2011-08-04 07:00:00 CEST
2011-08-04 07:00:22 CEST
REGLAMENTUOJAMA INFORMACIJA
YIT - Interim report (Q1 and Q3)
YIT's Interim Report January 1 - June 30, 2011: Good profitability in Construction Segments, Building Services in Germany developed strongly
Helsinki, 2011-08-04 07:00 CEST (GLOBE NEWSWIRE) -- YIT CORPORATION
INTERIM REPORT AUGUST 4, 2011, at 8:00 a.m.
YIT's Interim Report January 1 - June 30, 2011: Good profitability in
Construction Segments, Building Services in Germany developed strongly
SEGMENT REPORTING 1-6/2011 (1-6/2011): Clear growth in revenue
-- The operating profit of the segments was 19 percent higher than in the
previous year, amounting to EUR 120.7 million (1-6/2010: EUR 101.6
million). Operating profit was higher in Building Services Central Europe,
Construction Services Finland and International Construction Services.
-- Revenue of the segments was 25 percent higher than in the previous year,
increasing to EUR 2,163.8 million (1-6/2010: EUR 1,735.1 million). The
growth of the business was supported by an acquisition in Central Europe
completed at the beginning of September 2010, continuously favourable
residential sales and the picking up of the business premises market in
Finland.
-- The order backlog of the segments was 14 percent higher than the year
before, amounting to EUR 3,509.4 million (6/2010: EUR 3,067.4 million). The
order backlog of Building Services Central Europe increased clearly
compared to the previous year, which was largely attributable to the
acquisition completed at the beginning of September 2010. The order backlog
increased from the end of March 2011 in Building Services Northern Europe,
Construction Services Finland and International Construction Services.
SEGMENT REPORTING 4-6/2011 (4-6/2010): Clear growth in operating profit
-- The operating profit of the segments was 23 percent higher than in the
previous year, amounting to EUR 70.3 million (4-6/10: EUR 57.1 million).
-- Revenue of the segments was 24 percent higher than in the previous year,
amounting to EUR 1,136.9 million (4-6/10: EUR 914.3 million).
GROUP REPORTING 1-6/2011 (1-6/2010): Earnings per share increased significantly
-- The Group's profit before taxes increased by 79 percent from the previous
year to EUR 97.7 million in January-June (1-6/2010: EUR 54.6 million).
-- Earnings per share increased by 84 percent to EUR 0.57 (1-6:2010: EUR
0.31).
GUIDANCE: Profitable growth will continue in 2011
YIT Corporation reiterates its estimate issued in connection with the financial
statements for 2010 according to which, in 2011, the combined revenue of the
business segments will grow and operating profit will grow clearly compared to
2010.
YIT estimates residential sales to continue to be good in both Finland and
Russia. In particular, residential construction activity in Russia, German
building services and Building Services Northern Europe will provide
opportunities for improving profitability.
The increased uncertainty of 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.
The profit outlook is based on segment reporting, i.e. recognition of income
based on the percentage of completion.
KEY FIGURES
Development of the segments and the Group
Revenue, EUR million 1-6/11 1-6/10 Change 4-6/11 4-6/10 Change
--------------------------------------------------------------------------------
Building Services Northern 985.6 867.6 14% 509.4 460.8 11%
Europe
--------------------------------------------------------------------------------
Building Services Central 368.2 157.2 134% 191.1 86.9 120%
Europe
--------------------------------------------------------------------------------
Construction Services Finland 621.8 528.1 18% 332.3 275.2 21%
--------------------------------------------------------------------------------
International Construction 220.8 219.0 1% 120.5 112.1 7%
Services
--------------------------------------------------------------------------------
Other items -32.6 -36.8 -16.4 -20.7
--------------------------------------------------------------------------------
YIT's segments total 2,163.8 1,735.1 25% 1,136.9 914.3 24%
--------------------------------------------------------------------------------
IFRIC 15 adjustment -56.9 -115.1 0.3 -59.6
--------------------------------------------------------------------------------
YIT Group total 2,106.9 1,620.0 30% 1,137.2 854.7 33%
--------------------------------------------------------------------------------
Operating profit, EUR million 1-6/11 1-6/10 Change 4-6/11 4-6/10 Change
--------------------------------------------------------------------------------
Building Services Northern 35.9 44.9 -20% 18.8 25.1 -25%
Europe
--------------------------------------------------------------------------------
Building Services Central Europe 16.1 4.9 229% 12.1 3.1 290%
--------------------------------------------------------------------------------
Construction Services Finland 58.4 49.5 18% 32.8 26.4 24%
--------------------------------------------------------------------------------
International Construction 20.7 12.2 70% 12.3 7.6 62%
Services
--------------------------------------------------------------------------------
Other items -10.4 -9.9 -5.7 -5.1
--------------------------------------------------------------------------------
YIT's segments total 120.7 101.6 19% 70.3 57.1 23%
--------------------------------------------------------------------------------
IFRIC 15 adjustment -13.6 -31.8 -2.4 -21.2
--------------------------------------------------------------------------------
YIT Group total 107.1 69.8 53% 67.9 35.9 89%
--------------------------------------------------------------------------------
