2012-04-27 07:00:00 CEST
2012-04-27 07:00:24 CEST
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YIT - Interim report (Q1 and Q3)
YIT'S INTERIM REPORT JANUARY 1 – MARCH 31, 2012: Good residential sales continued, order backlog strengthened further
Helsinki, 2012-04-27 07:00 CEST (GLOBE NEWSWIRE) -- YIT CORPORATION
INTERIM REPORT APRIL 27, 2012, AT 8:00 A.M.
YIT'S INTERIM REPORT JANUARY 1 - MARCH 31, 2012: Good residential sales
continued, order backlog strengthened further
-- The operating profit of the segments increased by 4 percent on the previous
year to EUR 52.3 million (1-3/2011: EUR 50.4 million). The operating profit
of Building Services Northern Europe was burdened by tight price
competition, low utilisation rates of resources and loss-making Industrial
Services. Operating profit increased in Building Services Central Europe as
the result of successful profit improvement measures. Construction Services
Finland's operating profit increased as the result of continued favourable
residential sales and strong development in the construction of business
premises and infrastructure. Operating profit remained at the previous
year's level in International Construction Services.
-- The revenue of the segments was 7 percent higher than in the previous year,
increasing to EUR 1,098.3 million (1-3/2011: EUR 1,026.9 million). Revenue
grew in Building Services Northern Europe, Construction Services Finland
and International Construction Services. The growth in revenue was
supported by a slight revival in the demand for building services,
continued favourable residential sales in Finland and the favourable
development of business premises construction and the infrastructure
business.
-- The order backlog of the segments was 18 percent higher than a year
earlier, amounting to EUR 3,965.5 million (3/2011: EUR 3,355.6 million).
The order backlog was 6 percent higher than at the end of 2011.
-- The Group's profit before taxes based on segment reporting remained at the
previous year's level and was EUR 47.1 million (1-3/2011: EUR 45.9
million).
-- The Group's earnings per share based on segment reporting increased by 8
percent from the year before, amounting to EUR 0.28 (1-3/2011: EUR 0.26).
GUIDANCE: The Group's revenue based on segment reporting will remain on a par
with 2011 and operating profit will increase compared to 2011.
YIT Corporation reiterates its estimate issued in connection with the financial
statements for 2011 and according to which, in 2012, revenue will remain at the
level of 2011 and operating profit will increase compared to 2011. The profit
outlook is based on the segment-level reporting, i.e. recognition of income
based on the percentage of completion.
With the improvement of profitability with the progress of the efficiency
improvement programme, the Building Services Northern Europe business segment
will support the growth of YIT's revenue for 2012, especially during the last
two quarters of the year.
The high uncertainty over the general macroeconomic development may have a
negative effect also on decision-making by YIT's customers and thereby the
development and performance of YIT's business operations.
Juhani Pitkäkoski, President and CEO, in conjunction with the review:
Development in the first quarter met with our expectations. Residential sales
remained favourable in both Finland and Russia. In Russia, we responded to the
continued favourable demand by starting up the construction of more than 1,500
residential units. In addition to residential sales, strong development in
business premises construction and infrastructure construction contributed to
the favourable development in Construction Services Finland. With regard to
Building Services Central Europe, demand picked up compared to the fourth
quarter of 2011, and we continued to improve the profitability of the segment
with measures aimed at improving operational efficiency.
We will continue to focus on improving the profitability of Building Services
Northern Europe; there are extensive efficiency improvement measures under way
in the segment, and we expect their impact to be visible during the latter half
of 2012. Our order backlog strengthened compared to the end of 2011, which
provides a favourable starting point for the Group for the rest of the year.
Our aim is to utilise the opportunities presented by the market situation and
continue residential start-ups and plot investments. Low interest rates
typically support residential demand. In fact, we aim to increase the number of
residential development projects and start up the construction of approximately
700 residential units as development projects in Finland during the second
quarter.
KEY FIGURES
Development of the Group based on segment reporting (percentage of completion,
POC)
Revenue, EUR million 1-3/12 1-3/11 Change
-------------------------------------------------------------
Building Services Northern Europe 513.1 476.2 8%
-------------------------------------------------------------
Building Services Central Europe 159.4 177.1 -10%
-------------------------------------------------------------
Construction Services Finland 329.5 289.5 14%
-------------------------------------------------------------
International Construction Services 107.9 100.3 8%
-------------------------------------------------------------
Other items -11.6 -16.2
-------------------------------------------------------------
Group, total 1,098.3 1,026.9 7%
-------------------------------------------------------------
Operating profit, EUR million 1-3/12 1-3/11 Change
-----------------------------------------------------------
Building Services Northern Europe 14.6 17.1 -15%
-----------------------------------------------------------
Building Services Central Europe 5.2 4.0 30%
-----------------------------------------------------------
Construction Services Finland 29.7 25.6 16%
-----------------------------------------------------------
International Construction Services 8.5 8.4 1%
-----------------------------------------------------------
Other items -5.7 -4.7
-----------------------------------------------------------
Group, total 52.3 50.4 4%
-----------------------------------------------------------
Operating profit margin, % 1-3/12 1-3/11
---------------------------------------------------
Building Services Northern Europe 2.9 3.6
---------------------------------------------------
Building Services Central Europe 3.3 2.3
---------------------------------------------------
Construction Services Finland 9.0 8.8
---------------------------------------------------
International Construction Services 7.9 8.4
---------------------------------------------------
Group, total 4.8 4.9
---------------------------------------------------
Order backlog, EUR million 3/12 3/11 Change 3/12 12/11 Change
--------------------------------------------------------------------------------
Building Services Northern 969.4 804.9 20% 969.4 913.1 6%
Europe
--------------------------------------------------------------------------------
Building Services Central 500.5 573.2 -13% 500.5 449.5 11%
Europe
--------------------------------------------------------------------------------
Construction Services 1,428.0 1,176.0 21% 1,428.0 1,493.6 -4%
Finland
--------------------------------------------------------------------------------
International Construction 1,142.9 862.7 32% 1,142.9 962.5 19%
Services
--------------------------------------------------------------------------------
Other items -75.3 -61.2 -75.3 -66.0
--------------------------------------------------------------------------------
Group, total 3,965.5 3,355.6 18% 3,965.5 3,752.7 6%
--------------------------------------------------------------------------------
Key ratios of segment reporting (percentage of completion, POC)
1-3/12 1-3/11 Change
--------------------------------------------------------------------------
Profit before taxes, EUR million 47.1 45.9 3%
--------------------------------------------------------------------------
Profit for the review period, EUR million 1) 34.6 32.7 6%
--------------------------------------------------------------------------
Earnings/share, EUR 0.28 0.26 8%
--------------------------------------------------------------------------
Operating cash flow after investments, EUR million -9.0 16.1
--------------------------------------------------------------------------
Personnel at the end of period 25,703 25,748 0%
--------------------------------------------------------------------------
1) attributable to equity holders
INFORMATION SESSION, WEBCAST AND CONFERENCE CALL
YIT will hold a news conference on the interim report on Friday, April 27,
2012, at 10:00 a.m. (Finnish Time, EEST). The news conference will be held in
English. The news conference will be held at YIT's head office at Panuntie 11,
00620 Helsinki, Finland. The event is intended for analysts, portfolio managers
and the media.
The news conference and the presentation, given by the company's President and
CEO, Juhani Pitkäkoski, can be viewed live on YIT's website at
www.yitgroup.com/webcast. The live webcast will start at 10:00 a.m. The webcast
replay will be available at the same address starting at approximately 12:00
noon.
It is also possible to participate in the event through a conference call.
Participants are requested to call the assigned number +44 (0)20 7162 0077 at
least five minutes before the conference call begins, at 9:55 a.m. (Finnish
time, EEST) at the latest.
During the webcast and conference call, questions must be asked in English.
After the session, there will also be an opportunity for the media to ask
questions in Finnish.
Schedule in different time zones:
Interim The analyst, portfolio manager and Recorded
Report media event, conference call and live webcast
published webcast available
--------------------------------------------------------------------------------
EEST 8.00 10.00 12.00
(Helsinki)
--------------------------------------------------------------------------------
CEST (Paris, 7.00 9.00 11.00
Stockholm)
--------------------------------------------------------------------------------
BST (London) 6.00 8.00 10.00
--------------------------------------------------------------------------------
US EDT (New 1.00 3.00 5.00
York)
--------------------------------------------------------------------------------
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 e-mail to InvestorRelations@yit.fi or by telephone on +358
20 433 2257.
YIT Corporation
Juhani Pitkäkoski
President and CEO
For further information, please contact:
Timo Lehtinen, Chief Financial Officer, YIT Corporation, tel. +358 45 670 0626,
timo.lehtinen@yit.fi
Hanna-Maria Heikkinen, Vice President, Investor Relations, YIT Corporation,
tel. +358 40 826 2172, hanna-maria.heikkinen@yit.fi
Distribution: NASDAQ OMX Helsinki, principal media, www.yitgroup.com
INTERIM REPORT JANUARY 1 - MARCH 31, 2012
CONTENTS
-- Group's financial development based on segment reporting
-- Development by business segment
-- Personnel
-- Strategic objectives
-- Group's financial development based on Group reporting
-- Resolutions passed at the Annual General Meeting
-- Shares and shareholders
-- Most significant short-term business risks and risk management
-- Procurement as part of sustainability
-- Outlook for 2012
-- Events after the review period
-- Tables to the Interim Report
GROUP'S FINANCIAL DEVELOPMENT BASED ON SEGMENT REPORTING
Accounting principles applied in the interim report
YIT Corporation's management follows the development of the company's business
according to percentage of completion-based segment reporting. Therefore, the
descriptive part of the interim report focuses on describing the company's
performance according to this reporting. YIT also reports on its operations in
accordance with the IFRS guidelines, in connection with which the company
applies the IFRIC 15 guidelines, for example. The effects of the differences of
the recognition principles are presented in detail in the tables to the interim
report.
Continued favourable development in Construction Services Finland supported the
development of revenue
Revenue, EUR million 1-3/12 1-3/11 Change
-------------------------------------------------------------
Building Services Northern Europe 513.1 476.2 8%
-------------------------------------------------------------
Building Services Central Europe 159.4 177.1 -10%
-------------------------------------------------------------
Construction Services Finland 329.5 289.5 14%
-------------------------------------------------------------
International Construction Services 107.9 100.3 8%
-------------------------------------------------------------
Other items -11.6 -16.2
-------------------------------------------------------------
Group, total 1,098.3 1,026.9 7%
-------------------------------------------------------------
The revenue of YIT's segments increased by 7 percent in January-March compared
to the previous year, amounting to EUR 1,098.3 million (1-3/2011: EUR 1,026.9
million). Revenue grew in Building Services Northern Europe, Construction
Services Finland and International Construction Services. The growth in revenue
was supported by a slight revival in the demand for building services,
continued favourable residential sales in Finland and the favourable
development of business premises construction and the infrastructure business
in Finland. Changes in foreign exchange rates reduced the segments' revenue for
January-March by EUR 5.5 million compared to the previous year.
In January-March, Finland accounted for 42 percent (1-3/2011: 41%) of the
Group's revenue according to the segment reporting, Sweden for 16 percent
(1-3/2011: 15%), Norway for 13 percent (1-3/2011: 12%), Germany for 11 percent
(1-3/2011: 14%), Russia for 8 percent (1-3/2011: 9%), Denmark for 3 percent
(1-3/2011: 4%), Austria for 3 percent (1-3/2011: 2%), the Baltic countries for
2 percent (1-3/2011: 1%) and other countries for 2 percent (1-3/2011: 2%)
Profitability at the previous year's level
Operating profit, EUR million 1-3/12 1-3/11 Change
-----------------------------------------------------------
Building Services Northern Europe 14.6 17.1 -15%
-----------------------------------------------------------
Building Services Central Europe 5.2 4.0 30%
-----------------------------------------------------------
Construction Services Finland 29.7 25.6 16%
-----------------------------------------------------------
International Construction Services 8.5 8.4 1%
-----------------------------------------------------------
Other items -5.7 -4.7
-----------------------------------------------------------
Group, total 52.3 50.4 4%
-----------------------------------------------------------
Operating profit margin, % 1-3/12 1-3/11
---------------------------------------------------
Building Services Northern Europe 2.9 3.6
---------------------------------------------------
Building Services Central Europe 3.3 2.3
---------------------------------------------------
Construction Services Finland 9.0 8.8
---------------------------------------------------
International Construction Services 7.9 8.4
---------------------------------------------------
Group, total 4.8 4.9
---------------------------------------------------
YIT's operating profit based on segment reporting increased by 4 percent
compared to the previous year, amounting to EUR 52.3 million in January-March
(1-3/2011: EUR 50.4 million). The operating profit margin based on segment
reporting was 4.8 percent (1-3/2011: 4.9%). The operating profit for the review
period includes EUR -2.9 million of borrowing costs according to IAS 23
(1-3/2011: EUR -2.0 million). The IAS 23 standard defines the recording method
of borrowing costs in long-term construction projects.
The first quarter operating profit margin of Building Systems Northern Europe
fell short of the previous year due to strict price competition, especially in
project operations, the low utilisation rate of resources and the industrial
services business showing a loss. The profitability of Building Services
Central Europe improved from the previous year as the result of successful
profitability improvement measures.
Growth of the order backlog supports performance during the rest of the year
Order backlog, EUR million 3/12 3/11 Change 3/12 12/11 Change
--------------------------------------------------------------------------------
Building Services Northern 969.4 804.9 20% 969.4 913.1 6%
Europe
--------------------------------------------------------------------------------
Building Services Central 500.5 573.2 -13% 500.5 449.5 11%
Europe
--------------------------------------------------------------------------------
Construction Services 1,428.0 1,176.0 21% 1,428.0 1,493.6 -4%
Finland
--------------------------------------------------------------------------------
International Construction 1,142.9 862.7 32% 1,142.9 962.5 19%
Services
--------------------------------------------------------------------------------
Other items -75.3 -61.2 -75.3 -66.0
--------------------------------------------------------------------------------
Group, total 3,965.5 3,355.6 18% 3,965.5 3,752.7 6%
--------------------------------------------------------------------------------
The order backlog of YIT's segments was EUR 3,965.5 million at the end of March
(3/2011: EUR 3,355.6 million); 18 percent more than at the end of March the
previous year. The order backlog increased by 6 percent from the end of
December 2011, at which time it stood at EUR 3,752.7 million.
