2011-02-04 07:11:53 CET
2011-02-04 07:12:25 CET
REGULATED INFORMATION
YIT - Financial Statement Release
YIT's financial statements for 2010: EARNINGS PER SHARE DOUBLED - YIT ESTIMATES GROWTH IN REVENUE AND CLEAR GROWTH IN OPERATING PROFIT IN 2011
Helsinki, 2011-02-04 07:11 CET (GLOBE NEWSWIRE) --
YIT CORPORATION FINANCIAL STATEMENTS BULLETIN Feb 4, 2011
at 8:00 a.m.
YIT's financial statements for 2010:
EARNINGS PER SHARE DOUBLED - YIT ESTIMATES GROWTH IN REVENUE AND CLEAR GROWTH
IN OPERATING PROFIT IN 2011
SEGMENT-LEVEL REPORTING 10-12/2010 (10-12/2009): Fourth quarter by far the
strongest
-- The operating profit of the segments was 17 percent higher than in the
previous year, amounting to EUR 69.7 million (10-12/2009: EUR 59.7
million). Profitability clearly improved compared to the previous year in
Construction Services Finland and International Construction Services. The
operating profit of Building and Industrial Services was burdened by a
provision of EUR 3.0 million related to the reorganisation of business
operations acquired in Central Europe.
-- The revenue of the segments was 24 percent higher than in the previous
year, increasing to EUR 1,187.6 million (10-12/2009: EUR 960.5 million).
Revenue increased considerably in Building and Industrial Services and
International Construction Services. Residential sales accelerated
throughout the entire area of operations of International Construction
Services.
SEGMENT-LEVEL REPORTING 1-12/2010 (1-12/2009): Profitability improved clearly
-- The operating profit of the segments was 38 percent higher than in the
previous year, amounting to EUR 229.1 million (1-12/2009: EUR 165.5
million). The operating profit of Construction Services Finland was
considerably higher than in the previous year, with the focus of operations
being shifted to residential development projects. Operating profit
improved considerably in International Construction Services as well as the
result of improved residential sales. The operating profit of Building and
Industrial Services fell short of the year before: in particular,
profitability was burdened by the low level of new investments by customers
and non-recurring expenses amounting to EUR 6.3 million related to
acquisitions during the last two quarters.
-- The revenue of the segments was 11 percent higher than in the previous
year, increasing to EUR 3,847.0 million (1-12/2009:EUR 3,452.4 million).
Revenue increased across all segments.
-- The order backlog of the segments was 17 percent higher than the year
before, amounting to EUR 3,250.1 million (12/2009:EUR 2,773.6 million). An
acquisition completed in Central Europe in August increased the order
backlog at year end by EUR 274.9 million. In Russia, YIT strongly increased
the number of residential start-ups in 2010 compared to the previous year.
GROUP REPORTING 1-12/2010 (1-12/2009): Earnings per share doubled
-- Earnings per share increased by 104 percent to EUR 1.12 (1-12/:2009: EUR
0.55).
-- The Group's profit before taxes increased by 78 percent from the previous
year to EUR 194.8 million in January-December (1-12/2009:EUR 109.5
million). Financial expenses were cut in half compared to the previous
year.
GUIDANCE: Profitable growth will continue in 2011
YIT Corporation estimates that 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.
DIVIDEND PROPOSAL: Dividend increases to EUR 0.65
-- The Board of Directors proposes to the Annual General Meeting that a
dividend of EUR 0.65 per share be paid, representing 57.9 percent of the
Group's net profit for the period.
KEY FIGURES
Development of segments and the Group
Revenue, EUR million 1-12/10 1-12/09 Change 10-12/1 10-12/0 Change
0 9
--------------------------------------------------------------------------------
Building and Industrial 2,353.0 2,124.9 11% 777.8 573.9 36%
Services
--------------------------------------------------------------------------------
Construction Services 1,102.0 1,029.7 7% 294.2 290.6 1%
Finland
--------------------------------------------------------------------------------
International Construction 470.6 359.4 31% 139.7 113.0 24%
Services
--------------------------------------------------------------------------------
Other items -78.6 -61.6 -28% -24.1 -17.0 --
--------------------------------------------------------------------------------
YIT's segments total 3,847.0 3,452.4 11% 1,187.6 960.5 24%
--------------------------------------------------------------------------------
IFRIC 15 adjustment -59.4 33.2 -- 150.4 64.7 132%
--------------------------------------------------------------------------------
YIT Group, total 3,787.6 3,485.6 9% 1,338.0 1,025.3 30%
--------------------------------------------------------------------------------
Operating profit, EUR
million
-------------------------------------- -------- -------
Building and Industrial 105.1 119.3 -12% 32.4 37.6 -14%
Services
--------------------------------------------------------------------------------
Construction Services 108.1 81.9 32% 29.4 20.3 45%
Finland
--------------------------------------------------------------------------------
International Construction 34.7 -17.8 -- 13.4 7.5 79%
Services
--------------------------------------------------------------------------------
Other items -18.8 -17.9 -- -5.5 -5.7 --
--------------------------------------------------------------------------------
YIT's segments total 229.1 165.5 38% 69.7 59.7 17%
--------------------------------------------------------------------------------
IFRIC 15 adjustment -9.0 2.6 -- 46.7 3.6 --
--------------------------------------------------------------------------------
YIT Group, total 220.1 168.1 31% 116.4 63.3 84%
--------------------------------------------------------------------------------
Operating profit, % 1-12/10 1-12/09 10-12/1 10-12/0
0 9
-------------------------------------- ---------------------------------
Building and Industrial 4.5% 5.6% 4.2% 6.6%
Services
--------------------------------------------------------------------------------
Construction Services 9.8% 8.0% 10.0% 7.0%
Finland
--------------------------------------------------------------------------------
International Construction 7.4% -5.0% 9.6% 6.6%
Services
--------------------------------------------------------------------------------
YIT's segments total 6.0% 4.8% 5.9% 6.2%
--------------------------------------------------------------------------------
YIT Group, total 5.8% 4.8% 8.7% 6.2%
--------------------------------------------------------------------------------
Order backlog, EUR million 12/10 12/09 Change 12/10 9/10 Change
--------------------------------------------------------------------------------
Building and Industrial 1,264.4 850.4 49% 1,264.4 1,332.1 -5%
Services
--------------------------------------------------------------------------------
Construction Services 1,173.2 1,007.5 16% 1,173.2 1,205.2 -3%
Finland
--------------------------------------------------------------------------------
International Construction 870.8 960.1 -9% 870.8 884.8 -2%
Services
--------------------------------------------------------------------------------
Other items -58.3 -44.4 -- -58.3 -55.2 --
--------------------------------------------------------------------------------
YIT's segments total 3,250.1 2,773.6 17% 3,250.1 3,366.9 -3%
--------------------------------------------------------------------------------
IFRIC 15 adjustment 285.6 209.7 36% 285.6 360.6 -21%
--------------------------------------------------------------------------------
YIT Group, total 3,535.7 2,983.3 19% 3,535.7 3,727.5 -5%
--------------------------------------------------------------------------------
Key figures of Group reporting (IFRIC 15)
1-12/1 1-12/0 Change 10-12/ 10-12/ Change
0 9 10 09
--------------------------------------------------------------------------------
Profit before taxes, EUR million 194.8 109.5 78% 113.2 53.1 113%
--------------------------------------------------------------------------------
Profit for the review period, 140.6 68.1 106% 82.6 32.7 153%
EUR million
--------------------------------------------------------------------------------
Earnings/share, EUR 1.12 0.55 104% 0.65 0.26 150%
--------------------------------------------------------------------------------
Return on investment (last 12 14.3 11.0 -- -- -- --
months), %
--------------------------------------------------------------------------------
Equity ratio, % 31.9 32.4 -- -- -- --
--------------------------------------------------------------------------------
Gearing ratio, % 72.6 69.2 -- -- -- --
--------------------------------------------------------------------------------
Operating cash flow after -61.7 229.8 -- -5.6 146.4 --
investments, EUR million
--------------------------------------------------------------------------------
Personnel at end of period 25,832 23,480 10% 25,832 23,480 10%
--------------------------------------------------------------------------------
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 begun 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 the result of the new 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.
Construction Services' focus on residential development projects
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.
During 2010, the focus of residential construction in Finland was successfully
shifted to residential development projects sold directly to consumers, and the
number of rental housing project start-ups decreased considerably compared to
the year before. In addition to the increase in 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-December, YIT started the construction of a total of 7,257
(1-12/2009: 4,119) residential units, of which 3,092 (1-12/2009: 3,447) in
Finland, 3,683 (1-12/2009: 672) in Russia and 482 (1-12/2009: 0) in the Baltic
countries and the Czech Republic, where YIT started its first residential
project in the autumn 2010. In an acquisition completed in October, YIT
acquired a majority holding in Slovakian Reding a.s.. Following the
acquisition, YIT has 60 residential units under construction in Slovakia.
Residential start-ups have been a response to the continued favourable demand
among consumers and keeping the number of residential units for sale
sufficiently high. During January-December, YIT sold a total of 1,890
residential units directly to consumers in Finland (1-12/2009: 1,567), of which
478 were sold in October-December. In Russia, YIT sold a total of 3,073
residential units during 2010 (1-12/2009: 2,612), of which 857 were sold in
October-December. YIT has also been active in the Finnish business premises
market, which is showing signs of picking up: the development of rents of
business premises has levelled, and investors' yield requirements have begun to
decrease.
Acquisition in Central Europe increased building system services
The acquisition of a provider of technical building system services in Central
Europe was agreed in June and completed at the end of August. As a result,
approximately 2,000 employees joined YIT. The integration of business
operations in Central Europe, which has begun according to plans, and
development of these operations provide a favourable starting point for 2011.
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 accounted for 57.6 percent of the revenue of Building
and Industrial Services in January-December (1-12/2009: 54.2%), or EUR 1,355.0
million (1-12/2009: EUR 1,151.0 million).
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.
Growth objective was raised
In August, 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 increased and the focus of operations in Finlandwas increasingly
shifted to projects sold directly to consumers. In Russia, YIT is prepared for
growth, and the number of residential start-ups was increased considerably
towards the end of the year. YIT has a diverse residential offering under
construction in both Finland and Russia. In Building and Industrial Services,
the focus of business operations has been shifted to service and maintenance as
well as renovation and modernisation projects in line with the strategy.
Annual General Meeting 2011
YIT Corporation's Annual General Meeting will be held on Friday, March 11,
2011, starting at 10:00 a.m. (Finnish time, EEST) in Finlandia Hall, Conference
Wing, Hall A, located at the address: Mannerheimintie 13, Helsinki (entrance
through doors M1 and K1). Full notice of the meeting, including the Board of
Directors' proposals to the Annual General Meeting, will be published as a
separate stock exchange release on February 4, 2011.
Financial information in 2011
The Annual Report, including financial statements for 2010, will be published
on YIT's website in Finnish and English by February 18, 2010. Interim Reports
will be published on April 29, August 4 and October 28, 2011.
INFORMATION SESSION, WEBCAST AND CONFERENCE CALL
YIT will hold an information session for investors, analysts and the media on
Friday, February 4, 2011, at 10:00 a.m. (Finnish time, EEST) at YIT's head
office, address: Panuntie 11, 00620 Helsinki, Finland. The information session
will be held in English. After the session, representatives of the media can
also ask questions in Finnish. The presentation materials are available in
English and Finnish.
The information session can be viewed live on YIT's website, at
www.yitgroup.com/webcast. The webcast replay will be available at the same
address starting at approximately 12:00 noon. Participants are requested to
call the number provided (+358 9 2313 9202) at 9:55 a.m. (Finnish time, EEST)
at the latest, i.e. a minimum of five minutes before the conference call
begins.
Schedule in different time zones:
Interim The investor and analyst event, Recorded
Report conference call and live webcast webcast
published available
--------------------------------------------------------------------------------
EEST 08:00 10:00 12:00
(Helsinki)
--------------------------------------------------------------------------------
CEST (Paris, 07:00 09:00 11:00
Stockholm)
--------------------------------------------------------------------------------
BST (London) 06:00 08:00 10:00
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USEDT (New 01:00 03:00 05:00
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 at
+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
FINANCIAL STATEMENTS BULLETIN JANUARY 1 - DECEMBER 31 2010
CONTENTS
-- Group's financial development
-- Strategic objectives and their achievement
-- Development by business segment
-- Personnel
-- Resolutions passed at the Annual General Meeting
-- Shares, share options and shareholders
-- Most significant business risks and risk management
-- Outlook for 2011
-- Tables to the Financial Statement Bulletin
GROUP'S FINANCIAL DEVELOPMENT
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 begun 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.
YIT published the comparison figures for the financial year 2009, calculated on
the basis of the IFRIC 15 interpretation, in a stock exchange release on March
23, 2010. The effects of the application of the interpretation on the figures
have been explained in more detail in the notes to the Financial Statements
2010.
The Group's financial performance is presented with 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. The figures
for 2010 and 2009 are comparable.
REVENUE OF THE SEGMENTS INCREASED
The revenue of YIT's segments increased by 11percent in January-December
compared to the previous year, amounting to EUR 3,847.0million (1-12/2009: EUR
3,452.4 million). Revenue increased across all segments. Changes in foreign
exchange rates increased revenue by EUR 141.0 million compared to the previous
year.
The majority of revenue was generated in the Building and Industrial Services
segment. The segment's revenue increased compared to the year before as the
result of the acquisition completed in Central Europe in September.
Following the IFRIC 15 adjustment, YIT Group's revenue increased by 9 percent
from the previous year and was EUR 3,787.6 million for January-December
(1-12/2009: EUR 3,485.6 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
October-December, several major residential projects were completed,
particularly in Russia.
