central Europe 573.2 266.3 115 507.0
----------------------------------------------------------------------------
Construction Services Finland 1,176.0 905.4 30 1,173.2
----------------------------------------------------------------------------
International Construction Services 1) 862.7 1,013.2 -15 870.8
----------------------------------------------------------------------------
Other items -61.2 -45.8 -58.3
----------------------------------------------------------------------------
YIT's segments total 3,355.6 2,837.0 18 3,250.1
----------------------------------------------------------------------------
IFRIC 15 adjustments 343.4 315.5 285.7
----------------------------------------------------------------------------
YIT Group, total 3,699.0 3,152.5 17 3,535.7
----------------------------------------------------------------------------
1) At the end of March 2011, the value of projects that were still suspended
amounted to EUR 91 million (3/2010: EUR 235 million).
UNUSUAL ITEMS AFFECTING OPERATING PROFIT (EUR million)
1-3/11 1-3/10 Change, % 1-12/10
---------------------------------------------------------------------
Building Services Northern Europe 0.0 0.0 -1.4
---------------------------------------------------------------------
Building Services Central Europe 0.0 0.0 -4.9
---------------------------------------------------------------------
YIT Group, total 0.0 0.0 -6.3
---------------------------------------------------------------------
In 2010, the operating profit of Building Systems segment included EUR 6.3
million non- recurring expenses related to acquisitions made during the year.
Of the non-recurring items, EUR 1.4 million was recognised in the third quarter
of the year in Building Services Northern Europe and EUR 1.9 million in
Building Services Central Europe. EUR 3.0 milliom of non-recurring expenses
were booked in Building Services Central Europe in the fourth quarter.
BUSINESS COMBINATIONS AND DISPOSALS (EUR million)
In the Building Services Northern Europe segment YIT acquired contracting
operations within clean rooms from NNE Pharmaplan AB as of January 1, 2011.
Composition of acquired net assets and goodwill (EUR million)
3/11
--------------------------------------------------------------------------------
Consideration
--------------------------------------------------------------------------------
Cash 0.3
--------------------------------------------------------------------------------
Total consideration. transferred 0.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Acquisition-related costs (recognised as expenses) 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Recognised amounts of identifiable assets acquired and liabilities assumed
--------------------------------------------------------------------------------
Cash and cash equivalents
--------------------------------------------------------------------------------
Property, plant and equipment 0.1
--------------------------------------------------------------------------------
Intangible rights 0.2
--------------------------------------------------------------------------------
Total identifiable net assets 0.3
--------------------------------------------------------------------------------
Non-controlling interest -
--------------------------------------------------------------------------------
Goodwill -
--------------------------------------------------------------------------------
Total 0.3
--------------------------------------------------------------------------------
There were no disposals during the period under review.
CHANGES IN PROPERTY, PLANT AND EQUIPMENT (EUR million)
1-3/11 1-3/10 Change, % 1-12/10
-----------------------------------------------------------------------------
Carrying value at the beginning of period 106.7 99.8 7 99.8
-----------------------------------------------------------------------------
Increase 6.8 4.0 70 24.4
-----------------------------------------------------------------------------
Increase through acquisitions 0.0 0.4 -100 12.4
-----------------------------------------------------------------------------
Decrease -0.7 -1.4 -50 -6.1
-----------------------------------------------------------------------------
Depreciation and value adjustments -6.0 -5.8 3 -23.9
-----------------------------------------------------------------------------
Reclassification 0.3 1.8 -83 0.1
-----------------------------------------------------------------------------
Carrying value at the end of period 107.1 98.8 8 106.7
-----------------------------------------------------------------------------
INVENTORIES (EUR million)
3/11 3/10 Change, 12/10
%
--------------------------------------------------------------------------------
Raw materials and consumables 26.9 20.1 34 26.4
--------------------------------------------------------------------------------
Work in progress 704.7 667.9 6 639.0
--------------------------------------------------------------------------------
Land areas and plot owing companies 625.7 581.5 8 589.3
--------------------------------------------------------------------------------
Shares in completed housing and real estate 152.7 209.0 -27 181.2
companies
--------------------------------------------------------------------------------
Advance payments 41.5 47.7 -13 48.2
--------------------------------------------------------------------------------
Other inventories 0.7 1.2 -42 0.9
--------------------------------------------------------------------------------
Total inventories 1,552.2 1,527.4 2 1,484.9
--------------------------------------------------------------------------------
NOTES ON EQUITY (EUR million)
Share capital and share Number of Share capital (EUR Treasury
premium reserve shares million) shares
(EUR
million)
--------------------------------------------------------------------------------
January 1, 2011 125,078,422 149.2 -10.6
--------------------------------------------------------------------------------
March 31, 2011 125,078,422 149.2 -10.6
--------------------------------------------------------------------------------
INTEREST-BEARING LIABILITIES (EUR million)
No new bonds raised during the review period.
CHANGE IN CONTINGENT LIABILITIES AND ASSETS AND COMMITMENTS (EUR million)
3/11 3/10 Change, 12/10
%
--------------------------------------------------------------------------------
Collateral given for own commitments
--------------------------------------------------------------------------------
- Corporate mortgages 29.8 29.3 29.8
--------------------------------------------------------------------------------
- Other mortgages 53.2 -100
--------------------------------------------------------------------------------
Other commitments
--------------------------------------------------------------------------------
- Repurchase commitments 132.5 119.3 11 141.0
--------------------------------------------------------------------------------
- Operating leases 325.2 308.2 6 322.5
--------------------------------------------------------------------------------
- Rental guarantees for clients 5.9 8.6 -31 8.0
--------------------------------------------------------------------------------
- Other contingent liabilities 4.1 0.5 720 4.2
--------------------------------------------------------------------------------
- Other guarantees 5.2 0.2 over 5.2
1,000
--------------------------------------------------------------------------------
Liability under derivative contracts
--------------------------------------------------------------------------------
- Value of underlying instruments
--------------------------------------------------------------------------------
-- Interest rate derivatives 388.5 308.8 26 304.6
--------------------------------------------------------------------------------
-- Currency derivatives 218.9 304.0 -28 203.2
--------------------------------------------------------------------------------
-- Commodity derivatives 0.4 100 0.5
--------------------------------------------------------------------------------
- Market value
--------------------------------------------------------------------------------
-- Interest rate derivatives -2.5 -9.5 -74 -10.6
--------------------------------------------------------------------------------
-- Currency derivatives -3.8 -10.0 -62 0.3
--------------------------------------------------------------------------------
-- Commodity derivatives 0.0 0.1
--------------------------------------------------------------------------------
YIT Corporation's guarantees on behalf of its 1,313.7 973.5 35 1,202.5
subsidiaries
--------------------------------------------------------------------------------
TRANSACTIONS WITH ASSOCIATED COMPANIES (EUR million)
1-3/11 1-3/10 Change, % 1-12/10
-----------------------------------------------------------------------
Sales to associated companies 0.4 0.4 0 1.5
-----------------------------------------------------------------------
Purchases from associated companies 0.0 0.0 0 0.2
-----------------------------------------------------------------------
Trade and other receivables 0.0 0.0 0 0.0
-----------------------------------------------------------------------
Trade and other liabilities 0.0 0.0 0 0.0
-----------------------------------------------------------------------
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