Operating profit margin, % 1-6/11 1-6/10 4-6/11 4-6/10
-------------------------------------------------------------------
Building Services Northern Europe 3.6 5.2 3.7 5.4
-------------------------------------------------------------------
Building Services Central Europe 4.4 3.1 6.3 3.6
-------------------------------------------------------------------
Construction Services Finland 9.4 9.4 9.9 9.6
-------------------------------------------------------------------
International Construction Services 9.4 5.6 10.2 6.8
-------------------------------------------------------------------
YIT's segments total 5.6 5.9 6.2 6.2
-------------------------------------------------------------------
YIT Group total 5.1 4.3 6.0 4.2
-------------------------------------------------------------------
Order backlog, EUR million 6/11 6/10 Change 6/11 3/11 Change
--------------------------------------------------------------------------------
Building Services Northern 879.5 748.5 18% 879.5 804.9 9%
Europe
--------------------------------------------------------------------------------
Building Services Central 554.1 276.8 100% 554.1 573.2 -3%
Europe
--------------------------------------------------------------------------------
Construction Services 1,239.5 1,154.7 7% 1,239.5 1,176.0 5%
Finland
--------------------------------------------------------------------------------
International Construction 896.4 946.8 -5% 896.4 862.7 4%
Services
--------------------------------------------------------------------------------
Other items -60.2 -59.4 -60.2 -61.2
--------------------------------------------------------------------------------
YIT's segments total 3,509.4 3,067.4 14% 3,509.4 3,355.6 5%
--------------------------------------------------------------------------------
IFRIC 15 adjustment 287.5 261.8 287.5 343.4
--------------------------------------------------------------------------------
YIT Group total 3,796.9 3,329.2 14% 3,796.9 3,699.0 3%
--------------------------------------------------------------------------------
Key figures of Group reporting (IFRIC 15)
1-6/11 1-6/10 Change 4-6/11 4-6/10 Change
--------------------------------------------------------------------------------
Profit before taxes, EUR million 97.7 54.6 79% 63.0 27.9 126%
--------------------------------------------------------------------------------
Profit for the review period, 71.0 39.4 80% 46.1 20.4 126%
EUR million
--------------------------------------------------------------------------------
Earnings/share, EUR 0.57 0.31 84% 0.37 0.16 131%
--------------------------------------------------------------------------------
Operating cash flow after 15.9 65.5 -76% -0.2 31.7 -101%
investments, EUR million
--------------------------------------------------------------------------------
6/11 6/10 Change 6/11 3/11 Change
--------------------------------------------------------------------------------
Return on investment (last 12 15.6 10.7 15.6 14.0
months) %
--------------------------------------------------------------------------------
Equity ratio, % 29.7 31.8 29.7 28.5
--------------------------------------------------------------------------------
Gearing ratio, % 79.9 64.7 79.9 75.2
--------------------------------------------------------------------------------
Personnel at the end of period 26,807 23,877 12% 26,807 25,748 4%
--------------------------------------------------------------------------------
Group reporting (IFRIC 15)
YIT has applied the IFRIC 15 Agreements for the Construction of Real Estate
IFRS interpretation from the beginning of 2010. Due to the application of the
interpretation, Group reporting and segment reporting differ. The difference
between the accounting policies is reported as an IFRIC 15 adjustment.
As a result of the accounting policy, Group figures can fluctuate greatly
between quarters. In accordance with the accounting policy, residential
development projects are only recognised in Group figures upon project
delivery, while in segment reporting they are recognised as construction
progresses.
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.
Residential sales to consumers remained favourable
YIT's goal is to be a leader in residential construction in all of its market
areas - Finland, Russia, the Baltic countries and Central Eastern Europe. In
January-June, the focus of residential construction was still on residential
development projects sold directly to consumers. In addition to continued
favourable demand, YIT's residential sales in Russia were supported by YIT's
established position as a reliable construction company, YIT's diverse housing
offering, YIT's own marketing and promotion activities and extensive housing
loan collaboration with banks.
In January-June, YIT increased the number of residential start-ups compared to
the previous year and started the construction of a total of 3,836 residential
units aimed at consumers (1-6/2010: 3,341). Of the start-ups, 1,945 took place
in April-June (4-6 /2010: 1,979). Of the start-ups in January-June, 1,280 were
in Finland (1-6/2010: 1,236, 2,240 in Russia (1-6/2010: 1 872) and 316 in the
Baltic countries and Central Eastern Europe (1-6/2010: 233).
The residential start-ups responded to favourable demand among consumers and
increased the number of residential units for sale. During January-June, YIT
sold a total of 2,661 residential units directly to consumers (1-6/2010:
2,496), of which 1,394 in April-June (4-6/2010: 1,168). During January-June,
YIT sold a total of 1,048 residential units directly to consumers In Finland
(1-6/2010: 977), 1,457 in Russia (1-6/2010: 1,499) and 156 in the Baltic
countries and Central Eastern Europe (1-6/2010: 20).