Revenue, EUR million
1-12/10 1-12/09 Change 10-12/1 10-12/0 Change
0 9
--------------------------------------------------------------------------------
Building and Industrial 2,353.0 2,124.9 11% 777.8 573.9 36%
Services
--------------------------------------------------------------------------------
Construction Services 1,102.0 1,029.7 7% 294.2 290.6 1%
Finland
--------------------------------------------------------------------------------
International Construction 470.6 359.4 31% 139.7 113.0 24%
Services
--------------------------------------------------------------------------------
Other items -78.6 -61.6 -- -24.1 -17.0 --
--------------------------------------------------------------------------------
YIT's segments total 3,847.0 3,452.4 11% 1,187.6 960.5 24%
--------------------------------------------------------------------------------
IFRIC 15 adjustment -59.4 33.2 -- 150.4 64.7 132%
--------------------------------------------------------------------------------
YIT Group, total 3,787.6 3,485.6 9% 1,338.0 1,025,3 30%
--------------------------------------------------------------------------------
In January-December 2010, Finland accounted for 38.1 percent (45.8%) of the
Group's revenue, Sweden for 15.2 percent (15.3%), Central Europe for 14.5
percent (10.7%), Russia for 13.6 percent (9.2%), Norway for 12.3 percent
(11.9%), Denmark for 3.7 percent (4.2%) and the Baltic countries for 2.1
percent (2.8%).
OPERATING PROFIT AND PROFITABILITY OF THE SEGMENTS IMPROVED
The combined operating profit of YIT's segments increased by 38percent from the
year before and grew to EUR 229.1million in January-December (1-12/2009: EUR
165.5 million). The operating profit margin calculated on the basis of the
segment figures was 6.0 percent (1-12/2009: 4.8%).
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.
In Building and Industrial Services, YIT emphasised its service and maintenance
operations as planned, but the operating profit fell short of the year before
due to the low level of new building system and industrial investments.
In addition, the operating profit was weakened by non-recurring expenses
amounting to a total of approximately EUR 1.9 million in July-September 2010
associated with the acquisition made in Central Europe, expenses amounting to
approximately EUR 1 million connected with post-acquisition personnel
reductions in Denmark and expenses amounting to EUR 0.4 million connected with
other acquisitions. In addition, October-December profitability was burdened by
restructuring expenses of EUR 3.0 million related to the acquisition made in
Central Europe. The profitability of the acquired operations is lower than the
profitability of YIT's previous operations.
In Group-level reporting, residential development projects are only recognised
as income when a project is completed. Following the IFRIC 15 adjustment, the
Group's operating profit clearly increased compared to the previous year,
amounting to EUR 220.1million (1-12/2009: EUR 168.1 million). The Group's
operating profit margin was 5.8 percent (1-12/2009: 4.8%).
Operating profit, EUR million
1-12/10 1-12/09 Change 10-12/1 10-12/0 Change
0 9
--------------------------------------------------------------------------------
Building and Industrial 105.1 119.3 -12% 32.4 37.6 -14%
Services
--------------------------------------------------------------------------------
Construction Services 108.1 81.9 32% 29.4 20.3 45%
Finland
--------------------------------------------------------------------------------
International Construction 34.7 -17.8 -- 13.4 7.5 79%
Services
--------------------------------------------------------------------------------
Other items -18.8 -17.9 -- -5.5 -5.7 --
--------------------------------------------------------------------------------
YIT's segments total 229.1 165.5 38% 69.7 59.7 17%
--------------------------------------------------------------------------------
IFRIC 15 adjustment -9.0 2.6 -- 46.7 3.6 --
--------------------------------------------------------------------------------
YIT Group, total 220.1 168.1 31% 116.4 63.3 84%
--------------------------------------------------------------------------------
Operating profit margin
1-12/10 1-12/09 10-12/10 10-12/09
-------------------------------------------------------------------------
Building and Industrial Services 4.5% 5.6% 4.2% 6.6%
-------------------------------------------------------------------------
Construction Services Finland 9.8% 8.0% 10.0% 7.0%
-------------------------------------------------------------------------
International Construction Services 7.4% -5.0% 9.6% 6.6%
-------------------------------------------------------------------------
YIT's segments total 6.0% 4.8% 5.9% 6.2%
-------------------------------------------------------------------------
YIT Group, total 5.8% 4.8% 8.7% 6.2%
-------------------------------------------------------------------------
EARNINGS PER SHARE DOUBLED
Earnings per share increased by 104 percent to EUR 1.12 (1-12/2009: EUR 0.55).
Financial expenses were cut in half compared to the previous year, especially
due to lower hedging costs of the ruble.
The Group's profit before taxes increased by 78 percent from the previous year
to EUR 194.8 million in January-December (1-12/2009:EUR 109.5 million).
The Group's tax rate normalised in 2010 and amounted to 27.8 percent
(1-12/2009: 37.8%). The tax rate was exceptionally high in 2009 as several of
the Group's companies in Russia and the Baltic countries made losses, and YIT
estimated deferred tax assets conservatively.
DIVIDEND PROPOSAL
YIT's target for dividend payout is 40-60 percent of net profit for the period.
YIT also aims to increase the dividend each year. The Board of Directors
proposes to the Annual General Meeting that a dividend of EUR 0.65 per share be
paid, representing 57.9 percent of the Group's net profit for the period.
INCREASE IN RESIDENTIAL PRODUCTION AND ACQUISITIONS INCREASED THE ORDER BACKLOG
COMPARED TO THE END OF 2009
YIT's segments' order backlog was EUR 3,250.1 million at the end of the year;
approximately 17 percent more than at the end of the previous year (12/2009:
EUR 2,773.6 million). The order backlog remained relatively unchanged from the
end of September, at which time it stood at EUR 3,366.9 million.
An acquisition made in Central Europe increased the order backlog at the end of
December by EUR 274.9 million in the Building and Industrial Services segment.
The order backlog transferred in the acquisition has a lower margin than YIT's
earlier order backlog. In Construction Services Finland, the order backlog has
clearly grown compared to the previous year as YIT has started up new
residential and business premises projects. In International Construction
Services, the order backlog remained at the level of the end of September.
After the IFRIC 15 adjustment, YIT Group's order backlog was EUR 3,535.7million
at the end of the year (12/2009: EUR 2,983.3 million).
Order backlog, EUR million
12/10 12/09 Change 12/10 9/10 Change
--------------------------------------------------------------------------------
Building and Industrial 1,264.4 850.4 49% 1,264.4 1,332.1 -5%
Services
--------------------------------------------------------------------------------
Construction Services 1,173.2 1,007.5 16% 1,173.2 1,205.2 -3%
Finland
--------------------------------------------------------------------------------
International Construction 870.8 960.1 -9% 870.8 884.8 -2%
Services
--------------------------------------------------------------------------------
Other items -58.3 -44.4 -- -58.3 -55.2 --
--------------------------------------------------------------------------------
YIT's segments total 3,250.1 2,773.6 17% 3,250.1 3,366.9 -3%
--------------------------------------------------------------------------------
IFRIC 15 adjustment 285.7 209.7 36% 285.6 360.6 -21%
--------------------------------------------------------------------------------
YIT Group, total 3,535.7 2,983.3 19% 3,535.7 3,727.5 -5%
--------------------------------------------------------------------------------
CAPITAL EXPENDITURE AND ACQUISITIONS
Gross capital expenditure on non-current assets included on the balance sheet
totalled EUR 129.8 million (1-12/2009: EUR 27.9 million) during
January-December, representing 3.4 percent (1-12/2009: 0.8%) of revenue.
Investments in construction equipment amounted to EUR 9.1 million (1-12/2009:
EUR 9.0 million) and investments in information technology amounted to EUR 9.5
million (1-12/2009: 7.9 million). Other investments, including acquisitions,
amounted to EUR 111.2 million (1-12/2009: EUR 11.0 million). The annual revenue
of the acquired business acquisitions is approximately EUR 500 million.
In June, YIT agreed to acquire the business operations of a company providing
technical building system services in Central Europe. In addition, YIT has
implemented other, smaller business acquisitions in Building and Industrial
Services during January-December, especially in the Nordic countries.
In the International Construction Services segment, YIT increased its holding
in YIT Don, operating in Rostov-on-Don, to 100 percent in January and in YIT
Citystroi operating in Moscow to 75 percent in July. An agreement whereby YIT
acquired a 70 percent holding in the Slovakian construction company Reding a.s.
entered into force in October.
Business acquisitions and companies consolidated into the Group are discussed
in more detail in the notes to the financial statements bulletin.
GROWTH IN INVESTMENTS - OPERATING CASH FLOW AFTER INVESTMENTS WAS NEGATIVE
The Group's operating cash flow after investments amounted to EUR -61.7million
in January-December (1-12/2009:EUR 229.8 million) and EUR -5.6 million in
October-December (10-12/2009: EUR 146.4 million). Operating cash flow in 2010
was affected particularly by growth in development production under
construction, business acquisitions and plot investments as well as decreased
advance payments for contracting.
At the end of December, the Group's invested capital amounted to EUR 1,672.0
million (12/2009: EUR 1,466.3 million), whereas it was EUR 1,601.4 million at
the end of September. Of the Group's invested capital, 32.6 percent (12/2009:
38.0%), or EUR 544.9 million (12/2009: EUR 557.6 million) was invested in
Russia. The invested capital in Russia has decreased due to favourable
residential sales, even though exchange rate changes of the ruble increased the
capital invested in Russia by EUR 29.5 million in January-December. The Group's
capital invested in Russia is primarily accounted for by the International
Construction Services segment.
Return on investment clearly improved during the last quarter and was 14.3
percent (12/2009: 10.6%) 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 the year was EUR 3,117.1 million (12/2009:
EUR 2,777.1 million).
THE GROUP'S FINANCIAL POSITION REMAINED GOOD: NET FINANCIAL EXPENSES WERE CUT
IN HALF
In 2010, YIT continued to diversify and strengthen its capital structure. A
bond programme of EUR 400 million was established in March 2010, under which a
EUR 100 million bond targeted at domestic investors was issued. The five-year
bond carries an annual fixed rate coupon of 4.823 percent.
The Group's liquidity position is strong. Cash reserves amounted to EUR 148.3
million (12/2009: EUR 173.1 million) at the end of December. In addition,
available committed credit and overdraft facilities amounted to EUR 245.2
million, including committed credit facility agreements signed in December of
EUR 150 million. The committed limit agreements do not include an obligation to
maintain financial key ratios, i.e. covenants. In addition, a commercial paper
programme amounting to EUR 200 million is available for liquidity management.
The gearing ratio increased slightly compared with the previous year, amounting
to 72.6percent at the end of December 2010 (12/2009: 69.2%). The equity ratio
was 31.9percent (12/2009: 32.4%). Net financing debt increased from the
previous year to EUR 640.9 million (12/2009: EUR 529.1 million). Dividends of a
total of EUR 50.0 million were paid in the second quarter in accordance with
the resolution of the Annual General Meeting. During the third quarter of the
year, YIT paid EUR 73.0 million for the shares in Caverion GmbH, acquired in
Central Europe. The cash reserves of Caverion were EUR 48.0 million when it was
transferred to YIT and thus the cash flow effect of the acquisition (net) was
EUR -25.0 million.
Net financial expenses decreased to EUR 25.3 million (1-12/2009: EUR 58.6
million), or 0.7percent (1-12/2009: 1.7%) of the Group's revenue. The exchange
rate differences included in the net financial expenses, totalling EUR -7.3
million (1-12/2009: EUR -28.4 million), were comprised almost entirely of costs
of hedging debt investments in Russia. The net financial expenses include EUR
8.0 million(1-12/2009: EUR 0.6 million) of capitalisations in compliance with
IAS 23. At the end of December 2010, EUR 135.6 million (12/2009: EUR 213.9
million) of the capital invested in Russia were comprised of debt investments
and EUR 409.3 million (12/2009: EUR 343.8 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 789.1 million (12/2009: EUR 702.2
million) at the end of December, and their average interest rate was 3.4
percent (12/2009: 3.6%). Fixed-interest loans accounted for 60 percent
(12/2009: 64%) of the Group's financial liabilities. Of the loans, 36 percent
(12/2009: 28%) had been raised directly from the capital and money markets. The
maturity distribution of long-term loans is balanced. EUR 98.3 million of
long-term loans will mature in 2011.
The total amount of construction-stage contract receivables sold to financial
institutions grew as residential development projects increased, amounting to
EUR 166.7 million (12/2009: EUR 78.0 million). Of this amount, EUR 160.2
million (12/2009: EUR 69.2 million) is included in interest-bearing liabilities
on the balance sheet and the remainder comprises off-balance sheet items in
accordance with IAS 39. Due to the favourable operating cash flow for the
fourth quarter, construction-stage contract receivables amounting to EUR 59.0
million were repurchased. Interest expenses on receivables sold to financing
companies amounted to EUR 2.6million (1-12/2009: EUR 1.8 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 decreased to EUR 22.6 million (12/2009: EUR 34.5 million) at the end of
December, and they are included in interest-bearing liabilities. The interest
on the participations, EUR 0.9 million (1-12/2009: EUR 2.3 million), is
included in housing corporation charges and is thus booked in project expenses.
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 TARGETS AND THEIR ACHIEVEMENT
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 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.
Achievement of strategic targets
YIT's financial targets Target level Actual 2010
--------------------------------------------------------------------------------
Revenue growth Annually more than 10% on 8.8%
average
--------------------------------------------------------------------------------
Return on investment 20% 14.3%
--------------------------------------------------------------------------------
Operating cash flow Sufficient for dividend payout EUR -61.7 million
after investments and reduction of debt
--------------------------------------------------------------------------------
Equity ratio 35% 31.9%
--------------------------------------------------------------------------------
Dividend payout 40-60% of net profit for the 57.9% (Board of
period Directors' proposal)
--------------------------------------------------------------------------------
Return on investment and the equity ratio fell short of the company's long-term
financial targets in 2010. However, return on investment improved considerably
during the fourth quarter of 2010.
