2017-07-27 07:00:14 CEST
2017-07-27 07:00:14 CEST
REGULATED INFORMATION
Lemminkäinen - Half Year financial report
Lemminkäinen Half Year Financial Report 1 January - 30 June 2017
LEMMINKÄINEN CORPORATION STOCK EXCHANGE RELEASE 27 JULY 2017 AT 8:00 A.M.
LEMMINKÄINEN HALF YEAR FINANCIAL REPORT 1 JANUARY – 30 JUNE 2017
April‒June 2017 (4‒6/2016)
· On 19 June 2017, Lemminkäinen announced a plan to combine with YIT
Corporation to create a platform to grow to one of the leading urban
developers in the Northern European construction market.
The combination is intended to be completed on either 1 November 2017
or 1 January 2018, as possible.
· Order inflow was EUR 426.1 million (382.8).
· Order book at the end of the period amounted to EUR 1,647.4 million
(1,495.7).
· Net sales totalled EUR 466.0 million (457.1).
· Operating profit amounted to EUR 15.9 million (21.2), or 3.4% (4.6)
of net sales. The operating profit includes EUR 1.8 million transaction
costs related to the planned combination of Lemminkäinen and YIT.
· Profit for the period was EUR 9.4 million (12.3).
· Earnings per share were EUR 0.38 (0.48).
· Cash flow from operating activities totalled EUR 4.0 million (25.6).
· Equity ratio was 34.7% (33.8) and gearing 53.3% (52.2) at the end
of the review period.
· Interest-bearing net debt at the end of the review period was
EUR 156.8 million (165.2).
January‒June 2017 (1‒6/2016)
· Order inflow was EUR 850.4 million (783.3).
· Net sales totalled EUR 706.3 million (673.8).
· Operating profit amounted to EUR -17.0 million (-10.2),
or -2.4% (-1.5) of net sales. The operating profit includes
a EUR 3.4 million compensation paid by Lemminkäinen related to
the Helsinki Court of Appeal’s decision regarding breach of
the Finnish environmental protection law and EUR 1.8 million
transaction costs related to the planned combination of
Lemminkäinen and YIT.
· Profit for the period was EUR -21.0 million (-15.6).
· Earnings per share were EUR -0.96 (-0.83).
· Cash flow from operating activities totalled EUR -44.8 million (7.2).
Profit guidance for 2017
The profit guidance for 2017 remains intact. Lemminkäinen estimates that its net
sales in 2017 will grow from 2016 (EUR 1,682.7 million). Operating profit (IFRS)
in 2017 is expected to improve from EUR 45.1 million which reflects the
operational performance in 2016.[1]
----------------------------------------------------------------------
[1] Operational performance EUR 45.1 million has been calculated by deducting
from Group IFRS operating profit (EUR 67.6 million) reimbursements of EUR 19.4
million and lowered provisions of EUR 8.0 million related to asphalt cartel
decisions made by Helsinki Court of Appeal and by adding write-offs of EUR 4.9
million related to non-core businesses.