The order backlog of Building Systems increased on the previous year as the
result of a slight revival in the demand for building services. The order
backlog of Construction Services increased as a result of residential
start-ups. In addition, the order backlog of infrastructure construction
doubled from the previous year and improved the order backlog of Construction
Services Finland.
Capital expenditure and acquisitions
Gross capital expenditure on non-current assets included on the balance sheet
totalled EUR 13.6 million (1-3/2011: EUR 8.7 million) during January-March,
representing 1.2 percent (1-3/2011: 0.9%) of revenue. Investments in
construction equipment amounted to EUR 2.8 million (1-3/2011: EUR 3.8 million)
and investments in information technology to EUR 2.4 million (1-3/2011: EUR 1.8
million). Other investments, including acquisitions, amounted to EUR 8.3
million (1-3/2011: EUR 3.1 million).
During the review period, YIT made two acquisitions in the Building Services
Northern Europe segment. In Sweden, YIT acquired Elektriska Installationer i
Finspång AB, a company specialising in electricity, telecommunications, data,
alarm and low voltage installations, and its subsidiary Kraftmontage i Finspång
AB, specialising in electrical installations. The combined annual revenue of
the companies amounts to approximately EUR 2 million.
A more detailed description of acquisitions made during the review period can
be found in the tables to the interim report.
Negative cash flow during the first quarter
The Group's operating cash flow after investments amounted to EUR -9.0 million
in January-March (1-3/2011: EUR 16.1 million). The operating cash flow was
particularly affected by plot investments in Construction Services and the
increase in working capital in Building Services Central Europe; in Building
Services Northern Europe, the operating cash flow for the review period was
good.
At the end of March, the Group's invested capital amounted to EUR 1,848.7
million (12/2011: EUR 1,855.8 million). Of the Group's invested capital, 29
percent (12/2011: 26%), or EUR 528.7 million (12/2011: EUR 485.7 million) was
invested in Russia. Exchange rate changes of the ruble increased the capital
invested in Russia by EUR 27.4 million in January-March.
The amount of capital invested in Russia increased during the first quarter as
a result of increasing the volume of residential production. Smaller project
sizes, sales of residential units at an earlier construction phase, improved
terms of payment and an increased share of mortgage deals all increase capital
efficiency in the segment.
The Group's return on investment based on segment reporting amounted to 14.8
percent for the last 12 months (1-12/2011: 14.8%). Only operational items are
taken into account in calculating the segments' invested capital.
Profit before taxes at the previous year's level
Profit before taxes based on segment reporting remained at the previous year's
level and amounted to EUR 47.1 million in January-March (1-3/2011: EUR 45.9
million).
Earnings per share based on segment reporting increased by 8 percent from the
year before in January-March, amounting to EUR 0.28 (1-3/2011: EUR 0.26).
DEVELOPMENT BY BUSINESS SEGMENT
Development by business segment is presented using figures compliant with
segment reporting.
BUILDING SERVICES NORTHERN EUROPE
1-3/12 1-3/11 Change
-----------------------------------------------------
Revenue, EUR million 513.1 476.2 8%
-----------------------------------------------------
Operating profit, EUR million 14.6 17.1 -15%
-----------------------------------------------------
Operating profit margin, % 2.9 3.6
-----------------------------------------------------
4/11-3/12 1-12/11
----------------------------------------------------------------------------
Return on operative invested capital (last 12 months), % 24.5 23.8
----------------------------------------------------------------------------
3/12 3/11 Change 3/12 12/11 Change
--------------------------------------------------------------------------------
Operative invested capital, EUR 339.4 282.8 20% 339.4 372.9 -9%
million
--------------------------------------------------------------------------------
Order backlog, EUR million 969.4 804.9 20% 969.4 913.1 6%
--------------------------------------------------------------------------------
Revenue, EUR million 1-3/12 1-3/11 Change
-------------------------------------------------------
Finland 142.2 139.8 2%
-------------------------------------------------------
Sweden 178.5 155.7 15%
-------------------------------------------------------
Norway 147.1 127.4 15%
-------------------------------------------------------
Denmark 34.0 41.4 -18%
-------------------------------------------------------
Russia and the Baltic countries 11.2 11.9 -5%
-------------------------------------------------------
Total 513.1 476.2 8%
-------------------------------------------------------
The revenue of Building Services Northern Europe increased by 8 percent in
January-March compared to the previous year, amounting to EUR 513.1 million
(1-3/2011: EUR 476.2 million). Changes in foreign exchange rates reduced the
revenue for the review period by EUR 4.8 million compared to the previous year.
Revenue increased in Sweden and Norway in particular.
The segment's operating profit fell short of the previous year due to strict
price competition, especially in the project business, the low utilisation rate
of resources and industrial services showing a loss. The demand for industrial
services strengthened during the review period, but tight price competition
continued.
The restructuring of operations underway in all countries where Building
Services Northern Europe operates proceeded according to plan during the review
period. During 2011, decisions were made on the reduction of a total of
approximately 800 employees as the result of restructuring efforts. These
efforts are estimated to result in annual savings of approximately EUR 40
million from 2013 onwards. The aim is to improve the segment's profitability
also through rearrangement of the branch office network, more selective project
acquisition and making procurement more efficient. In addition, material
logistics, the invoicing process and servicing capacity planning will all be
made more efficient, the service culture will be strengthened and the
organisation structure will be adjusted to make servicing activity more
efficient.
The order backlog at the end of March increased by 20 percent on the previous
year, amounting to EUR 969.4 million (3/2011: EUR 804.9 million). In
particular, large energy-saving projects continued to increase their share of
the order backlog during the first quarter. Compared to the end of December
2011, the order backlog increased by 6 percent (12/2011: EUR 913.1 million).
Service and maintenance revenue continued to grow
Service and maintenance operations generated EUR 328.1 million (1-3/2011: EUR
302.5 million), or 64 percent (1-3/2011: 64%) of the segment's total revenue in
January-March.
YIT concluded several service and maintenance agreements in Sweden during the
review period. YIT will supply building system services to Alfa Laval AB's
production plant in Sweden and energy efficiency services to, for example, the
Diocese of Luleå and its 57 parishes. In Denmark, YIT signed during the review
period a maintenance agreement with the department in charge of palaces and
cultural facilities. The agreement covers electrical, heating and ventilation
installations in 42 buildings with a total floor area of approximately 400,000
m2. In Norway, the service and maintenance agreement between YIT and Oslo
Lufthavn AS (the Oslo airport) was extended.
Level of new investments was relatively low
New investments in building systems recovered slightly during the first
quarter, but still remained at a relatively low level. During the review
period, YIT signed an agreement on the delivery of electric installations in
the Danish Aabenraa hospital in connection with its renovation. The agreement
covers approximately 26,000 m2.
BUILDING SERVICES CENTRAL EUROPE
1-3/12 1-3/11 Change
-----------------------------------------------------
Revenue, EUR million 159.4 177.1 -10%
-----------------------------------------------------
Operating profit, EUR million 5.2 4.0 30%
-----------------------------------------------------
Operating profit margin, % 3.3 2.3
-----------------------------------------------------
4/11-3/12 1-12/11
----------------------------------------------------------------------------
Return on operative invested capital (last 12 months), % 59.7 53.8
----------------------------------------------------------------------------
3/12 3/11 Change 3/12 12/11 Change
--------------------------------------------------------------------------------
Operative invested capital, EUR 96.5 18.9 410% 96.5 72.0 34%
million
--------------------------------------------------------------------------------
Order backlog, EUR million 500.5 573.2 -13% 500.5 449.5 11%
--------------------------------------------------------------------------------
Revenue, EUR million 1-3/12 1-3/11 Change
----------------------------------------------------------------------
Germany 124.7 141.1 -12%
----------------------------------------------------------------------
Austria 30.0 21.9 37%
----------------------------------------------------------------------
Poland, the Czech Republic and other countries 4.7 14.1 -67%
----------------------------------------------------------------------
Total 159.4 177.1 -10%
----------------------------------------------------------------------
The revenue of Building Services Central Europe decreased by 10 per cent in
January-March compared to the previous year, amounting to EUR 159.4 million
(1-3/2011: EUR 177.1 million). The decrease in revenue was due to the
postponement of customers' investment decisions towards the end of 2011 in
Germany, the low level of activity in Central Eastern Europe and the
discontinuation of international projects.
The operating profit for January-March increased by 30 percent compared to the
previous year as the result of successful profitability improvement measures,
amounting to EUR 5.2 million (1-3/2011: EUR 4.0 million).
The demand in the German and Austrian building services markets was good in the
review period. The order backlog amounted to EUR 500.5 million at the end of
March (3/2011: EUR 573.2 million). The order backlog at the end of March
decreased by 13 percent compared to the previous year, but compared to the end
of December 2011, the order backlog increased by 11 percent (12/2011: EUR 449.5
million).
Service and maintenance revenue is growing
Service and maintenance operations generated EUR 45.6 million (1-3/2011: EUR
45.3 million), or 29 percent (1-3/2011: 26%) of the segment's total revenue in
January-March. The share of service and maintenance was significantly lower in
Building Services Central Europe (29%) than in Building Services Northern
Europe (64%), and therefore the opportunities for increasing it in Building
Services Central Europe are good.
YIT signed several service and maintenance agreements during the review period,
and the share of agreements pursuant to the YIT-developed ServiFlex concept is
increasing. For example, YIT signed with the German Automobile Association ADAC
a long-term agreement on the supply of maintenance services to the tallest
skyscraper in Munich.
Demand for new investments increased
The demand for new building system investments increased during the review
period in Central Europe, and YIT secured several significant projects during
the review period. In Germany, YIT will supply building system solutions to the
BMW plant, a medical centre in Berlin, the German intelligence service (BND)
and Airbus paint plant as well as a clean air complex for GlaxoSmithKline. In
Austria, YIT will deliver the technical building systems to a shopping centre
to be built in Salzburg and the Interspar hypermarket in Meidling, which is
being renovated.
CONSTRUCTION SERVICES FINLAND
1-3/12 1-3/11 Change
--------------------------------------------------------------------------------
Revenue, EUR million 329.5 289.5 14%
--------------------------------------------------------------------------------
Operating profit, EUR million 29.7 25.6 16%
--------------------------------------------------------------------------------
Operating profit excluding IAS 23 adjustment, EUR 31.4 27.1 16%
million
--------------------------------------------------------------------------------
Operating profit margin, % 9.0 8.8
--------------------------------------------------------------------------------
Operating profit margin excluding IAS 23 adjustment, % 9.5 9.4
--------------------------------------------------------------------------------
4/11-3/12 1-12/11
----------------------------------------------------------------------------
Return on operative invested capital (last 12 months), % 24.6 24.0
----------------------------------------------------------------------------
3/12 3/11 Change 3/12 12/11 Change
--------------------------------------------------------------------------------
Operative invested capital, 552.1 436.1 27% 552.1 558.4 -1%
EUR million
--------------------------------------------------------------------------------
Order backlog, EUR million 1,428.0 1,176.0 21% 1,428.0 1,493.6 -4%
--------------------------------------------------------------------------------
Revenue amounted to EUR 329.5 million (1-3/2011: EUR 289.5 million) and it
increased in January-March by 14 percent from the previous year as the volume
of residential and business premises construction was at a good level. Also,
the volume of infrastructure services was higher in January-March than in the
corresponding period the previous year.
The segment's operating profit increased by 16 percent in January-March
compared to the previous year, amounting to EUR 29.7 million (1-3/2011: EUR
25.6 million). The operating profit for the review period includes EUR -1.7
million of borrowing costs according to IAS 23 (1-3/2011: EUR -1.5 million).
The operating profit margin for the review period was on a par with the
previous year. The operating profit was improved by continued favourable
residential sales and good development in business premises construction and
infrastructure services.
The order backlog amounted to EUR 1,428.0 million at the end of March (3/2011:
1,176.0). The order backlog increased by 21 percent from the previous year,
especially due to the doubling of the order backlog in infrastructure
construction. Compared to the end of December 2011, the order backlog decreased
by 4 percent (12/2011: EUR 1,493.6 million).
The segment's capital tied into plot reserves totalled EUR 297.0 million
(3/2011: EUR 272.5 million) at the end of March. The plot reserves included
1,652,000 m2 of floor area of residential plots (3/2011: 1,549,000) and 634,000
m2 of floor area of plots for business premises (3/2011: 1,036,000).
Residential sales to consumers remained favourable
Residential sales continued at a good level in the first quarter. The demand
focused particularly on residential units in the final stages of construction
and completed residential units. Housing prices remained stable during the
first quarter. Residential sales to consumers have continued at a good level in
April.
Residential construction in Finland, number of residential units
1-3/12 1-3/11 Change 10-12/ 7-9/11 4-6/11
11
--------------------------------------------------------------------------------
Sold 775 592 31% 962 456 755
--------------------------------------------------------------------------------
- of which directly to consumers 453 535 -15% 449 396 513
--------------------------------------------------------------------------------
Start-ups 559 662 -16% 1,021 621 917
--------------------------------------------------------------------------------
- of which directly to consumers 237 605 -61% 508 561 675
--------------------------------------------------------------------------------
Completed 616 918 -33% 543 869 1,344
--------------------------------------------------------------------------------
- of which directly to consumers 499 563 -11% 543 580 791
--------------------------------------------------------------------------------
Under construction at the end of 4,049 4,302 -6% 4,105 3,627 3,875
the period
--------------------------------------------------------------------------------
- of which sold at the end of 2,398 2,660 -10% 2,208 1,743 2,127
the period
--------------------------------------------------------------------------------
For sale at the end of the 1,966 1,794 10% 2,180 2,121 1,956
period
--------------------------------------------------------------------------------
- of which completed 315 152 107% 283 237 208
--------------------------------------------------------------------------------
Changes in the number of residential units may take place after the start of
construction due to the division or combination of residences.
