2012-07-26 07:00:01 CEST
2012-07-26 07:00:22 CEST
REGULATED INFORMATION
YIT - Interim report (Q1 and Q3)
YIT's Interim Report January 1 – June 30, 2012: Good progress in Construction Services, order backlog exceeding EUR 4 million gives visibility
Helsinki, 2012-07-26 07:00 CEST (GLOBE NEWSWIRE) -- YIT CORPORATION
INTERIM REPORT JULY 26, 2012, AT 8:00 A.M.
YIT'S INTERIM REPORT JANUARY 1 - JUNE 30, 2012: Good progress in Construction
Services, order backlog exceeding EUR 4 billion gives visibility
April 1 - June 30, 2012: Good residential sales continued in the second quarter
-- The operating profit of the segments amounted to EUR 60.5 million in April
- June (4-6/2011: EUR 70.3 million). The operating profit of Construction
Services Finland and International Construction Services remained at the
previous year‘s level. The operating profit of Building Services Northern
Europe was burdened by the low profitability of project operations and a
negative non-recurring item of EUR 2.8 million in Industrial Services. The
operating profit of Building Services Central Europe was burdened by a
decrease in the segment's revenue, low profitability in Poland and the
Czech Republic and costs arising from the restructuring of operations.
-- The revenue of the segments for the second quarter was on a par with the
previous year, amounting to EUR 1,184.5 million (4-6/2011: EUR 1,136.9
million). Revenue grew in Building Services Northern Europe, Construction
Services Finland and International Construction Services. The development
of revenue was supported by a slight recovery in the demand for building
services in Northern Europe, favourable development of the infrastructure
business in Finland and growth in construction services revenue in the
Baltic countries and Central Eastern Europe.
-- The order backlog of the segments was 15 percent higher than a year
earlier, increasing to EUR 4,045.4 million (6/2011: EUR 3,509.4 million).
The order backlog remained at the level of the end of March 2012.
-- The Group's profit before taxes based on segment reporting was 17 percent
lower than the year before in April-June, amounting to EUR 54.5 million
(4-6/2011: EUR 65.5 million).
-- The Group's earnings per share based on segment reporting decreased by 13
percent in April-June from the year before, amounting to EUR 0.33
(4-6/2011: EUR 0.38).
January 1 - June 30, 2012: Operating profit increased in Construction Services
Finland
-- The operating profit of the segments was EUR 112.9 million (1-6/2011: EUR
120.7 million). Operating profit increased in Construction Services
Finland.
-- The revenue of the segments was 5 percent higher in January-June than in
the previous year, increasing to EUR 2,282.8 million (1-6/2011: EUR 2,163.8
million). Revenue grew in Building Services Northern Europe, Construction
Services Finland and International Construction Services.
-- The Group's profit before taxes based on segment reporting decreased by 9
percent from the year before, amounting to EUR 101.6 (1-6/2011: EUR 111.3
million).
-- The Group's earnings per share based on segment reporting decreased by 5
percent from the year before, amounting to EUR 0.61 (1-6/2011: EUR 0.64).
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 operating profit for 2012 during the second
half 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: Order backlog exceeding EUR 4 billion
gives visibility to the rest of the year
We aim to utilise the opportunities presented by the market situation: we
responded to the continued favourable demand by starting up the construction of
nearly 2,500 residential units during the second quarter. Low interest rates
support residential sales in Finland, and the favourable development in the
housing loan market is promoting our residential sales in Russia.
We are satisfied with the good development in Construction Services during the
second quarter. Residential sales picked up in Finland compared to the first
quarter and continued to be good in Russia.
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 first impact to be visible during the
second half of 2012. We will improve the profitability of Building Services
Central Europe through the restructuring of operations.
KEY FIGURES
Development of the Group based on segment reporting (percentage of completion,
POC)
Revenue, EUR million 1-6/12 1-6/11 Change 4-6/12 4-6/11 Change
--------------------------------------------------------------------------------
Building Services Northern 1,051.2 985.6 7% 538.1 509.4 6%
Europe
--------------------------------------------------------------------------------
Building Services Central 339.0 368.2 -8% 179.5 191.1 -6%
Europe
--------------------------------------------------------------------------------
Construction Services 677.4 621.8 9% 347.9 332.3 5%
Finland
--------------------------------------------------------------------------------
International Construction 241.3 220.8 9% 133.4 120.5 11%
Services
--------------------------------------------------------------------------------
Other items -26.0 -32.6 -14.4 -16.4
--------------------------------------------------------------------------------
Group, total 2,282.8 2,163.8 5% 1,184.5 1,136.9 4%
--------------------------------------------------------------------------------
Operating profit, EUR million 1-6/12 1-6/11 Change 4-6/12 4-6/11 Change
--------------------------------------------------------------------------------
Building Services Northern 30.0 35.9 -17% 15.3 18.8 -19%
Europe
--------------------------------------------------------------------------------
Building Services Central Europe 11.8 16.1 -27% 6.6 12.1 -45%
--------------------------------------------------------------------------------
Construction Services Finland 61.7 58.4 6% 32.0 32.8 -2%
--------------------------------------------------------------------------------
International Construction 21.2 20.7 3% 12.7 12.3 3%
Services
--------------------------------------------------------------------------------
Other items -11.8 -10.4 -6.1 -5.7
--------------------------------------------------------------------------------
Group, total 112.9 120.7 -6% 60.5 70.3 -14%
--------------------------------------------------------------------------------
Operating profit margin, % 1-6/12 1-6/11 4-6/12 4-6/11
-------------------------------------------------------------------
Building Services Northern Europe 2.9 3.6 2.8 3.7
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Building Services Central Europe 3.5 4.4 3.7 6.3
-------------------------------------------------------------------
Construction Services Finland 9.1 9.4 9.2 9.9
-------------------------------------------------------------------
International Construction Services 8.8 9.4 9.5 10.2
-------------------------------------------------------------------
Group, total 4.9 5.6 5.1 6.2
-------------------------------------------------------------------
Order backlog, EUR million 6/12 6/11 Change 6/12 3/12 Change
--------------------------------------------------------------------------------
Building Services Northern 955.1 879.5 9% 955.1 969.4 -1%
Europe
--------------------------------------------------------------------------------
Building Services Central 473.4 554.1 -15% 473.4 500.5 -5%
Europe
--------------------------------------------------------------------------------
Construction Services 1,499.9 1,239.5 21% 1,499.9 1,428.0 5%
Finland
--------------------------------------------------------------------------------
International Construction 1,186.7 896.4 32% 1,186.7 1,142.9 4%
Services
--------------------------------------------------------------------------------
Other items -69.7 -60.2 -69.7 -75.3
--------------------------------------------------------------------------------
Group, total 4,045.4 3,509.4 15% 4,045.4 3,965.5 2%
--------------------------------------------------------------------------------
Key ratios of segment reporting (percentage of completion, POC)
1-6/12 1-6/11 Change 4-6/12 4-6/11 Change
--------------------------------------------------------------------------------
Profit before taxes, EUR million 101.6 111.3 -9% 54.5 65.5 -17%
--------------------------------------------------------------------------------
Profit for the review period, 76.3 80.4 -5% 41.7 47.6 -13%
EUR million 1)
--------------------------------------------------------------------------------
Earnings/share, EUR 0.61 0.64 -5% 0.33 0.38 -13%
--------------------------------------------------------------------------------
Operating cash flow after 33.6 15.9 111% 42.6 -0.2
investments, EUR million
--------------------------------------------------------------------------------
Personnel at the end of the 26,255 26,807 -2% 26,255 26,807 -2
period
--------------------------------------------------------------------------------
1) attributable to equity holders
INFORMATION SESSION, WEBCAST AND CONFERENCE CALL
YIT will hold a news conference on the Interim Report on Thursday, July 26,
2012, at 10:00 a.m. (Finnish time, EEST). The news conference will be held at
YIT's head office at Panuntie 11, 00620 Helsinki, Finland. The event is in
English and targeted for investment 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. A recording
of the webcast 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, all questions should be presented in
English. At the end of the event, 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)
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CEST (Paris, 7:00 9:00 11:00
Stockholm)
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BST (London) 6:00 8:00 10:00
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US EDT (New 1:00 3:00 5:00
York)
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Financial reports and other investor information are available at YIT's
website, www.yitgroup.com/investors. The materials may be ordered via the
website, by sending 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 - JUNE 30, 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
-- Reducing carbon dioxide emissions as part of corporate responsibility
-- Outlook for 2012
-- 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 the 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, for example, the IFRIC 15 guidelines. The effects of the differences
of the recognition principles are presented in detail in the tables to the
Interim Report.
Development of Construction Services remained favourable
Revenue, EUR million 1-6/12 1-6/11 Change 4-6/12 4-6/11 Change
--------------------------------------------------------------------------------
Building Services Northern 1,051.2 985.6 7% 538.1 509.4 6%
Europe
--------------------------------------------------------------------------------
Building Services Central 339.0 368.2 -8% 179.5 191.1 -6%
Europe
--------------------------------------------------------------------------------
Construction Services 677.4 621.8 9% 347.9 332.3 5%
Finland
--------------------------------------------------------------------------------
International Construction 241.3 220.8 9% 133.4 120.5 11%
Services
--------------------------------------------------------------------------------
Other items -26.0 -32.6 -14.4 -16.4
--------------------------------------------------------------------------------
Group, total 2,282.8 2,163.8 5% 1,184.5 1,136.9 4%
--------------------------------------------------------------------------------
The revenue of YIT's segments increased by 5 percent in January-June compared
to the previous year, amounting to EUR 2,282.8 million (1-6/2011: EUR 2,163.8
million). Revenue for the second quarter remained on a par with the same period
the previous year, amounting to EUR 1,184.5 million (4-6/2011: EUR 1,136.9
million). Revenue grew in Building Services Northern Europe, Construction
Services Finland and International Construction Services. The development of
revenue was supported by a slight revival in the demand for building services
in Northern Europe, favourable development of the infrastructure business in
Finland and growth in construction services revenue in the Baltic countries and
Central Eastern Europe. Changes in foreign exchange rates increased the
segments' revenue for January-June by EUR 13.9 million and for the second
quarter by EUR 8.3 million compared to the previous year.
In January-June, Finland accounted for 44 percent of the Group's revenue
according to the segment reporting (1-6/2011: 43%), Sweden for 15 percent
(1-6/2011: 15%), Norway for 13 percent (1-6/2011: 12%), Germany for 11 percent
(1-6/2011: 14%), Russia for 8 percent (1-6/2011: 7%), Denmark for 3 percent
(1-6/2011: 4%), Austria for 3 percent (1-6/2011: 2%), the Baltic countries for
2 percent (1-6/2011: 1%) and other countries for 1 percent (1-6/2011: 3%).
Profitability decreased from the previous year
Operating profit, EUR million 1-6/12 1-6/11 Change 4-6/12 4-6/11 Change
--------------------------------------------------------------------------------
Building Services Northern 30.0 35.9 -17% 15.3 18.8 -19%
Europe
--------------------------------------------------------------------------------
Building Services Central Europe 11.8 16.1 -27% 6.6 12.1 -45%
--------------------------------------------------------------------------------
Construction Services Finland 61.7 58.4 6% 32.0 32.8 -3%
--------------------------------------------------------------------------------
International Construction 21.2 20.7 3% 12.7 12.3 3%
Services
--------------------------------------------------------------------------------
Other items -11.8 -10.4 -6.1 -5.7
--------------------------------------------------------------------------------
Group, total 112.9 120.7 -6% 60.5 70.3 -14%
--------------------------------------------------------------------------------
Operating profit margin, % 1-6/12 1-6/11 4-6/12 4-6/11
-------------------------------------------------------------------
Building Services Northern Europe 2.9 3.6 2.8 3.7
-------------------------------------------------------------------
Building Services Central Europe 3.5 4.4 3.7 6.3
-------------------------------------------------------------------
Construction Services Finland 9.1 9.4 9.2 9.9
-------------------------------------------------------------------
International Construction Services 8.8 9.4 9.5 10.2
-------------------------------------------------------------------
Group, total 4.9 5.6 5.1 6.2
-------------------------------------------------------------------
YIT's operating profit based on segment reporting decreased by 6 percent
compared to the previous year, amounting to EUR 112.9 million in January-June
(1-6/2011: EUR 120.7 million). The operating profit margin based on segment
reporting was 4.9 percent (1-6/2011: 5.6%). The operating profit for the review
period includes EUR -5.9 million of borrowing costs according to IAS 23
(1-6/2011: EUR -4.4 million).
The operating profit for the second quarter decreased by 14 percent from the
previous year to EUR 60.5 million (4-6/2011: EUR 70.3 million). The operating
profit margin based on segment reporting was 5.1 percent (4-6/2011: 6.2%). The
operating profit for the second quarter includes EUR -2.9 million of borrowing
costs according to IAS 23 (4-6/2011: EUR -2.4 million). The IAS 23 standard
defines the recording method of borrowing costs in long-term construction
projects.