DEVELOPMENT BY BUSINESS SEGMENT
The development by business segment is presented using figures compliant with
segment reporting. The figures for 2010 and 2009 are comparable.
BUILDING AND INDUSTRIAL SERVICES
Key figures
1-12/10 1-12/09 Change 10-12/1 10-12/0 Change
0 9
--------------------------------------------------------------------------------
Revenue, EUR million 2,353.0 2,124.9 11% 777.8 573.9 36%
--------------------------------------------------------------------------------
Operating profit, EUR 105.1 119.3 -12% 32.4 37.6 -14%
million
--------------------------------------------------------------------------------
Operating profit margin, % 4.5% 5.6% -- 4.2% 6.6% --
--------------------------------------------------------------------------------
Return on investment (last 24.3% 31.4% -- -- -- --
12 months), %
--------------------------------------------------------------------------------
12/10 12/09 Change 12/10 9/10 Change
--------------------------------------------------------------------------------
Invested capital, EUR 447.3 418.7 7% -- -- --
million
--------------------------------------------------------------------------------
Order backlog, EUR million 1,264.4 850.4 49% 1,264.4 1,332.1 -5%
--------------------------------------------------------------------------------
Revenue, EUR million 1-12/10 1-12/09 Change 10-12/10 10-12/09 Change
--------------------------------------------------------------------------
Finland 544.6 594.5 -8% 151.9 144.4 5%
--------------------------------------------------------------------------
Sweden 576.3 532.3 8% 175.5 157.7 11%
--------------------------------------------------------------------------
Norway 467.3 414.6 13% 134.0 112.5 19%
--------------------------------------------------------------------------
Central Europe 545.5 374.6 46% 250.3 104.6 139%
--------------------------------------------------------------------------
Russia 25.0 9.9 153% 6.4 2.2 191%
--------------------------------------------------------------------------
Denmark 141.3 145.9 -3% 42.5 37.4 14%
--------------------------------------------------------------------------
Baltic countries 18.0 18.1 -1% 6.2 4.0 55%
--------------------------------------------------------------------------
Other countries 35.0 35.0 0% 11.0 11.1 -1%
--------------------------------------------------------------------------
Total 2,353.0 2,124.9 11% 777.8 573.9 36%
--------------------------------------------------------------------------
-- In Building and Industrial Services, YIT proceeded in service and
maintenance operations as planned. Revenue increased in January-December
compared to the previous year, especially as the result of an acquisition
made in Central Europe. Changes in foreign exchange rates increased revenue
by EUR 100.5 million compared to the previous year.
-- The growth in revenue continued extensively during the fourth quarter.
However, the segment's operating profit fell short of the year before due to
the low level of new building system and industrial investments. In addition,
the operating profit was weakened by non-recurring expenses amounting to a
total of approximately EUR 1.9 million in July-September 2010 associated with
the acquisition made in Central Europe, expenses amounting to approximately EUR
1 million connected with post-acquisition personnel reductions in Denmark and
expenses amounting to EUR 0.4 million connected with other acquisitions. In
addition, October-December profitability was burdened by restructuring expenses
of EUR 3.0 million related to the acquisition made in Central Europe. The
profitability of the acquired operations is lower than the profitability of
YIT's previous operations.
Operating profit has increased clearly in Central Europe, where YIT has
succeeded in improving the profitability of the acquired business operations as
planned.
Of the Nordic countries, in 2010 profitability was the highest in Norway.
Increasing the share of service and maintenance operations has had a positive
impact on profitability in Norway. Profitability has remained at a moderate
level also in Finland and Sweden. Profitability was weak in Denmark, mainly due
to acquisition-related expenses and low utilisation rate of resources.
The order backlog at the end of December was 49 percent higher than the
previous year. The growth of the order backlog has been extensive throughout
the business areas of Building and Industrial Services. As a result of the
acquisition made in Central Europe at the end of August, the order backlog at
the end of December increased by EUR 274.9 million. The transferred order
backlog has a lower margin than YIT's earlier order backlog.
Acquisition expands 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 end of August. 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.
In addition, YIT has implemented several smaller acquisitions in the Nordic
countries in January-December, complementing the competence portfolio and
geographical service network provided by YIT.
The annual revenue of the business operations acquired in 2010 is approximately
EUR 500 million.
Share of revenue accounted for by service and maintenance grew in 2010
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 1,355.0 million (1-12/2009:
EUR 1,151.0 million), or 58 percent (1-12/2009: 54%) of the segment's total
revenue. During the fourth quarter, service and maintenance operations
generated EUR 404.5 million (10-12/2009: EUR 317.1 million), or 52 percent
(10-12/2009: 55%) 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. In Norway, ServiFlex agreements were made on the
maintenance of more than 20 properties owned by Vital Eiendom and with the
Jakob Hatteland group of companies at three locations.
In Sweden, YIT has agreed with three hospitals and several healthcare centres
on the supply, management and maintenance of technical services in Norrbotten
County. A framework agreement on the installation and renewal of residential
building systems was made with Vellingebostäder AB. In Finland, YIT is
responsible for the building system maintenance of five Metsäliitto plants in
Äänekoski. In Leuna, Germany, YIT signed an extension contract on facility
management at the TOTAL oil refinery, including both building systems and
infrastructure.
An agreement was made in October on the expansion of services with Yara Suomi
Oy to pump and valve servicing and maintenance of pipework and steel structures
at the Uusikaupunki, Harjavalta and Siilinjärvi plants.
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.
In Germany, a ten-year energy-saving project will be carried out at Germany's
Foreign Office premises in Berlin. Energy savings will be pursued at ten
Statkraft power stations in Norway through the renewal of automation systems.
In Finland, an agreement on the total delivery of an energy-saving project was
signed with the Town of Akaa, where the old heating systems of the school and
sports centre will be converted to utilise bioenergy. With regard to industrial
services, YIT will implement an energy-saving project at Outokumpu's steel mill
in Tornio, replacing the cold rolling mill's existing system of 50 separate
cooling compressors with a new cooling system based on absorption technology.
In addition, YIT will be in charge of the operation and maintenance of the
plant for seven years.
New investments still low
New investments in building systems recovered slightly, but still remained at a
low level. Demand among industrial customers was focused on service and
maintenance, and the demand for new investments remained at a low level as a
whole. According to a framework agreement made in December, YIT will deliver
security solutions to 45 Avinor airports in Norway. In December, YIT agreed
with the City of Mikkeli, Finland, that it will assume responsibility for the
technical maintenance services and renovation of the city premises from the
beginning of 2011. In Germany, YIT will build the local heating network in
Bodenmais and supply ventilation systems to the Brandenburg airport in Berlin,
Byk-Chemie and the new Centre Charlemagne museum in Aachen, for example. In
Poland, building systems will be delivered to the Wroclaw main railway station
and Lodz airport, among others. In Lithuania, YIT will design and install all
technical building systems, including clean rooms, to the Kaunas University of
Medicine pharmacy and the plant of Viltechmeda, a company manufacturing medical
instruments. With regard to industrial services, the overhaul of furnace 2 of
Rautaruukki's Raahe mill was agreed on in November.
CONSTRUCTION SERVICES FINLAND
Key figures
1-12/10 1-12/09 Change 10-12/1 10-12/0 Change
0 9
--------------------------------------------------------------------------------
Revenue, EUR million 1,102.0 1,029.7 7% 294.2 290.6 1%
--------------------------------------------------------------------------------
Operating profit, EUR 108.1 81.9 32% 29.4 20.3 45%
million
--------------------------------------------------------------------------------
Operating profit, % 9.8% 8.0% 10.0% 7.0%
--------------------------------------------------------------------------------
Return on investment (last 34.3% 20.5% -- --
12 months), %
--------------------------------------------------------------------------------
12/10 12/09 12/10 9/10
--------------------------------------------------------------------------------
Invested capital, EUR 328.9 315.7 4% -- -- --
million
--------------------------------------------------------------------------------
- of which plot reserves, 285.7 325.6 -12% 285.7 283.5 1%
EUR million
--------------------------------------------------------------------------------
Order backlog, EUR million 1,173.2 1,007.5 16% 1,173.2 1,205.2 -3%
--------------------------------------------------------------------------------
-- Revenue increased in January-December as production volumes remained at a
high level in residential construction and business premises construction
picked up.
-- Profitability improved considerably while operations focused on residential
property development projects.
-- The order backlog increased considerably from the previous year as YIT
started up new residential and business premises projects.
-- The segment's capital tied into plot reserves totalled EUR 285.7 million
(12/2009: EUR 325.6 million) at the end of December. The plot reserves
included 1,639,000 (12/2009: 1,630,000) m2 of floor area of residential
plots and 857,000 (12/2009: 908,000) m2 of floor area of plots for business
premises.
Residential sales continued steadily - 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 continued to be good during the fourth quarter,
especially for low- and mid-price residential units. In January-December, YIT
sold 1,890 (1-12/2009: 1,567) residential units directly to consumers: 506 in
the first, 471 in the second, 435 in the third and 478 in the fourth quarter.
Housing prices have increased at a moderate rate.
The focus of housing construction has been successfully shifted to residential
development projects aimed directly at consumers in accordance with market
demand. YIT has started the construction of a total of 2,550 residential units
aimed directly at consumers in January-December, of which 547 were started
during the fourth quarter. The number of rental housing project start-ups has
decreased compared to the year before. In 2010, YIT has actively replenished
its plot reserves by acquiring plots and making preliminary agreements
amounting to a total of approximately 480,000 m2of floor area.The company
therefore has good opportunities for start-ups in 2011 as well.
The new residential start-ups have maintained the sales inventory at a
sufficiently high level. At the end of December, YIT had 1,570 (12/2009: 1,061)
unsold residential units. The number of completed, unsold residential units has
decreased to a low level, amounting to 112 (12/2009: 216) at the end of
December. Two-thirds of the residential units under construction have been
sold, which decreases YIT's sales risk.
Residential construction in Finland, number of residential units
1-12/1 1-12/0 Change 10-12/ 7-9/10 4-6/10 1-3/10
0 9 10
--------------------------------------------------------------------------------
Sold 2,432 3,502 -31% 478 576 755 623
--------------------------------------------------------------------------------
- of which directly to 1,890 1,567 21% 478 435 471 506
consumers
--------------------------------------------------------------------------------
Start-ups 3,092 3,447 -10% 547 908 1,067 570
--------------------------------------------------------------------------------
- of which directly to 2,550 1,528 67% 547 767 783 453
consumers
--------------------------------------------------------------------------------
Completed 2,249 1,562 44% 473 657 751 368
--------------------------------------------------------------------------------
- of which directly to 857 1,337 -36% 298 184 272 103
consumers
--------------------------------------------------------------------------------
Under construction at 4,360 3,773 16% 4,360 4,543 4,292 3,975
the end of the period
--------------------------------------------------------------------------------
- of which sold at the 2,902 2,928 -1% 2,902 3,035 3,101 3,132
end of the period
--------------------------------------------------------------------------------
For sale at the end of 1,570 1,061 48% 1,570 1,624 1,324 1,011
the period
--------------------------------------------------------------------------------
- of which completed 112 216 -48% 112 116 133 168
--------------------------------------------------------------------------------
Business premises market shows signs of picking up
The construction of business premises picked up as the year advanced. The
decrease in business premise rents has stopped, and investors' yield
requirements have somewhat decreased.
The construction of the Triotto office project was started as a development
project in Käpylä, Helsinki, in December. The renting and construction of
property development projects started earlier in 2010, the Tiilitie Trade Park
in Petikko, Vantaa, with office, warehouse, production and retail facilities,
and Business Park Safiiri in Espoo, were continued. The first building of the
Tiilitie Logistics project has been rented in full.In 2010, YIT leased a total
of approximately 80,000 m2 of premises from the projects to its customers.
With regard to projects started earlier this year, for example, the shopping
centre connected with the development of the Hyvinkää centre quarter, in which
the value of YIT's construction and building system work is EUR 100 million,
was under construction. YIT is implementing a MotorCenter area focusing on
automotive-related services and equipment in Konala, Helsinki.
YIT is also actively engaged in renovation: YIT will renovate an office
building of 9,200m2in Pitäjänmäki, Helsinki, for Aberdeen. In Espoo, YIT will
carry out the renovation of the VTT Technical Research Centre of Finland's Fire
Safety Technology Laboratory.
Fewer municipal investments in infrastructure services
The demand for infrastructure construction has remained relatively stable, but
investments by the municipal sector have decreased and decision-making has been
delayed. Major road projects are expected to start this year and the next year,
such as the construction of a second rail track between Kokkola and Ylivieska
and the construction and renovation of the E18 motorway between Koskenkylä and
Kotka. YIT is participating in the tenders for the projects, which will be
implemented using the Public-Private-Partnership, or PPP, model, in cooperation
with Destia. In the Kokkola-Ylivieska rail track tenders and E18 project, the
order authorization exceeds EUR 1 billion. In addition, with regard to
infrastructure services, opportunities will open in rock engineering,
investments by the mining industry and the outsourcing of municipalities'
technical services.
During January-December, YIT had large-scale road projects under construction
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.