The focus of YIT's housing construction is on residential development projects
aimed directly at consumers in accordance with market demand. During the first
quarter, YIT started up the construction of 237 residential units as
development projects. In addition, YIT started up the construction of
approximately 220 student flats for KOAS (Central Finland Student Housing
Foundation) and the construction of approximately 100 residential units as
tender-based projects. During the second quarter, YIT aims to start up the
construction of approximately 700 residential units as development projects in
Finland.
YIT has actively replenished its plot reserves by acquiring plots and making
preliminary agreements on plots in order to ensure good opportunities for
residential start-ups also in the future.
The number of completed but unsold residential units has remained at a
relatively low level. Of the residential units under construction, 59 percent
have been sold (3/2011: 62%), which reduces YIT's sales risk. The merchandise
inventory is focused on medium-priced residential production: approximately 75
percent of the residential units for sale are priced at less than EUR 300,000.
YIT is well prepared to adjust its residential production according to the
market situation. The costs of completing the current residential and business
premises development projects for sale amounted to EUR 294.0 million at the end
of March 2012.
Favourable development in the business premises market continued
The development of the business and office premises market continued to be
favourable in the first quarter, and the order backlog of YIT's business and
office premises operations remained at a favourable level. The leasing of
business and office premises under construction proceeded well in
January-March: lease agreements were signed on approximately 6,400 m² of
premises. Rents for business premises and investors' yield requirements
remained unchanged in the first quarter.
Development of infrastructure construction remained favourable
Demand for infrastructure construction continued to be good in the first
quarter, and the order backlog of infrastructure services at the end of March
2012 was double the order backlog of the previous year.
During the review period, YIT was selected to implement the interior contract
of the Aviapolis railway station, which is part of the Ring Railway project.
The value of the contract is approximately EUR 37.5 million, and construction
is estimated to take approximately two years.
INTERNATIONAL CONSTRUCTION SERVICES
1-3/12 1-3/11 Change
--------------------------------------------------------------------------------
Revenue, EUR million 107.9 100.3 8%
--------------------------------------------------------------------------------
Operating profit, EUR million 8.5 8.4 1%
--------------------------------------------------------------------------------
Operating profit excluding IAS 23 adjustment, EUR 9.7 8.9 9%
million
--------------------------------------------------------------------------------
Operating profit margin, % 7.9 8.4
--------------------------------------------------------------------------------
Operating profit margin excluding IAS 23 adjustment, % 9.0 8.9
--------------------------------------------------------------------------------
4/11-3/12 1-12/11
----------------------------------------------------------------------------
Return on operative invested capital (last 12 months), % 6.1 6.5
----------------------------------------------------------------------------
3/12 3/11 Change 3/12 12/11 Change
--------------------------------------------------------------------------------
Operative invested capital, EUR 651.8 720.0 -9% 651.8 602.2 8%
million
--------------------------------------------------------------------------------
Order backlog, EUR million 1,142.9 862.7 32% 1,142.9 962.5 19%
--------------------------------------------------------------------------------
Revenue for January-March increased by 8 percent compared to the previous year,
which was particularly attributable to revenue growth in the Baltic countries
and Central Eastern Europe, amounting to EUR 107.9 million (1-3/2011: EUR 100.3
million).
Operating profit for the first quarter remained on a par with the previous
year, amounting to EUR 8.5 million (1-3/2011 EUR 8.4 million). The segment's
operating profit for January-March includes EUR -1.2 million of borrowing costs
according to IAS 23 (1-3/2011: EUR -0.5 million). The sale of projects at a
stage of construction even earlier than before had an effect on the recognition
of revenue and operating profit: only a limited amount of revenue is recognised
at the time of the sale for projects that are sold in their early stage of
construction. In addition, the harsh winter in Russia slowed down the progress
of construction and therefore the revenue recognition of the projects. The
weaker profitability of competitive tendering compared to residential
development projects and its continued high share of the revenue in the Baltic
countries in particular continued to impair the segment's profitability further
during the first quarter.
As the result of residential start-ups begun during the first quarter, the
order backlog at the end of March increased by 32 percent on the previous year
and 19 percent compared to the end of December 2011, amounting to EUR 1,142.9
million (3/2011: EUR 862.7 million, 12/2011: EUR 962.5 million). The segment's
order backlog was partially improved by the strengthening of the ruble, which
had an impact of EUR 58.5 million in January-March.
The costs of completing the current residential and business premises
development projects for sale amounted to EUR 431.0 million at the end of March
2012.
The segment's capital tied into plot reserves totalled EUR 346.1 million
(3/2011: EUR 353.1 million) at the end of March. The plot reserves included
2,562,000 m2 of floor area of residential plots (3/2011: 2,518,000) and 689,000
m2 of floor area of plots for business premises (3/2011: 712,000) in Russia,
the Baltic countries, the Czech Republic and Slovakia.
The segment's return on operative invested capital for the last 12 months was
6.1 percent, which is below the Group's strategic objective for return on
investment (20 percent). YIT aims to increase the segment's return on invested
capital by increasing the volume of operations, improving profitability and
increasing further capital efficiency.
Russian residential sales continued to be strong
Russia generated 79 percent (1-3/2011: 88%) of the revenue of International
Construction Services for January-March. Revenue in Russia decreased by 3
percent from the previous year to EUR 85.6 million (1-3/2011: EUR 88.0
million).
The capital tied into plot reserves in Russia amounted to EUR 260.7 million
(3/2011: EUR 274.9 million) at the end of March. The plot reserves included
2,200,000 (3/2011: 2,162,000) m2 of floor area of residential plots and 546,000
(3/2011: 563,000) m2 of floor area of plots for business premises.
Residential construction in Russia, number of residential units
1-3/12 1-3/11 Change 10-12/ 7-9/11 4-6/11
11
--------------------------------------------------------------------------------
Sold 955 675 41% 1,147 957 782
--------------------------------------------------------------------------------
Start-ups 1,540 1,151 34% 1,587 665 1,089
--------------------------------------------------------------------------------
Completed 1) 593 105 465% 694 539 238
--------------------------------------------------------------------------------
Under construction at the end of 8,313 5,495 51% 7,365 6,472 6,346
the period 2)
--------------------------------------------------------------------------------
- of which sold at the end of 2,881 1,375 110% 2,632 2,164 1,762
the period
--------------------------------------------------------------------------------
For sale at the end of the 5,799 4,687 24% 5,142 4,702 4,993
period
--------------------------------------------------------------------------------
- of which completed 367 567 -35% 409 394 409
--------------------------------------------------------------------------------
Under construction at the end of the 3/12 3/11 Change 12/11 9/11 6/11
period 2)
--------------------------------------------------------------------------------
St. Petersburg 2,102 1,935 9% 2,396 1,988 1,801
--------------------------------------------------------------------------------
Moscow region 3,882 2,646 47% 3,142 3,141 3,570
--------------------------------------------------------------------------------
Yekaterinburg, Kazan, Don Rostov and 2,329 914 155% 1,827 1,343 975
Moscow
--------------------------------------------------------------------------------
1) Completion of the projects requires commissioning by the authorities.
2) At the end of March 2012, YIT had 365 (3/2011: 365) 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.
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. YIT actively continued plot investments in the Moscow
region during the first quarter.
Typically, the first quarter is the softest quarter for the segment due to the
holiday season in Russia at the beginning of the year. Residential sales
continued to focus on projects at an early stage of construction in Russia
during the review period, meaning that a relatively smaller amount of revenue
is recognised for the sold residential units at the time of the sale. Work at
YIT construction sites had to be halted due to the harsh winter early in the
year, which had an impact on the progress of construction and in turn the
revenue recognition for the projects. Residential sales have continued at a
good level in Russia in April.
Residential sales have been supported by YIT's established position as a
reliable construction company in Russia, YIT's diverse housing offering, YIT's
own marketing and promotion measures and extensive housing loan cooperation
with banks. The significance of loan financing has increased in Russia, and, in
the first quarter, customers have taken out housing loans in 33 percent of
YIT's residential sales. Residential sales were also supported by the strong
growth in demand for new housing, continued favourable consumer confidence, oil
prices and moderate interest rates for mortgages.
Housing prices increased at a moderate rate during the review period in Russia,
and YIT increased the prices of its residential units slightly throughout
Russia.
Based on the favourable demand, YIT has actively started up new residential
projects in Russia, and start-ups were begun in the first quarter particularly
in Moscow, the Moscow region and Yekaterinburg.
The number of residential units for sale has been increased in a controlled
manner, and the merchandise inventory at the end of March was geographically
balanced. The number of completed but unsold residential units decreased from
the previous year. Of the residential units under construction, 35 percent had
been sold (3/2011: 25%).
After the handover of residential projects, YIT offers its customers service
and maintenance. At the end of March 2012, YIT was responsible for the service
and maintenance of almost 11,000 residential units.
YIT's volume in the Russian business premises market remained at a low level
during the first quarter of the year.
Revival of the residential market is slow in the Baltic countries and Central
Eastern Europe
Estonia, Latvia, Lithuania, the Czech Republic and Slovakia accounted for 21
percent of the revenue of International Construction Services for January-March
(1-3/2011: 12%). Revenue generated in these countries increased by 82 percent
compared to the year before to EUR 22.3 million (1-3/2011: EUR 12.3 million).
The capital tied into plot reserves in the Baltic countries, the Czech Republic
and Slovakia totalled EUR 85.4 million at the end of March (3/2011: EUR 78.2
million). The plot reserves included 362,000 m2 of floor area of residential
plots (3/2011: 356,000) and 143,000 m2 of floor area of plots for business
premises (3/2011: 149,000).
The weaker profitability of competitive tendering compared to residential
development projects and its continued high share of the revenue in the Baltic
countries in particular continued to impair the segment's profitability further
during the first quarter. YIT aims to shift the focus of operations from
tender-based production to residential development projects in order to improve
profitability as residential demand is reviving.
Residential construction in the Baltic countries and Central Eastern Europe,
number of residential units
1-3/12 1-3/11 Change 10-12/ 7-9/11 4-6/11
11
--------------------------------------------------------------------------------
Sold 75 57 32% 97 111 99
--------------------------------------------------------------------------------
Start-ups 0 135 -100% 58 152 181
--------------------------------------------------------------------------------
Completed 232 81 186% 147 60 0
--------------------------------------------------------------------------------
Under construction at the end of 378 430 -12% 614 698 611
the period
--------------------------------------------------------------------------------
- of which sold at the end of 104 47 121% 171 183 108
the period
--------------------------------------------------------------------------------
For sale at the end of the 526 527 0% 611 645 609
period
--------------------------------------------------------------------------------
- of which completed 252 144 75% 168 130 106
--------------------------------------------------------------------------------
Residential sales were at a relatively low level in the first quarter, and
housing prices remained stable in the Baltic countries and Central Eastern
Europe.
YIT's residential sales inventory in the Baltic countries, the Czech Republic
and Slovakia is approximately 500 residential units, and YIT aims to increase
the number of residential units for sale in accordance with demand. Acquisition
of new residential plots was continued during the review period.
PERSONNEL
Personnel by business segment 3/12 3/11 Change 3/12 12/11 Change
--------------------------------------------------------------------------------
Building Services Northern 15,640 15,712 0% 15,640 15,900 -2%
Europe
--------------------------------------------------------------------------------
Building Services Central Europe 3,505 3,712 -6% 3,505 3,506 0%
--------------------------------------------------------------------------------
Construction Services Finland 3,438 3,253 6% 3,438 3,429 0%
--------------------------------------------------------------------------------
International Construction 2,730 2,677 2% 2,730 2,753 -1%
Services
--------------------------------------------------------------------------------
Corporate Services 390 394 -1% 390 408 -4%
--------------------------------------------------------------------------------
Group, total 25,703 25,748 0% 25,703 25,996 -1%
--------------------------------------------------------------------------------
Personnel by country/region 3/12 3/11 Change 3/12 12/11 Change
--------------------------------------------------------------------------------
Finland 8,967 9,144 -2% 8,967 9,165 -2%
--------------------------------------------------------------------------------
Sweden 4,690 4,484 5% 4,690 4,770 -2%
--------------------------------------------------------------------------------
Norway 3,621 3,462 5% 3,621 3,602 1%
--------------------------------------------------------------------------------
Germany 2,577 2,771 -7% 2,577 2,627 -2%
--------------------------------------------------------------------------------
Russia 2,579 2,410 7% 2,579 2,498 3%
--------------------------------------------------------------------------------
Denmark 1,169 1,357 -14% 1,169 1,218 -4%
--------------------------------------------------------------------------------
Baltic countries 989 1,013 -2% 989 1,067 -7%
--------------------------------------------------------------------------------
Other countries (Central Europe 1,111 1,107 0% 1.111 1,049 6%
excluding Germany)
--------------------------------------------------------------------------------
Group, total 25,703 25,748 0% 25,703 25,996 -1%
--------------------------------------------------------------------------------
In January-March 2012, the Group employed 25,821 people on average (1-3/2011:
25,754). At the end of March, the Group employed 25,703 people (3/2011:
25,748).
The cost effect of YIT's share-based incentive scheme was about EUR 1.4 million
in January-March (1-3/2011: EUR 1.4 million).
STRATEGIC OBJECTIVES
YIT Corporation's Board of Directors confirmed the Group's strategy for
2012-2014 on September 21, 2011. The key strategic objective is balanced and
profitable growth. The Group's other strategic long-term target levels remain
unchanged: average annual revenue growth of more than 10 percent, return on
investment of 20 percent, operating cash flow after investments 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. When determining the
target levels, the assumption was made that economic growth in YIT's market
areas will continue.
In terms of business operations, the focus areas of YIT's growth continue to be
building systems service and maintenance operations and residential
construction. Growth is sought through acquisitions and organically. Building
system services will be 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 Switzerland
in building system services and Poland in construction services. Particular
focus areas for growth include residential construction in Russia and building
system services in Germany.
YIT published a stock exchange release on the confirmation of the strategy and
materials for the Capital Market Day focusing on the strategic focus areas on
September 22, 2011.