The second quarter operating profit margin of Building Systems Northern Europe
fell short of the previous year due to the low profitability of project
operations and a negative non-recurring item of EUR 2.8 million in Industrial
Services. The operating profit of Building Services Central Europe was burdened
by a decrease in the segment's revenue, low profitability in Poland and the
Czech Republic and costs arising from the restructuring of operations. The
operating profit of Construction Services Finland and International
Construction Services remained at the previous year‘s level.
Strong order backlog gives visibility
Order backlog, EUR million 6/12 6/11 Change 6/12 3/12 Change
--------------------------------------------------------------------------------
Building Services Northern 955.1 879.5 9% 955.1 969.4 -1%
Europe
--------------------------------------------------------------------------------
Building Services Central 473.4 554.1 -15% 473.4 500.5 -5%
Europe
--------------------------------------------------------------------------------
Construction Services 1,499.9 1,239.5 21% 1,499.9 1,428.0 5%
Finland
--------------------------------------------------------------------------------
International Construction 1,186.7 896.4 32% 1,186.7 1,142.9 4%
Services
--------------------------------------------------------------------------------
Other items -69.7 -60.2 -69.7 -75.3
--------------------------------------------------------------------------------
Group, total 4,045.4 3,509.4 15% 4,045.4 3,965.5 2%
--------------------------------------------------------------------------------
The order backlog of YIT's segments was EUR 4,045.4 million at the end of June
(6/2011: EUR 3,509.4 million); 15 percent more than at the end of June the
previous year. The order backlog remained unchanged from the end of March 2012,
at which time it stood at EUR 3,965.5 million.
The order backlogs of Building Services Northern Europe and International
Construction Services remained at the level of the end of March 2012. The order
backlog of Building Services Central Europe decreased slightly and the order
backlog of Construction Services Finland increased slightly compared to the end
of March 2012.
Capital expenditure and acquisitions
Gross capital expenditure on non-current assets included on the balance sheet
totalled EUR 24.1 million during January-June (1-6/2011: EUR 23.3 million),
representing 1.1 percent of revenue (1-6/2011: 1.1%). Investments in
construction equipment amounted to EUR 5.6 million (1-6/2011: EUR 7.1 million)
and investments in information technology to EUR 5.2 million (1-6/2011: EUR 4.9
million). Other investments, including acquisitions, amounted to EUR 13.3
million (1-6/2011: EUR 11.3 million).
YIT made two acquisitions in the Building Services Northern Europe business
segment during the second quarter. In Sweden, YIT acquired electrical
installations 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 company Madla Elektro. The
company's annual revenue is approximately EUR 4 million and it has around 30
employees. A more detailed description of acquisitions made during the review
period can be found in the tables to the Interim Report.
Positive cash flow during the second quarter
The Group's operating cash flow after investments amounted to EUR 33.6 million
in January-June (1-6/2011: EUR 15.9 million). The operating cash flow after
investments for the second quarter amounted to EUR 42.6 million (4-6/2011: EUR
-0.2 million). In Construction Services Finland, the operating cash flow for
the second quarter was good. The Group's operating cash flow for the second
quarter was burdened by plot investments in Construction Services and the
increase in production in International Construction Services.
At the end of June, the Group's invested capital amounted to EUR 1,883.5
million (3/2012: EUR 1,848.7 million). Of the Group's invested capital, 27
percent (3/2012: 29%), or EUR 509.2 million (3/2012: EUR 528.7 million) was
invested in Russia. Exchange rate changes of the ruble decreased the capital
invested in Russia by EUR 26.9 million in April-June.
In spite of the increasing volume of residential production, the amount of
capital invested in Russia remained on a par with the end of March, taking the
exchange rate change of the ruble into account. 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 13.7
percent for the last 12 months (4/2011-3/2012: 14.8%). Only operational items
are taken into account in calculating the segments' invested capital.
Profit before taxes decreased from the previous year
Profit before taxes based on segment reporting decreased by 9 percent compared
to the previous year, amounting to EUR 101.6 million in January-June (1-6/2011:
EUR 111.3 million). The profit before taxes for the second quarter decreased by
17 percent from the previous year to EUR 54.5 million (4-6/2011: EUR 65.6
million).
Earnings per share based on segment reporting decreased by 5 percent from the
year before in January-June, amounting to EUR 0.61 (1-6/2011: EUR 0.64).
Earnings per share for the second quarter decreased by 13 percent from the year
before, amounting to EUR 0.33 (4-6/2011: EUR 0.38).
DEVELOPMENT BY BUSINESS SEGMENT
Development by business segment is presented using figures compliant with
segment reporting.
BUILDING SERVICES NORTHERN EUROPE
1-6/12 1-6/11 Change 4-6/12 4-6/11 Change
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Revenue, EUR million 1,051.2 985.6 7% 538.1 509.4 6%
------------------------------------------------------------------------------
Operating profit, EUR million 30.0 35.9 -17% 15.3 18.8 -19%
------------------------------------------------------------------------------
Operating profit margin, % 2.9 3.6 2.8 3.7
------------------------------------------------------------------------------
7/11-6/12 4/11-3/12
------------------------------------------------------------------------------
Return on operative invested capital (last 12 months), % 21.4 24.5
------------------------------------------------------------------------------
6/12 6/11 Change 6/12 3/12 Change
--------------------------------------------------------------------------------
Operative invested capital, EUR 357.8 323.5 11% 357.8 339.4 5%
million
--------------------------------------------------------------------------------
Order backlog, EUR million 955.1 879.5 9% 955.1 969.4 -1%
--------------------------------------------------------------------------------
Revenue, EUR million 1-6/12 1-6/11 Change 4-6/12 4-6/11 Change
--------------------------------------------------------------------------------
Sweden 357.4 325.1 10% 178.9 169.4 6%
--------------------------------------------------------------------------------
Finland 301.0 299.3 1% 158.8 159.5 0%
--------------------------------------------------------------------------------
Norway 295.2 255.7 15% 148.1 128.3 15%
--------------------------------------------------------------------------------
Denmark 72.7 80.8 -10% 38.7 39.4 -2%
--------------------------------------------------------------------------------
Russia and the Baltic countries 25.0 24.7 1% 13.8 12.8 8%
--------------------------------------------------------------------------------
Total 1,051.2 985.6 7% 538.1 509.4 6%
--------------------------------------------------------------------------------
The revenue of Building Services Northern Europe increased by 7 percent in
January-June compared to the previous year, amounting to EUR 1,051.2 million
(1-6/2011: EUR 985.6 million). Changes in foreign exchange rates increased the
revenue for the review period by EUR 12.1 million compared to the previous
year. The revenue for the second quarter increased by 6 percent from the
previous year to EUR 538.1 million (4-6/2011: EUR 509.4 million). Changes in
foreign exchange rates increased the revenue for the second quarter by EUR 7.3
million compared to the previous year. Revenue increased in Sweden and Norway
in particular. The growth in revenue was supported by a slight revival in the
demand for building services.
The segment's operating profit for the review period decreased by 17 percent
from the previous year to EUR 30.0 million (1-6/2011: EUR 35.9 million). The
operating profit for the second quarter decreased by 19 percent from the
previous year to EUR 15.3 million (4-6/2011: EUR 18.8 million). The segment's
profitability was burdened by the low profitability of project operations and a
negative non-recurring item in Industrial Services. The operational performance
of Industrial Services improved during the second quarter, but the operating
profit was at a loss due to a non-recurring item of EUR 2.8 million related to
the final settlement of a customer project completed in 2011. YIT made a cost
provision of EUR 3.0 million related to the same project during the second
quarter of 2011.
The restructuring of operations underway in all countries where Building
Services Northern Europe operates proceeded according to plan during the review
period. The efficiency of the segment's regional organisations was enhanced
during the review period, and organisation structures streamlined in order to
improve the control and profitability of operations. The profitability of
project operations are being improved through more selective project selection,
increasingly systematic risk management and making procurement more efficient.
In the servicing business, capacity planning, preparation of work, material
logistics, the invoicing process and mobile data transfer to technicians will
be made more efficient. These efforts are estimated to result in annual savings
of approximately EUR 40 million from 2013 onwards.
The order backlog at the end of June increased by 9 percent from the previous
year, amounting to EUR 955.1 million (6/2011: EUR 879.5 million). The order
backlog remained unchanged from the end of March 2012, at which time it stood
at EUR 969.4 million.
Service and maintenance revenue continued to grow
Service and maintenance operations generated EUR 672.5 million (1-6/2011: EUR
610.6 million), or 64 percent of the segment's total revenue in January-June
(1-6/2011: 62%). During the second quarter, service and maintenance operations
generated EUR 344.4 million (4-6/2011: EUR 308.1 million), or 64 percent of the
segment's total revenue (4-6/2011: 60%).
During the second quarter, YIT signed several service and maintenance
agreements in Northern Europe. YIT will supply building system services to
Seabroker Eiendom's energy-efficient building in Norway. YIT also signed an
agreement with the City of Varkaus on the delivery of energy efficiency
services to the city's ice stadium.
In accordance with an agreement signed during the second quarter, YIT and
Finnair will continue their collaboration, which began in 2006, to make the
technical maintenance of Finnair Facilities Management and properties more
efficient. The agreement covers approximately 250,000 square metres of premises
at the Helsinki-Vantaa airport and extends to the end of 2014.
Level of new investments was relatively low
The recovery of new investments in building systems continued slightly during
the second quarter, but investments still remained at a relatively low level.
During the second quarter, YIT signed agreements on the delivery of pipework,
ventilation and sprinkler installations to the Bodø cultural centre in Norway,
among other projects. In addition, YIT will deliver building system
installation work to Deloitte's head office constructed in Oslo. The total
value of the contracts is about EUR 11 million.
YIT signed an agreement on the installation of building operating systems at
the University Hospital in Linköping, Sweden, during the second quarter. The
value of the contract is approximately EUR 4 million.
BUILDING SERVICES CENTRAL EUROPE
1-6/12 1-6/11 Change 4-6/12 4-6/11 Change
-----------------------------------------------------------------------------
Revenue, EUR million 339.0 368.2 -8% 179.5 191.1 -6%
-----------------------------------------------------------------------------
Operating profit, EUR million 11.8 16.1 -27% 6.6 12.1 -45%
-----------------------------------------------------------------------------
Operating profit margin, % 3.5 4.4 3.7 6.3
-----------------------------------------------------------------------------
7/11-6/12 4/11-3/12
------------------------------------------------------------------------------
Return on operative invested capital (last 12 months), % 39.4 59.7
------------------------------------------------------------------------------
6/12 6/11 Change 6/12 3/12 Change
--------------------------------------------------------------------------------
Operative invested capital, EUR 106.5 40.8 161% 106.5 96.4 10%
million
--------------------------------------------------------------------------------
Order backlog, EUR million 473.4 554.1 -15% 473.4 500.5 -5%
--------------------------------------------------------------------------------
Revenue, EUR million 1-6/12 1-6/11 Change 4-6/12 4-6/11 Change
--------------------------------------------------------------------------------
Germany 261.4 296.8 -12% 136.7 155.7 -12%
--------------------------------------------------------------------------------
Austria 67.4 46.6 45% 37.4 24.7 51%
--------------------------------------------------------------------------------
Poland, the Czech Republic and 10.2 24.8 -59% 5.5 10.7 -49%
other countries
--------------------------------------------------------------------------------
Total 339.0 368.2 -8% 179.6 191.1 -6%
--------------------------------------------------------------------------------
The revenue of Building Services Central Europe decreased by 8 percent in
January-June compared to the previous year, amounting to EUR 339.0 million
(1-6/2011: EUR 368.2 million). The revenue for the second quarter decreased by
6 percent from the previous year to EUR 179.5 million (4-6/2011: EUR 191.1
million). The decrease in revenue was due to the slight decrease in demand at
the end of 2011 and beginning of 2012 in Germany, the low level of activity in
Central Eastern Europe and the decision of the company to discontinue
international project activities.
The operating profit for January-June decreased by 27 percent from the previous
year to EUR 11.8 million (1-6/2011: EUR 16.1 million). The operating profit for
the second quarter decreased by 45 percent from the previous year to EUR 6.6
million (4-6/2011: EUR 12.1 million). The decrease in revenue, low
profitability in Poland and the Czech Republic and costs arising from the
restructuring of operations impaired the segment's profitability during the
second quarter. YIT has initiated restructuring of operations in Poland, aiming
to decrease the share of project business and increasing the share of more
profitable service and maintenance operations. In Germany, YIT will close down
its low-performing units. The operating profit for the second quarter of 2011
was improved by a sales gain of EUR 5 million from the divestment of Hungarian
operations.