+---------------------+--+------+------+------+--------+--------+------+--------
-+
|Key figures, IFRS | |4-6/17|4-6/16|Change|1-6/ 1-6/ |Change|1-12/16|
| | | | | | 17 | 16 | | |
+---------------------+--+------+------+------+--------+--------+------+--------
-+
|Net sales |M€| 466.0| 457.1| 8.9 |706.3|673.8| 32.5|1,682.7|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Paving |M€| 175.9| 198.4| -22.5|218.8|230.3|-11.5| 648.5|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Infra projects |M€| 122.1| 116.6| 5.5|201.7|181.6| 20.1| 426.2|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Building |M€| 155.8| 141.0| 14.8|269.6|254.1| 15.5| 581.2|
|construction, Finland| | | | | | | | |
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Russian operations|M€| 21.5| 12.1| 9.4| 31.3| 17.9| 13.4| 54.5|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Other operations |M€| -9.3| -10.9| 1.6|-15.2|-10.1| -5.1| -27.7|
|and Group | | | | | | | |
|eliminations
| | | | | | | | |
+---------------------+--+------+------+------+--------+--------+------+--------
-+
|Operating profit |M€| 15.9| 21.2| -5.3|-17.0|-10.2| -6.8| 67.6|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Paving |M€| 8.5| 15.6| -7.1|-16.3| -9.7| -6.6| 20.8|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Infra projects |M€| 1.8| 3.8| -2.0| -1.8| 0.3| -2.1| 12.5|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Building |M€| 7.9| 3.7| 4.2| 8.5| 3.0| 5.5| 17.2|
|construction, Finland| | | | | | | |
|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Russian operations|M€| 0.0| -0.6| 0.6| -1.1| -1.2| 0.1| -3.8|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Other operations |M€| -2.2| -1.3| -0.9| -6.3| -2.5| -3.8| 20.9|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
|Operating margin | %| 3.4| 4.6| | -2.4| -1.5| | 4.0|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Paving | %| 4.8| 7.9| | -7.4| -4.2| | 3.2|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Infra projects | %| 1.4| 3.2| | -0.9| 0.2| | 2.9|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Building | %| 5.0| 2.6| | 3.1| 1.2| | 3.0|
|construction, Finland| | | | | | | |
|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
| Russian operations| %| -0.2| -5.3| | -3.5| -6.8| | -7.0|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
|Pre-tax profit |M€| 11.8| 16.4| -4.6|-25.4|-18.9| -6.5| 49.2|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
|Profit for the period|M€| 9.4| 12.3| -2.9|-21.0|-15.6| -5.4| 38.0|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
|Earnings per share | €| 0.38| 0.48| -0.10|-0.96|-0.83| -0.13| 1.27|
|for the period, basic| | | | | | | |
|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
|Earnings per share | €| 0.38| 0.48| -0.10|-0.96|-0.83| -0.13| 1.26|
|for the period, | | | | | | | |
|
|diluted | | | | | | | |
|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
|Cash flow from |M€| 4.0| 25.6| -21.6|-44.8 | 7.2| -52.0| 131.7|
|operating activities | | | | | | | |
|
+---------------------+--+------+------+------+--------+--------+------+--------
-+
+--------------------+--+-------+-------+-------+-------+-------+-------+
|Key figures, IFRS | |30 June|30 June| Change| 31| Change| 31 Dec|
| | | 2017| 2016|6/17 vs| March|6/17 vs| 2016|
| | | | | 6/16| 2017| 3/17| |
+--------------------+--+-------+-------+-------+-------+-------+-------+
|Order book |M€|1,647.4|1,495.7| 151.7|1,566.8| 80.6|1,265.2|
+--------------------+--+-------+-------+-------+-------+-------+-------+
|Operating capital |M€| 420.6| 446.4| -25.8| 392.9| 27.7| 388.2|
+--------------------+--+-------+-------+-------+-------+-------+-------+
|Balance sheet total |M€|1,018.0|1,055.5| -37.5| 931.0| 87.0| 968.0|
+--------------------+--+-------+-------+-------+-------+-------+-------+
|Interest-bearing net|M€| 156.8| 165.2| -8.4| 137.6| 19.2| 81.1|
|debt | | | | | | | |
+--------------------+--+-------+-------+-------+-------+-------+-------+
|Equity ratio 1) | %| 34.7| 33.8| | 37.3| | 39.5|
+--------------------+--+-------+-------+-------+-------+-------+-------+
|Gearing 2) | %| 53.3| 52.2| | 47.7| | 24.3|
+--------------------+--+-------+-------+-------+-------+-------+-------+
|Return on capital | %| 11.0| 4.6| | 11.6| | 11.3|
|employed, rolling 12| | | | | | | |
|months | | | | | | | |
+--------------------+--+-------+-------+-------+-------+-------+-------+
1) Equity ratio, if hybrid bonds were treated as debt: 6/2017: 30.6%, 6/2016
26.4% and 12/2016: 35.4%.
2) Gearing, if hybrid bonds were treated as debt: 6/2017: 73.8%, 6/2016 95.0%
and 12/2016: 38.8%.
President and CEO Casimir Lindholm:
“In the second quarter, our net sales grew slightly year-on-year,” says Casimir
Lindholm, President and CEO. “Our operating profit decreased year-on-year.