GROUP'S FINANCIAL DEVELOPMENT BASED ON GROUP REPORTING (IFRS)
1-3/12 1-3/11 Change
---------------------------------------------------------------------------
Revenue, EUR million 1,098.4 969.7 13%
---------------------------------------------------------------------------
Operating profit, EUR million 55.2 39.2 41%
---------------------------------------------------------------------------
Operating profit margin, % 5.0 4.0
---------------------------------------------------------------------------
Profit before taxes, EUR million 49.9 34.7 44%
---------------------------------------------------------------------------
Profit for the review period, EUR million 1) 36.5 24.8 47%
---------------------------------------------------------------------------
Earnings/share, EUR 0.29 0.20 45%
---------------------------------------------------------------------------
Operating cash flow after investments, EUR million -9.0 16.1
---------------------------------------------------------------------------
1) attributable to equity holders
3/12 3/11 Change 3/12 12/11 Change
--------------------------------------------------------------------------------
Order backlog, EUR million 4,385.3 3,699.0 19% 4,385.3 4,148.6 6%
--------------------------------------------------------------------------------
Return on investment (last 12.8 14.0 12,8 12,0
12 months) %
--------------------------------------------------------------------------------
Equity ratio, % 28.8 28.5 28.8 30.2
--------------------------------------------------------------------------------
Gearing ratio, % 84.2 75.2 84.2 80.4
--------------------------------------------------------------------------------
Revenue based to Group reporting increased by 13 percent compared to the
previous year, amounting to EUR 1,098.4 million in January-March (1-3/2011: EUR
969.7 million). The completion schedules of development projects affect the
Group's revenue recognition, and therefore Group-level figures may fluctuate
greatly between different quarters. The number of residential units completed
during the first quarter was higher than the previous year. The number of
residential units completed in Russia, the Baltic countries and Central Eastern
Europe was clearly higher than the year before, while in Finland the number of
residential units completed was clearly lower than the year before.
In Group-level reporting, residential development projects are only recognised
as income upon project delivery. Following the IFRIC 15 adjustment, the Group's
operating profit increased by 41 percent compared to the previous year,
amounting to EUR 55.2 million (1-3/2011: EUR 39.2 million). Following the IFRIC
15 adjustment, the Group's operating profit margin was 5.0 percent (1-3/2011:
4.0%).
Profit before taxes based on Group reporting increased by 44 percent compared
to the previous year, amounting to EUR 49.9 million in January-March (1-3/2011:
EUR 34.7 million).
Earnings per share based on Group reporting increased by 45 percent from the
year before in January-March, amounting to EUR 0.29 (1-3/2011: EUR 0.20).
The order backlog based on Group reporting amounted to EUR 4,385.3 million at
the end of March (3/2011: EUR 3,699.0 million).
Return on investment amounted to 12.8 percent for the last 12 months
(1/2011-12/2011: 12.0%). Invested capital is calculated by deductingnon-interest bearing liabilities from the balance sheet total. The balance
sheet total at the end of March was EUR 3,631.9 million (12/2011: EUR 3,504.5
million).
The equity ratio decreased slightly compared to the end of December 2011,
amounting to 28.8 percent (12/2011: 30.2%).
Diverse capital structure and good liquidity position
YIT has a diverse capital structure and a good liquidity position. Cash
reserves amounted to EUR 209.3 million at the end of March (12/2011: EUR 206.1
million). In addition, committed credit and overdraft facilities amounting to a
total of EUR 357.4 million were unutilised. YIT has a total of EUR 280 million
in committed credit facilities, of which EUR 50 million are valid until
December 2013, EUR 30 million until December 2014 and EUR 200 million until
December 2015. The committed credit facilities do not include an obligation to
maintain financial key ratios, i.e. covenants.
The gearing ratio increased compared with the end of December 2011, amounting
to 84.2 percent at the end of March 2012 (12/2011: 80.4%). Net financial
liabilities increased from the end of December 2011 to EUR 755.8 million
(12/2011: EUR 740.4 million).
Net financial expenses increased compared to the previous year's level and
amounted to EUR 5.2 million (1-3/2011: EUR 4.5 million), or 0.5 percent
(1-3/2011: 0.5%) of the Group's revenue. The net financial expenses include EUR
3.8 million of capitalisations in compliance with IAS 23 (1-3/2011: EUR 3.1
million). The exchange rate differences included in the net financial expenses,
totalling EUR -1.0 million (1-3/2011: EUR -1.3 million), was comprised almost
entirely of costs of hedging debt investments in Russia. The hedged ruble
exposure has remained on the same level as in December 2011. At the end of
March 2012, EUR 88.1 million of the capital invested in Russia was comprised of
debt investments (12/2011: EUR 85.7 million) and EUR 440.6 million were equity
investments or similar fixed net investments (12/2011: EUR 400.0 million). 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 965.2 million at the end of March
(12/2011: EUR 946.6 million), and the average interest rate was 3.2 percent
(12/2011: 3.2%). Fixed-interest loans accounted for 59 percent of the Group's
financial liabilities (12/2011: 50%). Of the loans, 42 percent had been raised
directly from the capital and money markets (12/2011: 41%), 46 percent from
banks and other financial institutions (12/2011: 45%) and 12 percent from
insurance companies (12/2011: 13%). The maturity distribution of long-term
loans is balanced. A total of EUR 37.4 million of long-term loans will mature
during the last three quarters of 2012.
During the first quarter, YIT issued, under the company's programme for
issuance of notes, a EUR 50 million bond targeted at Finnish investors. Due at
August 18, 2014, the bond carries an annual interest rate of three month
Euribor rate + 1.75 percent.
The total amount of construction-stage contract receivables sold to financial
institutions grew from the end of December 2011, amounting to EUR 323.3 million
at the end of March (12/2011: EUR 265.6 million). Of this amount, EUR 237.0
million is included in interest-bearing liabilities on the balance sheet
(12/2011: EUR 221.8 million) and the remainder comprises off-balance sheet
items in accordance with IAS 39. Interest expenses on receivables sold to
financing companies amounted to EUR 1.4 million during the review period
(1-3/2011: EUR 1.1 million) and these are fully included in the financial
expenses of the review period.
Participations in the housing corporation loans of unsold completed residential
units amounted to EUR 45.4 million at the end of March (12/2011: EUR 45.1
million), and it is included in interest-bearing liabilities. The interest on
the participations, EUR 0.5 million (1-3/2011: EUR 0.2 million), is included in
housing corporation charges and is thus booked in project expenses.
After the end of the review period, the company has paid out dividends of EUR
87.7 million for 2011 in compliance with the resolution of the Annual General
Meeting.
The Group's balanced business structure and solid financial position enable the
implementation of YIT's growth strategy and the acquisitions and plot
investments required by it. On the other hand, the Group has also prepared for
macroeconomic uncertainty by strengthening its liquidity position.
RESOLUTIONS PASSED AT THE ANNUAL GENERAL MEETING
YIT Corporation's Annual General Meeting was held on March 13, 2012. The Annual
General Meeting adopted the 2011 financial statements, discharged the members
of the Board of Directors and the President and CEO from liability, confirmed
the dividend as proposed by the Board of Directors, decided on the Board of
Directors' fees and elected the auditor. The Annual General Meeting confirmed
the composition of the Board of Directors: Henrik Ehrnrooth (Chairman), Reino
Hanhinen (Vice Chairman), Kim Gran, Antti Herlin, Satu Huber and Michael
Rosenlew were re-elected as Board members.
At its organisational meeting on March 13, 2012, the Board elected the chairmen
and members of the Audit Committee, Personnel Committee as well as the Working
Committee from among its number.
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 13, 2012. The stock exchange releases and a presentation of the members
of the Board of Directors are available at YIT's website: www.yitgroup.com.
SHARES AND SHAREHOLDERS
The company has one series of shares. Each share carries one vote and confers
an equal right to a dividend.
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 2012 (2011: EUR 149,216,748.22), and the
number of shares outstanding was 127,223,422 (2011: 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 13, 2012, to authorise the Board of Directors to
purchase the company's shares as proposed by the Board of Directors. In
addition to this, the Board of Directors has a valid share issue authorisation
issued by YIT's Annual General Meeting on March 10, 2010. The share issue
authorisation also includes an authorisation to decide on the conveyance of
treasury shares.
YIT Corporation held 1,952,414 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. During the review period, 4,131 shares were returned to the
company in accordance with the terms and conditions of the share-based
incentive scheme, after which the company held 1,956,545 treasury shares.
Trading in shares
The price of YIT's share was EUR 12.38 at the beginning of the year (January 1,
2011: EUR 18.65). The closing rate of the share on the last trading day of the
review period was EUR 16.12 (March 31, 2011: EUR 20.92). The share price
increased by approximately 30 percent during January-March. The highest price
of the share during the review period was EUR 17.25 (1-3/2011: EUR 21.92), the
lowest was EUR 12.12 (1-3/2011: EUR 17.75) and the average price was EUR 15.35
(1-3/2011: EUR 20.02). Share turnover on Nasdaq OMX in January-March amounted
to 35,141 thousand shares (1-3/2011: 30,004 thousand). The value of turnover
was EUR 539.9 million (1-3:2011: EUR 601.4 million), source: Nasdaq OMX.
In addition to the Helsinki Stock Exchange, YIT shares are also traded on other
market places, such as Chi-X, BATS and Turquoise. The share of trade volume on
alternative market places remained on a par with the previous year during the
review period. During January-March, 20,874 thousand YIT Corporation shares
changed hands on alternative market places (1-3/2011: 20,180 thousand),
corresponding to approximately 37 percent of the total share trade (1-3/2011:
40%). Of the alternative market places, YIT shares changed hands particularly
in Chi-X, source: Fidessa Fragmentation Index.
YIT Corporation's market capitalisation at the end of the review period was EUR
2,019.3 million (3/2011: EUR 2,616.6 million). The market capitalisation has
been calculated excluding the shares held by the company.
Number of shareholders and flagging notifications
At the end of March 2012, the number of registered shareholders was 36,435
(3/2011: 32,278). At the end of March, a total of 31.8 percent of the shares
were owned by nominee-registered and non-Finnish investors (3/2011: 39.7%).
During the review period, the company received no "flagging notifications" of
change in ownership in YIT Corporation in accordance with Chapter 2, section 9
of the Securities Market Act.
MAJOR SHORT-TERM BUSINESS RISKS AND RISK MANAGEMENT
YIT has specified the major risk factors and their management from the point of
view of the Group as a whole, taking the special characteristics of YIT's
business operations and environment into consideration. Risks are divided into
strategic, operational, financial and event risks.
YIT has developed the Group's business structure to be balanced and more
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 as well as alternative scenarios and action plans based
on them 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. Risks associated with acquisitions are managed by selecting
projects according to strict criteria and effective integration processes that
familiarise new employees with YIT's values, operating methods and strategy.
YIT's typical operational risks include risks related to plot investments,
sales risk of residential and commercial development projects and risks related
to contract tenders, service agreements, project management and personnel. YIT
manages sales risk by matching the number of housing start-ups with the
estimated residential demand and the number of unsold residential units (the
figures for residential production are presented under Development by business
segment) and by normally securing key tenants and/or the investor prior to
starting a business premises project. A strong increase in interest rates and
changes in the availability of housing loans and real estate financing are key
risks related to the demand for residential units.
YIT tests the value of its plots as required by IFRS accounting principles.
Plot reserves are measured at acquisition cost and the plot value is impaired
when it is estimated that the building being constructed on the plot will be
sold at a price lower than the sum of the price of the plot and the
construction costs. No write-offs were made to plots in the review period.
Financing and financial risks include liquidity, credit and counterparty,
interest rate and currency risks and risks related to the reporting process.
Financing and financial risks are managed through accounting and financing
policies, internal control as well as internal and external audit.
YIT's most significant currency risk is related to investments in ruble terms.
Capital invested in Russia totalled EUR 528.7 million at the end of the period
(12/2011: EUR 485.7 million). The amount of equity or equivalent net
investments at the end of the period was EUR 440.6 million (12/2011: EUR 400.0
million). The equity investments in the Russian subsidiaries are unhedged in
accordance with the treasury policy, and a potential devaluation of the ruble
would have an equal negative impact on the Group's shareholders' equity. Debt
investments amounted to EUR 88.1 million at the end of the period (12/2011: EUR
85.7 million), and this exposure was hedged in full. The differences 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, resulting from, for example, fire, collapse or theft. YIT
complies with a group-wide security policy covering the different areas of
security.
A more detailed account of YIT's risk management policy and the most
significant risks was published in the Annual Report 2011. Financing risks were
described in more detail in the notes to the Financial Statements for 2011.
PROCUREMENT AS PART OF SUSTAINABILITY
YIT aims to ensure good and ethical guidelines related to procurement. One of
the focus areas has been fighting the grey economy, to which attention has been
paid in Finland in particular. From the beginning of 2012, YIT required all of
its Finnish subcontractors to be members of the tilaajavastuu.fi service, which
aims to prevent illegal activities. Membership of the service makes it easier
for sites to ensure that subcontractors have met all of their statutory
obligations. Estonian subcontractors will also be required to join the service
immediately when this is technically possible.
Construction Services Finland has arranged internal training related to
fighting the grey economy. A total of 380 people have taken part in the
training, including project managers, responsible foremen and site personnel
responsible for sourcing in particular. YIT cooperates closely with the
Confederation of Finnish Construction Industries RT and various authorities in
order to promote the prevention of the grey economy throughout the construction
industry.
Ethical and sound operating methods are also supported in several other ways.
The ethical guidelines for supplier collaboration have been updated. In
addition, we are working to increase the supervision of subcontractors so that
we can use the level of occupational safety as one of the grounds for
subcontractor selection in the future. We aim to improve the management of our
supply chain further in order to minimise the risks in it.
YIT uses an anonymous reporting channel for reporting any misconduct.
OUTLOOK FOR 2012
YIT Corporation reiterates its estimate issued in connection with the financial
statements for 2011 and according to which, in 2012, revenue will remain at the
level of 2011 and operating profit will increase compared to 2011. The profit
outlook is based on the segment-level reporting, i.e. recognition of income
based on the percentage of completion.