Demand in the Central European building services market continued to be
relatively stable during the review period. The order backlog amounted to EUR
473.4 million at the end of June (6/2011: EUR 554.1 million). The order backlog
at the end of June decreased by 15 percent from the previous year and by 5
percent from the end of March 2012 (3/2012: EUR 500.5 million).
Service and maintenance revenue is growing
Service and maintenance operations generated EUR 99.1 million (1-6/2011: EUR
94.3 million), or 29 percent of the segment's total revenue in January-June
(1-6/2011: 26%). During the second quarter, service and maintenance operations
generated EUR 53.5 million (4-6/2011: EUR 49.0 million), or 30 percent of the
segment's total revenue (4-6/2011: 26%). The share of service and maintenance
was significantly lower in Building Services Central Europe (4-6/2012: 30%)
than in Building Services Northern Europe (4-6/2012: 64%), and therefore the
opportunities for increasing it in Building Services Central Europe are good.
The share of agreements pursuant to the YIT-developed ServiFlex concept is
increasing, and the company signed several new service and maintenance
agreements during the second quarter. In Germany, YIT signed an agreement on
the delivery of service functions to the German Aerospace Centre (DLR) and
Krones AG. Furthermore, several long-term contracts were renewed during the
second quarter.
Demand for new investments remained stable
The demand for new building system investments remained stable during the
review period in Germany and Austria, but the level of activity in large
projects slowed down to some extent in Germany during the second quarter. YIT
secured several significant projects during the second quarter. In Germany, YIT
will deliver energy-efficient building systems to the Joseph Pschorr Haus
building constructed in Munich and ventilation systems to BMW's plant built in
Leipzig.
CONSTRUCTION SERVICES FINLAND
1-6/12 1-6/11 Change 4-6/12 4-6/11 Change
--------------------------------------------------------------------------------
Revenue, EUR million 677.4 621.8 9% 347.9 332.3 5%
--------------------------------------------------------------------------------
Operating profit, EUR million 61.7 58.4 6% 32.0 32.8 -2%
--------------------------------------------------------------------------------
Operating profit excluding IAS 64.9 61.5 6% 33.6 34.4 -2%
23 adjustment, EUR million
--------------------------------------------------------------------------------
Operating profit margin, % 9.1 9.4 9.2 9.9
--------------------------------------------------------------------------------
Operating profit margin 9.6 9.9 9.7 10.4
excluding IAS 23 adjustment, %
--------------------------------------------------------------------------------
7/11-6/12 4/11-3/12
------------------------------------------------------------------------------
Return on operative invested capital (last 12 months), % 25.0 24.6
------------------------------------------------------------------------------
6/12 6/11 Change 6/12 3/12 Change
--------------------------------------------------------------------------------
Operative invested capital, 515.3 451.7 14% 515.3 552.1 -7%
EUR million
--------------------------------------------------------------------------------
Order backlog, EUR million 1,499.9 1,239.5 21% 1,499.9 1,428.0 5%
--------------------------------------------------------------------------------
Revenue amounted to EUR 677.4 million in January-June (1-6/2011: EUR 621.8
million) and it increased by 9 percent from the previous year. The revenue for
the second quarter increased by 5 percent from the previous year to EUR 347.9
million (4-6/2011: EUR 332.3 million). The growth in revenue was supported by
an increase in the volume of the infrastructure services in the second quarter.
The segment's operating profit increased by 6 percent in January-June compared
to the previous year, amounting to EUR 61.7 million (1-6/2011: EUR 58.4
million). The operating profit for the review period includes EUR -3.3 million
of borrowing costs according to IAS 23 (1-6/2011: EUR -3.1 million). Operating
profit for the second quarter remained on a par with the previous year,
amounting to EUR 32.0 million (4-6/2011 EUR 32.8 million). The operating profit
for the second quarter includes EUR -1.6 million of borrowing costs according
to IAS 23 (4-6/2011: EUR -1.6 million). The operating profit increased in
infrastructure services during the second quarter.
The order backlog amounted to EUR 1,499.9 million at the end of June (6/2011:
EUR 1,239.5 million). The order backlog increased by 21 percent from the
previous year and by 5 percent from the end of March 2012 (3/2012: EUR 1,428.0
million).
The segment's capital tied into plot reserves totalled EUR 279.2 million
(3/2012: EUR 297.0 million) at the end of June. The reserves included plots for
1,658,000 m2 of residential plots (3/2012: 1,652,000) and 628,000 m2 of
business premises (3/2012: 634,000).
Good residential sales to consumers continued
Residential sales continued at a good level in the second quarter. The demand
focused particularly on residential units in the final stages of construction
and completed residential units. Housing prices remained stable during the
review period. Residential sales to consumers have continued at a normal level
in July.
Residential construction in Finland, number of residential units
1-6/12 1-6/11 Change 4-6/12 1-3/12 Change
--------------------------------------------------------------------------------
Sold 1,492 1,347 11% 717 775 -7%
--------------------------------------------------------------------------------
- of which directly to consumers 950 1,048 -9% 497 453 10%
--------------------------------------------------------------------------------
Started 1,555 1,579 -2% 996 559 78%
--------------------------------------------------------------------------------
- of which directly to consumers 1,013 1,280 -21% 776 237 227%
--------------------------------------------------------------------------------
Completed 1,552 2,262 -31% 936 616 52%
--------------------------------------------------------------------------------
- of which directly to consumers 1,346 1,354 -1% 847 499 70%
--------------------------------------------------------------------------------
Under construction at the end of 4,109 3,875 6% 4,109 4,049 1%
the period
--------------------------------------------------------------------------------
- of which sold at the end of 2,293 2,127 8% 2,293 2,398 -4%
the period
--------------------------------------------------------------------------------
For sale at the end of the 2,245 1,956 15% 2,245 1,966 14%
period
--------------------------------------------------------------------------------
- of which completed 429 208 106% 429 315 36%
--------------------------------------------------------------------------------
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 own residential development
projects aimed directly at consumers in accordance with market demand. During
the second quarter, YIT started up the construction of 776 residential units as
own development projects. In addition, YIT started up the construction of
approximately 200 residential units as tender-based projects.
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, 56 percent
have been sold (6/2011: 56%), which reduces YIT's sales risk. The sales
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 301.4 million at the end
of June 2012.
Favourable development in the business and office premises market continued
The development of the business and office premises market continued to be
favourable in the second quarter, and the order backlog of YIT's business and
office premises operations remained at a good level. The leasing of business
and office premises under construction proceeded well in April-June: lease
agreements were signed on approximately 5,800 m² of premises. Rents for
business premises and investors' yield requirements remained stable in the
second quarter.
During the second quarter, YIT sold the Ratinankaari office and commercial
building in Tampere to a fund managed by Pohjola. The value of the transaction
was approximately EUR 37 million. The construction of Ratinankaari has begun,
and it is estimated to be complete in June 2013. During the second quarter, YIT
announced that it will start up the construction of the Avia Line 3 office
building in Vantaa. The office building of some 3,300 m2 is the third in a
group of four which, when completed, will comprise a total of about 12,000 m2
of office space. At the same time, a garage with 250 parking spaces will be
built for the use of all tenants in the Avia Line office buildings. Starting in
August, the construction work is expected to be complete in June 2013.
Development of infrastructure construction remained favourable
Demand for infrastructure construction continued to be good in the second
quarter, and the order backlog of infra services at the end of June 2012 was
double the order backlog of the previous year.
During the second quarter, YIT won seven separate regional contracts in the
Finnish Transport Agency's competitive bidding for regional road maintenance
contracts. The grand total of the contracts to be signed is approximately EUR
91 million, and the contracts will start in October 2012. YIT was also
selected to implement the interior contract of the Ruskeasanta railway station,
a part of the Ring Railway project in Vantaa, Finland. The value of the
contract is approximately EUR 28 million, and it includes the construction of a
railway station, pipework, ventilation and electrical engineering, and the
interior of the tunnel section. The construction work for the station, built
underground, has been started and will last for approximately two years.
INTERNATIONAL CONSTRUCTION SERVICES
1-6/12 1-6/11 Change 4-6/12 4-6/11 Change
--------------------------------------------------------------------------------
Revenue, EUR million 241.3 220.8 9% 133.4 120.5 11%
--------------------------------------------------------------------------------
Operating profit, EUR million 21.2 20.7 3% 12.7 12.3 3%
--------------------------------------------------------------------------------
Operating profit excluding IAS 23.8 22.0 8% 14.1 13.1 8%
23 adjustment, EUR million
--------------------------------------------------------------------------------
Operating profit margin, % 8.8 9.4 9.5 10.2
--------------------------------------------------------------------------------
Operating profit margin 9.9 10.0 10.6 10.9
excluding IAS 23 adjustment, %
--------------------------------------------------------------------------------
7/11-6/12 4/11-3/12
------------------------------------------------------------------------------
Return on operative invested capital (last 12 months), % 6.5 6.1
------------------------------------------------------------------------------
6/12 6/11 Change 6/12 3/12 Change
--------------------------------------------------------------------------------
Operative invested capital, 655.7 668.3 -2% 655.7 651.8 1%
EUR million
--------------------------------------------------------------------------------
Order backlog, EUR million 1,186.7 896.4 32% 1,186.7 1,142.9 4%
--------------------------------------------------------------------------------
Revenue for January-June increased by 9 percent compared to the previous year,
which was particularly attributable to revenue growth in the Baltic countries
and Central Eastern Europe, amounting to EUR 241.3 million (1-6/2011: EUR 220.8
million). The revenue for the second quarter increased by 11 percent from the
previous year to EUR 133.4 million (4-6/2011: EUR 120.5 million).
The operating profit for the review period remained on a par with the previous
year, amounting to EUR 21.2 million (1-6/2011 EUR 20.7 million). The segment's
operating profit for January-June includes EUR -2.6 million of borrowing costs
according to IAS 23 (1-6/2011: EUR -1.3 million). The revenue for the second
quarter was also on a par with the previous year, amounting to EUR 12.7 million
(4-6/2011: EUR 12.3 million). The operating profit for the second quarter
includes EUR -1.4 million of borrowing costs according to IAS 23 (4-6/2011: EUR
-0.8 million). The sale of projects at an earlier phase of construction 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 in
their early stage of construction. The weaker profitability of competitive
tendering compared to own residential development projects and its continued
high share of the revenue in the Baltic countries in particular impaired the
segment's profitability during the second quarter.
Thanks to several residential start-ups, the order backlog at the end of June
increased by 32 percent on the previous year, amounting to EUR 1,186.7 million
(6/2011: EUR 896.4 million). The order backlog remained on a par with the end
of March 2012, at which time it stood at EUR 1,142.9 million. The segment's
order backlog was partly decreased by the weakening of the ruble, which had an
impact of EUR -52.6 million in April-June.
The costs of completing the current residential and business premises
development projects for sale amounted to EUR 462.0 million at the end of June
2012.
The segment's capital tied into plot reserves totalled EUR 362.3 million at the
end of June (3/2012: EUR 346.1 million). The reserves included plots for
2,566,000 m2 of residential plots (3/2012: 2,562,000) and 689,000 m2 of
business premises in Russia, the Baltic countries, the Czech Republic and
Slovakia (3/2012: 689,000).
The segment's return on operative invested capital for the last 12 months was
6.5 percent, which is below the Group's strategic target for return on invested
capital (20 percent). YIT aims to increase the segment's return on invested
capital primarily by increasing the volume of operations, improving
profitability and further increasing capital efficiency.
Russian residential sales continued to be strong
Russia generated 77 percent of the revenue of International Construction
Services for January-June (1-6/2011: 85%). Revenue generated in Russia remained
on a par with the previous year, amounting to EUR 185.7 million (1-6/2011 EUR
187.4 million).
The capital tied into plot reserves in Russia totalled EUR 281.2 million
(3/2012: EUR 260.7 million) at the end of June. The reserves included plots for
2,211,000 m2 of residential plots (3/2012: 2,200,000) and 546,000 m2 of
business premises (3/2012: 546,000).
Residential construction in Russia, number of residential units
1-6/12 1-6/11 Change 4-6/12 1-3/12 Change
--------------------------------------------------------------------------------
Sold 1,889 1,457 30% 934 955 -2%
--------------------------------------------------------------------------------
Started 2,663 2,240 19% 1,123 1,540 -27%
--------------------------------------------------------------------------------
Completed 1) 1,358 343 296% 765 593 29%
--------------------------------------------------------------------------------
Under construction at the end of 8,670 6,346 37% 8,670 8,313 4%
the period 2)
--------------------------------------------------------------------------------
- of which sold at the end of 3,159 1,762 79% 3,159 2,881 10%
the period
--------------------------------------------------------------------------------
For sale at the end of the 5,987 4,993 20% 5,987 5,799 3%
period
--------------------------------------------------------------------------------
- of which completed 476 409 16% 476 367 30%
--------------------------------------------------------------------------------
Under construction at the end of the 6/12 6/11 Change 6/12 3/12 Change
period 2)
--------------------------------------------------------------------------------
St. Petersburg 2,290 1,801 27% 2,290 2,102 9%
--------------------------------------------------------------------------------
Moscow region 4,016 3,570 12% 4,016 3,882 3%
--------------------------------------------------------------------------------
Yekaterinburg, Kazan, Don Rostov and 2,364 975 142% 2,364 2,329 2%
Moscow city
--------------------------------------------------------------------------------
1) Completion of the projects requires commissioning by the authorities.