YIT has also been active in the Finnish business premises market, which picked
up further during the review period. The decrease in rents stopped in 2010,
interest among foreign investors has increased and investors' yield
requirements have begun to decrease. Leasing of YIT's commercial development
projects advanced well during the review period, and YIT sold two commercial
development projects during the second quarter.
Improving the profitability in Building Services
As a result of the acquisition completed at the beginning of September 2010,
the significance of Central Europe to the Group has increased clearly. YIT's
business segment structure was revised from March 1, 2011, with Building and
Industrial Services being divided into two segments: Building Services Northern
Europe and Building Services Central Europe. From March 1, 2011, YIT's four
business segments are: Building Services Northern Europe, Building Services
Central Europe, Construction Services Finland and International Construction
Services. YIT's comparable figures for 2010 according to the new business
segment structure were published in a separate stock exchange release on March
24, 2011.
Karl-Walter Schuster (61) was appointed as the head of Building Services
Central Europe and as a member of the Group Management Board as of March 1,
2011. Matti Malmberg (51) was appointed as the head of Building Services
Northern Europe and as a member of the Group Management Board as of June 29,
2011.
The Group's strategic goal is to increase building system, industrial service
and maintenance operations in the Nordic countries and Central Europe. Service
and maintenance revenue in Building Services Northern Europe was EUR 610.6
million (1-6/2010: EUR 588.8 million) and in Building Services Central Europe
EUR 94.3 million (1-6/2010: EUR 44.5 million). During the review period, the
share of service and maintenance was significantly lower in Building Services
Central Europe (26%) than in Building Services Northern Europe (62%), and
therefore the opportunities for increasing it in Building Services Central
Europe are good.
The operating profit of Building Services Northern Europe was weakened by tight
price competition, especially in project operations, and the continued
relatively low level of new investments in building systems and demand for
industrial services. The profitability of the Building Services Northern Europe
segment was also burdened by a provision of EUR 3.0 million related to an
individual customer project. The profitability of building services in Denmark
and industrial services in Finland continued to be low during the second
quarter. Building Services Northern Europe is undergoing a restructuring of
operations in industrial services in Finland and in Building Services Denmark.
The aim is to improve profitability at the segment level also through
rearrangements of the branch office network, selective project acquisition and
making procurement more efficient.
The profitability of the business operations acquired in Central Europe at the
beginning of September 2010 was below YIT's average profitability, but efforts
to improve their profitability have succeeded according to plans.
Annual growth objective was raised to more than 10 percent
In August 2010, the Group's strategic annual revenue growth target was
increased to more than 10 percent on average. In Russia, YIT's strong market
position and improved operating environment enable growth; therefore, the
number of residential start-ups was increased clearly during 2010, and
increasing the number also continued during the review period. In Finland, the
focus continues to be on projects sold directly to consumers and, following the
revival of the market, also on own-based business premises development.
YIT has a diverse residential offering under construction in both Finland and
Russia, and the number of start-ups will increase during 2011 compared to the
previous year. In Building Services, the focus of business operations will be
shifted to service and maintenance. The recovery of investments in building
systems, especially in Germany, will also offer opportunities for project
operations.
NEWS CONFERENCE, WEBCAST AND CONFERENCE CALL
YIT will hold a news conference on the interim report on Thursday, August 4,
2011, at 10:00 a.m. (Finnish Time, EEST). The news conference will be held in
English and will be held at YIT's head office at Panuntie 11, 00620 Helsinki,
Finland. The event is intended for analysts, portfolio managers and the media.
The news conference and the presentation, given by the company's President and
CEO, Juhani Pitkäkoski, can be viewed live on YIT's website at
www.yitgroup.com/webcast. The live webcast will start at 10:00 a.m. The webcast
replay will be available at the same address starting at approximately 12:00
noon.
It is also possible to participate in the event through a conference call.
Participants are requested to call the assigned number (+44 (0)20 7162 0077) at
least five minutes before the conference call begins, at 9:55 a.m. (Finnish
time, EEST) at the latest.
During the webcast and conference call, questions must be asked in English.
After the session, there will also be an opportunity for the media to ask
questions in Finnish.
Schedule in different time zones:
Interim The investor and analyst event, Recorded
Report conference call and live webcast webcast
published available
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EEST 8:00 10:00 12:00
(Helsinki)
--------------------------------------------------------------------------------
CEST (Paris, 7:00 9:00 11:00
Stockholm)
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BST (London) 6:00 8:00 10:00
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US EDT (New 1:00 3:00 5:00
York)
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Financial reports and other investor information are available at YIT's
website, www.yitgroup.com/investors. The materials may be ordered via the
website, by sending an e-mail to InvestorRelations@yit.fi or by telephone on
+358 20 433 2257.