With the improvement of profitability with the progress of the efficiency
improvement programme, the Building Services Northern Europe business segment
will support the growth of YIT's revenue for 2012, especially during the last
two quarters of the year.
The high uncertainty over the general macroeconomic development may have a
negative effect also on decision-making by YIT's customers and thereby the
development and performance of YIT's business operations.
Building Services Northern Europe
The market situation in building services varies by country in the Nordic
countries. According to an estimate by the construction industry's
Euroconstruct expert network, the service and maintenance market is estimated
to grow slightly in all Nordic countries during 2012 (November 2011 report).
The increase in technology in buildings increases the need for new services.
The demand for energy efficiency services is expected to remain stable. The
public sector is expected to continue the outsourcing of real estate services.
According to the Euroconstruct forecast, the building system project market in
Finland and Denmark is expected to remain soft in 2012. New investments have
not increased much due to the continued low level of construction of business
premises and offices. According to an estimate by Prognoscentret, the project
market in Sweden and Norway will increase at a reasonable rate in 2012. The
construction of business premises is estimated to increase both in Sweden and
Norway, which will open up new opportunities for YIT. The building system
market is, however, post-cyclic by nature. The public sector invests less in
new buildings than the year before, with governments aiming to balance their
budgets.
In the Baltic countries and Russia, both the project and service market is
estimated to develop and grow at a steady rate.
An investment survey by the Confederation of Finnish Industries EK,
manufacturing industry and energy sector investments in Finland will increase
slightly in 2012. The investments are mainly made to replace capacity, and the
amount of expansion investments is estimated to remain low. The industrial
maintenance market is estimated to remain stable.
Building Services Central Europe
In Building Services Central Europe, the service and maintenance market as well
as the project market, which is dependent on new investments, are expected to
grow at a moderate rate. The opportunities for growth in service and
maintenance are favourable, particularly in the German and Austrian maintenance
markets. The building system services market in Central Eastern Europe (Poland,
the Czech Republic and Romania) is developing slowly.
New investments in building systems have remained at a good level in the
countries where YIT operates in Central Europe, especially in Germany, Austria
and Poland. New investments in building systems are expected to remain stable.
Growth in the demand for energy-efficient services is possible over the next
few years with high energy prices and tightening environmental legislation,
particularly in Germany and Austria.
Construction Services Finland
With regard to Construction Services Finland, housing demand is expected to
continue to be good. Residential demand continues to be supported by low
interest rates, the relatively stable employment rates and migration to growth
centres. Interest rates are estimated to decrease slightly further in 2012.
Migration will continue to be strong in Finland, with people increasingly
moving to growth centres. Furthermore, the population and the number of
household-dwelling units will increase with continued migration and the
increasing number of one-person households.
According to the Confederation of Finnish Construction Industries' forecast,
the construction of 28,000 residential units will start in Finland during 2012
(2011: 32,200). According to a report published by VTT Technical Research
Centre of Finland in January, the annual need for the production of new
residential units amounts to 24,000-29,000 residential units over the long
term. YIT's goal is to strengthen its position as the leading housing developer
in Finland.
YIT estimates that housing prices will remain stable in 2012. Construction
costs are estimated to increase, mainly due to new energy regulations, but the
increase is expected to be moderate in 2012.
According to VTT's (Technical Research Centre of Finland) estimate, the volume
of office construction will decrease by approximately 8-9 percent during 2012.
Underutilisation rates of offices continue to be rather high after the last
recession, with the building stock also including relatively old office
premises. YIT estimates that the demand will focus on modern and
energy-efficient offices.
According to the VTT estimate, the volume of business premises construction
will begin to decrease. The shift of the retail trade towards larger and larger
business properties and the expansion of foreign retail chains in Finland
maintain the volume of construction. Vacancy rates of business premises are
rather low. The decrease in the willingness to take risks due to the European
credit crunch may be reflected in the level of new investments in the business
premises market in 2012.
According to the VTT's forecast infrastructure construction remains stable in
2012. Rail and metro construction is expected to continue to increase, at least
during 2012-2013. The market situation of rock construction is expected to
remain favourable due to mine investments and underground rock excavation
projects, at least until 2014. The road maintenance market is expected to
remain stable, and new tenders will create opportunities for YIT to increase
its market share.
International Construction Services
The volume of residential construction is estimated to increase in Russia in
2012. According to an estimate by the Russian government, residential
construction in Russia will amount to approximately 67 million m2, showing an
increase of approximately 5 percent on the previous year.
Moscow, the Moscow region and St. Petersburg make up the largest residential
markets in Russia: these areas account for approximately one-fifth of all
residential construction. Even though the volume of residential construction
has been increasing over the past few years, there is still a need for new
residential units in all areas. Residential demand has remained favourable also
due to strong economic development in Russia, good consumer confidence and
favourable development in the housing loan market. However, housing loan
interest rates began to increase at the end of 2011.
The future outlook of Russian residential construction is good. Living space
per person is still clearly lower than in Western Europe and housing is in poor
condition, which creates the need for new, high-quality housing. Furthermore,
the number of household-dwelling units is expected to increase, and the middle
class to increase as a share of the population. The development of the housing
loan market in Russia has also contributed to the demand for new residential
units. YIT has promoted the availability of loans to consumers through
extensive cooperation with banks. YIT expects housing prices to increase in
Russia in 2012 at a rate slightly higher than local inflation. Construction
costs are estimated to increase hand in hand with housing prices.
The volume of business premises construction is expected to grow at a moderate
rate in 2012. The largest individual market is St. Petersburg, where YIT will
continue the marketing and sales of the Gorelovo industrial park.
In the Baltic countries, residential demand has been increasing as the result
of piled-up demand, improved consumer confidence and the employment situation.
VTT estimates that the number of residential units completed in 2012 will
increase to 11,200 or by approximately 9 percent from the previous year.
According to VTT's estimate, residential start-ups in 2012 are estimated to be
at last year's level in the Czech Republic. Interest and unemployment rates are
increasing, which typically decreases the demand for residential units.
Residential prices have remained stable in Slovakia. VTT estimates that
residential start-ups will remain low in 2012 due to the high stocks of unsold
residential units. On the other hand, the residential market is supported by
the favourable economic growth in Slovakia and the interest rates remaining
low.
EVENTS AFTER THE REVIEW PERIOD
YIT acquired the Swedish company Dala Elmontage Lindkvist & Bodin AB. The
company's annual revenue is approximately EUR 5 million, and it has about 30
employees. In Norway, YIT acquired the electrical installations specialist
Madla Elektro. The company's annual revenue is approximately EUR 4 million and
it has around 30 employees.
INTERIM REPORT JAN 1 - MAR 31, 2012: TABLES
The information presented in the Interim Report has not been audited.
1. SEGMENT REPORTING
1.1 Segment reporting accounting principles
1.2 Key figures, segment reporting
1.3 Revenue, segment reporting
1.4 Operating profit and Profit for the review period, segment reporting
1.5 Order backlog, segment reporting
1.6 YIT Group figures by quarter, segment reporting
1.7 Segment information by quarter, segment reporting
1.8 Reconciliation of the segment reporting and the group reporting
2 GROUP REPORTING, IFRS
2.1 Key figures, IFRS
2.2 YIT Group figures by quarter, IFRS
2.3 Consolidated income statement, IFRS
2.4 Statement of comprehensive income, IFRS
2.5 Consolidated balance sheet, IFRS
2.6 Consolidated statement of changes in equity
2.7 Consolidated cash flow statement
2.8 Accounting principles of the interim report
2.9 Definitions of key financial figures
2.10 Financial risk management
2.11 Unusual items affecting operating profit
2.12 Business combinations and disposals
2.13 Changes in property, plant and equipment
2.14 Inventories
2.15 Notes on equity
2.16 Borrowings
2.17 Change in contingent liabilities and assets and commitments
2.18 Transactions with associated companies
2.19 Events after the review period
1. SEGMENT REPORTING
1.1 Accounting principles of segment reporting
Building Services Northern Europe and Building Services Central Europe
segments' reporting to YIT Group's management board is based on YIT Group's
accounting principles. In the reporting of Construction Services Finland
segment and International Construction Services segment, the revenue from own
residential and commercial development projects is recognised on the basis of
the percentage of degree of completion and the degree of sale, using percentage
of completion method, which does not fully comply with Group's IFRS accounting
principles. According to Group's IFRS accounting principles revenue from own
residential and commercial development projects is recognised at the
completion. In the case of YIT's commercial real estate development projects,
the recognition practice will be evaluated on a case-by-case basis and in
accordance with the terms and conditions of each contract. Sold projects are
recognised either when the construction work has started or when the project is
complete. The share of income and expenses to be recognised is calculated by
multiplying the percentage of completion by the percentage of sale multiplied
by the occupancy rate. YIT usually sells commercial real estate development
projects to investors either prior to construction or during an early phase.
The impact on revenue and operating profit of two revenue recognition
principles is shown in the line IFRIC 15 adjustment. As a result of the
accounting policy, Group figures can fluctuate greatly between quarters.
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.
1.2 Key figures, segment reporting
3/12 3/11 Change 12/11
--------------------------------------------------------------------------------
Revenue, EUR million 1,098.3 1,026.9 7% 4,524.7
--------------------------------------------------------------------------------
Operating profit, EUR million 52.3 50.4 4% 240.5
--------------------------------------------------------------------------------
% of revenue 4.8 4.9 5.3
--------------------------------------------------------------------------------
Profit before taxes, EUR million 47.1 45.9 3% 215.8
--------------------------------------------------------------------------------
Profit for the report period, EUR million 1) 34.6 32.7 6% 156.7
--------------------------------------------------------------------------------
Earnings per share, EUR 0.28 0.26 8% 1.25
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 0.28 0.26 8% 1.25
--------------------------------------------------------------------------------
Equity per share, EUR 7.74 7.05 10 % 7.93
--------------------------------------------------------------------------------
Return on investment, from the last 12 14.8 15.1 14.8
months, %
--------------------------------------------------------------------------------
Equity ratio, % 31.5 31.0 32.9
--------------------------------------------------------------------------------
Order backlog at the end of the period, EUR 3,965.5 3,335.6 18% 3,752.7
million
--------------------------------------------------------------------------------
Average number of personnel 25,821 25,754 0% 26,254
--------------------------------------------------------------------------------
1) Attributable to equity holders of the parent company
1.3 Revenue, segment reporting
EUR million 1-3/12 1-3/11 Change 1-12/11
----------------------------------------------------------------------
Building Services Northern Europe 513.1 476.2 8% 2,097.6
----------------------------------------------------------------------
- Group internal -11.5 -14.3 -63.2
----------------------------------------------------------------------
- external 501.6 461.9 9% 2,034.4
----------------------------------------------------------------------
Building Services Central Europe 159.4 177.1 -10% 779.3
----------------------------------------------------------------------
- Group internal 0.0 0.0 -0.3
----------------------------------------------------------------------
- external 159.4 177.1 -10% 779.0
----------------------------------------------------------------------
Construction Services Finland 329.5 289.5 14% 1,226.9
----------------------------------------------------------------------
- Group internal -0.3 -0.3 -1.9
----------------------------------------------------------------------
- external 329.2 289.2 14% 1,225.0
----------------------------------------------------------------------
International Construction Services 107.9 100.3 8% 489.2
----------------------------------------------------------------------
- Group internal -0.0 -1.8 -4.2
----------------------------------------------------------------------
- external 107.8 98.5 9% 485.0
----------------------------------------------------------------------
Other items 0.3 0.3 1.5
----------------------------------------------------------------------
Revenue in total, segment reporting 1,098.3 1,026.9 7% 4,524.7
----------------------------------------------------------------------
IFRIC 15 adjustments 0.1 -57.2 -142.6
----------------------------------------------------------------------
Revenue in total, IFRS 1,098.4 969.7 13% 4,382.1
----------------------------------------------------------------------
1.4 Operating profit and Profit for the review period, segment reporting
EUR million 1-3/12 1-3/11 Change 1-12/11
--------------------------------------------------------------------------------
Building Services Northern Europe 14.6 17.1 -15% 78.8
--------------------------------------------------------------------------------
Building Services Central Europe 5.2 4.0 30% 33.3
--------------------------------------------------------------------------------
Construction Services Finland 29.7 25.6 16% 111.6
--------------------------------------------------------------------------------
International Construction Services 8.5 8.4 1% 37.2
--------------------------------------------------------------------------------
Other items -5.7 -4.7 21% -20.4
--------------------------------------------------------------------------------
Operating profit total, segment reporting 52.3 50.4 4% 240.5
--------------------------------------------------------------------------------
Financial income and expenses -5.2 -4.5 16% -24.8
--------------------------------------------------------------------------------
Profit before taxes, segment reporting 47.1 45.9 3% 215.8
--------------------------------------------------------------------------------
Taxes -12.2 -12.9 -5% -58.0
--------------------------------------------------------------------------------
Attributable to non-controlling interests -0.3 -0.2 50% -1.0
--------------------------------------------------------------------------------
Profit for the review period, segment reporting 34.6 32.7 6% 156.7
--------------------------------------------------------------------------------
IFRIC 15 adjustments 1.9 -8.0 -32.3
--------------------------------------------------------------------------------
Profit for the review period, IFRS 36.5 24.8 47% 124.4
--------------------------------------------------------------------------------
Operating profit margin, segment reporting
% 1-3/12 1-3/11 1-12/11
------------------------------------------------------------
Building Services Northern Europe 2.9 3.6 3.8
------------------------------------------------------------
Building Services Central Europe 3.3 2.3 4.3
------------------------------------------------------------
Construction Services Finland 9.0 8.8 9.1
------------------------------------------------------------
International Construction Services 7.9 8.4 7.6
------------------------------------------------------------
Operating profit, segment reporting 4.8 4.9 5.3
------------------------------------------------------------
1.5 Order backlog, segment reporting
EUR million 3/12 3/11 Change 12/11
-------------------------------------------------------------------------
Building Services Northern Europe 969.4 804.9 20% 913.1
-------------------------------------------------------------------------
Building Services Central Europe 500.5 573.2 -13% 449.5
-------------------------------------------------------------------------
Construction Services Finland 1,428.0 1,176.0 21% 1,493.6
-------------------------------------------------------------------------