2) At the end of June 2012, YIT had 365 residential units at Russian sites
whose construction was suspended in the autumn of 2008 (6/2011: 365). 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 own 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 St.
Petersburg and the Moscow region during the second quarter.
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. In July, residential sales have continued at a normal level
in Russia.
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 second quarter, customers have taken out housing loans in 39 percent of
YIT's residential sales. Residential sales were also supported by the pent up
demand for new housing, continued favourable consumer confidence, oil prices
and moderate interest rates for mortgages.
Housing prices continued to increase at a moderate rate during the second
quarter in Russia, and YIT slightly increased the prices of its residential
units in all of its operating cities in Russia.
Based on the favourable demand, YIT has actively started up new residential
projects in Russia, and in the second quarter start-ups were made in St.
Petersburg, the Moscow region, Rostov-on-Don and Yekaterinburg. During the
second quarter, YIT expanded its operations to the city of Elektrostal, located
in the eastern part of Moscow region.
The number of residential units for sale has been increased in a controlled
manner, and the sales inventory at the end of June was geographically balanced.
The number of completed but unsold residential units has remained at a
relatively low level. Of the residential units under construction, 36 percent
had been sold (6/2011: 28%).
After the handover of residential projects, YIT offers its customers service
and maintenance. At the end of June 2012, YIT was responsible for the service
and maintenance of approximately 11,500 residential units.
YIT's volume in the Russian business premises market remained at a low level
during the second 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 23
percent of the revenue of International Construction Services for January-June
(1-6/2011: 15%). Revenue generated in these countries increased by 67 percent
compared to the year before to EUR 55.6 million (1-6/2011: EUR 33.4 million).
The capital tied into plot reserves in the Baltic countries, the Czech Republic
and Slovakia totalled EUR 81.1 million at the end of June (3/2012: EUR 85.4
million). The reserves included plots for 355,000 m2 of residential plots
(3/2012: 362,000) and 143,000 m2 of business premises (3/2012: 143,000).
The weaker profitability of competitive tendering compared to own residential
development projects and its continued high share of the revenue in the Baltic
countries in particular continued to impair the segment's profitability during
the second quarter. YIT aims to shift the focus of operations from tender-based
production to own residential development projects in order to improve
profitability as residential demand revives.
Residential construction in the Baltic countries and Central Eastern Europe,
number of residential units
1-6/12 1-6/11 Change 4-6/12 1-3/12 Change
--------------------------------------------------------------------------------
Sold 167 156 7% 92 75 23%
--------------------------------------------------------------------------------
Started 284 316 -10% 284 0
--------------------------------------------------------------------------------
Completed 279 81 244% 47 232 -80%
--------------------------------------------------------------------------------
Under construction at the end of 615 611 1% 615 378 63%
the period
--------------------------------------------------------------------------------
- of which sold at the end of 110 108 2% 110 104 6%
the period
--------------------------------------------------------------------------------
For sale at the end of the 718 609 18% 718 526 37%
period
--------------------------------------------------------------------------------
- of which completed 213 106 101% 213 252 -15%
--------------------------------------------------------------------------------
Residential sales were at a relatively low level in the second 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 700 units, and YIT aims to increase the number of
residential units for sale in accordance with demand. YIT made residential
start-ups in Latvia, Lithuania, Slovakia and in the Czech Republic in
particular. Acquisition of new residential plots was continued during the
second quarter. YIT's relative position in the region has strengthened as a
result of YIT's stable financial position.
Construction of business premises in the Baltic countries and Central Eastern
Europe
During the second quarter, YIT signed an agreement according to which Capital
Mill purchases YIT's 90% holding of an office building in Tallinn. The floor
area of the office building constructed by YIT is approximately 8,300 m², and
it is estimated to be completed in August 2012.
PERSONNEL
Personnel by business segment 6/12 6/11 Change 6/12 3/12 Change
--------------------------------------------------------------------------------
Building Services Northern 15,736 16,269 -3% 15,736 15,640 1%
Europe
--------------------------------------------------------------------------------
Building Services Central Europe 3,465 3,597 -4% 3,465 3,505 -1%
--------------------------------------------------------------------------------
Construction Services Finland 3,918 3,730 5% 3,918 3,438 14%
--------------------------------------------------------------------------------
International Construction 2,713 2,785 -3% 2,713 2,730 -1%
Services
--------------------------------------------------------------------------------
Corporate Services 423 426 -1% 423 390 8%
--------------------------------------------------------------------------------
Group, total 26,255 26,807 -2% 26,255 25,703 2%
--------------------------------------------------------------------------------
Personnel by country/region 6/12 6/11 Change 6/12 3/12 Change
--------------------------------------------------------------------------------
Finland 9,652 10,031 -4% 9,652 8,967 8%
--------------------------------------------------------------------------------
Sweden 4,629 4,681 -1% 4,629 4,690 -1%
--------------------------------------------------------------------------------
Norway 3,617 3,423 6% 3,617 3,621 0%
--------------------------------------------------------------------------------
Germany 2,530 2,706 -7% 2,530 2,577 -2%
--------------------------------------------------------------------------------
Russia 2,596 2,465 5% 2,596 2,579 1%
--------------------------------------------------------------------------------
Denmark 1,160 1,369 -15% 1,160 1,169 -1%
--------------------------------------------------------------------------------
Baltic countries 963 1,074 -10% 963 989 -3%
--------------------------------------------------------------------------------
Other countries (Central Europe 1,108 1,058 5% 1,108 1,111 0%
excluding Germany)
--------------------------------------------------------------------------------
Group, total 26,255 26,807 -2% 26,255 25,703 2%
--------------------------------------------------------------------------------
In January-June 2012, the Group employed 25,919 people on average (1-6/2011:
25,754). At the end of June, the Group employed 26,255 people (6/2011: 26,807).
YIT hired almost 1,000 summer employees in its Finnish operations for the
summer 2012. The summer employees work in a variety of production-related and
administrative tasks at YIT in construction, building services, industrial and
corporate services functions.
The cost effect of YIT's share-based incentive scheme was about EUR 2.5 million
in January-June (1-6/2011: EUR 2.7 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)
1-6/12 1-6/11 Change 4-6/12 4-6/11 Change
--------------------------------------------------------------------------------
Revenue, EUR million 2,317.3 2,106.9 10% 1,218.9 1,137.2 7%
--------------------------------------------------------------------------------
Operating profit, EUR 122.8 107.1 15% 67.7 67.9 0%
million
--------------------------------------------------------------------------------
Operating profit margin, % 5.3 5.1 5.6 6.0
--------------------------------------------------------------------------------
Profit before taxes, EUR 111.5 97.7 14% 61.6 63.0 -2%
million
--------------------------------------------------------------------------------
Profit for the review 83.6 71.0 18% 46.6 46.1 1%
period, EUR million 1)
--------------------------------------------------------------------------------
Earnings/share, EUR 0.67 0.57 18% 0.37 0.37 0%
--------------------------------------------------------------------------------
Operating cash flow after 33.6 15.9 111% 42.6 -0.2
investments, EUR million
--------------------------------------------------------------------------------
1) attributable to equity holders
6/12 6/11 Change 6/12 3/12 Change
--------------------------------------------------------------------------------
Order backlog, EUR million 4,409.3 3,796.9 16% 4,409.3 4,385.3 1%
--------------------------------------------------------------------------------
Return on investment (last 12.5 15.7 12.5 12.8
12 months) %
--------------------------------------------------------------------------------
Equity ratio, % 30.0 29.7 30.0 28.8
--------------------------------------------------------------------------------
Gearing ratio, % 86.7 79.9 86.7 84.2
--------------------------------------------------------------------------------
Revenue based on Group reporting increased by 10 percent compared to the
previous year, amounting to EUR 2,317.3 million in January-June (1-6/2011: EUR
2,106.9 million). The revenue for the second quarter increased by 7 percent
from the previous year to EUR 1,218.9 million (4-6/2011: EUR 1,137.2 million).
The completion schedules of own 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 second
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, own residential development projects are only
recognised as income upon project delivery. Following the IFRIC 15 adjustment,
the Group's operating profit for January-June increased by 15 percent compared
to the previous year, amounting to EUR 122.8 million (1-6/2011: EUR 107.1
million). Following the IFRIC 15 adjustment, the Group's operating profit
margin for January-June was 5.3 percent (1-6/2011: 5.1%). Operating profit for
the second quarter was on a par with the previous year, amounting to EUR 67.7
million (4-6/2011: EUR 67.9 million). Operating profit margin for the second
quarter was 5.6 percent (4-6/2011: 6.0%).
Profit before taxes based on Group reporting increased by 14 percent compared
to the previous year, amounting to EUR 111.5 million in January-June (1-6/2011:
EUR 97.7 million). Profit before taxes for the second quarter was on a par with
the previous year, amounting to EUR 61.6 million (4-6/2011: EUR 63.0 million).
Earnings per share based on Group reporting increased by 18 percent from the
year before in January-June, amounting to EUR 0.67 (1-6/2011: EUR 0.57).
Earnings per share for the second quarter was on a par with the previous year,
amounting to EUR 0.37 (4-6/2011: EUR 0.37).
The order backlog based on Group reporting amounted to EUR 4,409.3 million at
the end of June (6/2011: EUR 3,796.9 million).
Return on investment amounted to 12.5 percent for the last 12 months
(4/2011-3/2012: 12.8%). Invested capital is calculated by deducting
non-interest bearing liabilities from the balance sheet total. The balance
sheet total at the end of June was EUR 3,646.9 million (3/2012: EUR 3,631.9
million).
The equity ratio increased slightly compared to the end of March 2012,
amounting to 30.0 percent (3/2012: 28.8%).
Diverse capital structure and good liquidity position
YIT has a diverse capital structure and a good liquidity position. Cash
reserves amounted to EUR 169.5 million at the end of June (3/2012: EUR 209.3
million). In addition, committed credit and overdraft facilities amounting to a
total of EUR 357.1 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 March 2012, amounting to
86.7 percent at the end of June (3/2012: 84.2%). Net financial liabilities
increased from the end of March 2012 to EUR 803.1 million (3/2012: EUR 755.8
million).
Net financial expenses increased in January-June compared to the previous year
and amounted to EUR 11.3 million (1-6/2011: EUR 9.4 million), or 0.5 percent
(1-6/2011: 0.4%) of the Group's revenue. The net financial expenses include EUR
7.9 million of capitalisations in compliance with IAS 23 (1-6/2011: EUR 6.3
million). The exchange rate differences included in the net financial expenses,
totalling EUR -2.7 million (1-6/2011: EUR -2.1 million), were comprised almost
entirely of costs of hedging debt investments in Russia. Net financial expenses
increased in the second quarter compared to the previous year and amounted to
EUR -6.1 million (4-6/2011: EUR -4.9 million), or 0.5 percent (4-6/2011: 0.4%)
of the Group's revenue. The net financial expenses include EUR 4.2 million of
capitalisations in compliance with IAS 23 (4-6/2011: EUR 3.2 million). The
exchange rate differences included in the net financial expenses totalled EUR
-1.6 million (4-6/2011: EUR -0.8 million).
The hedged ruble exposure increased from the end of March 2012. At the end of
June 2012, EUR 103.1 million of the capital invested in Russia was comprised of
debt investments (3/2012: EUR 88.1 million) and EUR 406.1 million were equity
investments or similar fixed net investments (3/2012: EUR 440.6 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 972.6 million at the end of June (3/2012:
EUR 965.2 million), and the average interest rate was 3.1 percent (3/2012:
3.2%). Fixed-interest loans accounted for 58 percent of the Group's financial
liabilities (3/2012: 59%). Of the loans, 47 percent had been raised directly
from the capital and money markets (3/2012: 42%), 41 percent from banks and
other financial institutions (3/2012: 46%) and 11 percent from insurance
companies (3/2012: 12%). The maturity distribution of long-term loans is
balanced. A total of EUR 23.1 million of long-term loans will mature during the
latter half of 2012.
The total amount of construction-stage contract receivables sold to financial
institutions decreased from the end of March 2012, amounting to EUR 274.3
million at the end of June (3/2012: EUR 323.3 million). Of this amount, EUR
182.0 million is included in interest-bearing liabilities on the balance sheet
(3/2012: EUR 237.0 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 2.6 million in the review period (1-6/2011: EUR 2.2
million), of which EUR 1.2 million in the second quarter (4-6/2011: EUR 1.1
million) and these are fully included in the financial expenses.