YIT Corporation
Juhani Pitkäkoski
President and CEO
For further information, please contact:
Timo Lehtinen, Chief Financial Officer, 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, 2011
CONTENTS
-- Group's financial development
-- Strategic objectives
-- Development by business segment
-- Personnel
-- Resolutions passed at the Annual General Meeting
-- Shares, share options and shareholders
-- Most significant short-term business risks and risk management
-- Outlook for 2011
-- Events after the review period
-- Tables to the Interim Report
GROUP'S FINANCIAL DEVELOPMENT
Changes in organisational structure and Group management
As a result of the acquisition completed at the beginning of September 2010,
the significance of Central Europe to the Group has increased significantly.
YIT's business segment structure was revised from March 1, 2011, with Building
and Industrial Services being divided into two segments: Building Services
Northern Europe and Building Services Central Europe. From March 1, 2011, YIT's
four business segments are: Building Services Northern Europe, Building
Services Central Europe, Construction Services Finland and International
Construction Services. YIT's comparable figures for 2010 according to the new
business segment structure were published in a separate stock exchange release
on March 24, 2011.
Karl-Walter Schuster (61) was appointed as the head of Building Services
Central Europe and as a member of the Group Management Board as of March 1,
2011. Previously, he acted as the head of the Central Europe division within
the Building and Industrial Services business segment. Matti Malmberg (51) was
appointed as the head of Building Services Northern Europe and as a member of
the Group Management Board as of June 29, 2011. Previously, he acted as the
Senior Vice President in charge of Building Systems Finland, Russia and the
Baltic countries.
During the second quarter, YIT Corporation's Board of Directors established a
new committee with the purpose of assisting the Board in matters related to the
development of YIT's business. The members of this Working Committee are the
Board of Directors' chairman Henrik Ehrnrooth (chair) and vice chairman Reino
Hanhinen, as well as Michael Rosenlew, appointed by the Board of Directors from
among its number.
Application of IFRIC 15 interpretation
YIT has applied the IFRIC 15 Agreements for the Construction of Real Estate
IFRS interpretation from the start of the financial period that began on
January 1, 2010. Due to the application of the interpretation, Group reporting
and segment reporting differ. The key difference is that residential
developments are only recognised in Group figures upon project delivery, while
in segment reporting they are recognised as construction progresses.
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 Group's financial performance is presented using both figures compliant
with Group reporting and figures compliant with segment reporting, referred to
as the performance of the segments or the segments total figure. The difference
between the accounting policies is reported as an IFRIC 15 adjustment.
Revenue of the segments increased by a quarter on the previous year
Revenue, EUR million 1-6/11 1-6/10 Change 4-6/11 4-6/10 Change
--------------------------------------------------------------------------------
Building Services Northern 985.6 867.6 14% 509.4 460.8 11%
Europe
--------------------------------------------------------------------------------
Building Services Central 368.2 157.2 134% 191.1 86.9 120%
Europe
--------------------------------------------------------------------------------
Construction Services Finland 621.8 528.1 18% 332.3 275.2 21%
--------------------------------------------------------------------------------
International Construction 220.8 219.0 1% 120.5 112.1 7%
Services
--------------------------------------------------------------------------------
Other items -32.6 -36.8 -16.4 -20.7
--------------------------------------------------------------------------------
YIT's segments total 2,163.8 1,735.1 25% 1,136.9 914.3 24%
--------------------------------------------------------------------------------
IFRIC 15 adjustment -56.9 -115.1 0.3 -59.6
--------------------------------------------------------------------------------
YIT Group total 2,106.9 1,620.0 30% 1,137.2 854.7 33%
--------------------------------------------------------------------------------
Revenue of YIT's segments increased by 25 percent in January-June compared to
the previous year, amounting to EUR 2,163.8 million (1-6/2010: EUR 1,735.1
million). Revenue increased across all segments. The revenue of Building
Services Central Europe increased compared to the year before mainly as the
result of the acquisition completed in September 2010. Changes in foreign
exchange rates increased the segments' revenue for the review period by EUR
33.2 million compared to the previous year.
Following the IFRIC 15 adjustment, YIT Group's revenue increased by 30 percent
from the previous year and was EUR 2,106.9 million for January-June (1-6/2010:
EUR 1,620.0 million). The completion schedules of property development projects
affect the Group's revenue recognition, and therefore Group figures may
fluctuate greatly between different quarters. In January-June, the number of
residential units completed in Russia was lower than the year before, while in
Finland, the Baltic Countries and Central Eastern Europe, more residential
units were completed than the year before.
In January-June 2011, Finland accounted for 42 percent (44%) of the Group's
revenue, Sweden for 16 percent (17%), Germany for 13 percent (6%), Norway for
12 percent (14%), Russia for 7 percent (9%), Denmark for 4 percent (4%), the
Baltic countries for 1 percent (1%) and other countries for 5 percent (5%).