INTERNATIONAL CONSTRUCTION SERVICES
Key figures
1-12/1 1-12/0 Change 10-12/1 10-12/0 Change
0 9 0 9
--------------------------------------------------------------------------------
Revenue, EUR million 470.6 359.4 31% 139.7 113.0 24%
--------------------------------------------------------------------------------
Operating profit, EUR million 34.7 -17.8 -- 13.4 7.5 79%
--------------------------------------------------------------------------------
Operating profit, % 7.4% -5.0% -- 9.6% 6.6% --
--------------------------------------------------------------------------------
Return on investment (last 12 5.2% -2.7% -- --
months), %
--------------------------------------------------------------------------------
12/10 12/09 12/10 9/10
--------------------------------------------------------------------------------
Invested capital, EUR million 677.3 681.3 -1% -- -- --
--------------------------------------------------------------------------------
- of which plot reserves, EUR 303.6 246.5 23% 303.6 282.8 7%
million
--------------------------------------------------------------------------------
Order backlog, EUR million 870.8 960.1 -9% 870.8 884.8 - 2%
--------------------------------------------------------------------------------
-- -- Revenue increased on the previous year as a result of strong
residential
sales, progress of construction and higher selling prices.
-- 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 order backlog decreased slightly compared to the end of September. The
segment's order backlog was improved by the strengthening of the ruble,
which had an impact of EUR +16.0 million in October-December. The order
backlog includes residential units whose construction was suspended in
Russia in October 2008 due to market uncertainties. At the end of December
2010, the value of projects that were still suspended amounted to EUR 137.1
million (12/2009: EUR 282 million).
-- The segment's capital tied into plot reserves totalled EUR 303.6 million
(12/2009: EUR 246.5 million) at the end of December. The plot reserves
included 2,498,000 (12/2009: 2,327,000) m2 of floor area of residential
plots and 712,000 (12/2009: 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 favourable - a considerable number of units
were completed during the fourth quarter
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 improve its reputation as a reliable housing construction company. Russia
generated 88 percent (1-12/2009: 85%) of the segment's revenue for
January-December. Revenue increased by 35 percent in Russia compared with the
previous year, amounting to EUR 412.0 million (1-12/2009: EUR 305.7 million).
The capital tied into plot reserves in Russia totalled EUR 223.6 million
(12/2009: EUR 171.7 million) at the end of December. The plot reserves included
2,124,000 (12/2009: 1,974,000) m2 of floor area of residential plots and
563,000 (12/2009: 563,000) m2 of floor area of plots for business premises.
During the year, YIT acquired approximately 300,000 m2 of residential building
rights in the cities where it operates in Russia.
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 majority of residential start-ups have taken place
in St. Petersburg and the Moscow Oblast. Especially during the fourth quarter,
start-ups took place in Yekaterinburg and Kazan as well.
In 2010, residential sales increased from the year before. In January-December,
YIT sold 3,073 residential units (1-12/2009: 2,612) in Russia. The number of
residential units sold during the first quarter was 817 units, during the
second quarter 682, during the third quarter 717 and during the fourth quarter
857. Sales for the fourth quarter included 98 residential units sold to a
corporate customer, which in part increased the sales volume.
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. Loan financing was
utilised in 28 percent of YIT's residential sales in 2010. The significance of
loan financing has increased during the course of the year, and in the fourth
quarter, the customer has taken out a housing loan in 42 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.
The development of prices in the Russian residential market was uneven in 2010,
and the average selling prices decreased in some cities. The supply of new
residential units increased during the year as YIT and competitors continued
the construction of suspended projects and new residential start-ups. The
increased share of projects that are in their early stage of construction in
the supply had a decreasing impact on average prices, especially in the St.
Petersburg and Moscow Oblast markets.
During the fourth quarter of 2010, the average price level of new residential
units in Russia remained stable. The favourable demand for completed
residential units and residential units close to completion made it possible to
increase the prices slightly during the fourth quarter, especially in St.
Petersburg. Demand also picked up in the Moscow Oblast towards the end of the
year.
YIT has started new residential projects in Russia in response to demand since
the second half of 2009. The number of residential units for sale has increased
slightly during the year, amounting to 4,211 (12/2009: 3,603) at the end of
December. The number of completed unsold residential units increased to 805 at
the end of December (12/2009: 1,243).
The number of residential units under construction decreased during the fourth
quarter as several large residential projects with a total of 2,486 residential
units were completed in October-December. 3,426 residential units were
completed during the year as a whole (1-12/2009: 4,960). After the handover of
residential projects, YIT offers its customers service and maintenance. At the
end of 2010, the service covered approximately 7,000 residential units in St.
Petersburg and the Moscow Oblast.
Residential construction in Russia, number of residential units
1-12/1 1-12/0 Change 10-12/ 7-9/10 4-6/10 1-3/10
0 9 10
--------------------------------------------------------------------------------
Sold 3,073 2,612 18% 857 717 682 817
--------------------------------------------------------------------------------
Start-ups 3,683 672 448% 1,140 671 1,074 798
--------------------------------------------------------------------------------
Completed 1) 3,426 4,960 -31% 2,486 299 320 321
--------------------------------------------------------------------------------
Under construction at 4,457 4,174 7% 4,457 5,797 5,425 4,671
the end of the period
--------------------------------------------------------------------------------
- of which sold at the 1,051 1,814 -42% 1,051 2,468 2,094 1,986
end of the period
--------------------------------------------------------------------------------
For sale at the end of 4,211 3,603 17% 4,211 3,931 3,977 3,585
the period
--------------------------------------------------------------------------------
- of which completed 805 1,243 -35% 805 602 646 900
--------------------------------------------------------------------------------
1) Completion of the projects requires commissioning by the authorities.
2) At the end of December 2010, YIT had 685 (12/2009: 2,145) 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
As a whole, YIT's volume in the Russian business premises market was low in
2010. Extension work for Atria's factory was completed during 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 increased during
the year, and negotiations with potential customers will continue.
Bottom of the residential market has been bypassed 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 11 percent (1-12/2009: 13%) of the segment's revenue for
January-December. Revenue generated in these countries increased by 14 percent
compared to the year before to EUR 51.1 million (1-12/2009: EUR 44.8 million).
The capital tied into plot reserves in the Baltic countries, the Czech Republic
and Slovakia totalled EUR 80.0 million (12/2009: EUR 74.8 million) at the end
of December. The plot reserves included 374,000 (12/2009: 353,000) m2 of floor
area of residential plots and 149,000 (12/2009: 136,000) m2 of floor area of
plots for business premises. During 2010, YIT acquired 15,000 m2 of floor area
of new residential plots to support its growth in the Czech Republic.
The focus of YIT's operations was shifted from contract production to
residential construction. During the first quarter of 2010, YIT started its
first new residential construction projects for more than two years in the
Baltic countries. In the third quarter, YIT Stavo started the construction of
its first housing project in the Czech Republic, to which country the Group
expanded its operations through an acquisition in 2008. In October, the Group's
operations expanded to Slovakia when YIT acquired a 70 percent holding in a
construction company focusing on residential and business premises
construction. In total, the construction of 482 (1-12/2009: 0) residential
units was started in the Baltic countries and the Czech Republic, of which 111
were in the first quarter, 122 in the second quarter, 96 in the third quarter
and 153 in the fourth quarter. At the end of December, there were 376 (12/2009:
0) residential units under construction, including YIT Reding's project of 60
residential units close to Bratislava.
YIT's residential inventory is still low in the Baltic countries, the Czech
Republic and Slovakia. In January-December, a total of 73 (1-12/2009: 256)
residential units were sold in these countries. Residential sales accelerated
towards the end of the year, and 40 residential units were sold during the
fourth quarter. At the end of December, there were 449 (12/2009: 40)
residential units for sale, of these 116 were (12/2009: 40) completed. The
number of residential units completed during 2010 was 106 (1-12/2009: 592). All
of the residential units completed in 2010 were completed during the fourth
quarter.
Residential demand and prices have turned to moderate growth in the Baltic
countries, the Czech Republic and Slovakia. The demand for new residential
units is gradually picking up with the upswing of the economy, but it is still
at a low level quantitatively. As a whole, the construction market situation
continued to be challenging, especially in the Baltic countries.
PERSONNEL
In January-December 2010, the Group employed 24,317 (1-12/2009: 24,497) people
on average. At the end of the period, the Group employed 25,832 (12/2009:
23,480) people, whereas at the end of September the figure was 25,943. In
connection with the acquisition made in Central Europe, approximately 2,000
employees were transferred to YIT's Building and Industrial Services segment at
the beginning of September. YIT employed approximately 1,000 summer employees
during the summer of 2010.
A personnel survey carried out late in the year showed that employees' job
satisfaction has improved compared to the previous year.
Occupational safety was a key focus area for YIT in 2010. Efforts to improve
occupational safety have included additional guidelines and training. YIT's
management monitors the development of occupational safety comprehensively.
Occupational safety is measured using a common indicator (number of accidents
per one million hours worked), and the results have improved. In 2010, the
accident frequency was 19. Efforts will be made to improve occupational safety
in 2011 as well.
YIT harmonised its ethical guidelines to cover the entire Group in 2010. YIT
aims to comply with high ethical principles, and ethical guidelines are part of
YIT's operational culture.
During the first half of the year, 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 2010, and its cost effect was about EUR 3.9
million in January-December.
Personnel by business segment
The largest segment by personnel was Building and Industrial Services,
employing 76 percent (12/2009: 75%) of YIT's personnel. Construction Services
Finland employed 12 percent (12/2009: 13%), International Construction Services
10 percent (12/2009: 11%) and Corporate Services 1 percent (12/2009: 1%) of the
personnel.
Personnel by business segment 12/10 12/09 Change 12/10 9/10 Change
--------------------------------------------------------------------------------
Building and Industrial Services 19,611 17,557 12% 19,611 19,694 0%
--------------------------------------------------------------------------------
Construction Services Finland 3,209 2,936 9% 3,209 3,221 0%
--------------------------------------------------------------------------------
International Construction 2,656 2,647 0% 2,656 2,681 -1%
Services
--------------------------------------------------------------------------------
Corporate Services 356 340 5% 356 347 3%
--------------------------------------------------------------------------------
YIT Group, total 25,832 23,480 10% 25,832 25,943 0%
--------------------------------------------------------------------------------
Personnel by country/region
Of YIT's employees, 36 percent worked in Finland (12/2009: 39%), 36 percent
(12/2009: 37%) in the other Nordic countries, 15 percent (12/2009: 9%) in
Central Europe, 9 percent (12/2009: 11%) in Russia and 4 percent (12/2009: 4%)
in the Baltic countries.
Personnel by country/region 12/10 12/09 Change 12/10 9/10 Change
---------------------------------------------------------------------------
Finland 9,209 9,102 1% 9,209 9,333 -1%
---------------------------------------------------------------------------
Sweden 4,429 4,193 6% 4,429 4,296 3%
---------------------------------------------------------------------------
Central Europe 3,930 2,160 82% 3,930 3,863 2%
---------------------------------------------------------------------------
Norway 3,505 3,248 8% 3,505 3,461 1%
---------------------------------------------------------------------------
Russia 2,390 2,600 -8% 2,390 2,397 0%
---------------------------------------------------------------------------
Denmark 1,386 1,269 9% 1,386 1,462 -5%
---------------------------------------------------------------------------
Baltic countries 983 908 8% 983 1,131 -13%
---------------------------------------------------------------------------
YIT Group, total 25,832 23,480 10% 25,832 25,943 0%
---------------------------------------------------------------------------
RESOLUTIONS PASSED AT THE ANNUAL GENERAL MEETING
YIT Corporation's Annual General Meeting was held on March 10, 2010. The Annual
General Meeting adopted the 2009 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 as the same as in the previous year:
Henrik Ehrnrooth (Chairman), Reino Hanhinen (Vice Chairman), Eino Halonen,
Antti Herlin, Satu Huber, Lauri Ratia and Kim Gran.
In its organisational meeting on March 10, 2010, 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 10, 2010. The stock exchange releases, the Board of Directors' proposals
to the Annual General Meeting 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.
Shares could be subscribed for in 2010 under the Series N share options issued
by YIT Corporation in 2006 between April 1 and November 30, 2010. No shares
were subscribed for during the period with the share options. The share option
programme ended on November 30, 2010.
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 the
review period (2009: EUR 149,216,748.22), and the number of shares outstanding
was 127,223,422 (2009: 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 10, 2010, 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 and share options
The closing rate of YIT's share on the last trading day of 2010 was EUR 18.65
(2009: EUR 14.45).The share price increased by 29 percent during the year. The
highest price of the share in 2010 was EUR 19.00 (2009: EUR 14.49), the lowest
was EUR 12.98 (2009: EUR 4.31) and the average price was EUR 16.35 (2009: EUR
8.52). Share turnover on OMX Nasdaq in January-December 2010 amounted to
127,536,954 shares (1-12/2009: 190,057,125). The value of turnover was EUR
2,085.0 million (1-12:2009: EUR 1,631.4 million).
YIT Corporation's market capitalisation at the end of the period was EUR
2,332.7 million (12/2009: EUR 1,807.4 million). The market capitalisation has
been calculated excluding the shares held by the company.
A total of 64,867 Series N share options issued in 2006 were traded in
January-December at an average price of EUR 0.70. No shares were subscribed for
during the period with the share options. During the corresponding period of
the previous year, no N share options were traded.
Number of shareholders and flagging notifications
At the end of the year, the number of registered shareholders was 32,476 (2009:
29,678). The number of private investors increased by approximately 2,400
during 2010. At the end of December, a total of 37.9 percent (2009: 36.5%) of
the shares were owned by nominee-registered and non-Finnish investors.
During January-December 2010, one “flagging notification” of change in
ownership in YIT Corporation was made in accordance with Chapter 2, section 9
of the Securities Market Act. Varma Mutual Pension Insurance Company gave
notification that its holdings had increased to above 5 percent of YIT
Corporation's shares and votes following a share transaction on May 21, 2010.