Participations in the housing corporation loans of unsold completed residential
units amounted to EUR 62.9 million at the end of June (3/2012: EUR 45.4
million), and they are included in interest-bearing liabilities. The interest
on the participations is included in housing corporation charges and is thus
booked in project expenses. Interest on the participations amounted to EUR 1.0
million in the review period (1-6/2011: EUR 0.5 million) of which EUR 0.5
million in the second quarter (4-6/2011: EUR 0.3 million).
During the second quarter, YIT Corporation 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.
YIT Corporation's Board of Directors confirmed the rewards for the 2011 earning
period under the share-based incentive scheme for YIT's management on April 26,
2012, which were conveyed as a directed share issue without consideration. In
the share issue, 130,976 YIT Corporation shares were issued and conveyed
without consideration to the key persons participating in the Share Ownership
Plan according to the terms and conditions of the plan.
During the review period, 12,672 shares were returned to the company in
accordance with the terms and conditions of the share-based incentive scheme,
after which the company held 1,834,110 treasury shares at the end of June 2012.
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 13.38 (June 30, 2011: EUR 17.24). The share price
increased by approximately 8 percent during January-June. The highest price of
the share during the review period was EUR 17.25 (1-6/2011: EUR 21.92), the
lowest was EUR 11.87 (1-6/2011: EUR 15.41) and the average price was EUR 14.95
(1-6/2011: EUR 19.58). Share turnover on Nasdaq OMX in January-June amounted to
61,906 thousand shares (1-6/2011: 61,762 thousand). The value of turnover was
EUR 925.8 million (1-6:2011: EUR 1,204.7 million), source: Nasdaq OMX.
In addition to the Helsinki Stock Exchange, YIT shares are also traded on
alternative market places, such as Chi-X, BATS and Turquoise. The share of
trade volume on alternative market places decreased slightly compared to the
previous year during the review period. During January-June, 36,340 thousand
YIT Corporation shares changed hands on alternative market places (1-6/2011:
39,241 thousand), corresponding to approximately 37 percent of the total share
trade (1-6/2011: 39%). Of the alternative market places, YIT shares changed
hands particularly in Chi-X, source: Nasdaq OMX and Fidessa Fragmentation
Index.
YIT Corporation's market capitalisation at the end of the review period was EUR
1,677.7 million (6/2011: EUR 2,159.7 million). The market capitalisation has
been calculated excluding the shares held by the company.
Number of shareholders and flagging notifications
At the end of June 2012, the number of registered shareholders was 35,888
(6/2011: 32,975). At the end of June, a total of 31.5 percent of the shares
were owned by nominee-registered and non-Finnish investors (6/2011: 39.3%).
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 (own 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 own 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 denominated in
rubles. Capital invested in Russia totalled EUR 509.2 million at the end of the
period (3/2012: EUR 528.7 million). The amount of equity or equivalent net
investments at the end of the period was EUR 406.1 million (3/2012: EUR 440.6
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 103.1 million at the end of the period (3/2012: EUR
88.1 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.
REDUCING CARBON DIOXIDE EMISSIONS AS PART OF CORPORATE RESPONSIBILITY
YIT aims to reduce its carbon dioxide (CO2) emissions significantly in the
years to come. Reduction of emissions supports cost-efficiency and is part of
YIT's strategy of balanced and profitable growth. YIT aims to minimise the
environmental impacts of its activity by, among others, making its operations
more efficient and utilising its services and solutions related to energy
efficiency. Measures that influence the energy consumption of buildings include
24-hour monitoring of indoor conditions, LED illumination, heat recovery and
continuous maintenance. In the future, emissions will also be reduced by
increasingly using renewable energy sources and creating innovative energy and
material efficient working methods.
Furthermore, YIT aims to make its energy consumption more efficient and improve
the reporting on carbon dioxide emissions. YIT responded to the CDP survey
(Carbon Disclosure Project) for the first time with regard to YIT's carbon
dioxide emissions in 2011 and measures to reduce them and fight climate change.
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 operating profit for 2012 during the second
half 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 (June 2012 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 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. In Denmark, construction of business premises and renovation are
estimated to begin to increase slightly during 2012-2013. 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 stay at a low level.
According to 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 and
Austria. 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 remain low 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.
Vacancy rates of offices continue to be rather high after the last recession,
with the vacant 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. A decrease in
oil prices might weaken the Russian economy and thereby also affect the housing
construction outlook.
The volume of business premises construction is expected to grow at a moderate
rate in 2012. YIT's largest single 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 pent 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 interest rates remaining low.
INTERIM REPORT JAN 1 - JUN 30, 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 Jan 1 - Jun 30, 2012, IFRS
2.4 Statement of comprehensive income Jan 1 - Jun 30, 2012, IFRS
2.5 Consolidated income statement Apr 1 - Jun 30, 2012, IFRS
2.6 Consolidated balance sheet, IFRS
2.7 Consolidated statement of changes in equity
2.8 Consolidated cash flow statement
2.9 Accounting principles of the interim report
2.10 Definitions of key financial figures
2.11 Financial risk management
2.12 Unusual items affecting operating profit
2.13 Business combinations and disposals
2.14 Changes in property, plant and equipment
2.15 Inventories
2.16 Notes on equity
2.17 Borrowings
2.18 Change in contingent liabilities and assets and commitments
2.19 Transactions with associated companies
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
1-6/12 1-6/11 Change 1-12/11
--------------------------------------------------------------------------------
Revenue, EUR million 2,282.8 2,163.8 5% 4,524.7
--------------------------------------------------------------------------------
Operating profit, EUR million 112.9 120.7 -6% 240.5
--------------------------------------------------------------------------------
% of revenue 4.9 5.6 5.3
--------------------------------------------------------------------------------
Profit before taxes, EUR million 101.6 111.3 -9% 215.8
--------------------------------------------------------------------------------
Profit for the report period, EUR million 1) 76.3 80.4 -5% 156.7
--------------------------------------------------------------------------------
Earnings per share, EUR 0.61 0.64 -5% 1.25
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 0.61 0.64 -5% 1.25
--------------------------------------------------------------------------------
Equity per share, EUR 7.91 7.42 7% 7.93
--------------------------------------------------------------------------------
Return on investment, from the last 12 13.7 15.4 14.8
months, %
--------------------------------------------------------------------------------
Equity ratio, % 32.2 31.8 32.9
--------------------------------------------------------------------------------
Order backlog at the end of the period, EUR 4,045.4 3,509.4 15% 3,752.7
million
--------------------------------------------------------------------------------
Average number of personnel 25,919 26,021 0% 26,254
--------------------------------------------------------------------------------
1) Attributable to equity holders of the parent company
1.3 Revenue, segment reporting
EUR million 1-6/12 1-6/11 Change 1-12/11
----------------------------------------------------------------------
Building Services Northern Europe 1,051.2 985.6 7% 2,097.6
----------------------------------------------------------------------
- Group internal -25.6 -28.9 -63.2
----------------------------------------------------------------------
- external 1,025.5 956.7 7% 2,034.4
----------------------------------------------------------------------
Building Services Central Europe 339.0 368.2 -8% 779.3
----------------------------------------------------------------------
- Group internal -0.1 -0.1 -0.3
----------------------------------------------------------------------
- external 338.8 368.1 -8% 779.0
----------------------------------------------------------------------
Construction Services Finland 677.4 621.8 9% 1,226.9
----------------------------------------------------------------------
- Group internal -0.9 -0.7 -1.9
----------------------------------------------------------------------
- external 676.5 621.1 9% 1,225.0
----------------------------------------------------------------------
International Construction Services 241.3 220.8 9% 489.2
----------------------------------------------------------------------
- Group internal -0.1 -3.7 -4.2
----------------------------------------------------------------------
- external 241.2 217.1 11% 485.0
----------------------------------------------------------------------
Other items 0.8 0.8 1.5
----------------------------------------------------------------------
Revenue in total, segment reporting 2,282.8 2,163.8 5% 4,524.7
----------------------------------------------------------------------
IFRIC 15 adjustments 34.5 -56.9 -142.6
----------------------------------------------------------------------
Revenue in total, IFRS 2,317.3 2,106.9 10% 4,382.1
----------------------------------------------------------------------
1.4 Operating profit and Profit for the review period, segment reporting
EUR million 1-6/12 1-6/11 Change 1-12/11
--------------------------------------------------------------------------------
Building Services Northern Europe 30.0 35.9 -17% 78.8
--------------------------------------------------------------------------------
Building Services Central Europe 11.8 16.1 -27% 33.3
--------------------------------------------------------------------------------
Construction Services Finland 61.7 58.4 6% 111.6
--------------------------------------------------------------------------------
International Construction Services 21.2 20.7 3% 37.2
--------------------------------------------------------------------------------
Other items -11.8 -10.4 -20.4
--------------------------------------------------------------------------------
Operating profit total, segment reporting 112.9 120.7 -6% 240.5
--------------------------------------------------------------------------------
Financial income and expenses -11.3 -9.4 20% -24.8
--------------------------------------------------------------------------------
Profit before taxes, segment reporting 101.6 111.3 -9% 215.8
--------------------------------------------------------------------------------
Taxes -25.0 -30.4 -18% -58.0
--------------------------------------------------------------------------------
Attributable to non-controlling interests -0.3 -0.5 -44% -1.0
--------------------------------------------------------------------------------
Profit for the review period, segment reporting 76.3 80.4 -5% 156.7
--------------------------------------------------------------------------------
IFRIC 15 adjustments 7.1 -9.5 -32.3
--------------------------------------------------------------------------------
Profit for the review period, IFRS 83.4 70.9 18% 124.4
--------------------------------------------------------------------------------
Operating profit margin, segment reporting
% 1-6/12 1-6/11 1-12/11
------------------------------------------------------------
Building Services Northern Europe 2.9 3.6 3.8
------------------------------------------------------------
Building Services Central Europe 3.5 4.4 4.3
------------------------------------------------------------
Construction Services Finland 9.1 9.4 9.1
------------------------------------------------------------
International Construction Services 8.8 9.4 7.6
------------------------------------------------------------
Operating profit, segment reporting 4.9 5.6 5.3
------------------------------------------------------------
1.5 Order backlog, segment reporting
EUR million 6/12 6/11 Change 12/11
-------------------------------------------------------------------------
Building Services Northern Europe 955.1 879.5 9% 913.1
-------------------------------------------------------------------------
Building Services Central Europe 473.4 554.1 -15% 449.5
-------------------------------------------------------------------------
Construction Services Finland 1,499.9 1,239.5 21% 1,493.6
-------------------------------------------------------------------------
International Construction Services 1,186.7 896.4 32% 962.5
-------------------------------------------------------------------------
Other items -69.7 -60.2 -66.0
-------------------------------------------------------------------------
Order backlog total, segment reporting 4,045.4 3,509.4 15% 3,752.7
-------------------------------------------------------------------------
IFRIC 15 adjustments 363.9 287.5 27% 395.9
-------------------------------------------------------------------------
Order backlog, IFRS 4,409.3 3,796.9 16% 4,148.6
-------------------------------------------------------------------------
1.6 YIT Group figures by quarter, segment reporting
4-6/12 1-3/12 10-12/1 7-9/11 4-6/11 1-3/11
1
--------------------------------------------------------------------------------
Revenue, EUR million 1,184.5 1,098.3 1,264.5 1,096.5 1,136.9 1,026.9
--------------------------------------------------------------------------------
Operating profit, EUR 60.5 52.3 76.2 43.6 70.3 50.4
million
--------------------------------------------------------------------------------
% of revenue 5.1 4.8 6.0 4.0 6.2 4.9
--------------------------------------------------------------------------------
Profit before taxes, EUR 54.5 47.1 68.6 35.8 65.5 45.9
million
--------------------------------------------------------------------------------
Profit for the review 41.7 34.6 51.8 24.5 47.6 32.7
period, EUR million 1)
--------------------------------------------------------------------------------
Earnings/share, EUR 0.33 0.28 0.41 0.20 0.38 0.26
--------------------------------------------------------------------------------
Diluted earnings/share, 0.33 0.28 0.41 0.20 0.38 0.26
EUR
--------------------------------------------------------------------------------
Equity/share, EUR 7.91 7.74 7.93 7.38 7.42 7.05
--------------------------------------------------------------------------------
Return on investment, from 13.7 14.8 14.8 14.4 15.4 15.1
the last 12 months, %
--------------------------------------------------------------------------------
Equity ratio, % 32.2 31.5 32.9 31.4 31.8 31.0
--------------------------------------------------------------------------------
Order backlog at the end 4,045.4 3,965.5 3,752.7 3,489.0 3,509.4 3,355.6
of the period, EUR
million
--------------------------------------------------------------------------------
Average number of 25,998 25,821 26,245 23,796 26,021 25,754
personnel
--------------------------------------------------------------------------------
Personnel at the end of 26,255 25,703 25,996 26,502 26,807 25,748
the period
--------------------------------------------------------------------------------
1) Attributable to equity holders of the parent company
1.7. Segment information by quarter, segment reporting