Operating profit of the segments increased clearly during the second quarter
Operating profit, EUR million 1-6/11 1-6/10 Change 4-6/11 4-6/10 Change
--------------------------------------------------------------------------------
Building Services Northern 35.9 44.9 -20% 18.8 25.1 -25%
Europe
--------------------------------------------------------------------------------
Building Services Central Europe 16.1 4.9 229% 12.1 3.1 290%
--------------------------------------------------------------------------------
Construction Services Finland 58.4 49.5 18% 32.8 26.4 24%
--------------------------------------------------------------------------------
International Construction 20.7 12.2 70% 12.3 7.6 62%
Services
--------------------------------------------------------------------------------
Other items -10.4 -9.9 -5.7 -5.1
--------------------------------------------------------------------------------
YIT's segments total 120.7 101.6 19% 70.3 57.1 23%
--------------------------------------------------------------------------------
IFRIC 15 adjustment -13.6 -31.8 -2.4 -21.2
--------------------------------------------------------------------------------
YIT Group total 107.1 69.8 53% 67.9 35.9 89%
--------------------------------------------------------------------------------
Operating profit margin, % 1-6/11 1-6/10 4-6/11 4-6/10
-------------------------------------------------------------------
Building Services Northern Europe 3.6 5.2 3.7 5.4
-------------------------------------------------------------------
Building Services Central Europe 4.4 3.1 6.3 3.6
-------------------------------------------------------------------
Construction Services Finland 9.4 9.4 9.9 9.6
-------------------------------------------------------------------
International Construction Services 9.4 5.6 10.2 6.8
-------------------------------------------------------------------
YIT's segments total 5.6 5.9 6.2 6.2
-------------------------------------------------------------------
YIT Group total 5.1 4.3 6.0 4.2
-------------------------------------------------------------------
The operating profit of YIT's segments increased by 19 percent in January-June
compared to the previous year, amounting to EUR 120.7 million (1-6/2010: EUR
101.6 million). The operating profit margin calculated on the basis of the
segment figures was 5.6 percent (1-6/2010: 5,9 %). The operating profit of the
segments includes EUR -4.4 million (1-6/2010: EUR -1.0 million) of borrowing
costs according to IAS 23. The IAS 23 standard defines the recording method of
borrowing costs in long-term construction projects.
Profitability was improved by the focus of operations on residential
development projects in Construction Services Finland and the sale of two
commercial development projects during the second quarter. The profitability of
International Construction Services improved through growth in residential
sales and an increase in housing prices in Russia. As for Building Services
Central Europe, operating profit improved particularly with the German
operations improving their performance. The profitability of Building Services
Central Europe improved also as the result of the divestment of operations in
Hungary in the second quarter, with an effect of EUR 5.0 million on the
segment's operating profit.
In Building Services Northern Europe, the operating profit fell short of the
previous year due to tight price competition, especially in project operations,
and the relatively low level of investments in building systems and demand for
industrial services. The profitability of the Building Services Northern Europe
segment was also burdened by a provision of EUR 3.0 million related to an
individual customer project.
In Group reporting, residential development projects are only recognised as
income upon project delivery. Following the IFRIC 15 adjustment, the Group's
operating profit increased by 53 percent compared to the previous year,
amounting to EUR 107.1 million (1-6/2010: EUR 69.8 million). Following the
IFRIC 15 adjustment, the Group's operating profit margin was 5.1 (1-6/2010:
4.3%).
Earnings per share improved significantly
Financial expenses decreased compared to the previous year, mainly due to the
increasingly lower hedging costs of the ruble and higher IAS 23 adjustment.
The Group's profit before taxes increased by 79 percent from the previous year
to EUR 97.7 million in January-June (1-6/2010: EUR 54.6 million).
Earnings per share increased by 84 percent from the previous year to EUR 0.57
(1-6:2010: EUR 0.31).
Order backlog continued to strengthen
Order backlog, EUR million 6/11 6/10 Change 6/11 3/11 Change
--------------------------------------------------------------------------------
Building Services Northern 879.5 748.5 18% 879.5 804.9 9%
Europe
--------------------------------------------------------------------------------
Building Services Central 554.1 276.8 100% 554.1 573.2 -3%
Europe
--------------------------------------------------------------------------------
Construction Services 1,239.5 1,154.7 7% 1,239.5 1,176.0 5%
Finland
--------------------------------------------------------------------------------
International Construction 896.4 946.8 -5% 896.4 862.7 4%
Services
--------------------------------------------------------------------------------
Other items -60.2 -59.4 -60.2 -61.2
--------------------------------------------------------------------------------
YIT's segments total 3,509.4 3,067.4 14% 3,509.4 3,355.6 5%
--------------------------------------------------------------------------------
IFRIC 15 adjustment 287.5 261.8 287.5 343.4
--------------------------------------------------------------------------------
YIT Group total 3,796.9 3,329.2 14% 3,796.9 3,699.0 3%
--------------------------------------------------------------------------------
The order backlog of YIT's segments was EUR 3,509.4 million at the end of June
(6/2010: EUR 3,067.4 million); approximately 14 percent more than at the end of
June the previous year. The order backlog increased by 5 percent from the end
of March 2011, at which time it stood at EUR 3,355.6 million.