The company held a total of 6,570,908 YIT shares, which equals 5.17 percent of
YIT Corporation's shares.
Most significant 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.
The most significant strategic risks are connected with changes in the
operating environment, implementation of acquisitions and management of
capital. Changes in economic, demographic, technological and political factors
have an effect on the demand for YIT's services and the prevailing level of
costs. The key is to manage risks related to the operating environment in the
International Construction Services segment where the focus of operations is on
investment-intensive residential development production in Russia, the Baltic
countries and Central Eastern Europe.
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 and Industrial Services business has grown in
Central Europe as the result of an acquisition completed at the end of August,
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 the investor prior to
starting a business premises project.
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 2010.
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 treasury
policies, internal control as well as internal and external audit.
YIT's most significant currency risk is the currency risk related to
investments in ruble terms. Capital invested in Russia totalled EUR 544.9
million (12/2009: EUR 557.6 million) at the end of the period. The amount of
net equity investments at the end of the period was EUR 409.3 million (12/2009:
EUR 343.8 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 135.6 million
(12/2009: EUR 213.9 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 is 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 estimates that in 2011, the combined revenue of the business
segments will grow and operating profit will grow clearly compared to 2010. The
profit outlook is based on segment reporting, i.e. recognition of income based
on the percentage of completion.
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.
Building and Industrial Services
In Building and Industrial Services, 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 countries, the German market in particular offers good growth
opportunities. The building system services market is developing in Eastern
Europe and Russia, but it will take some time for the culture of purchasing
services to consolidate itself. New investments in building systems will remain
at a relatively low level throughout YIT's market area due to the low level of
business premises construction and the post-cyclical nature of building system
services. New investments in building systems are expected to grow by 2-3
percent in business premises construction and 3-5 percent in residential
construction.
Streamlining measures in the private sector and public administration open
opportunities for outsourcing of facility services, even though the slowing
down of decision-making in the public sector is a risk. Growth in the demand
for energy-efficiency services is possible in the next few years with high
energy prices and tightening environmental legislation. 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.
YIT has an extensive network of local offices in the markets where it operates
and a solid market position in building system and industrial service and
maintenance operations, projects and energy-efficiency services.
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 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 moderate. YIT actively started new
residential projects in 2010, which offers the company a solid starting point
for 2011. The increase in the prices of residential units has levelled off. YIT
expects prices to continue to increase at a moderate rate. 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.
The business premises market shows signs of picking up: investors' yield
requirements have decreased and rents of business premises are expected to
begin rising in 2011. Vacancy rates are still high, and new investments in
office property is likely to remain at a relatively low level. A number of
offices, especially old and vacant ones, will not return to use as business
premises due to 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 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 improved consumer
confidence, improved availability of housing loans and decreased interest
rates. In Russia, housing demand also depends on oil prices and the ruble
exchange rate.
Housing prices have stabilised at the end of 2010. 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. 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.
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.
BOARD OF DIRECTORS' PROPOSAL FOR THE DISTRIBUTION OF DISTRIBUTABLE EQUITY
The distributable equity of YIT Corporation on December 31, 2010 is EUR
299,689,283.92,
of which the profit for the financial period 2010 is EUR 111,303,159.73.
The Board of Directors proposes to the Annual General Meeting that the
distributable equity be disposed of as follows:
-- Payment of a dividend to shareholders
EUR 0.65 per share, or 81,300,974.30
-- Remains in distributable equity 218,388,309.62
299,689,283.92
===========
No significant changes have taken place in the company's financial position
after the end of the financial year. The company's liquidity is good and, in
the view of the Board of Directors, the proposed dividend payout does not
jeopardise the company's solvency.
Helsinki, February 3, 2011
Henrik Ehrnrooth Reino Hanhinen
Chairman Vice chairman
Eino Halonen Antti Herlin
Satu Huber Lauri Ratia
Kim Gran Juhani Pitkäkoski
President and CEO
TABLES TO THE FINANCIAL STATEMENT BULLETINJAN 1 - DEC 31, 2010
The information presented in the Financial Statements Bulletin 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 - Dec 31, 2010
Consolidated income statement January 1 - December 31, 2010
Statement of comprehensive income January 1 - December 31, 2010
Consolidated income statement July 1 - December 31, 2010
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
As from the beginning of 2010, Group reporting will apply the new IFRIC 15
interpretation, according to which own residential development projects will be
recognised at the time of delivery and own commercial real estate development
projects based on the percentage of completion or at the time of delivery. The
figures for 2010 and 2009 are comparable.
KEY FIGURES
12/2010 12/2009 change
%
--------------------------------------------------------------------------------
Earnings per share, EUR 1.12 0.55 104
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 1.12 0.55 104
--------------------------------------------------------------------------------
Equity per share, EUR 7.04 6.09 16
--------------------------------------------------------------------------------
Average share price during the period, EUR 16.35 8.52 92
--------------------------------------------------------------------------------
Share price at end of period, EUR 18.65 14.45 29
--------------------------------------------------------------------------------
Market capitalization at end of period, MEUR 2,332.7 1,807.4 29
--------------------------------------------------------------------------------
Weighted average share-issue adjusted number of shares 125,078 125,167 --
outstanding, thousands
--------------------------------------------------------------------------------
Weighted average share-issue adjusted number of shares 125,078 125,167 --
outstanding, thousands, diluted
--------------------------------------------------------------------------------
Share-issue adjusted number of shares outstanding at 125,078 125,078 --
end of period, thousands
--------------------------------------------------------------------------------
Net interest-bearing debt at end of period, MEUR 640.9 529.1 21
--------------------------------------------------------------------------------
Return on investment, from the last 12 months, % 14.3 11.0 --
--------------------------------------------------------------------------------
Return on equity, % 17,1 8.9 --
--------------------------------------------------------------------------------
Equity ratio, % 31.9 32.4 --
--------------------------------------------------------------------------------
Gearing ratio, % 72.6 69.2 --
--------------------------------------------------------------------------------
Gross capital expenditures, MEUR 129.8 27.9 365
--------------------------------------------------------------------------------
% of revenue 3.4 0.8 --
--------------------------------------------------------------------------------
Order backlog at end of period, MEUR 1) 3,535.7 2,983.3 19
--------------------------------------------------------------------------------
of which order backlog outside Finland 1,857.7 1,885.7 -1
--------------------------------------------------------------------------------
Average number of personnel 24,317 24,497 -1
--------------------------------------------------------------------------------
1) Portion of binding orders and own development projects not recognized as
income.
YIT GROUP FIGURES BY QUARTER
I/2009 II/2009 III/200 IV/2009 I/2010 II/2010 III/201 IV/2010
9 0
--------------------------------------------------------------------------------
Revenue, 843.2 862.8 754.3 1,025.3 765.3 854.8 829.6 1,338.0
MEUR
--------------------------------------------------------------------------------
Operatin 28.7 43.3 32.8 63.3 33.9 35.9 33.9 116.4
g
profit,
MEUR
--------------------------------------------------------------------------------
% of 3.4 5.0 4.3 6.2 4.4 4.2 4.1 8.7
revenue
--------------------------------------------------------------------------------
Financia 1.3 0.4 0.9 1.9 0.7 1.1 1.1 0.7
l
income,
MEUR
--------------------------------------------------------------------------------
Exchange -9.6 -5.1 -7.8 -5.9 -2.3 -1.9 -2.3 -0.8
rate
differen
ces,
MEUR
--------------------------------------------------------------------------------
Financia -11.6 -8.2 -8.8 -6.2 -5.6 -7.2 -5.7 -3.1
l
expenses
, MEUR
--------------------------------------------------------------------------------
Profit 8.8 30.4 17.1 53.1 26.7 27.9 27.0 113.2
before
taxes,
MEUR
--------------------------------------------------------------------------------
% of 1.0 3.5 2.3 5.2 3.5 3.3 3.3 8.5
revenue
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Balance 2,998.6 2,993.3 3,041.6 2,777.1 2,994.8 3,067.9 3,234.6 3,117.1
sheet
total,
MEUR
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings 0.06 0.15 0.08 0.26 0.15 0.16 0.16 0.65
per
share,
EUR
--------------------------------------------------------------------------------
Equity 5.46 5.67 5.78 6.09 6.08 6.35 6.30 7.04
per
share,
EUR
--------------------------------------------------------------------------------
Share 5.05 7.40 13.01 14.45 17.10 14.78 17.39 18.65
price at
end of
period,
EUR
--------------------------------------------------------------------------------
Market 631.6 925.6 1,627.0 1,807.4 2,138.8 1,848.7 2,175.1 2,332.7
capitali
zation
at end
of
period,
MEUR
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return 16.5 11.5 11.1 11.0 11.3 10.7 10.6 14.3
on
investme
nt, from
the last
12
months,
%
--------------------------------------------------------------------------------
Equity 27.0 28.1 28.2 32.4 30.2 31.8 29.2 31.9
ratio, %
--------------------------------------------------------------------------------
Net 674.1 699.7 674.4 529.1 496.0 514.8 636.6 640.9
interest
-bearing
debt at
end of
period,
MEUR
--------------------------------------------------------------------------------
Gearing 98.3 98.1 92.9 69.2 65.0 64.7 80.5 72.6
ratio, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gross 6.7 3.9 5.1 12.2 9.4 8.7 81.0 30.7
capital
expendit
ures,
MEUR
--------------------------------------------------------------------------------
Order 3,256.3 3,120.0 3,059.6 2,983.3 3,152.5 3,329.2 3,727.5 3,535.7
backlog,
MEUR
--------------------------------------------------------------------------------
Personne 25,239 24,763 24,003 23,480 23,211 23,877 25,943 25,832
l at end
of
period
--------------------------------------------------------------------------------
SEGMENT INFORMATION BY QUARTER
YIT applies the IFRIC 15 Agreements for the Construction of Real Estate IFRS
interpretation from the start of the financial period begun on January 1, 2010.
Due to the application of the interpretation, Group reporting and segment
reporting differ. In segment reporting, the figures will continue to be calculated based on the
previous accounting principle, i.e. percentage of completion will be applied in
the recognition of revenue from own residential and commercial real estate
development projects.
As from the beginning of 2010, Group reporting applies the new interpretation.
According to the interpretation own residential development projects will be
recognised at the time of delivery. Own commercial real estate development
projects will be recognized based on the percentage of completion or
alternatively at the time of delivery.
Figures for 2010 and 2009 are comparable.
Revenue by business segment (EUR million)
I/2009 II/200 III/20 IV/2009 I/2010 II/201 III/20 IV/2010
9 09 0 10
--------------------------------------------------------------------------------
Building and 537.9 529.2 483.9 573.9 477.0 547.4 550.9 777.8
Industrial
Services
--------------------------------------------------------------------------------
Construction 239.8 253.0 246.3 290.6 252.9 275.2 279.7 294.2
Services
Finland
--------------------------------------------------------------------------------
International 61.4 87.4 97.6 113.0 106.9 112.1 111.9 139.7
Construction
Services
--------------------------------------------------------------------------------
Other items -15.5 -16.4 -12.8 -17.0 -16.0 -20.4 -18.3 -24.1
--------------------------------------------------------------------------------
YIT's segments 823.7 853.2 815.0 960.5 820.8 914.3 924.2 1,187.6
total
--------------------------------------------------------------------------------
IFRIC 15 19.5 9.7 -60.7 64.7 -55.5 -59.6 -94.6 150.4
adjustments
--------------------------------------------------------------------------------
YIT Group, 843.2 862.8 754.3 1,025.3 765.3 854.7 829.6 1,338.0
total
--------------------------------------------------------------------------------
Operating profit by business segment (EUR million)
I/2009 II/200 III/20 IV/200 I/2010 II/201 III/20 IV/201
9 09 9 0 10 0
--------------------------------------------------------------------------------
Building and 28.6 28.2 24.9 37.6 21.6 28.2 22.8 32.4
Industrial
Services 1)
--------------------------------------------------------------------------------
Construction 20.9 19.9 20.8 20.3 23.1 26.4 29.3 29.4
Services Finland
--------------------------------------------------------------------------------
International -23.8 -5.2 3.7 7.5 4.6 7.6 9.2 13.4
Construction
Services
--------------------------------------------------------------------------------
Other items -3.6 -4.8 -3.8 -5.7 -4.8 -5.1 -3.4 -5.5
--------------------------------------------------------------------------------
YIT's segments 22.1 38.1 45.6 59.7 44.5 57.1 57.9 69.7
total
--------------------------------------------------------------------------------
IFRIC 15 6.6 5.2 -12.8 3.6 -10.6 -21.2 -24.0 46.7
adjustments
--------------------------------------------------------------------------------
YIT Group, total 28.7 43.3 32.8 63.3 33.9 35.9 33.9 116.4
--------------------------------------------------------------------------------
Operating profit margin by business segment (%)
I/2009 II/200 III/20 IV/200 I/2010 II/201 III/20 IV/201
9 09 9 0 10 0
--------------------------------------------------------------------------------
Building and 5.3% 5.3% 5.1% 6.6% 4.5% 5.2% 4.1% 4.2 %
Industrial
Services 1)
--------------------------------------------------------------------------------
Construction 8.7% 7.9% 8.4% 7.0% 9.1% 9.6% 10.5% 10.0 %
Services Finland
--------------------------------------------------------------------------------
International -38.7% -5.9% 3.8% 6.6% 4.3% 6.8% 8.2% 9.6 %
Construction
Services
--------------------------------------------------------------------------------
YIT's segments 2.7% 4.5% 5.6% 6.2% 5.4% 6.2% 6.3% 5.9 %
total
--------------------------------------------------------------------------------
YIT Group. total 3.4% 5.0% 4.3% 6.2% 4.4% 4.2% 4.1% 8.7 %
--------------------------------------------------------------------------------
1) The operating profit of Building and Industrial Services in 7-9/2010 was
weakened by non-recurring expenses amounting to a total of approximately EUR
1.9 million associated with the acquisition made in Central Europe, expenses
amounting to approximately EUR 1 million connected with post-acquisition
personnel reductions in Denmark, and EUR 0.4 million associated with other
acquisitions. In addition, 10-12/2010 profitability was burdened by
restructuring expenses of EUR 3.0 million related to the acquisition made in
Central Europe.