Revenue by business segment
EUR million 4-6/12 1-3/12 10-12/1 7-9/11 4-6/11 1-3/11
1
--------------------------------------------------------------------------------
Building Services Northern 538.1 513.1 600.1 511.9 509.4 476.2
Europe
--------------------------------------------------------------------------------
Building Services Central 179.5 159.4 200.3 210.8 191.1 177.1
Europe
--------------------------------------------------------------------------------
Construction Services 347.9 329.5 335.7 269.4 332.3 289.5
Finland
--------------------------------------------------------------------------------
International Construction 133.4 107.9 145.9 122.5 120.5 100.3
Services
--------------------------------------------------------------------------------
Other items -14.4 -11.6 -17.5 -18.1 -16.4 -16.2
--------------------------------------------------------------------------------
Revenue in total, segment 1,184.5 1,098.3 1,264.5 1,096.5 1,136.9 1,026.9
reporting
--------------------------------------------------------------------------------
Operating profit by business segment
EUR million 4-6/12 1-3/12 10-12/ 7-9/11 4-6/11 1-3/11
11
--------------------------------------------------------------------------------
Building Services Northern 15.3 14.6 23.0 19.9 18.8 17.1
Europe
--------------------------------------------------------------------------------
Building Services Central Europe 6.6 5.2 9.3 7.9 12.1 4.0
--------------------------------------------------------------------------------
Construction Services Finland 32.0 29.7 32.1 21.1 32.8 25.6
--------------------------------------------------------------------------------
International Construction 12.7 8.5 17.4 -0.9 12.3 8.4
Services
--------------------------------------------------------------------------------
Other items -6.1 -5.7 -5.6 -4.4 -5.7 -4.7
--------------------------------------------------------------------------------
Operating profit in total, 60.5 52.3 76.2 43.6 70.3 50.4
segment reporting
--------------------------------------------------------------------------------
Operating profit margin by business segment
% 4-6/12 1-3/12 10-12/11 7-9/11 4-6/11 1-3/11
--------------------------------------------------------------------------------
Building Services Northern 2.8 2.9 3.8 3.9 3.7 3.6
Europe
--------------------------------------------------------------------------------
Building Services Central 3.7 3.3 4.6 3.7 6.3 2.3
Europe
--------------------------------------------------------------------------------
Construction Services Finland 9.2 9.0 9.6 7.8 9.9 8.8
--------------------------------------------------------------------------------
International Construction 9.5 7.9 11.9 -0.7 10.2 8.4
Services
--------------------------------------------------------------------------------
Order backlog by business segment
EUR million 6/12 3/12 12/11 9/11 6/11 3/11
--------------------------------------------------------------------------------
Building Services Northern 955.1 969.4 913.1 886.1 879.5 804.9
Europe
--------------------------------------------------------------------------------
Building Services Central 473.4 500.5 449.5 523.9 554.1 573.2
Europe
--------------------------------------------------------------------------------
Construction Services 1,499.9 1,428.0 1,493.6 1,289.3 1,239.5 1,176.0
Finland
--------------------------------------------------------------------------------
International Construction 1,186.7 1,142.9 962.5 850.1 896.4 862.7
Services
--------------------------------------------------------------------------------
Other items -69.7 -75.3 -66.0 -60.3 -60.2 -61.2
--------------------------------------------------------------------------------
Order backlog, segment 4,045.4 3,965.5 3,752.7 3,489.0 3,509.4 3,355.6
reporting
--------------------------------------------------------------------------------
Operative invested capital
EUR million 6/12 3/12 12/11 9/11 6/11 3/11
-----------------------------------------------------------------------------
Building Services Northern Europe 357.8 339.4 372.9 375.6 323.5 282.8
-----------------------------------------------------------------------------
Building Services Central Europe 106.5 96.4 72.0 56.0 40.8 18.9
-----------------------------------------------------------------------------
Construction Services Finland 515.3 552.1 558.4 503.0 451.7 436.1
-----------------------------------------------------------------------------
International Construction Services 655.7 651.8 602.2 601.5 668.3 720.0
-----------------------------------------------------------------------------
Return on operative invested capital
last 12 months, % 6/12 3/12 12/11 9/11 6/11 3/11
------------------------------------------------------------------------
Building Services Northern Europe 21.4 24.5 23.8 23.5 28.6 34.8
------------------------------------------------------------------------
Building Services Central Europe 39.4 59.7 53.8 58.5 91.7 83.1
------------------------------------------------------------------------
Construction Services Finland 25.0 24.6 24.0 26.3 30.9 28.3
------------------------------------------------------------------------
International Construction Services 6.5 6.1 6.5 5.8 6.7 5.8
------------------------------------------------------------------------
1.8 Reconciliation of the segment reporting and the group reporting
Report 1-6/12 1-6/11
1-12/11
ing
perio
d
--------------------------------------------------------------------------------
----------
Income Segment IFRIC IFRS Segment IFRIC IFRS Segment
IFRIC IFRS
state reportin 15 reportin 15 reportin
15
ment, g adjust g adjust g
adjust
EUR ments ments
ments
milli
on
--------------------------------------------------------------------------------
----------
Revenu 2,282.8 34.5 2,317.3 2,163.8 -56.9 2,106.9 4,524.7
-142.6 4,382.1
e
--------------------------------------------------------------------------------
----------
Other -2,148.5 -24.5 -2,173.0 -2,023.7 43.3 -1,980.3 -4,244.6
102.1 -4,142.5
opera
ting
incom
e and
expen
ses
--------------------------------------------------------------------------------
----------
Deprec -21.5 -21.5 -19.4 -19.4 -39.6
-39.6
iation
--------------------------------------------------------------------------------
----------
Operat 112.9 10.0 122.8 120.7 -13.6 107.1 240.5
-40.5 200.0
ing
profi
t
--------------------------------------------------------------------------------
----------
Financ -11.3 -11.3 -9.4 -9.4 -24.8
-24.8
ial
incom
e and
expen
ses
--------------------------------------------------------------------------------
----------
Profit 101.6 10.0 111.5 111.3 -13.6 97.7 215.7
-40,5 175.3
befor
e
taxes
--------------------------------------------------------------------------------
----------
Income -25.0 -2.9 -27.9 -30.4 3.7 -26.7 -58.0
-7,8 -50.2
taxes
--------------------------------------------------------------------------------
----------
Profit 76.6 7.1 83.6 80.9 -9.9 71.0 157.7
125.1
for
the
revie
w
perio
d
--------------------------------------------------------------------------------
----------
Attrib
utable
to:
--------------------------------------------------------------------------------
----------
Equity 76.3 7.1 83.4 80.4 -9.5 70.9 156.7
-32.2 124.5
holde
rs of
the
paren
t
compa
ny
--------------------------------------------------------------------------------
----------
Non-co 0.3 -0.1 0.2 0.5 -0.4 0.1 1.0
-0.4 0.6
ntroll
ing
inter
ests
--------------------------------------------------------------------------------
----------
--------------------------------------------------------------------------------
----------
Earnin 0.61 0.67 0.64 0.57 1.25
0.99
gs/sha
re,
EUR
--------------------------------------------------------------------------------
----------
Dilute 0.61 0.67 0.64 0.57 1.25
0.99
d
earni
ngs/sh
are,
EUR
--------------------------------------------------------------------------------
----------
Quarter 4-6/12 4-6/11
--------------------------------------------------------------------------------
Income Segment IFRIC 15 IFRS Segment IFRIC 15 IFRS
statement, reporting adjustmen reporting adjustmen
EUR million ts ts
--------------------------------------------------------------------------------
Revenue 1,184.5 34.4 1,218.9 1,136.9 0.3 1,137.2
--------------------------------------------------------------------------------
Other operating -1,113.4 -27.3 -1,140.7 -1,056.8 -2.7 -1,059.4
income and
expenses
--------------------------------------------------------------------------------
Depreciation -10.6 -10.6 -9.8 -9.8
--------------------------------------------------------------------------------
Operating profit 60.5 7.1 67.7 70.3 -2.4 67.9
--------------------------------------------------------------------------------
Financial income -6.1 -6.1 -4.8 -4.8
and expenses
--------------------------------------------------------------------------------
Profit before 54.5 7.1 61.6 65.5 -2.4 63.2
taxes
--------------------------------------------------------------------------------
Income taxes -12.8 -2.2 -15.0 -17.5 0.6 -16.9
--------------------------------------------------------------------------------
Profit for the 41.7 4.9 46.6 48.0 -1.8 46.3
review period
--------------------------------------------------------------------------------
Attributable to:
--------------------------------------------------------------------------------
Equity holders 41.7 5.2 46.9 47.6 -1.4 46.2
of the parent
company
--------------------------------------------------------------------------------
Non-controlling 0.0 -0.3 -0.3 0.3 -0.2 0.1
interests
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings/share, 0.33 0.37 0.38 0.37
EUR
--------------------------------------------------------------------------------
Diluted 0.33 0.37 0.38 0.37
earnings/share,
EUR
--------------------------------------------------------------------------------
6/12 6/11 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 540.0 540.0 532.3 532.3 538.1
538.1
non-c
urrent
asset
s
--------------------------------------------------------------------------------
----
Deferr 44.0 9.7 53.7 41.6 10.2 51.8 47.2 13.1
60.3
ed tax
asset
s
--------------------------------------------------------------------------------
----
--------------------------------------------------------------------------------
----
Curren
t
asset
s
--------------------------------------------------------------------------------
----
Invent 1,469.0 300.5 1,769.5 1,324.7 267.3 1,592.0 1,348.2 324.4
1,672.6
ories
--------------------------------------------------------------------------------
----
Trade 1,161.6 -47.4 1,114.3 1,040.1 -62.9 977.2 1,122.0 -94.7
1,027.3
and
other
receiv
ables
--------------------------------------------------------------------------------
----
Cash 169.5 169.5 234.1 234.1 206.1
206.1
and
cash
equiva
lents
--------------------------------------------------------------------------------
----
Total 3,384.1 262.8 3,646.9 3,172.8 214.6 3,387.4 3,261.6 242.9
3,504.5
asset
s
--------------------------------------------------------------------------------
----
--------------------------------------------------------------------------------
----
Equity 994.7 -68.7 926.0 933.0 -53.7 879.3 996.7 -75.6
921.1
--------------------------------------------------------------------------------
----
--------------------------------------------------------------------------------
----
Non-cu
rrent
liabi
lities
--------------------------------------------------------------------------------
----
Financ 549.9 549.9 555.5 555.5 522.9
522.9
ial
liabi
lities
--------------------------------------------------------------------------------
----
Other 131.9 131.9 97.0 97.0 128.5
128.5
non-c
urrent
liabil
ities
--------------------------------------------------------------------------------
----
Deferr 98.1 -8.4 89.6 97.8 -6.2 91.6 96.6 -8.3
88.3
ed tax
liabi
lities
--------------------------------------------------------------------------------
----
--------------------------------------------------------------------------------
----
Curren
t
liabi
lities
--------------------------------------------------------------------------------
----
Financ 341.6 81.0 422.7 280.4 101.0 381.4 325.2 98.4
423.6
ial
liabi
lities
--------------------------------------------------------------------------------
----
Advanc 298.5 259.6 558.1 243.0 178.8 421.8 231.3 227.0
458.3
es
recei
ved
--------------------------------------------------------------------------------
----
Other 969.3 -0.6 968.8 966.3 -5.4 960.9 960.4 1.2
961.6
curre
nt
liabi
lities
--------------------------------------------------------------------------------
----
Total 3,384.1 262.8 3,646.9 3,172.8 214.6 3,387.4 3,261.6 242.9
3,504.5
equit
y and
liabi
lities
--------------------------------------------------------------------------------
----
2. GROUP REPORTING, IFRS
2.1 Key figures, IFRS
6/12 6/11 Change 12/11
--------------------------------------------------------------------------------
Earnings/share, EUR 0.67 0.57 18% 0.99
--------------------------------------------------------------------------------
Diluted earnings/share, EUR 0.67 0.57 18% 0.99
--------------------------------------------------------------------------------
Equity/share, EUR 7.37 7.00 5% 7.33
--------------------------------------------------------------------------------
Average share price during the period, EUR 14.95 19.58 -24% 15.28
--------------------------------------------------------------------------------
Share price at the end of the period, EUR 13.38 17.24 -22% 12.38
--------------------------------------------------------------------------------
Market capitalization at the end of the 1,677.7 2,159.7 -22% 1,550.9
period, EUR million
--------------------------------------------------------------------------------
Weighted average share-issue adjusted number 125,316 125,113 0% 125,210
of shares outstanding, thousands
--------------------------------------------------------------------------------
Weighted average share-issue adjusted number 125,316 125,113 0% 125,210
of shares outstanding, thousands, diluted
--------------------------------------------------------------------------------
Share-issue adjusted number of shares 125,389 125,274 0% 125,271
outstanding at the end of the period,
thousands
--------------------------------------------------------------------------------
Net interest-bearing debt at the end of the 803.1 702.7 14% 740.4
period, EUR million
--------------------------------------------------------------------------------
Return on investment, from the last 12 12.5 15.7 12.0
months, %
--------------------------------------------------------------------------------
Equity ratio, % 30.0 29.7 30.2
--------------------------------------------------------------------------------
Gearing ratio, % 86.7 79.9 80.4
--------------------------------------------------------------------------------
Gross capital expenditures, EUR million 24.1 23.1 4% 48.7
--------------------------------------------------------------------------------
% of revenue 1.0 1.1 1.1
--------------------------------------------------------------------------------
Unrecognised order backlog at the end of the 4,409.3 3,796.9 16% 4,148.6
period, EUR million
--------------------------------------------------------------------------------
of which order backlog outside Finland 2,299.4 2,068.3 11% 2,066.9
--------------------------------------------------------------------------------
Average number of personnel 25,919 25,754 1% 26,254
--------------------------------------------------------------------------------
2.2 YIT Group figures by quarter, IFRS
EUR million 4-6/12 1-3/12 10-12/1 7-9/11 4-6/11 1-3/11
1
--------------------------------------------------------------------------------
Revenue, EUR million 1,218.9 1,098.4 1,190.4 1,084.8 1,137.2 969.7
--------------------------------------------------------------------------------
Operating profit, EUR 67.7 55.2 57.5 35.4 67.9 39.2
million
--------------------------------------------------------------------------------
% of revenue 5.6 5.0 4.8 3.3 6.0 4.0