International Construction Services 1,142.9 862.7 32% 962.5
-------------------------------------------------------------------------
Other items -75.3 -61.2 -66.0
-------------------------------------------------------------------------
Order backlog total, segment reporting 3,965.5 3,355.6 18% 3,752.7
-------------------------------------------------------------------------
IFRIC 15 adjustments 419.8 343.4 395.9
-------------------------------------------------------------------------
Order backlog, IFRS 4,385.3 3,699.0 19% 4,148.6
-------------------------------------------------------------------------
1.6 YIT Group figures by quarter, segment reporting
1-3/12 1-3/11 4-6/11 7-9/11 10-12/1
1
--------------------------------------------------------------------------------
Revenue, EUR million 1,098.3 1,026.9 1,136.9 1,096.5 1,264.5
--------------------------------------------------------------------------------
Operating profit, EUR million 52.3 50.4 70.3 43.6 76.2
--------------------------------------------------------------------------------
% of revenue 4.8 4.9 6.2 4.0 6.0
--------------------------------------------------------------------------------
Profit before taxes, EUR million 47.1 45.9 65.5 35.8 68.6
--------------------------------------------------------------------------------
Profit for the review period, EUR 34.6 32.7 47.6 24.5 51.8
million 1)
--------------------------------------------------------------------------------
Earnings/share, EUR 0.28 0.26 0.38 0.20 0.41
--------------------------------------------------------------------------------
Diluted earnings/share, EUR 0.28 0.26 0.38 0.20 0.41
--------------------------------------------------------------------------------
Equity/share, EUR 7.74 7.05 7.42 7.38 7.93
--------------------------------------------------------------------------------
Return on investment, from the last 14.8 15.1 15.4 14.4 14.8
12 months, %
--------------------------------------------------------------------------------
Equity ratio, % 31.5 31.0 31.8 31.4 32.9
--------------------------------------------------------------------------------
Order backlog at the end of the 3,965.5 3,355.6 3,509.4 3,489.0 3,752.7
period, EUR million
--------------------------------------------------------------------------------
Average number of personnel 25,821 25,754 26,021 23,796 26,245
--------------------------------------------------------------------------------
Personnel at the end of the period 25,703 25,748 26,807 26,502 25,996
--------------------------------------------------------------------------------
1) Attributable to equity holders of the parent company
1.7. Segment information by quarter, segment reporting
Revenue by business segment
EUR million 1-3/12 1-3/11 4-6/11 7-9/11 10-12/11
--------------------------------------------------------------------------------
Building Services Northern Europe 513.1 476.2 509.4 511.9 600.1
--------------------------------------------------------------------------------
Building Services Central Europe 159.4 177.1 191.1 210.8 200.3
--------------------------------------------------------------------------------
Construction Services Finland 329.5 289.5 332.3 269.4 335.7
--------------------------------------------------------------------------------
International Construction 107.9 100.3 120.5 122.5 145.9
Services
--------------------------------------------------------------------------------
Other items -11.6 -16.2 -16.4 -18.1 -17.5
--------------------------------------------------------------------------------
Revenue in total, segment 1,098.3 1,026.9 1,136.9 1,096.5 1,264.5
reporting
--------------------------------------------------------------------------------
Operating profit by business segment
EUR million 1-3/12 1-3/11 4-6/11 7-9/11 10-12/11
--------------------------------------------------------------------------------
Building Services Northern Europe 14.6 17.1 18.8 19.9 23.0
--------------------------------------------------------------------------------
Building Services Central Europe 5.2 4.0 12.1 7.9 9.3
--------------------------------------------------------------------------------
Construction Services Finland 29.7 25.6 32.8 21.1 32.1
--------------------------------------------------------------------------------
International Construction Services 8.5 8.4 12.3 -0.9 17.4
--------------------------------------------------------------------------------
Other items -5.7 -4.7 -5.7 -4.4 -5.6
--------------------------------------------------------------------------------
Operating profit in total, segment 52.3 50.4 70.3 43.6 76.2
reporting
--------------------------------------------------------------------------------
Operating profit margin by business segment
% 1-3/12 1-3/11 4-6/11 7-9/11 10-12/11
-----------------------------------------------------------------------------
Building Services Northern Europe 2.9 3.6 3.7 3.9 3.8
-----------------------------------------------------------------------------
Building Services Central Europe 3.3 2.3 6.3 3.7 4.6
-----------------------------------------------------------------------------
Construction Services Finland 9.0 8.8 9.9 7.8 9.6
-----------------------------------------------------------------------------
International Construction Services 7.9 8.4 10.2 -0.7 11.9
-----------------------------------------------------------------------------
Order backlog by business segment
EUR million 3/12 3/11 6/11 9/11 12/11
--------------------------------------------------------------------------------
Building Services Northern Europe 969.4 804.9 879.5 886.1 913.1
--------------------------------------------------------------------------------
Building Services Central Europe 500.5 573.2 554.1 523.9 449.5
--------------------------------------------------------------------------------
Construction Services Finland 1,428.0 1,176.0 1,239.5 1,289.3 1,493.6
--------------------------------------------------------------------------------
International Construction Services 1,142.9 862.7 896.4 850.1 962.5
--------------------------------------------------------------------------------
Other items -75.3 -61.2 -60.2 -60.3 -66.0
--------------------------------------------------------------------------------
Order backlog, segment reporting 3,965.5 3,355.6 3,509.4 3,489.0 3,752.7
--------------------------------------------------------------------------------
Operative invested capital
EUR million 3/12 3/11 6/11 9/11 12/11
----------------------------------------------------------------------
Building Services Northern Europe 339.4 282.8 323.5 375.6 372.9
----------------------------------------------------------------------
Building Services Central Europe 96.4 18.9 40.8 56.0 72.0
----------------------------------------------------------------------
Construction Services Finland 552.1 436.1 451.7 503.0 558.4
----------------------------------------------------------------------
International Construction Services 651.8 720.0 668.3 601.5 602.2
----------------------------------------------------------------------Return on operative invested capital
The last 12 months, % 3/12 3/11 6/11 9/11 12/11
------------------------------------------------------------------
Building Services Northern Europe 24.5 34.8 28.6 23.5 23.8
------------------------------------------------------------------
Building Services Central Europe 59.7 83.1 91.7 58.5 53.8
------------------------------------------------------------------
Construction Services Finland 24.6 28.3 30.9 26.3 24.0
------------------------------------------------------------------
International Construction Services 6.1 5.8 6.7 5.8 6.5
------------------------------------------------------------------
1.8 Reconciliation of the segment reporting and the group reporting
1-3/12 1-3/11 1-12/11
--------------------------------------------------------------------------------
-------
Income Segment IFRIC IFRS Segment IFRIC IFRS Segment IFRIC
IFRS
state reportin 15 reporti 15 reportin 15
ment, g adjust ng adjust g adjust
EUR ments ments ments
milli
on
--------------------------------------------------------------------------------
-------
Revenu 1,098.3 0.1 1,098.4 1,026.9 -57.2, 969.7, 4,524.7 -142.6
4,382.1
e
--------------------------------------------------------------------------------
-------
Other -1,035.1 2.8 -1,032.3 -966.9 46.0 -920.9 -4,244.6 102.1
-4,142.5
opera
ting
incom
e and
expen
ses
--------------------------------------------------------------------------------
-------
Deprec -10.9 -10.9 -9.6 -9.6 -39.6
-39.6
iation
--------------------------------------------------------------------------------
-------
Operat 52.3 2.9 55.2 50.4 -11.2 39.2 240.5 -40.5
200.0
ing
profi
t
--------------------------------------------------------------------------------
-------
Financ -5.2 -5.2 -4.5 -4.5 -24.8 -7.8
-24.8
ial
incom
e and
expen
ses
--------------------------------------------------------------------------------
-------
Profit 47.1 2.8 49.9 45.9 -11.2 34.7 215.7 -32.7
175.3
befor
e
taxes
--------------------------------------------------------------------------------
-------
Income -12.2 -0.7 -12.9 -12.9 -3.1 -9.8 -58.0
-50.2
taxes
--------------------------------------------------------------------------------
-------
Profit 34.9 2.1 37.0 32.9 -8.0 24.9 157.7
125.1
for
the
revie
w
perio
d
--------------------------------------------------------------------------------
-------
Attrib
utable
to:
--------------------------------------------------------------------------------
-------
Equity 34.6 1.9 36.5 32.8 -8.0 24.8 156.7 -32.2
124.5
holde
rs of
the
paren
t
compa
ny
--------------------------------------------------------------------------------
-------
Non-co 0.3 0.2 0.5 0.2 -0.1 0.1 1.0 -0.4
0.6
ntroll
ing
inter
ests
--------------------------------------------------------------------------------
-------
--------------------------------------------------------------------------------
-------
Earnin 0.28 0.29 0.26 0.20 1.25
0.99
gs/sha
re,
EUR
--------------------------------------------------------------------------------
-------
Dilute 0.28 0.29 0.26 0.20 1.25
0.99
d
earni
ngs/sh
are,
EUR
--------------------------------------------------------------------------------
-------
3/12 3/11 12/11
--------------------------------------------------------------------------------
----
Balanc Segment IFRIC IFRS Segment IFRIC IFRS Segment IFRIC
IFRS
e reporti 15 reporti 15 reporti 15
sheet ng adjust ng adjust ng adjust
, ments ments ments
EUR
milli
on
--------------------------------------------------------------------------------
----
Non-cu
rrent
asset
s
--------------------------------------------------------------------------------
----
Other 546.1 546.1 531.0 531.0 538.1
538.1
non-c
urrent
asset
s
--------------------------------------------------------------------------------
----
Deferr 51.0 13.4 64.4 39.7 12.4 52.2 47.2 13.1
60.3
ed tax
asset
s
--------------------------------------------------------------------------------
----
--------------------------------------------------------------------------------
----
Curren
t
asset
s
--------------------------------------------------------------------------------
----
Invent 1,438.0 336.8 1,774.8 1,282.2 269.9 1,552.2 1,348.2 324.4
1,672.6
ories
--------------------------------------------------------------------------------
----
Trade 1,116.8 -79.5 1,037.3 933.3 -81.3 852.0 1,122.0 -94.7
1,027.3
and
other
receiv
ables
--------------------------------------------------------------------------------
----
Other 19.8 19.8
recei
vables
--------------------------------------------------------------------------------
----
Cash 209.3 209.3 267.6 267.6 206.1
206.1
and
cash
equiva
lents
--------------------------------------------------------------------------------
----
Total 3,361.1 270.8 3,631.9 3,073.6 201.2 3,274.8 3,261.6 242.9
3,504.5 asset
s
--------------------------------------------------------------------------------
----
--------------------------------------------------------------------------------
----
Equity 973.4 75.8 897.6 884.9 -52.0 832.9 996.7 -75.6
921.1
--------------------------------------------------------------------------------
----
--------------------------------------------------------------------------------
----
Non-cu
rrent
liabi
lities
--------------------------------------------------------------------------------
----
Financ 564.1 564.1 477.1 477.1 522.9
522.9
ial
liabi
lities
--------------------------------------------------------------------------------
----
Other 131.9 131.9 83.9 83.9 128.5
128.5
non-c
urrent
liabil
ities
--------------------------------------------------------------------------------
----
Deferr 97.3 -7.8 89.5 92.6 -4.0 88.6 96.6 -8.3
88.3
ed tax
liabi
lities
--------------------------------------------------------------------------------
----
--------------------------------------------------------------------------------
----
Curren
t
liabi
lities
--------------------------------------------------------------------------------
----
Financ 292.2 108.9 401.1 289.7 126.9 416.6 325.2 98.4
423.6
ial
liabi
lities
--------------------------------------------------------------------------------
----
Advanc 271.7 247.0 518.7 227.4 129.3 356.7 231.3 227.0
458.3
es
recei
ved
--------------------------------------------------------------------------------
----
Other 1,030.5 -1.6 1,028.9 1,018.0 1.0 1,019.0 960.4 1.2
961.6
curre
nt
liabi
lities
--------------------------------------------------------------------------------
----
Total 3,361.1 270.8 3,631.9 3,073.6 201.2 3,274.8 3,261.6 242.9
3,504.5
equit
y and
liabi
lities
--------------------------------------------------------------------------------
----
2. GROUP REPORTING, IFRS
2.1 Key figures, IFRS
3/12 3/11 Change 12/11
--------------------------------------------------------------------------------
Earnings/share, EUR 0.29 0.20 50% 0.99
--------------------------------------------------------------------------------
Diluted earnings/share, EUR 0.29 0.20 50% 0.99
--------------------------------------------------------------------------------
Equity/share, EUR 7.14 6.64 8% 7.33
--------------------------------------------------------------------------------
Average share price during the period, EUR 15.35 20.02 -23% 15.28
--------------------------------------------------------------------------------
Share price at the end of the period, EUR 16.12 20.92 -23% 12.38
--------------------------------------------------------------------------------
Market capitalization at the end of the 2,019.3 2,616.6 -23% 1,550.9
period, EUR million
--------------------------------------------------------------------------------
Weighted average share-issue adjusted number 125,270 125,078 125,210
of shares outstanding, thousands
--------------------------------------------------------------------------------
Weighted average share-issue adjusted number 125,270 125,078 125,210
of shares outstanding, thousands, diluted
--------------------------------------------------------------------------------
Share-issue adjusted number of shares 125,267 125,078 125,271
outstanding at the end of the period,
thousands
--------------------------------------------------------------------------------
Net interest-bearing debt at the end of the 755.9 626.1 21% 740.4
period, EUR million
--------------------------------------------------------------------------------
Return on investment, from the last 12 12.8 14.0 12.0
months, %
--------------------------------------------------------------------------------
Equity ratio, % 28.8 28.5 30.2
--------------------------------------------------------------------------------
Gearing ratio, % 84.2 75.2 80.4
--------------------------------------------------------------------------------
Gross capital expenditures, EUR million 13.6 8.7 55% 48.7
--------------------------------------------------------------------------------
% of revenue 1.2 0.9 1.1
--------------------------------------------------------------------------------
Unrecognised order backlog at the end of the 4,385.3 3,699.0 19% 4,148.6
period, EUR million
--------------------------------------------------------------------------------
of which order backlog outside Finland 2,356.0 1,976.7 19% 2,066.9
--------------------------------------------------------------------------------
Average number of personnel 25,821 25,754 0% 26,254
--------------------------------------------------------------------------------
2.2 YIT Group figures by quarter, IFRS
EUR million 1-3/12 1-3/11 4-6/11 7-9/11 10-12/1
1--------------------------------------------------------------------------------
Revenue, EUR million 1,098.4 969.7 1,137.2 1,084.8 1,190.4
--------------------------------------------------------------------------------
Operating profit, EUR million 55.2 39.2 67.9 35.4 57.5
--------------------------------------------------------------------------------
% of revenue 5.0 4.0 6.0 3.3 4.8
--------------------------------------------------------------------------------
Financial income, EUR million 1.4 2.4 0.3 0.0 1.4
--------------------------------------------------------------------------------
Exchange rate differences, EUR -1.0 -1.3 -0.8 0.0 -2.1
million
--------------------------------------------------------------------------------
Financial expenses, EUR million -5.7 -5.6 -4.4 -7.8 -6.9
--------------------------------------------------------------------------------
Profit before taxes, EUR million 49.9 34.7 63.0 27.6 49.9
--------------------------------------------------------------------------------
% of revenue 4.5 3.6 5.5 2.5 4.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Balance sheet total, EUR million 3,631.9 3,274.8 3,387.4 3,418.6 3,504.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings/share, EUR 0.29 0.20 0.37 0.15 0.27
--------------------------------------------------------------------------------
Equity/share, EUR 7.14 6.64 7.00 6.93 7.33
--------------------------------------------------------------------------------
Share price at the end of the 16.12 20.92 17.24 11.33 12.38
period, EUR
--------------------------------------------------------------------------------
Market capitalization, EUR million 2,019.3 2,616.6 2,159.7 1,419.3 1,550.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return on investment, from the last 12.8 14.0 15.7 15.6 12.0
12 months, %