The order backlog of Building Services Central Europe increased significantly
compared to the previous year as a result of the acquisition completed at the
beginning of September 2010. The order backlog increased from the end of March
2011 in Building Services Northern Europe, Construction Services Finland and
International Construction Services. The order backlog of Construction Services
increased particularly as a result of increasing residential development
projects and an increase in the volume of business premises construction in
Finland.
Following the IFRIC 15 adjustment, YIT Group's order backlog was EUR 3,796.9
million at the end of June (6/2010: EUR 3,329.2 million).
Capital expenditure and acquisitions
Gross capital expenditure on non-current assets included on the balance sheet
totalled EUR 23.3 million (1-6/2010: EUR 18.1 million) during January-June,
representing 1.1 percent (1-6/2010: 1.1%) of revenue. Investments in
construction equipment amounted to EUR 7.1 million (1-6/2010: EUR 4.2 million)
and investments in information technology to EUR 4.9 million (1-6/2010: EUR 4.1
million). Other investments, including acquisitions, amounted to EUR 11.3
million (1-6/2010: EUR 9.8 million).
When assessing acquisitions, YIT's goal is to acquire companies that support
YIT's strategy of becoming the leading building system service provider in the
Nordic countries and Europe. The acquired company's business culture, areas of
competence and payback time of the purchase price of the acquired company are
key criteria.
During the second quarter, YIT completed three acquisitions in the Nordic
countries and entered into agreements on further two acquisitions. In Sweden,
YIT acquired Orad i Sydost AB, a company specialising in industrial pipeworks
with an annual revenue of approximately EUR 1.5 million. The company has 13
employees. YIT also acquired Johnson Control's Commercial Refrigeration
business in Sweden, with annual revenue of approximately EUR 15 million. The
acquired unit is one of the leading refrigeration companies in Sweden, with
more than 100 employees across Sweden. YIT also acquired Frisk Ventilation, a
supplier of ventilation-related services, in Sweden, with annual revenue of
approximately EUR 7 million and 23 employees.
During the review period, the company agreed on the acquisition of MISAB
Sprinkler & VVS AB in Sweden. The company provides complete solutions for
plumbing and sprinkler, ventilation, fire protection and industrial systems.
The company's annual revenue is approximately EUR 7 million and it employs 40
people. The acquisition took effect on July 1, 2011.
In Finland, during the review period, YIT entered into an agreement on the
acquisition of the business operations of Sakari Timonen Oy, a specialist in
refrigeration engineering. In addition to the business operations, the
company's personnel will also be transferred to YIT. The company's annual
revenue is approximately EUR 1 million. The business acquisition took effect on
July 1, 2011.
During the second quarter, YIT implemented its strategy by selling its holding
in the German company AGO AG and its Hungarian business operations. The shares
in AGO AG were part of the acquisition that took effect at the beginning of
September 2010, whereby YIT acquired a holding of 59.25 percent in the German
company specialising in the production and sales of energy, with annual revenue
of approximately EUR 50 million. The revenue of the Hungarian operations
divested by YIT during the second quarter amounted to approximately EUR 10
million in 2010.
Business acquisitions and companies consolidated into the Group are discussed
in more detail in the tables to the interim report.
Investments in growth impaired cash flow
The Group's operating cash flow for the review period after investments
amounted to EUR 15.9 million (1-6/2010: EUR 65.5 million). In April-June, the
Group's operating cash flow for the review period after investments amounted to
EUR -0.2 million (4-6/2010: EUR 31.7 million). Operating cash flow in the
second quarter was affected particularly by growth in development production
under construction, plot investments and seasonal increase in receivables in
Building Services.
At the end of June, the Group's invested capital amounted to EUR 1,816.1
million (3/2011: EUR 1,726.6 million). Of the Group's invested capital, 29
percent (3/2011: 32%), or EUR 531.9 million (3/2011: EUR 558.2 million) was
invested in Russia. Exchange rate changes of the ruble decreased the capital
invested in Russia by EUR 1.5 million in April-June.
The Group's capital invested in Russia is primarily accounted for by the
International Construction Services segment. Capital invested in Russia
decreased in spite of an increase in residential production. The use of capital
has been made more efficient by decreasing the size of projects, selling
apartments at an earlier construction phase and increasing the share of
mortgage deals.
Return on investment improved, amounting to 15.6 percent for the last 12 months
(4/2010-3/2011: 14.0%). 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 3,387.4 million (3/2011: EUR 3,274.8
million).
The Group's financial position enables the implementation of the growth strategy
YIT has a diverse capital structure and a strong liquidity position. Cash
reserves amounted to EUR 234.1 million (3/2011: EUR 267.6 million) at the end
of June. In addition, committed credit and overdraft facilities amounting to a
total of EUR 223,9 are available. The committed limit agreements do not include
an obligation to maintain financial key ratios, i.e. covenants.