--------------------------------------------------------------------------------
Financial income, EUR 2.8 1.4 1.4 0.0 0.3 2.4
million
--------------------------------------------------------------------------------
Exchange rate differences, -1.6 -1.0 -2.1 0.0 -0.8 -1.3
EUR million
--------------------------------------------------------------------------------
Financial expenses, EUR -7.3 -5.7 -6.9 -7.8 -4.4 -5.6
million
--------------------------------------------------------------------------------
Profit before taxes, EUR 61.6 49.9 49.9 27.6 63.0 34.7
million
--------------------------------------------------------------------------------
% of revenue 5.1 4.5 4.2 2.5 5.5 3.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Balance sheet total, EUR 3,646.9 3,631.9 3,504.5 3,418.6 3,387.4 3,274.8
million
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings/share, EUR 0.37 0.29 0.27 0.15 0.37 0.20
--------------------------------------------------------------------------------
Equity/share, EUR 7.37 7.14 7.33 6.93 7.00 6.64
--------------------------------------------------------------------------------
Share price at the end of 13.38 16.12 12.38 11.33 17.24 20.92
the period, EUR
--------------------------------------------------------------------------------
Market capitalization, EUR 1,677.7 2,019.3 1,550.9 1,419.3 2,159.7 2,616.6
million
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return on investment, from 12.5 12.8 12.0 15.6 15.7 14.0
the last 12 months, %
--------------------------------------------------------------------------------
Equity ratio, % 30.0 28.8 30.2 29.2 29.7 28.5
--------------------------------------------------------------------------------
Net interest-bearing debt 803.1 755.9 740.4 755.0 702.7 626.1
at the end of the period,
MEUR
--------------------------------------------------------------------------------
Gearing ratio, % 86.7 84.2 80.4 86.8 79.9 75.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gross capital 10.5 13.6 7.1 18.3 14.6 8.7
expenditures, EUR million
--------------------------------------------------------------------------------
% of revenue 0.9 1.2 0.6 1.7 1.3 0.9
--------------------------------------------------------------------------------
Unrecognised order backlog 4,409.3 4,385.3 4,148.6 3,738.3 3,796.9 3,699.0
at the end of the period,
EUR million
--------------------------------------------------------------------------------
Personnel at the end of 26,255 25,703 25,996 26,502 26,807 25,748
the period
--------------------------------------------------------------------------------
2.3 Consolidated income statement, IFRS
EUR million 1-6/12 1-6/11 Change 1-12/11
--------------------------------------------------------------------------------
Revenue 2,317.3 2,106.9 10% 4,382.1
--------------------------------------------------------------------------------
of which activities outside Finland 1,307.4 1,219.6 7% 2,607.7
--------------------------------------------------------------------------------
Other operating income and expenses -2,173.3 -1,980.3 10% -4,142.9
--------------------------------------------------------------------------------
Share of results of associated companies 0.3 -0.1 0.4
--------------------------------------------------------------------------------
Depreciation and impairments -21.5 -19.4 11% -39.6
--------------------------------------------------------------------------------
Operating profit 122.8 107.1 15% 200.0
--------------------------------------------------------------------------------
% of revenue 5.3 5.1 4% 4.6
--------------------------------------------------------------------------------
Financial income 4.3 2.7 58% 4.2
--------------------------------------------------------------------------------
Exchange rate differences -2.7 -2.1 27% -4.1
--------------------------------------------------------------------------------
Financial expenses -12.9 -10.0 29% -24.8
--------------------------------------------------------------------------------
Profit before taxes 111.5 97.7 14% 175.3
--------------------------------------------------------------------------------
% of revenue 4.8 4.6 5% 4.0
--------------------------------------------------------------------------------
Income taxes 1) -27.9 -26.7 4% -50.2
--------------------------------------------------------------------------------
Profit for the review period 83.6 71.0 18% 125.1
--------------------------------------------------------------------------------
% of revenue 3.6 3.4 6% 2.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 83.4 70.9 18% 124.5
--------------------------------------------------------------------------------
Non-controlling interests 0.2 0.1 130% 0.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share attributable to the
equity holders of the parent company
--------------------------------------------------------------------------------
Earnings/share, EUR 0.67 0.57 18% 0.99
--------------------------------------------------------------------------------
Diluted earnings/share, EUR 0.67 0.57 18% 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 1-6/12 1-6/11 Change 1-12/1
1
--------------------------------------------------------------------------------
Profit for the review period 83.6 71.0 18% 125.0
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
- Cash flow hedges -0.6 1.4 -2.0
--------------------------------------------------------------------------------
-- Deferrred tax 0.1 -0.4 0.4
--------------------------------------------------------------------------------
- Change in fair value for available for sale 0.5 investments
--------------------------------------------------------------------------------
-- Deferrred tax -0.1
--------------------------------------------------------------------------------
- Change in translation differences 6.0 1.8 233% -8.5
--------------------------------------------------------------------------------
- Other change -0.5 0.1
--------------------------------------------------------------------------------
Other comprehensive income, total 5.5 2.3 139% -9.7
--------------------------------------------------------------------------------
Total comprehensive result 89.2 73.3 22% 115.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 89.1 72.8 22% 114.5
--------------------------------------------------------------------------------
Non-controlling interest 0.1 0.5 -74% 0.9
--------------------------------------------------------------------------------
2.5 Consolidated income statement, quarter, IFRS
EUR million 4-6/12 4-6/11 Change
--------------------------------------------------------------------------------
Revenue 1,218.9 1,137.2 7%
--------------------------------------------------------------------------------
of which activities outside Finland 668.3 628.1 6%
--------------------------------------------------------------------------------
Other operating income and expenses -1,140.9 -1,059.6 8%
--------------------------------------------------------------------------------
Share of results of associated companies 0.2 0.1 106%
--------------------------------------------------------------------------------
Depreciation and impairments -10.6 -9.8 8%
--------------------------------------------------------------------------------
Operating profit 67.7 67.9 0%
--------------------------------------------------------------------------------
% of revenue 5.6 6.0
--------------------------------------------------------------------------------
Financial income 2.8 0.3 841%
--------------------------------------------------------------------------------
Exchange rate differences -1.6 -0.8 101%
--------------------------------------------------------------------------------
Financial expenses -7.3 -4.4 65%
--------------------------------------------------------------------------------
Profit before taxes 61.6 63.0 -2%
--------------------------------------------------------------------------------
% of revenue 5.1 5.5
--------------------------------------------------------------------------------
Income taxes 1) -15.0 -16.9 -12%
--------------------------------------------------------------------------------
Profit for the review period 46.6 46.1 1%
--------------------------------------------------------------------------------
% of revenue 3.8 4.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 46.9 46.1 2%
--------------------------------------------------------------------------------
Non-controlling interests 0.2 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share attributable to the equity
holders of the parent company
--------------------------------------------------------------------------------
Earnings/share, EUR 0.37 0.37 0%
--------------------------------------------------------------------------------
Diluted earnings/share, EUR 0.37 0.37 0%
--------------------------------------------------------------------------------
1) Taxes for the review period are based on the taxes for the whole financial
year.
2.6 Consolidated balance sheet, IFRS
EUR million 6/12 6/11 Change 12/11
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Property, plant and equipment 108.1 106.4 2% 110.8
--------------------------------------------------------------------------------
Goodwill 347.5 349.4 -1% 347.5
--------------------------------------------------------------------------------
Other intangible assets 62.3 52.3 19% 54.1
--------------------------------------------------------------------------------
Shares in associated companies 0.6 2.6 -78% 3.1
--------------------------------------------------------------------------------
Other investments 3.8 3.4 13% 3.8
--------------------------------------------------------------------------------
Other receivables 17.8 18.2 -2% 18.8
--------------------------------------------------------------------------------
Deferred tax assets 53.7 51.8 4% 60.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Inventories 1,769.5 1,592.0 11% 1,672.6
--------------------------------------------------------------------------------
Trade and other receivables 1,114.3 977.2 14% 1,027.3
--------------------------------------------------------------------------------
Cash and cash equivalents 169.5 234.1 -28% 206.1
--------------------------------------------------------------------------------
Total assets 3,646.9 3,387.4 8% 3,504.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity and liabilities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders of the
parent company
--------------------------------------------------------------------------------
Share capital 149.2 149.2 0% 149.2
--------------------------------------------------------------------------------
Other equity 774.6 727.9 6% 769.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-controlling interest 2.2 2.2 1% 2.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity 926.0 879.3 5% 921.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 89.6 91.6 -2% 88.3
--------------------------------------------------------------------------------
Pension liabilities 27.6 26.9 3% 26.5
--------------------------------------------------------------------------------
Provisions 61.7 49.6 24% 54.1
--------------------------------------------------------------------------------
Borrowings 549.9 555.5 -1% 522.9
--------------------------------------------------------------------------------
Other liabilities 42.6 20.5 108% 47.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Advances received 558.1 421.8 32% 458.3
--------------------------------------------------------------------------------
Trade and other payables 918.1 916.7 0% 909.3
--------------------------------------------------------------------------------
Provisions 50.7 44.2 15% 52.3
--------------------------------------------------------------------------------
Current borrowings 422.7 381.4 11% 423.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 3,646.9 3,387.4 8% 3,504.5
--------------------------------------------------------------------------------
2.7 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 83.4 83.4 0.2
83.6
for
the
perio
d
--------------------------------------------------------------------------------
-----
Other
compr
ehensi
ve
incom
e:
--------------------------------------------------------------------------------
-----
Cash -0.6 -0.6
-0.6
flow
hedge
s
--------------------------------------------------------------------------------
-----
- 0.1 0.1
0.1
Defer
red
tax
--------------------------------------------------------------------------------
-----
Change 6.1 6.1 -0.1
6.0
in
trans
lation
diffe
rences
--------------------------------------------------------------------------------
-----
Compre 6.1 -0.5 83.4 89.1 0.1
89.2
hensiv
e
incom
e,
total
--------------------------------------------------------------------------------
-----
Transa
ctions
with
owner
s
--------------------------------------------------------------------------------
-----
Divide -87.7 -87.7 -0.4
-88.1
nd
paid
--------------------------------------------------------------------------------
-----
Share- 1.1 0.6 2.0 3.7
3.7
based
incen
tive
schem
es
--------------------------------------------------------------------------------
-----
Transa 1.1 0.6 -85.7 -84.0 -0.4
-84.4
ctions
with
owner
s,
total
--------------------------------------------------------------------------------
-----
Equity 149.2 1.9 3.9 -17.4 -4.0 -9.2 799.2 923.8 2.2
926.0
on
June
30,
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 70.9 70.9 0.1
71.0
for
the
perio
d
--------------------------------------------------------------------------------
-----
Other
compr
ehensi
ve
incom
e:
--------------------------------------------------------------------------------
-----
Cash 1.4 1.4
1.4
flow
hedge
s
--------------------------------------------------------------------------------
-----
- -0.4 -0.4
-0.4
Defer
red
tax
--------------------------------------------------------------------------------
-----
Change 1.6 -0.2 1.4 0.4
1.8
in
trans
lation
diffe
rences
--------------------------------------------------------------------------------
-----
Other -0.2 -0.3 -0.5
-0.5
chang
e
--------------------------------------------------------------------------------
-----
Compre -0.2 1.6 1.0 70.4 72.8 0.5
73.3
hensiv
e
incom
e,
total
--------------------------------------------------------------------------------
-----
Transa
ctions
with
owner
s
--------------------------------------------------------------------------------
-----
Divide -81.3 -81.3 -0.2
-81.5
nd
paid
--------------------------------------------------------------------------------
-----
Share- 2.9 0.9 0.8 4.6
4.6
based
incen
tive
schem
es
--------------------------------------------------------------------------------
-----
Transf 0.2 1.8 -2.0 0.0
0.0
er
from
retai
ned
earni
ngs
--------------------------------------------------------------------------------
-----
Transa 0.2 4.7 0.9 -82.5 -76.7 -0.2
-76.9
ctions
with
owner
s,
total
--------------------------------------------------------------------------------
-----
Change
s in
owner
ship
share
s in
subsi
diarie
s
--------------------------------------------------------------------------------
-----
Change 0.9 0.9 -0.9
0.0
s in
group
owner
ship
share
s
in
subsi
diarie
s -
no
loss
of
contr
ol
--------------------------------------------------------------------------------
-----
Change 0.9 0.9 -0.9
0.0
s in
owner
ship
share
s in
subsi
diarie
s,
total
--------------------------------------------------------------------------------
-----
Equity 149.2 2.0 4.7 -12.6 -1.4 -9.7 744.9 877.1 2.2
879.3
on
June
30,
2011
--------------------------------------------------------------------------------
-----
2.8 Consolidated cash flow statement
EUR million 4-6/12 4-6/11 Change 1-6/12 1-6/11 Change 1-12/1
1
--------------------------------------------------------------------------------
Cash flow from
operating activities
--------------------------------------------------------------------------------
Net profit for the 46.6 46.1 1% 83.6 71.0 18% 125.1
period
--------------------------------------------------------------------------------