On September 30. 2009. the court of arbitration issued its ruling in the
dispute concerning the mechanical installation contract YIT carried out for
Neste Oil's Porvoo oil refinery. The effect of the ruling on Building and
Industrial Services' operating profit for Q3/2009 was EUR -3.2 million.
Order backlog by business segment at end of period (EUR million)
I/2009 II/2009 III/200 IV/2009 I/2010 II/2010 III/201 IV/2010
9 0
--------------------------------------------------------------------------------
Building 1,048.3 984.7 946.7 850.4 964.2 1,025.3 1,332.1 1,264.4
and
Industri
al
Services
1)
--------------------------------------------------------------------------------
Construc 819.8 846.9 909.9 1,007.5 905.4 1,154.7 1,205.2 1,173.2
tion
Services
Finland
--------------------------------------------------------------------------------
Internat 1,239.1 1,126.8 998.4 960.1 1,013.2 946.8 884.8 870.8
ional
Construc
tion
Services
2)
--------------------------------------------------------------------------------
Other -62.1 -41.9 -54.2 -44.4 -45.8 -59.4 -55.2 -58.3
items
--------------------------------------------------------------------------------
YIT's 3,045.0 2,916.4 2,800.8 2,773.6 2,837.0 3,067.4 3,366.9 3,250.1
segments
total
--------------------------------------------------------------------------------
IFRIC 15 211.3 203.6 258.8 209.7 315.5 261.8 360.6 285.6
adjustme
nts
--------------------------------------------------------------------------------
YIT 3,256.3 3,120.1 3,059.6 2,983.3 3,152.5 3,329.2 3,727.5 3,535.7
Group.
total
--------------------------------------------------------------------------------
1) The order backlog value of Caverion -group, which was acquired in 2010,
amounted to EUR 275 million at the end of December 2010 (9/10: EUR 306
million).
2) The order backlog includes residential units whose construction was
suspended in Russia in October 2008 due to market uncertainties. At the end of
December 2010, the value of projects that were still suspended amounted to EUR
137.1 million (12/2009: EUR 282 million).
2. CONSOLIDATED FINANCIAL STATEMENTS JAN 1 - DEC 31, 2010
As from the beginning of 2010, Group reporting will apply the new IFRIC 15
interpretation, according to which own residential development projects will be
recognised at the time of delivery and own commercial real estate development
projects based on the percentage of completion or at the time of delivery. The
figures for 2010 and 2009 are comparable.
CONSOLIDATED INCOME STATEMENT JAN 1 - DEC 31, 2010 (EUR million)
1-12/201 1-12/200 change,
0 9 %
--------------------------------------------------------------------------------
Revenue 3,787.6 3,485.6 9
--------------------------------------------------------------------------------
of which activities outside Finland 2,343.6 1,885.7 24
--------------------------------------------------------------------------------
Operating expenses and other income -3,531.1 -3,283.3 8
--------------------------------------------------------------------------------
Share of results of associated companies -0.5 -0.6 -17
--------------------------------------------------------------------------------
Depreciation and write-downs -35.9 -33.6 7
--------------------------------------------------------------------------------
Operating profit 1) 220.1 168.1 31
--------------------------------------------------------------------------------
% of revenue 5.8 4.8 --
--------------------------------------------------------------------------------
Financial income 3.7 4.5 -18
--------------------------------------------------------------------------------
Exchange rate differences -7.3 -28.4 -74
--------------------------------------------------------------------------------
Financial expenses -21.7 -34.7 -37
--------------------------------------------------------------------------------
Profit before taxes 194.8 109.5 78
--------------------------------------------------------------------------------
% of revenue 5.1 3.1 --
--------------------------------------------------------------------------------
Income taxes -54.2 -41.4 31
--------------------------------------------------------------------------------
Profit for the report period 140.6 68.1 106
--------------------------------------------------------------------------------
% of revenue 3.7 2.0 --
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 140.3 68.3 105
--------------------------------------------------------------------------------
Minority interests 0.3 -0.2 --
--------------------------------------------------------------------------------
140.6 68.1 106
--------------------------------------------------------------------------------
Earnings per share attributable to the equity
holders of the parent company
--------------------------------------------------------------------------------
Earnings per share, EUR 1.12 0.55 104
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 1.12 0.55 104
--------------------------------------------------------------------------------
STATEMENT OF COMPREHENSIVE INCOME JAN 1 - DEC 31, 2010 (EUR million)
1-12/2010 1-12/2009 change. %
--------------------------------------------------------------------------------
Profit for the report period 140.6 68.1 106
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
- Change in the fair value of interest -1.0 -0.0 --
derivatives
--------------------------------------------------------------------------------
--- Deferred tax 0.3 0.0 --
--------------------------------------------------------------------------------
- Change in translation differences 29.2 -5.1 --
--------------------------------------------------------------------------------
- Other change 0.0 -0.6 --
--------------------------------------------------------------------------------
Other comprehensive income. total 28.5 -5.7 --
--------------------------------------------------------------------------------
Total comprehensive income 169.1 62.4 171
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 168.7 63.2 167
--------------------------------------------------------------------------------
Minority interests 0.4 -0.8 --
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT OCT 1 - DEC 31, 2010 (EUR million)
10-12/20 10-12/20 change.
10 09 %
--------------------------------------------------------------------------------
Revenue 1,338.0 1,025.3 30
--------------------------------------------------------------------------------
of which activities outside Finland 962.2 595.6 62
--------------------------------------------------------------------------------
Operating income and expenses -1,211.5 -953.4 27
--------------------------------------------------------------------------------
Share of results of associated companies -0.2 -0.2
--------------------------------------------------------------------------------
Depreciation and write-downs -9.9 -8.4 18
--------------------------------------------------------------------------------
Operating profit 1) 116.4 63.3 84
--------------------------------------------------------------------------------
% of revenue 8.7 6.2 --
--------------------------------------------------------------------------------
Financial income 0.7 1.9 -63
--------------------------------------------------------------------------------
Exchange rate differences -0.8 -5.9 -86
--------------------------------------------------------------------------------
Financial expenses -3.1 -6.2 -50
--------------------------------------------------------------------------------
Profit before taxes 113.2 53.1 113
--------------------------------------------------------------------------------
% of revenue 8.5 5.2 --
--------------------------------------------------------------------------------
Income taxes -30.6 -20.4 50
--------------------------------------------------------------------------------
Profit for the report period 82.6 32.7 153
--------------------------------------------------------------------------------
% of revenue 6.2 3.2 --
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 81.5 32.4 152
--------------------------------------------------------------------------------
Minority interests 1.1 0.3 267
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share attributable to the equity
holders of the parent company
--------------------------------------------------------------------------------
Earnings per share, EUR 0.65 0.26 150
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 0.65 0.26 150
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET (EUR million)
31.12.2010 31.12.2009 Change 1.1.2009
%
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Property, plant and equipment 106.7 99.8 7 104.6
--------------------------------------------------------------------------------
Goodwill 350.9 291.0 21 291.0
--------------------------------------------------------------------------------
Other intangible assets 50.5 32.8 54 35.1
--------------------------------------------------------------------------------
Shares in associated companies 2.7 3.2 -16 3.8
--------------------------------------------------------------------------------
Other investments 3.4 2.0 70 2.5
--------------------------------------------------------------------------------
Other receivables 15.9 14.4 10 12.7
--------------------------------------------------------------------------------
Deferred tax assets 44.7 43.1 4 40.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Inventories 1,484.9 1,477.6 0 1,715.4
--------------------------------------------------------------------------------
Trade and other receivables 889.3 640.1 39 731.2
--------------------------------------------------------------------------------
Cash and cash equivalents 148.3 173.1 -14 201.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets held for sale 19.8 -- -- --
--------------------------------------------------------------------------------
Total assets 3,117.1 2,777.1 12 3,138.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders
of the parent company
--------------------------------------------------------------------------------
Share capital 149.2 149.2 0 149.2
--------------------------------------------------------------------------------
Other equity 730.8 612.7 19 615.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-controlling interest 2.9 2.2 32 3.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity 882.9 764.1 16 768.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 77.2 66.8 16 63.2
--------------------------------------------------------------------------------
Pension liabilities 26.9 17.6 53 19.7
--------------------------------------------------------------------------------
Provisions 49.5 49.0 1 45.0
--------------------------------------------------------------------------------
Interest-bearing liabilities 504.6 502.0 1 516.2
--------------------------------------------------------------------------------
Other liabilities 10.3 3.3 212 4.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Trade and other payables 1,218.8 1,133.5 8 1,298.2
--------------------------------------------------------------------------------
Provisions 45.1 40.6 11 43.6
--------------------------------------------------------------------------------
Interest-bearing current liabilities 284.6 200.2 42 379.9
--------------------------------------------------------------------------------
Liabilities of assets held for sale 17.2 -- --
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 3,117.1 2,777.1 12 3,138.4
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(EUR million)
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
Januar
y 1,
2010
--------------------------------------------------------------------------------
-----
Compre
hensiv
e
income
--------------------------------------------------------------------------------
-----
Profit -- -- -- -- -- -- 140.3 -- 0.3
140.6
for
the
period
--------------------------------------------------------------------------------
-----
Other
compre
hensiv
e
income
--------------------------------------------------------------------------------
-----
Change -- -- -- -- -1.0 -- -- -- --
in the
fair
value
of
intere
st
deriva
tives
--------------------------------------------------------------------------------
-----
- -- -- -- -- 0.3 -- -- -- --
Deferr
ed tax
asset
--------------------------------------------------------------------------------
-----
Change -- -- -- 28.2 -- -- 1.0 --
29.2
in
transl
ation
differ
ences
--------------------------------------------------------------------------------
-----
Compre -- -- -- 28.2 -0.7 -- 141.3 168.8 0.3
169.1
hensiv
e
income
,
total
--------------------------------------------------------------------------------
-----
Transa
ctions
with
owners
--------------------------------------------------------------------------------
-----
Divide -- -- -- -- -- -- -50.5 -- -0.8
-51.3
nd
paid
--------------------------------------------------------------------------------
-----
Share -- . -11.6 -- -- -- 11.6 -- --
0.0
option
scheme
--------------------------------------------------------------------------------
-----
Transf -- 0.3 -- -- -- -- -0.3 -- --
0.0
er
from
retain
ed
earnin
gs
--------------------------------------------------------------------------------
-----
Share- -- -- -- -- -- -- 0.9 -- --
0.9
based
incent
ive
scheme
--------------------------------------------------------------------------------
-----
Transa -- 0.3 -11.6 -- -- -- -38.3 -49.6 -0.8
-50.4
ctions
with
owners
,
total
--------------------------------------------------------------------------------
-----
Change
s in
owners
hip
shares
in
subsid
iaries
--------------------------------------------------------------------------------
-----
Change -- -- -- -- -- -- -1.0 -- 1.0
0.0
s in
group
owners
hip
shares
in
subsid
iaries
- no
loss
of
contro
l
--------------------------------------------------------------------------------
-----
Change -- -- -- -- -- -- -- -- 0.1
0.1
s from
busine
ss
combin
ations
--------------------------------------------------------------------------------
-----
Change -1.0 1.1
0.1
s in
owners
hip
shares
in
subsid
iaries
,
total
--------------------------------------------------------------------------------
-----
Balanc 149.2 2.0 0.0 -14.2 -2.4 -10.6 756.1 881.1 2.8
882.9
e at
Decemb
er 31,
2010
--------------------------------------------------------------------------------
-----
--------------------------------------------------------------------------------
-----
Restat 149.2 1.4 13.9 -37.4 -1.7 -6.6 645.9 764.7 3.8
768.5
ed
balanc
e
Januar
y 1,
2009
--------------------------------------------------------------------------------
-----
Compre
hensiv
e
income
--------------------------------------------------------------------------------
-----
Profit -- -- -- -- -- -- 68.3 -- -0.2
68.1
for
the
period
--------------------------------------------------------------------------------
-----
Other
compre
hensiv
e
income
--------------------------------------------------------------------------------
-----
Change -- -- -- -- 0.0 -- -- -- --
0.0
in the
fair
value
of
intere
st
deriva
tives
--------------------------------------------------------------------------------
-----
- -- -- -- -- -0.0 -- -- -- --
-0.0
Deferr
ed tax
asset
--------------------------------------------------------------------------------
-----
Change -- -- -- -5.0 -- -- 0.0 -- -0.1
-5.1
in
transl
ation
differ
ences
--------------------------------------------------------------------------------
-----
Compre -- -- -- -5.0 0.0 -- 68.2 63.2 -0.8
62.3
hensiv
e
income
.