The gearing ratio increased slightly compared to the end of March 2011,
amounting to 79.9 percent at the end of June 2011 (3/2011: 75.2%). The equity
ratio improved to 29.7 percent (3/2011: 28.5%). Net financing debt increased
from the end of March 2011 to EUR 702.7 million (3/2011: EUR 626.1 million).
Net financial expenses decreased to EUR 9.4 million during the review period
(1-6/2010: EUR 15.1 million), or 0.4 percent (1-6/2010: 0.9%) of the Group's
revenue. The net financial expenses include EUR 6.3 million (1-6/2010: EUR 2.8
million) of capitalisations in compliance with IAS 23. The exchange rate
differences included in the net financial expenses, totalling EUR -2.1 million
(1-6/2010: EUR -4.2 million), were comprised almost entirely of costs of
hedging debt investments in Russia. At the end of June 2011, EUR 117.9 million
(3/2011: EUR 140.3 million) of the capital invested in Russia were comprised of
debt investments and EUR 414.4 million (3/2011: EUR 417.9 million) were equity
investments or similar fixed net investments. In accordance with YIT's hedging
policy, the debt investments are hedged against exchange rate risk, while
equity investments are not hedged due to their permanent nature.
Financial liabilities amounted to EUR 936.8 million (3/2011: EUR 893.8 million)
at the end of June, and their average interest rate was 3.5 percent (3/2011:
3.2%). Fixed-interest loans accounted for 58 percent (3/2011: 52%) of the
Group's financial liabilities. Of the loans, 41 percent (3/2011: 32%) had been
raised directly from the capital and money markets. The maturity distribution
of long-term loans is balanced. A total of EUR 74.1 million of long-term loans
will mature during the latter half of 2011.
During the second quarter, YIT issued, under the company's programme for
issuance of notes, a EUR 100 million bond targeted at institutional and other
selected investors. Due June 20, 2016, the bond carries an annual fixed coupon
rate of 4.750 percent and has an issue price of 99.843 percent. The effective
yield of the bond is 4.786 percent.
Large residential projects were completed during the second quarter in Finland,
and the total amount of construction-stage contract receivables sold to
financial institutions decreased from the end of March 2011 as a result. The
total amount of construction-stage contract receivables sold to financial
institutions amounted to EUR 197.8 million at the end of June (3/2011: EUR
252.4 million). Of this amount, EUR 190.6 million (3/2011: EUR 237.9 million)
is included in interest-bearing liabilities on the balance sheet and the
remainder comprises off-balance sheet items in accordance with IAS 39. Interest
expenses on receivables sold to financing companies amounted to EUR 2.2 million
(1-6/2010: EUR 0.9 million) during the review period and these are fully
included in the financial expenses of the review period.
Participations in the housing corporation loans of unsold completed residential
units amounted to EUR 37.3 million (3/2011: EUR 25.2 million) at the end of
June, and they are included in interest-bearing liabilities. The interest on
the participations, EUR 0.5 million (1-6/2010: EUR 0.5 million), is included in
housing corporation charges and is thus booked in project expenses.
YIT paid out dividends of EUR 81.3 million for 2010 during the second quarter
in compliance with the resolution of the Annual General Meeting.
The Group's balanced business structure and solid financial position enable the
implementation of YIT's growth strategy and the acquisitions and plot
investments required by it.
STRATEGIC OBJECTIVES
YIT Corporation's Board of Directors confirmed the Group's strategy for
2011-2013 on August 18, 2010. The key strategic objective is profitable growth.
The Group's annual revenue growth target was increased to more than 10 percent
on average. The prior target was an average annual revenue growth of 5-10
percent. The Group's other strategic target levels remain unchanged: return on
investment of 20 percent, operating cash flow after investments must be
sufficient for dividend payout and the reduction of debt, equity ratio of 35
percent and dividend payout of 40-60 percent of net profit for the period.
In terms of business operations, the focus areas of YIT's growth are building
system service and maintenance operations and residential construction. Growth
will be sought both organically and through acquisitions. YIT seeks growth by
strengthening its local market position and through geographical expansion to
new countries. Building system services 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 the United Kingdom, the Netherlands and Belgium in building
system services and Poland in construction services.
YIT published a stock exchange release on the confirmation of the strategy on
August 19, 2010, and materials for the Capital Market Day focusing on the
strategic focus areas on September 2, 2010.
DEVELOPMENT BY BUSINESS SEGMENT
The development by business segment is presented using figures compliant with
segment reporting.