Reversal of 24.9 29.3 -15% 66.9 53.1 26% 143.5
accrual-based items
--------------------------------------------------------------------------------
Change in working
capital
--------------------------------------------------------------------------------
Change in trade and -50.5 -121.7 -59% -31.1 -76.2 -59% -159.2
other receivables
--------------------------------------------------------------------------------
Change in inventories -32.5 -40.7 -20% -88.2 -98.0 -10% -196.3
--------------------------------------------------------------------------------
Change in current 86.8 118.5 -27% 84.6 135.1 -37% 189.4
liabilities
--------------------------------------------------------------------------------
Change in working 3.8 -43.9 -34.7 -39.1 -11% -166.1
capital, total
--------------------------------------------------------------------------------
Interest paid -10.7 -5.4 98% -22.1 -18.2 21% -34.3
--------------------------------------------------------------------------------
Other financial items, 0.3 -2.0 -5.9 -4.3 36% -5.3
net
--------------------------------------------------------------------------------
Interest received 0.7 0.7 -4% 1.8 1.6 11% 4.1
--------------------------------------------------------------------------------
Taxes paid -12.5 -21.3 -41% -36.4 -36.5 0% -49.6
--------------------------------------------------------------------------------
Net cash generated from 53.3 3.5 over 53.4 27.6 93% 17.4
operating activities thousan
d
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from
investing activities
--------------------------------------------------------------------------------
Acquisition of -5.0 -4.7 6% -7.1 -5.0 42% -8.8
subsidiaries, net of
cash
--------------------------------------------------------------------------------
Purchase of property, -5.7 -6.8 -16% -10.5 -13.4 -22% -30.0
plant and equipment
--------------------------------------------------------------------------------
Purchase of intangible -2.3 -2.3 -2% -4.9 -4.1 18% -8.9
assets
--------------------------------------------------------------------------------
Increases in other 0.0 0.0 0.0 -0.1
investments
--------------------------------------------------------------------------------
Disposal of 0.0 5.9 0.0 5.9 5.9
subsidiaries, net of
cash
--------------------------------------------------------------------------------
Proceeds from sale of 2.1 1.5 40% 2.5 2.2 14% 4.5
fixed assets
--------------------------------------------------------------------------------
Proceeds from sale of 0.1 2.7 -96% 0.1 2.7 -96% 2.7
other investments
--------------------------------------------------------------------------------
Net cash used in -10.7 -3.7 189% -19.8 -11.7 69% -34.7
investing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating cash flow 42.6 -0.2 33.6 15.9 111% -17.3
after investments
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from
financing activities
--------------------------------------------------------------------------------
Change in loan -3.7 -11.8
receivables
--------------------------------------------------------------------------------
Change in current 21.9 -33.7 50.5 46.8 8% 139.4
liabilities
--------------------------------------------------------------------------------
Proceeds from 50.0 100.0 -50% 100.0 175.0 -43% 175.0
borrowings
--------------------------------------------------------------------------------
Repayments of -64.3 -18.7 244% -123.1 -71.2 73% -157.4
borrowings
--------------------------------------------------------------------------------
Payments of financial -0.1 -1.0 -87% -0.2 -1.6 -85% -0.9
leasing debts
--------------------------------------------------------------------------------
Dividends paid and -88.1 -81.5 8% -88.1 -81.5 8% -81.5
other distribution of
assets
--------------------------------------------------------------------------------
Net cash used in -84.2 -34.9 141% -72.6 67.5 74.6
financing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and -41.6 -35.1 19% -39.0 83.4 57.3
cash equivalents
--------------------------------------------------------------------------------
Cash and cash 209.3 266.2 19% 204.7 147.6 39% 147.6
equivalents at the
beginning of the
period
--------------------------------------------------------------------------------
Change in the fair 0.0 0.2 2.0 0.3 567% -0.2
value of the cash
equivalents
--------------------------------------------------------------------------------
Cash and cash 167.6 231.3 -28% 167.6 231.3 -28% 204.7
equivalents at the end
of the period
--------------------------------------------------------------------------------
2.9 Accounting principles of the interim report
YIT Corporation's Interim Report for January 1 - June 30, 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-Jun, 2012 rate Jan-Jun, 2011 rate
Jun 30, 2012 Jun 30, 2011
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1 EUR = CZK 25.1690 25.6400 24.3490 24.3450
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DKK 7.4350 7.4334 7.4561 7.4587
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HUF 295.4500 287.7700 269.4200 266.1100
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MYR 4.0027 3.9960 4.2552 4.3626
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NOK 7.5728 7.5330 7.8235 7.7875
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PLN 4.2450 4.2488 3.9520 3.9903
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RUB 39.6976 41.3700 40.1453 40.4000
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SEK 8.8823 8.7728 8.9391 9.1739
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SGD 1.6391 1.5974 1.7655 1.7761
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USD 1.2966 1.2590 1.4033 1.4453
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LVL 3.4528 3.4528 3.4528 3.4528
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LTL 0.6983 0.6967 0.7028 0.7028
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2.10 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)
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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
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Return on Segment's operating profit + interest included in operating profit
operative Segment's operative invested capital (average)
invested
capital (%)
=
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Equity ratio Equity + non-controlling interest x 100
(%) = Balance sheet total - advances received
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Gearing Interest-bearing liabilities - cash and cash equivalents x 100
ratio (%) = Shareholder's equity + non-controlling interest
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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
=
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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
=
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Equity/share Shareholders' equity
(EUR) = Share issue-adjusted average number of outstanding shares at the
end of period
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Market (Number of shares - treasury shares) x share price on the closing
capitalizat date by share series
ion =
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2.11 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
2.12 Unusual items affecting operating profit
EUR million 1-6/12 1-6/11 Change 1-12/11
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Building Services Northern Europe -2.8 -3.0 -7% -3.0
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Building Services Central Europe 5.0 5.0
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International Construction Services -10.0
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YIT Group, total -2.8 2.0 -8.0
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In 2012 during second quarter Building Service Nothern Europe's operating
profit is decreased by a non-recurring item of EUR 2.8 million related to the
final settlement of a customer project completed in 2011. Building Service
Nothern Europe made a cost provision of EUR 3.0 million related to the same
project during the second quarter of 2011.
In 2011 during second quarter 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.
2.13 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 and in April 2012 the share capitals of
companies specialized in electrical installations, Dala Elmontage Lidkvist &
Bodin AB in Sweden and Madla Elektro AS in Norway. Total acquisition price
amounted to EUR 8.8 million. The acquisitions are not expected to result in
goodwill.
Composition of acquired net assets and goodwill
EUR million 6/12
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Consideration
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Cash 8.1
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Contingent consideration 0.6
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Total consideration 8.8
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Acquisition -related costs, 0.2
(recognised as other operating expenses)
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Recognised amounts of identifiable assets acquired and liabilities
assumed
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Cash and cash equivalents 1.1
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Tangible assets 0.5
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Intangible rights:
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Customer base 1.5
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Order backlog 3.8
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Other intangible rights 7.7
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Inventories 0.9
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Trade and other receivables 6.6
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Deferred tax liabilities, net -0.7
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Trade and other payables -12.6
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Total identifiable net assets 8.8
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Non-controlling interest (minority share)
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Goodwill 0.0
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Total entity value 8.8
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There were no disposals during the review period.
2.14 Changes in property, plant and equipment
EUR million 1-6/12 1-6/11 Change 1-12/11
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Carrying value at the beginning of the period 110.8 106.7 4% 106.7
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Increase 10.6 13.4 -21% 30.1
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Increase through acquisitions 0.5 0.1 427% 1.1
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Decrease -2.9 -2.0 43% -3.7
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Decrease through disposals -0.1 -0.1
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Depreciation and value adjustments -11.7 -12.1 -3% -23.9
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Reclassifications 0.2 0.4 -55% 0.6
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Carrying value at the end of the period 108.1 106.4 2% 110.8
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2.15 Inventories
EUR million 6/12 6/11 Change 12/11
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Raw materials and consumables 33.3 27.7 20% 27.6
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Work in progress 815.9 701.7 16% 792.8
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Land areas and plot owning companies 641.8 665.4 -4% 643.8
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Shares in completed housing and real estate 218.4 157.6 39% 158.2
companies
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Advance payments 56.8 38.6 47% 49.5
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Other inventories 3.3 1.0 229% 0.7
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Total inventories 1 769.5 1 592.0 11% 1,672.6
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2.16 Notes on equity
Share capital and share Number Share capital (EUR Treasury
premium account of outstanding million) shares
shares (EUR
million)
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January 1, 2012 125,271,008 149.2 -9.7
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Return of treasury shares, -4,131
1.1.- 31.3.2012
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Return of treasury shares, -8,541
1.4.- 30.6.2012
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Transfer of treasury shares 130,976 0.6
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June 30, 2012 125,389,312 149.2 -9.2
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2.17 Borrowings
EUR million Fair Carrying Nominal
value value value
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Bonds in financial statements December 330.8 335.1 335.7
31, 2011
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Valuation of the above bonds on June 30, 286.8 281.6 282.2
2012
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Bonds raised during the review period:
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Floating-rate bonds
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1/2012 -2014, Euribor 3 month + 1,75% 1) 50.0 49.9 50.0
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Total bonds on June 30, 2012 336.8 331.6 332.2
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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.
2.18 Change in contingent liabilities and assets and commitments
EUR million 6/12 6/11 Change 12/11
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Collateral given for own commitments
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- Corporate mortgages 30.2 29.3 3% 31.2
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- Other pledged assets 0.6 0.9
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Other commitments to associated companies 7.0 7.0 7.0
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Other commitments
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- Repurchase commitments 311.0 228.1 36% 293.1
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- Operating leases 323.8 321.0 1% 330.7
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- Rental guarantees for clients 2.5 5.2 -52% 4.1
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- Other contingent liabilities 1.4 4.0 -65% 1.5
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- Guarantees given 0.0
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Liability under derivative contracts
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- Value of underlying instruments
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-- Interest rate derivatives 403.0 385.9 4% 329.4
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-- Foreign exchange derivatives 173.1 174.8 -1% 194.1
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-- Commodity derivatives 4.3 0.2 over
thousand
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- Market values
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-- Interest rate derivatives -13.7 -5.8 136% -11.9
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-- Foreign exchange derivatives 3.4 -2.9 1.1
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-- Commodity derivatives -1.5 0.0
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YIT Corporation's guarantees on behalf of 1 523.3 1 279.5 19% 1,515.4
its subsidiaries
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2.19 Transactions with associated companies
EUR million 1-6/12 1-6/11 Change 1-12/11
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Sales to associated companies 0.8 0.7 16% 1.5
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Purchases from associated companies 0.0 0.0 0.1
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Trade and other receivables 0.7 0.3 138% 0.0
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Trade and other liabilities 0.0 0.0 0.0
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