total
--------------------------------------------------------------------------------
-----
Transa
ctions
with
owners
--------------------------------------------------------------------------------
-----
Divide -- -- -- -- -- -- -62.5 -- -0.8
-63.3
nd
paid
--------------------------------------------------------------------------------
-----
Purcha -- -- -- -- -- -4.0 -- -- --
-4.0
se of
treasu
ry
shares
--------------------------------------------------------------------------------
-----
Transf -- 0.3 -- -- -- -- -0.3 -- --
0.0
er
from
retain
ed
earnin
gs
--------------------------------------------------------------------------------
-----
Share -- -- -2.3 -- -- -- 2.8 -- --
0.5
option
scheme
--------------------------------------------------------------------------------
-----
Transa 0.0 0.3 -2.3 0.0 0.0 -4.0 -60.0 -66.0 -0.8
-66.8
ctions
with
owners
,
total
--------------------------------------------------------------------------------
-----
Balanc 149.2 1.7 11.6 -42.4 -1.7 -10.6 654.1 761.9 2.2
764.1
e at
Decemb
er 31,
2009
--------------------------------------------------------------------------------
-----
--------------------------------------------------------------------------------
-----
Balanc 149.2 1.4 13.9 -35.2 -1.7 -6.6 682.1 803.1 4.6
807.7
e at
Januar
y 1,
2009
--------------------------------------------------------------------------------
-----
The -- -- -- -2.2 -- -- -36.2 -38.4 -0.8
-39.2
effect
s of
applic
ation
of
IFRIC
15
--------------------------------------------------------------------------------
-----
Restat 149.2 1.4 13.9 -37.4 -1.7 -6.6 645.9 764.7 3.8
768.5
ed
balanc
e
Januar
y 1,
2009
--------------------------------------------------------------------------------
-----
CONSOLIDATED CASH FLOW STATEMENT(EUR million)
1-12/2010 1-12/2009 Change %
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
Net profit for the period 140.6 68.3 106
--------------------------------------------------------------------------------
Reversal of accrual-based items 130.3 166.4 -22
--------------------------------------------------------------------------------
Change in working capital
--------------------------------------------------------------------------------
Change in trade and other receivables -77.3 98.1 --
--------------------------------------------------------------------------------
Change in inventories 60.3 173.5 -65
--------------------------------------------------------------------------------
Change in current liabilities -135.4 -154.1 -11
--------------------------------------------------------------------------------
Change in working capital. total -152.4 117.5 --
--------------------------------------------------------------------------------
Interest paid -27.5 -35.3 -22
--------------------------------------------------------------------------------
Other financial items. net -37.2 -22.0 69
--------------------------------------------------------------------------------
Interest received 3.5 4.7 -28
--------------------------------------------------------------------------------
Taxes paid -50.5 -38.7 30
--------------------------------------------------------------------------------
Net cash generated from operating activities 6.8 260.9 -99
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------
Acquisition of subsidiaries. net of cash -45.4 -7.5 505
--------------------------------------------------------------------------------
Purchase of property. plant and equipment -19.9 -20.8 -5
--------------------------------------------------------------------------------
Purchase of intangible assets -8.4 -7.2 19
--------------------------------------------------------------------------------
Increases in other investments -1.3 0.0 --
--------------------------------------------------------------------------------
Proceeds from sale of tangible and intangible 6.5 4.1 129
assets
--------------------------------------------------------------------------------
Proceeds from sale of other investments 0.0 0.3 33
--------------------------------------------------------------------------------
Net cash used in investing activities -68.5 -31.1 110
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating cash flow after investments -61.7 229.8 --
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing activities
--------------------------------------------------------------------------------
Change in current liabilities 34.2 -138.6 --
--------------------------------------------------------------------------------
Proceeds from borrowings 100.0 60.0 67
--------------------------------------------------------------------------------
Repayments of borrowings -50.4 -110.6 -57
--------------------------------------------------------------------------------
Payments of financial leasing debts -0.1 -0.3 -67
--------------------------------------------------------------------------------
Purchase of treasury shares 0.0 -4.0 -100
--------------------------------------------------------------------------------
Dividends paid and other distribution of assets -51.2 -63.4 -19
--------------------------------------------------------------------------------
Net cash used in financing activities 32.5 -256.9 --
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents -29.3 -27.1 8
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of 173.1 197.7 -12
the period
--------------------------------------------------------------------------------
Change in the fair value of the cash equivalents 3.8 2.5 48
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the 147.6 173.1 -15
period
--------------------------------------------------------------------------------
3. NOTES
ACCOUNTING PRINCIPLES OF THE INTERIM REPORT
YIT Corporation's financial statements for January 1 - December 31, 2010 have
been drafted in line with the IAS 34 Interim Financial Reporting standard. The
consolidated financial statements have been drafted in compliance with the
International Financial Reporting Standards, and the IAS/IFRS standards
approved by the EU Commission by December 31, 2010 and SIC and IFRIC
interpretations have been complied with in the drafting of the statements. The
financial statements bulletin is based on the audited financial statements for
2010.
IFRIC 15 Agreements for the Construction of Real Estate
YIT applies the IFRIC 15 Agreements for the Construction of Real Estate IFRS
interpretation from the start of the financial period beginning on January 1,
2010. The IFRIC 15 interpretation contains guidelines on when the revenue
generated by the construction of real estate must be recognised on the basis of
the delivery of the building and when the percentage of completion method can
be applied. In YIT, the new interpretation will have an impact on the
recognition of own development projects involving residential and commercial
real estate. The interpretation will not have any impact on construction
contracting or building and industrial services.
In Group-level reports as of January 1, 2010, the revenue generated by YIT's
own residential development projects are recognised when the project is
complete i.e. when the residential units are ready to be handed over to the
client. The share of income and expenses to be recognized will be calculated
also in the future by multiplying the percentage of completion by the
percentage of sale. Under the old practice, the revenue recognition began when
the construction work started using the percentage of completion method.
YIT had sold its commercial real estate development projects that were under
construction to investors before the start of construction or during the early
stages of the construction work, which together with other facts means that in
most cases the revenue of these projects could be recognised in accordance with
the old practice also in the future. The share of income and expenses to be
recognized would then be calculated also in the future by using the formula
percentage of completion multiplied by the percentage of sale multiplied by the
occupancy rate. Under the old practice, the recognition of sold projects was
possible to start always immediately when the construction work started. In the
case of YIT's new 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. These projects will be recognised when
the construction work has started or when the project is complete.
In Finland, YIT finances its projects by selling construction-stage contract
receivables to financing companies. According to the new interpretation, sold
residential units from own development projects will be recognised as revenue
when the project is complete. As a result, all construction-stage contract
receivables related to residential production and sold to financing companies
must be reported as part of the interest-bearing liabilities on the balance
sheet. Under the old practice, part of construction-stage contract receivables
related to residential production was reported as off-balance sheet items.
Due to applying the interpretation the items in consolidated income statement,
consolidated balance sheet and consolidated cash flow statement for the
previous periods have been adjusted for comparability as follows:
Changes in consolidated income statement (EUR million)
1-3/09 4-6/09 7-9/09 10-12/0 1-3/09 1-6/09 1-9/09 1-12/0
9 9
--------------------------------------------------------------------------------
Revenue 19.5 9.7 -60.7 64.7 19.5 29.2 -31.5 33.2
--------------------------------------------------------------------------------
Operating 6.6 5.2 -12.8 3.6 6.6 11.8 -1.0 2.6
profit
--------------------------------------------------------------------------------
Profit before 6.6 5.2 -12.8 3.6 6.6 11.8 -1.0 2.6
taxes
--------------------------------------------------------------------------------
Deferred taxes -1.3 -1.1 2.8 -1.1 -1.3 -2.4 0.4 -0.7
--------------------------------------------------------------------------------
Profit for the 5.3 4.1 -10.0 2.5 5.3 9.4 -0.6 1.9
period
--------------------------------------------------------------------------------
Changes in consolidated balance sheet (EUR million)
Jan 1, 2009 3/09 6/09 9/09 12/09
--------------------------------------------------------------------
Inventories 205.5 186.1 183.0 230.8 168.1
--------------------------------------------------------------------
Trade and other receivables -46.8 -33.6 -33.7 -43.9 -20.7
--------------------------------------------------------------------
Deferred tax receivables 5.8 6.4 6.1 8.8 3.3
--------------------------------------------------------------------
Equity -39.1 -31.8 -28.1 -38.2 -36.5
--------------------------------------------------------------------
Current borrowings 49.8 38.9 28.3 34.0 31.4
--------------------------------------------------------------------
Trade and other liabilities 157.4 149.2 152.3 197.6 162.0
--------------------------------------------------------------------
Provisions 1.6 5.4 5.0 4.6 0.6
--------------------------------------------------------------------
Deferred tax liabilities -5.2 -2.8 -2.1 -2.3 -6.8
--------------------------------------------------------------------
Balance sheet total 164.5 158.9 155.4 195.7 150.7
--------------------------------------------------------------------
Changes in consolidated cash flow statement (EUR million)
1-3/09 1-6/09 1-9/09 1-12/09
-----------------------------------------------------------------------------
Net cash generated from operating activities 10.9 21.5 15.7 18.4
-----------------------------------------------------------------------------
Operating cash flow after investments 10.9 21.5 15.7 18.4
-----------------------------------------------------------------------------
Net cash used in financing activities -10.9 -21.5 -15.7 -18.4
-----------------------------------------------------------------------------
Under the new practice, the quarterly revenue and profits of the YIT Group will
now fluctuate more in accordance with the completion dates of development
projects. The new revenue recognition practice also means that it will take
more time for the Group's financial figures to reflect changes in production
volumes. The adoption of the interpretation will not have any impact on the
figures covering YIT's segments published by the Group as the information will
continue to be calculated in accordance with prior accounting principles.
YIT published the comparison figures for consolidated income statement,
consolidated balance sheet, consolidated cash flow statement and key figures
for 2009 in a stock exchange release published on March 23, 2010.
Other standards and interpretations that have been applied as of January 1,
2010 have minor effects on YIT during the report period. The effects are
described in the accounting principles of financial statements for the year
2010.
Currency exchange rates used in the Interim Report
Average rate Balance sheet rate Average rate Balance sheet rate
1-12/2010 December 31, 2010 1-12/2009 December 31, 2009
--------------------------------------------------------------------------------
1 EUR = CZK 25.2910 25.061 26.436 26.473
--------------------------------------------------------------------------------
DKK 7.4471 7.4535 7.4463 7.4418
--------------------------------------------------------------------------------
EEK 15.6466 15.6466 15.6466 15.6466
--------------------------------------------------------------------------------
HUF 275.34 277.95 280.39 270.42
--------------------------------------------------------------------------------
MYR 4.1896 4.0950 -- --
--------------------------------------------------------------------------------
NOK 8.0056 7.8000 8.7287 8.3000
--------------------------------------------------------------------------------
PLN 3.9951 3.9750 4.3270 4.1045
--------------------------------------------------------------------------------
RUB 40.2718 40.82 44.1306 43.1540
--------------------------------------------------------------------------------
SEK 9.5447 8.9655 10.6189 10.2520
--------------------------------------------------------------------------------
SGD 1.7640 1.7136 -- --
--------------------------------------------------------------------------------
USD 1.3463 1.3362 -- 1.4643
--------------------------------------------------------------------------------
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
YIT applies the IFRIC 15 Agreements for the Construction of Real Estate IFRS
interpretation from the start of the financial period begun on January 1, 2010.
Due to the application of the interpretation, Group reporting and segment
reporting differ.
In segment reporting, the figures will continue to be calculated based on the
previous accounting principle, i.e. percentage of completion will be applied in
the recognition of revenue from own residential and commercial real estate
development projects.
As from the beginning of 2010, Group reporting will apply the new
interpretation. According to the interpretation own residential development
projects will be recognised at the time of delivery. Own commercial real estate
development projects will be recognized in most cases based on the percentage
of completion or alternatively at the time of delivery.
The figures for 2010 and 2009 are comparable.
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.
Revenue by business segment (EUR million)
1-12/2010 1-12/2009 Change %
-------------------------------------------------------------------
Building and Industrial Services 2,353.0 2,124.9 11
-------------------------------------------------------------------
- Group internal -70.7 -58.6 21
-------------------------------------------------------------------
- external 2,282.2 2,066.3 10
-------------------------------------------------------------------
Construction Services Finland 1,102.0 1,029.7 7
-------------------------------------------------------------------
- Group internal -1.9 -1.8 6
-------------------------------------------------------------------
- external 1,100.1 1,028.0 7
-------------------------------------------------------------------
International Construction Services 470.6 359.4 31
-------------------------------------------------------------------
- Group internal -7.1 -3.1 129
-------------------------------------------------------------------
- external 463.5 356.3 30
-------------------------------------------------------------------
Other items 1.2 1.8 --
-------------------------------------------------------------------
YIT's segments total 3,847.0 3,452.4 11
-------------------------------------------------------------------
IFRIC 15 adjustments -59.4 33.2 --
-------------------------------------------------------------------
YIT Group, total - external 3,787.6 3,485.6 9
-------------------------------------------------------------------
Operating profit by business segment (EUR million)
1-12/2010 1-12/2009 Change %
-------------------------------------------------------------------
Building and Industrial Services 1) 105.1 119.3 -12
-------------------------------------------------------------------
Construction Services Finland 108.1 81.9 32
-------------------------------------------------------------------
International Construction Services 34.7 -17.8 --
-------------------------------------------------------------------
Other items -18.8 -17.9 --
-------------------------------------------------------------------
YIT's segments total 229.1 165.5 38
-------------------------------------------------------------------
IFRIC 15 adjustments -9.0 2.6 --
-------------------------------------------------------------------
YIT Group. total 220.1 168.1 31
-------------------------------------------------------------------
1) The operating profit of Building and Industrial Services in 7-9/2010 was
weakened by non-recurring expenses amounting to a total of approximately EUR
1.9 million associated with the acquisition made in Central Europe, expenses
amounting to approximately EUR 1 million connected with post-acquisition
personnel reductions in Denmark, and EUR 0.4 million associated with other
acquisitions. In addition, 10-12/2010 profitability was burdened by
restructuring expenses of EUR 3.0 million related to the acquisition made in
Central Europe.