--------------------------------------------------------------------------------
Equity ratio, % 28.8 28.5 29.7 29.2 30.2
--------------------------------------------------------------------------------
Net interest-bearing debt at the 755.9 626.1 702.7 755.0 740.4
end of the period, MEUR
--------------------------------------------------------------------------------
Gearing ratio, % 84.2 75.2 79.9 86.8 80.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gross capital expenditures, EUR 13.6 8.7 14.6 18.3 7.1
million
--------------------------------------------------------------------------------
% of revenue 1.2 0.9 1.3 1.7 0.6
--------------------------------------------------------------------------------
Unrecognised order backlog at the 4,385.3 3,699.0 3,796.9 3,738.3 4,148.6
end of the period, EUR million
--------------------------------------------------------------------------------
Personnel at the end of the period 25,703 25,748 26,807 26,502 25,996
--------------------------------------------------------------------------------
2.3 Consolidated income statement, IFRS
EUR million 1-3/12 1-3/11 Change 1-12/11
--------------------------------------------------------------------------------
Revenue 1,098.4 969.7 13% 4,382.1
--------------------------------------------------------------------------------
of which activities outside Finland 639.2 591.5 8% 2,607.7
--------------------------------------------------------------------------------
Other operating income and expenses -1,032.4 -920.7 12% -4,142.9
--------------------------------------------------------------------------------
Share of results of associated companies 0.1 -0.2 0.4
--------------------------------------------------------------------------------
Depreciation and impairments -10.9 -9.6 14% -39.6
--------------------------------------------------------------------------------
Operating profit 55.2 39.2 41% 200.0
--------------------------------------------------------------------------------
% of revenue 5.0 4.0 4.6
--------------------------------------------------------------------------------
Financial income 1.4 2.4 -42% 4.2
--------------------------------------------------------------------------------
Exchange rate differences -1.0 -1.3 -23% -4.1
--------------------------------------------------------------------------------
Financial expenses -5.7 -5.6 2% -24.8
--------------------------------------------------------------------------------
Profit before taxes 49.9 34.7 44% 175.3
--------------------------------------------------------------------------------
% of revenue 4.5 3.6 4.0
--------------------------------------------------------------------------------
Income taxes 1) -12.9 -9.8 32% -50.2
--------------------------------------------------------------------------------
Profit for the review period 37.0 24.9 49% 125.1
--------------------------------------------------------------------------------
% of revenue 3.4 2.6 2.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 36.5 24.8 47% 124.5
--------------------------------------------------------------------------------
Non-controlling interests 0.5 0.1 0.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share attributable to the
equity holders of the parent company
--------------------------------------------------------------------------------
Earnings/share, EUR 0.29 0.20 50% 0.99
--------------------------------------------------------------------------------
Diluted earnings/share, EUR 0.29 0.20 50% 0.99
--------------------------------------------------------------------------------
1) Taxes for the review period are based on the taxes for the whole financial
year.
2.4 Statement of comprehensive income, IFRS
EUR million 1-3/12 1-3/11 Change 1-12/1
1
--------------------------------------------------------------------------------
Profit for the review period 37.0 24.9 49% 125.1
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
- Cash flow hedges -0.1 2.6 -2.0
--------------------------------------------------------------------------------
-- Deferrred tax 0.0 -0.7 0.4
--------------------------------------------------------------------------------
- Change in fair value for available for sale 0.5
investments
--------------------------------------------------------------------------------
-- Deferrred tax -0.1
--------------------------------------------------------------------------------
- Change in translation differences 25.7 4.5 471% -8.4
--------------------------------------------------------------------------------
- Other change -0.4 0.1
--------------------------------------------------------------------------------
Other comprehensive income, total 25.6 6.0 327% -9.7
--------------------------------------------------------------------------------
Total comprehensive result 62.6 30.9 103% 115.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 62.3 30.7 103% 114.5
--------------------------------------------------------------------------------
Non-controlling interest 0.3 0.2 50% 0.9
--------------------------------------------------------------------------------
2.5 Consolidated balance sheet, IFRS
EUR million 3/12 3/11 Change 12/11
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Property, plant and equipment 110.9 107.1 4% 110.8
--------------------------------------------------------------------------------
Goodwill 347.5 350.9 -1% 347.5
--------------------------------------------------------------------------------
Other intangible assets 61.1 48.8 25% 54.1
--------------------------------------------------------------------------------
Shares in associated companies 3.2 2.5 28% 3.1
--------------------------------------------------------------------------------
Other investments 3.9 3.4 15% 3.8
--------------------------------------------------------------------------------
Other receivables 19.4 18.3 6% 18.8
--------------------------------------------------------------------------------
Deferred tax assets 64.4 52.2 23% 60.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Inventories 1,774.8 1,552.2 14% 1,672.6
--------------------------------------------------------------------------------
Trade and other receivables 1,037.3 852.0 22% 1,027.3
--------------------------------------------------------------------------------
Cash and cash equivalents 209.3 267.6 -22% 206.1
--------------------------------------------------------------------------------
Assets held for sale 0.0 19.8
--------------------------------------------------------------------------------
Total assets 3,631.9 3,274.8 11% 3,504.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity and liabilities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders of the
parent company
--------------------------------------------------------------------------------
Share capital 149.2 149.2 149.2
--------------------------------------------------------------------------------
Other equity 745.5 681.0 9% 769.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-controlling interest 2.9 2.7 7% 2.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity 897.6 832.9 8% 921.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 89.5 88.6 1% 88.3
--------------------------------------------------------------------------------
Pension liabilities 27.0 26.9 0% 26.5
--------------------------------------------------------------------------------
Provisions 55.1 49.2 12% 54.1
--------------------------------------------------------------------------------
Borrowings 564.1 477.1 18% 522.9
--------------------------------------------------------------------------------
Other liabilities 49.8 7.8 47.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Advances received 518.7 356.7 45% 458.3
--------------------------------------------------------------------------------
Trade and other payables 965.7 956.1 1% 909.3
--------------------------------------------------------------------------------
Provisions 63.2 45.7 38% 52.3
--------------------------------------------------------------------------------
Current borrowings 401.1 416.6 -4% 423.6
--------------------------------------------------------------------------------
Liabilities of assets held for sale 17.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 3,631.9 3,274.8 11% 3,504.5
--------------------------------------------------------------------------------
2.6 Consolidated statement of changes in equity
Attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-----
EUR Share Legal Other Cumula Fair Treasu Retain Total Non-co
Total
milli capita reserv reserv tive value ry ed ntroll
equity
on l e e transl reserv shares earnin ing
ation e gs intere
differ st
ences
--------------------------------------------------------------------------------
-----
Equity 149.2 1.9 2.8 -23.4 -3.6 -9.7 801.5 918.7 2.5
921.1
on
Janua
ry 1.
2012
--------------------------------------------------------------------------------
-----
Compre
hensiv
e
incom
e
--------------------------------------------------------------------------------
-----
Profit 36.5 36.5 0.5
37.0
for
the
perio
d
--------------------------------------------------------------------------------
-----
Other
compr
ehensi
ve
incom
e:
--------------------------------------------------------------------------------
-----
Cash -0.1 -0.1
-0.1
flow
hedge
s
--------------------------------------------------------------------------------
-----
- 0.0 0.0
0.0
Defer
red
tax
--------------------------------------------------------------------------------
-----
Change 25.9 25.9 -0.2
25.7
in
trans
lation
diffe
rences
--------------------------------------------------------------------------------
-----
Compre 0.0 0.0 0.0 25.9 -0.1 0.0 36.5 62.3 0.3
62.6
hensiv
e
incom
e,
total
--------------------------------------------------------------------------------
-----
Transa
ctions
with
owner
s
--------------------------------------------------------------------------------
-----
Divide -87.7 -87.7
-87.7
nd
paid
--------------------------------------------------------------------------------
-----
Share- 1.4 1.4
1.4
based
incen
tive
schem
es
--------------------------------------------------------------------------------
-----
Transa -86.3 -86.3
-86.3
ctions
with
owner
s,
total
--------------------------------------------------------------------------------
-----
Equity 149.2 1.9 2.8 2.5 -3.7 -9.7 751.7 894.7 2.9
897.6
on
March
31,
2012
--------------------------------------------------------------------------------
-----
Attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-----
EUR Share Legal Other Cumula Fair Treasu Retain Total Non-co
Total
milli capita reserv reserv tive value ry ed ntroll
equity
on l e e transl reserv shares earnin ing
ation e gs intere
differ st
ences
--------------------------------------------------------------------------------
-----
Equity 149.2 2.0 0.0 -14.2 -2.4 -10.6 756.1 880.1 2.8
882.9
on
Janua
ry 1.
2011
--------------------------------------------------------------------------------
-----
Compre
hensiv
e
incom
e
--------------------------------------------------------------------------------
-----
Profit 24.8 24.8 0.1
24.9
for
the
perio
d
--------------------------------------------------------------------------------
-----
Other
compr
ehensi
ve
incom
e:
--------------------------------------------------------------------------------
-----
Cash 2.6 2.6
2.6
flow
hedge
s
--------------------------------------------------------------------------------
-----
- -0.7 -0.7
-0.7
Defer
red
tax
--------------------------------------------------------------------------------
-----
Change 4.4 4.4 0.1
4.5
in
trans
lation
diffe
rences
--------------------------------------------------------------------------------
-----
Other -0.4 -0.4
-0.4
chang
e
--------------------------------------------------------------------------------
-----
Compre 0.0 0.0 0.0 4.4 1.9 0.0 24.4 30.7 0.2
30.9
hensiv
e
incom
e,
total
--------------------------------------------------------------------------------
-----
Transa
ctions
with
owner
s
--------------------------------------------------------------------------------
-----
Divide -81.3 -81.3
-81.3
nd
paid
--------------------------------------------------------------------------------
-----
Share- 0.4 0.4
0.4
based
incen
tive
schem
es
--------------------------------------------------------------------------------
-----
Transa 0.0 0.0 0.0 0.0 0.0 0.0 -80.9 -80.9 0.0
-80.9
ctions
with
owner
s,
total
--------------------------------------------------------------------------------
-----
Change
s in
owner
ship
share
s in
subsi
diarie
s
--------------------------------------------------------------------------------
-----
Change 0.3 0.3 -0.3
0.0
s in
group
owner
ship
share
s
in
subsi
diarie
s -
no
loss
of
contr
ol
--------------------------------------------------------------------------------
-----
Non-co 0.0
0.0
ntroll
ing
inter
ests
from
busine
ss
combi
nation
s
--------------------------------------------------------------------------------
-----
Change 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 -0.3
0.0
s in
owner
ship
share
s in
subsi
diarie
s,
total
--------------------------------------------------------------------------------
-----
Equity 149.2 2.0 0.0 -9.8 -0.5 -10.6 699.9 830.2 2.7
832.9
on
March
31,
2011
--------------------------------------------------------------------------------
-----
2.7 Consolidated cash flow statement
EUR million 1-3/12 1-3/11 Change 1-12/1
1
--------------------------------------------------------------------------------
Cash flow from operating activities
--------------------------------------------------------------------------------
Net profit for the period 37.0 24.9 49% 125.1
--------------------------------------------------------------------------------
Reversal of accrual-based items 42.0 23.8 76% 143.5
--------------------------------------------------------------------------------
Change in working capital
--------------------------------------------------------------------------------
Change in trade and other receivables 19.4 45.5 -57% -159.2
--------------------------------------------------------------------------------
Change in inventories -55.7 -57.3 -3% -196.3
--------------------------------------------------------------------------------
Change in current liabilities -2.2 16.6 -113% 189.4
--------------------------------------------------------------------------------
Change in working capital, total -38.5 4.8 -166.1
--------------------------------------------------------------------------------
Interest paid -11.4 -12.8 -11% -34.3
--------------------------------------------------------------------------------
Other financial items, net -6.2 -2.3 -170% -5.3
--------------------------------------------------------------------------------
Interest received 1.1 0.9 22% 4.1
--------------------------------------------------------------------------------
Taxes paid -23.9 -15.2 57% -49.6
--------------------------------------------------------------------------------
Net cash generated from operating activities 0.1 24.1 -100% 17.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investing activities
--------------------------------------------------------------------------------
Acquisition of subsidiaries, net of cash -2.1 -0.3 -600% -8.8
--------------------------------------------------------------------------------
Purchase of property, plant and equipment -4.8 -6.6 -27% -30.0
--------------------------------------------------------------------------------
Purchase of intangible assets -2.6 -1.8 44% -8.9
--------------------------------------------------------------------------------
Increases in other investments 0.0 0.0 -0.1
--------------------------------------------------------------------------------
Disposal of subsidiaries, net of cash 0.0 0.0 5.9
--------------------------------------------------------------------------------
Proceeds from sale of fixed assets 0.4 0.7 -43% 4.5
--------------------------------------------------------------------------------
Proceeds from sale of other investments 0.1 0.0 2.7
--------------------------------------------------------------------------------
Net cash used in investing activities -9.1 -8.0 -14% -34.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating cash flow after investments -9.0 16.1 -17.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing activities
--------------------------------------------------------------------------------
Change in loan receivables -8.1
--------------------------------------------------------------------------------
Change in current liabilities 28.6 80.5 -64% 139.4
--------------------------------------------------------------------------------
Proceeds from borrowings 50.0 75.0 -33% 175.0
--------------------------------------------------------------------------------
Repayments of borrowings -58.8 -52.5 12% -157.4
--------------------------------------------------------------------------------
Payments of financial leasing debts -0.1 -0.6 -83% -0.9
--------------------------------------------------------------------------------
Dividends paid and other distribution of assets -81.5
--------------------------------------------------------------------------------
Net cash used in financing activities 11.6 102.4 -89% 74.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents 2.6 118.5 -98% 57.3
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of 204.7 147.6 39% 147.6
the period
--------------------------------------------------------------------------------
Change in the fair value of the cash equivalents 2.0 0.1 -0.2
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the 209.3 266.2 -21% 204.7
period
--------------------------------------------------------------------------------
2.8 Accounting principles of the interim report
YIT Corporation's Interim Report for January 1 - March 31, 2012 has been drawn
up in line with IAS 34: Interim Financial Reporting. The information presented
in the Interim Report has not been audited. YIT has applied the same accounting
policy and IFRS standards and interpretations in the drafting of the Interim
Report as in its annual financial statements for 2011. The new standards,
interpretations and amendments on current standards that have been approved by
EU and have been applied as of January 1, 2012 have no effect on group
reporting.