Operating profit includes EUR 1.8 million transaction costs related to the
planned combination of Lemminkäinen and YIT. The decline was mainly driven by
the Paving segment, where the season start was delayed due to exceptionally cold
weather. In Infra projects, lower operating profit was mainly due to lower
margins in the Baltic countries. Building construction, Finland improved its
result, which was supported by higher volumes and margin improvements. In
Russian operations, the result also improved due to higher volumes in building
construction.”
“Our order book developed favourably during the second quarter. Of our segments,
Building construction, Finland and Russian operations have strong order books.
In Paving and Infra projects we are still seeking order book growth. The market
outlook in our main market area remains positive, which should support our
growth targets. We have also strengthened our organisation in Infra projects
Sweden as planned.”
“On 19 June 2017, we and YIT Corporation announced a plan to combine the two
companies. The combination is expected to create significant value for the
shareholders of the combined company through decreased sensitivity to economic
cycles and improved competitiveness providing a strong platform for growth. The
combination is intended to be completed on either 1 November 2017 or 1 January
2018, as possible.”
“During 2017, we will continue to focus on improving our operational efficiency
by improving our processes as well as material and energy efficiency.”
Market outlook
In Finland, the total volume of construction is expected to grow slightly in
2017. Residential construction overall is estimated to remain at a good level,
although investor demand is expected to decline somewhat from the high levels
witnessed in 2016. Demand for apartments will still be focused on small units in
urban growth centres. Non-residential construction is estimated to remain
stable, due to individual major projects and public sector works. Renovation is
expected to grow moderately due to increasing urbanisation and public sector
works.
Infrastructure construction is expected to grow approximately 2% in 2017. The
Government's decisions regarding transport projects in the General Government
Fiscal Plan as well as major cities’ investments in transportation
infrastructure improve the outlook for both paving and infra projects. The rock
engineering market is slowing down. The state's planned investments in basic
road maintenance are expected to keep demand stable for paving in 2017. Demand
for infra projects is maintained by complex projects in urban growth centres and
industrial investments but the competition is intense.
In Norway and Sweden, infrastructure construction is boosted by multi-year,
state-funded traffic infrastructure development programmes. In both countries,
infrastructure construction is expected to grow in 2017. Large-scale road and
railway projects are ongoing or planned near urban growth centres in Sweden and
Norway, which will increase demand for infra projects and paving. In addition,
especially Norway is investing in the development and renewal of energy
production.
In Denmark, demand for paving is expected to decline as public investments in
road infrastructure are decreasing.
In Russia, economic growth is estimated to remain at a low level. The
fluctuations in the price of oil are reflected in the currency exchange rate. In
negotiated contracting in building construction, price competition is high but
the reliability of the builder has become a competitive advantage. Construction
and repair projects on major roads are expected to maintain demand for paving.
In the Baltic countries, the volume of infrastructure construction has started
to grow.
Briefing
A Finnish-language briefing for analysts and the media will be held at 12:00
noon (EET) on Thursday 27 July 2017 at Lemminkäinen’s head office. The street
address is Salmisaarenaukio 2, Helsinki, Finland. Lemminkäinen's President and
CEO Casimir Lindholm will present the Half year financial report. The
presentation material can be found in Finnish and English at the company’s
website, www.lemminkainen.com/investors.
Financial reporting in 2017
In 2017, Lemminkäinen’s financial reports are published as follows:
9 February 2017 Financial statements bulletin 2016
Week 9 Annual report 2016
27 April 2017 Interim report 1 Jan – 31 March 2017
27 July 2017 Half year financial report 1 Jan – 30 June 2017
26 October 2017 Interim report 1 Jan – 30 Sep 2017
LEMMINKÄINEN CORPORATION
Corporate Communications
Additional information:
Casimir Lindholm, President and CEO, tel. +358 2071 53378
Ilkka Salonen, CFO, tel. +358 2071 53378
DISTRIBUTION:
Nasdaq Helsinki Ltd
Key media
www.lemminkainen.com
Lemminkäinen is an expert in complex infrastructure construction and building
construction in Northern Europe and one of the largest paving companies in its
market. Together with our customers and 4,700 professionals we employ, we build
a sustainable society. In 2016, our net sales were EUR 1.7 billion. Lemminkäinen
Corporation’s share is quoted on Nasdaq Helsinki Ltd. www.lemminkainen.com
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