On September 30, 2009 the court of arbitration issued its ruling in the dispute
concerning the mechanical installation contract YIT carried out for Neste Oil's
Porvoo oil refinery. The effect of the ruling on Building and Industrial
Services' operating profit for Q3/2009 was EUR -3.2 million.
Order backlog by business segment at end of period (EUR million)
12/2010 12/2009 Change %
------------------------------------------------------------------
Building and Industrial Services 1) 1,264.4 850.4 49
------------------------------------------------------------------
Construction Services Finland 1,173.2 1,007.5 16
------------------------------------------------------------------
International Construction Services 2) 870.8 960.1 -9
------------------------------------------------------------------
Other items -58.3 -44.4 --
------------------------------------------------------------------
YIT's segments total 3,250.1 2,773.6 17
------------------------------------------------------------------
IFRIC 15 adjustments 285.6 209.7 36
------------------------------------------------------------------
YIT Group, total 3,535.7 2,983.3 19
------------------------------------------------------------------
1) The order backlog value of Caverion -group, which was acquired in 2010,
amounted to EUR 275 million at the end of December 2010 ( 9/10: EUR 306
million).
2) The order backlog includes residential units whose construction was
suspended in Russia in October 2008 due to market uncertainties. At the end of
December 2010, the value of projects that were still suspended amounted to EUR
137.1 million (12/2009: EUR 282 million).
UNUSUAL ITEMS AFFECTING OPERATING PROFIT (EUR million)
1-12/2010 1-12/2009 Change %
----------------------------------------------------------------
Building and Industrial Services -6.3 -3.2 97
----------------------------------------------------------------
YIT Group, total -6.3 -3.2 97
----------------------------------------------------------------
The operating profit of Building and Industrial Services in 7-9/2010 was
weakened by non-recurring expenses amounting to a total of approximately EUR
1.9 million associated with the acquisition made in Central Europe, expenses
amounting to approximately EUR 1 million connected with post-acquisition
personnel reductions in Denmark, and EUR 0.4 million associated with other
acquisitions. In addition, 10-12/2010 profitability was burdened by
restructuring expenses of EUR 3.0 million related to the acquisition made in
Central Europe.
On September 30, 2009 the court of arbitration issued its ruling in the dispute
concerning the mechanical installation contract YIT carried out for Neste Oil's
Porvoo oil refinery. The effect of the ruling on Building and Industrial
Services' operating profit for Q3/2009 was EUR -3.2 million.
BUSINESS COMBINATIONS AND DISPOSALS (EUR million)
In the Building and Industrial Services segment, YIT agreed on June 23, 2010.
that it will acquire the entire share capital of Caverion GmbH, the parent
company of the German Caverion group of companies, providing technical building
system services. Caverion Group's most significant countries of operation are
Germany, Poland and Hungary. The completion of the transaction was subject to
approval by the competition authorities. The Caverion group has been
consolidated into YIT Group from September 1, 2010.
The final purchase price of the Caverion GmbH shares was EUR 73.0 million, and
it has been paid in cash.
The fair value of the acquired identifiable intangible assets is approximately
EUR 4.4 million. The preliminary net fair value for the assets held for sale
is approximately EUR 2.6 million and for trade receivables is EUR 35.8 million.
The acquisition generated approximately EUR 59.9 million of goodwill. According
to the management's estimate, the goodwill is based on the operational network
provided by the Caverion Group companies. competence of the personnel and
market share in the Central European market as well as shifting the focus of
business operations in the acquired units towards long-term service agreements
and servicing and maintenance operations. Significant synergy benefits are seen
in operational models that will be harmonised, the expanding service offering
and procurement.
Composition of acquired net assets and goodwill of Caverion group (EUR million)
12/2010
--------------------------------------------------------------------------------
Consideration
--------------------------------------------------------------------------------
Cash 73.0
--------------------------------------------------------------------------------
Total consideration, transferred 73.0
--------------------------------------------------------------------------------
Asset item based on a compensation obligation --
--------------------------------------------------------------------------------
Total consideration 73.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Acquisition-related costs 1.9
--------------------------------------------------------------------------------
(recognised as expenses in other operating expenses)
--------------------------------------------------------------------------------
Recognised amounts of identifiable assets acquired and liabilities
assumed
--------------------------------------------------------------------------------
Cash and cash equivalents 48.0
--------------------------------------------------------------------------------
Property, plant and equipment 7.8
--------------------------------------------------------------------------------
Order backlog 1.6
--------------------------------------------------------------------------------
Compensation for prohibition of competition 2.8
--------------------------------------------------------------------------------
Assets held for sale 19.8
--------------------------------------------------------------------------------
Inventories 6.4
--------------------------------------------------------------------------------
Trade and other receivables 116.8
--------------------------------------------------------------------------------
Deferred tax liabilities, net -0.6
--------------------------------------------------------------------------------
Pension liabilities -11.7
--------------------------------------------------------------------------------
Loans -0.3
--------------------------------------------------------------------------------
Trade and other liabilities -160.7
--------------------------------------------------------------------------------
Liabilities of the assets held for sale -17.2
--------------------------------------------------------------------------------
Total identifiable net assets 12.7
--------------------------------------------------------------------------------
Non-controlling interest 0.4
--------------------------------------------------------------------------------
Goodwill 59,9
--------------------------------------------------------------------------------
Total 73.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Revenue included in the income statement for the period 173.4
--------------------------------------------------------------------------------
Profit for the period included in the income statement for the period 6.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Revenue had the consolidation taken place from the beginning of 2010 454.1
--------------------------------------------------------------------------------
Profit for the period had the consolidation taken place from the 8.7
beginning of 2010
--------------------------------------------------------------------------------
Moreover, YIT implemented other small business acquisitions in the Building and
Industrial Services segment during the review period. The companies acquired
were Eltjänst Br Björk Installation AB, Ekonomisk Luftbehandling AB, Fristads
Rör-El AB, G:sson Teleteknik AB and Ferm VVS and Jansson & Eriksson AB in
Sweden, Ugelvik Nesset AB, Haug og Ruud AS and Energiprosjekt in Norway and
Brdr. Petersens Eftf. A/S and Carl Christensen & Co. A/S in Denmark.
In the International Construction Services segment. YIT entered into an
agreement on acquiring the Slovakian construction company Reding a.s. on August
12, 2010. Reding is a construction company focusing on residential and business
premises construction. The company has 150 employees. The transaction was
completed on October 7, 2010, after the Slovakian competition authorities had
approved the share transaction and the other terms and conditions of the
agreement had been fulfilled. YIT acquired a 70 percent holding in the company.
YIT has additionally agreed to purchase the remaining 30 percent from the
seller gradually by 2016. The seller will continue as the company's Managing
Director. 100 share of Reding a.s has been consolidated y to YIT Group from
October 7, 2010.
The total cost of these other acquisitions amounts to EUR 26.1 million. The
acquisitions do not result in goodwill, EUR 21.7 million of the purchase price
has been allocated to intangible rights or assets in connection with the
customer base, agreement base, compensation for prohibition of competition,
unpatented technology or inventory.
Composition of acquired net assets and goodwill of other acquisitions (EUR
million)
12/2010
--------------------------------------------------------------------------------
Consideration
--------------------------------------------------------------------------------
Cash 23.1
--------------------------------------------------------------------------------
Total consideration, Transferred
--------------------------------------------------------------------------------
Contingent consideration 3.0
--------------------------------------------------------------------------------
Asset item based on a compensation obligation --
--------------------------------------------------------------------------------
Total consideration 26.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Acquisition-related costs
--------------------------------------------------------------------------------
(recognised as expenses in other operating expenses) 0.6
--------------------------------------------------------------------------------
Recognised amounts of identifiable assets acquired and liabilities
assumed
--------------------------------------------------------------------------------
Cash and cash equivalents 2.6
--------------------------------------------------------------------------------
Property, plant and equipment 4.8
--------------------------------------------------------------------------------
Allocations of intangible assets 16.4
--------------------------------------------------------------------------------
Inventories 12.0
--------------------------------------------------------------------------------
Trade and other receivables 19.7
--------------------------------------------------------------------------------
Deferred tax liabilities, net -1.8
--------------------------------------------------------------------------------
Pension liabilities 0.0
--------------------------------------------------------------------------------
Loans -2.2
--------------------------------------------------------------------------------
Trade and other liabilities -25.5
--------------------------------------------------------------------------------
Conditional debt --
--------------------------------------------------------------------------------
Total identifiable net assets 26.1
--------------------------------------------------------------------------------
Non-controlling interest 0.0
--------------------------------------------------------------------------------
Goodwill 0.0
--------------------------------------------------------------------------------
Total value 26.1
--------------------------------------------------------------------------------
YIT increased its holding in YIT Don from 78 percent to 100 percent in January
and in YIT Citystroi from 65 percent to 75 percent in July.
There were no business divestments during the period under review.
CHANGES IN PROPERTY, PLANT AND EQUIPMENT(EUR million)
1-12/2010 1-12/2009 Change %
-------------------------------------------------------------------------
Carrying value at the beginning of period 99.8 104.6 -5
-------------------------------------------------------------------------
Increase 24.4 21.5 13
-------------------------------------------------------------------------
Increase through acquisitions 12.4 0.0 --
-------------------------------------------------------------------------
Decrease -6.1 -3.4 79
-------------------------------------------------------------------------
Depreciation and value adjustments -23.9 -22.9 4
-------------------------------------------------------------------------
Other 0,1 0.0 --
-------------------------------------------------------------------------
Carrying value at the end of period 106.7 99.8 7
-------------------------------------------------------------------------
INVENTORIES (EUR million)
12/2010 12/2009 Change %
--------------------------------------------------------------------------------
Raw materials and consumables 26.4 18.8 40
--------------------------------------------------------------------------------
Work in progress 639.0 610.0 5
--------------------------------------------------------------------------------
Land areas and plot owing companies 589.3 572.1 3
--------------------------------------------------------------------------------
Shares in completed housing and real estate 181.2 224.8 -19
companies
--------------------------------------------------------------------------------
Advance payments 48.2 51.5 -6
--------------------------------------------------------------------------------
Other inventories 0.9 0.4 125
--------------------------------------------------------------------------------
Total inventories 1,484.9 1,477.6 0
--------------------------------------------------------------------------------
NOTES ON EQUITY(EUR million)
Share capital and share Number of Share capital (EUR Treasury
premium reserve shares million) shares
(EUR
million)
--------------------------------------------------------------------------------
Jan 1, 2010 125,078,422 149.2 -10.6
--------------------------------------------------------------------------------
Dec 12, 2010 125,078,422 149.2 -10.6
--------------------------------------------------------------------------------
BORROWINGS (EUR million)
Fair value Carrying Nominal
value value
--------------------------------------------------------------------------------
Bonds in financial statements December 31, 189.2 199.9 200.0
2009
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Valuation of the above bonds on December 183.5 192.8 200.0
31, 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Bonds raised during the review period:
--------------------------------------------------------------------------------
Fixed-rate bonds
--------------------------------------------------------------------------------
1/2010-2015. interest rate 4.823%. EUR 1) 101.9 99.8 100.0
--------------------------------------------------------------------------------
Total bonds December 31, 2010 285.4 292.6 292.9
--------------------------------------------------------------------------------
Terms of the bonds raised during the revenue period in brief:
1) Loan period March 26. 2010 - March 26. 2015. interest payments in arrear at
March 26. annually.
The bond is unsecured. ISIN code FI4000012067.
CHANGE IN CONTINGENT LIABILITIES AND ASSETS AND COMMITMENTS (EUR million)
12/2010 12/2009 Change %
--------------------------------------------------------------------------------
Collateral given for own commitments
--------------------------------------------------------------------------------
- Corporate mortgages 29.8 29.3 0
--------------------------------------------------------------------------------
- Other mortgages 0.0 45.2 -100
--------------------------------------------------------------------------------
Other commitments
--------------------------------------------------------------------------------
- Repurchase commitments 141.0 106.4 33
--------------------------------------------------------------------------------
- Operating leases 322.5 321.9 0
--------------------------------------------------------------------------------
- Rental guarantees for clients 8.0 9.2 -13
--------------------------------------------------------------------------------
- Other contingent liabilities 4.2 0.4 950
--------------------------------------------------------------------------------
- Other guarantees 5.2 -- --
--------------------------------------------------------------------------------
Liability under derivative contracts
--------------------------------------------------------------------------------
- Value of underlying instruments
--------------------------------------------------------------------------------
--- Interest rate derivatives 304.6 362.3 -16
--------------------------------------------------------------------------------
--- Currency derivatives 203.2 83.5 143
--------------------------------------------------------------------------------
--- Commodity derivatives 0.5 -- --
--------------------------------------------------------------------------------
- Market value
--------------------------------------------------------------------------------
--- Interest rate derivatives -10.6 -5.9 80
--------------------------------------------------------------------------------
--- Currency derivatives 0.3 -9.4 -103
--------------------------------------------------------------------------------
--- Commodity derivatives 0.1 -- --
--------------------------------------------------------------------------------
YIT Corporation's guarantees on behalf of its 1,202.5 943.3 27
subsidiaries
--------------------------------------------------------------------------------
TRANSACTIONS WITH ASSOCIATED COMPANIES(EUR million)
1-12/2010 1-12/2009 Change %
-------------------------------------------------------------------
Sales to associated companies 1.5 1.3 15
-------------------------------------------------------------------
Purchases from associated companies 0.2 0.2 0
-------------------------------------------------------------------
Trade and other receivables 0.0 0.1 -100
-------------------------------------------------------------------
Trade and other liabilities 0.0 0.1 --
-------------------------------------------------------------------
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