In the Interim report the figures are presented in million euros doing the
roundings on each line, which may cause some rounding inaccuracies in column
and total sums.
Currency exchange rates used in the interim report bulletin
Average rate Balance sheet Average rate Balance sheet
Jan-Mar, 2012 rate Jan-Mar, 2011 rate
Mar 31, 2012 Mar 31, 2011
--------------------------------------------------------------------------------
1 EUR = CZK 25.083 24.7300 24.3760 24.5430
--------------------------------------------------------------------------------
DKK 7.4350 7.4399 7.4549 7.4567
--------------------------------------------------------------------------------
HUF 296.8900 294.9200 272.5000 265.7200
--------------------------------------------------------------------------------
MYR 4.0122 4.0916 4.1643 4.2983
--------------------------------------------------------------------------------
NOK 7.5870 7.6040 7.8234 7.8330
--------------------------------------------------------------------------------
PLN 4.2332 4.1522 3.9441 4.0106
--------------------------------------------------------------------------------
RUB 39.5504 39.2950 40.0048 40.2850
--------------------------------------------------------------------------------
SEK 8.8531 8.8455 8.8647 8.9329
--------------------------------------------------------------------------------
SGD 1.6573 1.6775 1.7458 1.7902
--------------------------------------------------------------------------------
USD 1.3107 1.3356 1.3670 1.4207
--------------------------------------------------------------------------------
LVL 3.4528 3.4528 0.7028 0.7028
--------------------------------------------------------------------------------
LTL 0.6985 0.7003 3.4528 3.4528
--------------------------------------------------------------------------------
2.9 Definitions of key financial figures
Return on Group's profit before taxes + interest expenses + other financial
investment expenses +/- exchange rate differences x 100
(ROI %) = Balance sheet total - capitalised interest - non-interest bearing
liabilities (average)
--------------------------------------------------------------------------------
Segment's Tangible and intangible assets + goodwill + shares in associated
operative companies + investments + inventories + trade receivables + other
invested non-interest bearing operational receivables *) - provisions -
capital = trade payables - advances received - non-interest bearing
liabilities *)
*) excl. items associated with taxes, distribution of profit and
financial items
--------------------------------------------------------------------------------
Return on Segment's operating profit + interest included in operating profit
operative Segment's operative invested capital (average)
invested
capital (%)
=
--------------------------------------------------------------------------------
Equity ratio Equity + non-controlling interest x 100
(%) = Balance sheet total - advances received
--------------------------------------------------------------------------------
Gearing Interest-bearing liabilities - cash and cash equivalents x 100
ratio (%) = Shareholder's equity + non-controlling interest
--------------------------------------------------------------------------------
Segment Net profit for the period (attributable for equity holders),
reporting, segment reporting
earnings / Share issue-adjusted average number of outstanding shares during
share (EUR) the period
=
--------------------------------------------------------------------------------
Group IFRS Net profit for the period (attributable for equity holders), group
reporting, reporting
earnings/ Share issue-adjusted average number of outstanding shares during
share (EUR) the period
=
--------------------------------------------------------------------------------
Equity/share Shareholders' equity
(EUR) = Share issue-adjusted average number of outstanding shares at the
end of period
--------------------------------------------------------------------------------
Market (Number of shares - treasury shares) x share price on the closing
capitalizat date by share series
ion =
--------------------------------------------------------------------------------
2.10 Financial risk management
Financial risks include liquidity, interest rate, currency and credit risk, and
their management is a part of the Group's treasury policy. The Board of
Directors has approved the Corporate Treasury Policy. The Group's treasury
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 2011
2.11 Unusual items affecting operating profit
EUR million 1-3/12 1-3/11 Change 1-12/11
--------------------------------------------------------------------
Building Services Northern Europe 0.0 0.0 -3.0
--------------------------------------------------------------------
Building Services Central Europe 0.0 0.0 5.0
--------------------------------------------------------------------
International Construction Services -10.0
--------------------------------------------------------------------
YIT Group, total 0.0 0.0 -8.0
--------------------------------------------------------------------
In the second quarter 2011, a EUR 3.0 million provision booked affects
negatively Building Services Northern Europe's operating profit and a EUR 5.0
million gain on the sale of Hungarian businesses affects positively Building
Services Central Europe's operating profit. International Construction Services
segment's operating profit is weakened by a provision of EUR 10 million related
to the rectifying of the ammonia problem booked in the third quarter of 2011.
2.12 Business combinations and disposals
Building Service Central Europe acquired in January 2012 a cooling solutions
and services provider, P&P Kälteanlagenbau GmbH and an HVAC solution provider,
WM Haustechnik GmbH. Building Services Northern Europe segment acquired as well
in January 2012 the share capitals of Elektriska Installationer i Finspång AB
and Kraftmontage i Finspång AB. Total acquisition price amounted to EUR 5.9
million. The acquisitions are not expected to result in goodwill.
Composition of acquired net assets and goodwill
EUR million 3/12
--------------------------------------------------------------------------------
Consideration
--------------------------------------------------------------------------------
Cash 5.2
--------------------------------------------------------------------------------
Contingent consideration 0.7
--------------------------------------------------------------------------------
Total consideration 5.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Acquisition -related costs, 0.1
(recognised as other operating expenses)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Recognised amounts of identifiable assets acquired and liabilities assumed
--------------------------------------------------------------------------------
Cash and cash equivalents 3.8
--------------------------------------------------------------------------------
Tangible assets 0.3
--------------------------------------------------------------------------------
Intangible rights:
--------------------------------------------------------------------------------
Order backlog 1.9
--------------------------------------------------------------------------------
Other intangible rights 7.7
--------------------------------------------------------------------------------
Inventories 0.8
--------------------------------------------------------------------------------
Trade and other receivables 1.5
--------------------------------------------------------------------------------
Deferred tax liabilities, net -0.4
--------------------------------------------------------------------------------
Trade and other payables -9.7
--------------------------------------------------------------------------------
Total identifiable net assets 5.9
--------------------------------------------------------------------------------
Non-controlling interest (minority share) -
--------------------------------------------------------------------------------
Goodwill -
--------------------------------------------------------------------------------
Total entity value 5.9
--------------------------------------------------------------------------------
There were no disposals in the review period.
2.13 Changes in property, plant and equipment
EUR million 1-3/12 1-3/11 Change 1-12/11
------------------------------------------------------------------------------
Carrying value at the beginning of the period 110.8 106.7 4% 106.7
------------------------------------------------------------------------------
Increase 4.7 6.8 -31% 30.1
------------------------------------------------------------------------------
Increase through acquisitions 0.3 0.0 1.1
------------------------------------------------------------------------------
Decrease -0.3 -0.7 -57% -3.7
------------------------------------------------------------------------------
Decrease through disposals -0.1
------------------------------------------------------------------------------
Depreciation and value adjustments -5.9 -6.0 -2% -23.9
------------------------------------------------------------------------------
Reclassifications 1.3 0.3 0.6
------------------------------------------------------------------------------
Carrying value at the end of the period 110.9 107.1 4% 110.8
------------------------------------------------------------------------------
2.14 Inventories
EUR million 3/12 3/11 Change 12/11
--------------------------------------------------------------------------------
Raw materials and consumables 31.0 26.9 15% 27.6
--------------------------------------------------------------------------------
Work in progress 880.4 704.7 25% 792.8
--------------------------------------------------------------------------------
Land areas and plot owning companies 643.1 625.7 3% 643.8
--------------------------------------------------------------------------------
Shares in completed housing and real estate 147.1 152.7 -3% 158.2
companies
--------------------------------------------------------------------------------
Advance payments 70.4 41.5 70% 49.5
--------------------------------------------------------------------------------
Other inventories 2.5 0.7 257% 0.7
--------------------------------------------------------------------------------
Total inventories 1,774.8 1,552.2 14% 1,672.6
--------------------------------------------------------------------------------
2.15 Notes on equity
Share capital and share Number of Share capital (EUR Treasury
premium account shares million) shares
(EUR
million)
--------------------------------------------------------------------------------
January 1, 2012 125,271,008 149.2 -9.7
--------------------------------------------------------------------------------
Return of treasury shares -4,131
--------------------------------------------------------------------------------
March 31, 2012 125,266,877 149.2 -9.7
--------------------------------------------------------------------------------
2.16 Borrowings
EUR million Fair Carrying Nominal
value value value
--------------------------------------------------------------------------------
Bonds in financial statements December 330.8 335.1 335.7
31, 2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Valuation of the above bonds on March 284.6 281.6 282.2
31, 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Bonds raised during the review period:
--------------------------------------------------------------------------------
Floating-rate bonds
--------------------------------------------------------------------------------
1/2012 -2014, Euribor 3 month + 1,75% 1) 50.1 49.9 50.0
--------------------------------------------------------------------------------
Total bonds on March 31, 2012 334.7 331.5 332.2
--------------------------------------------------------------------------------
Terms of the bonds raised during the review period in brief:
1) Loan period February 17, 2012 - August 18, 2014, interest payments annually
February 17, May 17, August 17 and November 17 in arrear. The bond is unsecured
and its ISIN code is FI4000037874.
2.17 Change in contingent liabilities and assets and commitments
EUR million 3/12 3/11 Change 12/11
--------------------------------------------------------------------------------
Collateral given for own commitments
--------------------------------------------------------------------------------
- Corporate mortgages 30.2 29.8 1% 31.2
--------------------------------------------------------------------------------
- Other pledged assets 0.9
--------------------------------------------------------------------------------
Other commitments to associated companies 7.0 7.0 7.0
--------------------------------------------------------------------------------
Other commitments
--------------------------------------------------------------------------------
- Repurchase commitments 286.7 132.5 116% 293.1
--------------------------------------------------------------------------------
- Operating leases 320.2 325.2 -2% 330.7
--------------------------------------------------------------------------------
- Rental guarantees for clients 1.9 5.9 -68% 4.1
--------------------------------------------------------------------------------
- Other contingent liabilities 1.4 4.1 -66% 1.5
--------------------------------------------------------------------------------
- Guarantees given 0.0 0.0 0.0
--------------------------------------------------------------------------------
Liability under derivative contracts
--------------------------------------------------------------------------------
- Value of underlying instruments
--------------------------------------------------------------------------------
-- Interest rate derivatives 355.7 388.5 -8% 329.4
--------------------------------------------------------------------------------
-- Foreign exchange derivatives 150.8 218.9 -31% 194.1
--------------------------------------------------------------------------------
-- Commodity derivatives 4.4 0.4
--------------------------------------------------------------------------------
- Market values
--------------------------------------------------------------------------------
-- Interest rate derivatives -12.8 -2.5 -11.9
--------------------------------------------------------------------------------
-- Foreign exchange derivatives -0.8 -3.8 -79% 1.1
--------------------------------------------------------------------------------
-- Commodity derivatives -0.3 0.0
--------------------------------------------------------------------------------
YIT Corporation's guarantees on behalf of its 1,584.7 1,313.7 21% 1,515.4
subsidiaries
--------------------------------------------------------------------------------
2.18 Transactions with associated companies
EUR million 1-3/12 1-3/11 Change 1-12/11
--------------------------------------------------------------------
Sales to associated companies 0.3 0.4 -25% 1.5
--------------------------------------------------------------------
Purchases from associated companies 0.0 0.0 0% 0.1
--------------------------------------------------------------------
Trade and other receivables 0.0 0.0 0% 0.0
--------------------------------------------------------------------
Trade and other liabilities 0.0 0.0 0% 0.0
--------------------------------------------------------------------
2.19 Events after the review period
YIT acquired the Swedish company Dala Elmontage Lindkvist & Bodin AB. The
company's annual revenue is approximately EUR 5 million, and it has about 30
employees. In Norway, YIT acquired the electrical installations specialist
Madla Elektro. The company's annual revenue is approximately EUR 4 million and
it has around 30 employees.
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