BUILDING SERVICES NORTHERN EUROPE
Key figures
1-6/11 1-6/10 Change 4-6/11 4-6/10 Change
-----------------------------------------------------------------------------
Revenue, EUR million 985.6 867.6 14% 509.4 460.8 11%
-----------------------------------------------------------------------------
Operating profit, EUR million 35.9 44.9 -20% 18.8 25.1 -25%
-----------------------------------------------------------------------------
Operating profit margin, % 3.6 5.2 3.7 5.4
-----------------------------------------------------------------------------
6/11 6/10 Change 6/11 3/11 Change
----------------------------------------------------------------------
Order backlog, EUR million 879.5 748.5 18% 879.5 804.9 9%
----------------------------------------------------------------------
Revenue, EUR million 1-6/11 1-6/10 Change 4-6/11 4-6/10 Change
-------------------------------------------------------------------------------
Finland 299.3 282.1 6% 159.5 151.9 5%
-------------------------------------------------------------------------------
Sweden 325.1 266.8 22% 169.4 142.9 19%
-------------------------------------------------------------------------------
Norway 255.7 236.7 8% 128.3 122.5 5%
-------------------------------------------------------------------------------
Denmark 80.8 62.7 29% 39.4 32.5 21%
-------------------------------------------------------------------------------
Russia and the Baltic countries 24.7 19.3 28% 12.8 11.0 16%
-------------------------------------------------------------------------------
Total 985.6 867.6 14% 509.4 460.8 11%
-------------------------------------------------------------------------------
The revenue of Building Services Northern Europe increased by 14 percent in
January-June compared to the previous year, amounting to EUR 985.6 million
(1-6/2010: EUR 867.6 million). Revenue for the second quarter increased by 11
percent to EUR 509.4 million (4-6/2010: EUR 460.8 million). Changes in foreign
exchange rates increased the revenue for January-June by EUR 34.0 million
compared to the previous year. The increase in revenue was widespread: revenue
increased in all countries.
The segment's operating profit fell short of the year before due to strict
price competition, especially in project operations and the relatively low
level of new investments in building systems and demand for industrial
services. The segment's operating profit for the second quarter was burdened by
a provision of EUR 3.0 million related to an individual customer project.
Profitability was highest in Norway during the review period: increasing the
share of service and maintenance operations has had a positive impact on
profitability in Norway. Profitability remained at a moderate level also in
Finland and Sweden during the review period. The profitability of building
system services in Denmark and industrial services in Finland continued to be
low during the second quarter.
Building Services Northern Europe is undergoing a restructuring of operations
in industrial services in Finland and in building services Denmark. The aim is
to improve profitability at the segment level also through rearrangements of
the branch office network, selective project acquisition and making procurement
more efficient.
The order backlog at the end of June was 18 percent higher than the year
before, and 9 percent higher than at the end of March 2011. The order backlog
increased in all countries except for Denmark.
During the second quarter, YIT completed three acquisitions in Sweden and
entered into agreements on two further acquisitions. The acquisitions
complemented YIT's offering, competence portfolio and geographical service
network. The combined revenue of the acquired business operations was
approximately EUR 30 million in 2010.
Service and maintenance revenue grew during the first half of 2011
YIT's goal is to be the leading provider of technical system maintenance in the
Nordic countries and Central Europe. The target is to increase service and
maintenance operations at a faster rate than other operations.
Service and maintenance operations generated EUR 610.6 million (1-6/2010: EUR
588.8 million), or 62 percent (1-6/2010: 68%) of the segment's total revenue.
YIT has improved the offering of service and maintenance operations by
developing a ServiFlex concept where customers can agree on extensive service
entities in a single contract. The iServiflex service was launched in
industrial services during the first quarter. Customers increasingly appreciate
simplicity in purchasing services, and the number of extensive service
agreements is estimated to increase.
During the second quarter, YIT entered into a ServiFlex agreement with the
SILVAN retailer chain, among others. The agreement covers electrical work and
services related to pipework and ventilation in the chain's 39 outlets in
Denmark. The agreement is an extension of the cooperation between YIT and the
SILVAN chain, whereby YIT implements energy-saving solutions at eight of the
chain's outlets. In Finland, YIT signed more than 20 new ServiFlex agreements
during the second quarter on the servicing and maintenance of various office
and residential buildings, business properties and production plants across the
country.
During the second quarter, YIT signed a contract on pipeline collection systems
for waste in the new Kalasatama and Jätkäsaari residential areas in Helsinki
with companies owned by the City of Helsinki. YIT will design and construct
automatic Envac pipeline systems for waste collection in the areas and assume
responsibility for their care and maintenance after commissioning. The
investments will be realised in 2012-2030 as the construction of the areas
proceeds, and the maintenance period will be about 20 years from the completion
of the investments. The installation work will begin in Jätkäsaari in July and
the system is estimated to be in use in 2012. The Kalasatama system will be in
use in 2014. The value of the investments will be around EUR 80 million and
maintenance around EUR 20 million.
YIT signed a four-year nationwide framework agreement with DSB (Danish State
Railways) during the second quarter on the maintenance of refrigeration and
ventilation systems in all DSB buildings across Denmark, including railway
stations, office buildings and workshops. The agreement can be extended by one
year.
In addition, during the second quarter YIT entered into several agreements on
the delivery of building system services to Finnish schools and public
buildings.
New investments still relatively low
New investments in building systems recovered slightly during the review
period, but still remained at a relatively low level. Demand among industrial
customers was also focused on service and maintenance, and the demand for new
investments remained at a low level during the second quarter.
In Denmark, an extensive student housing complex will be constructed at Aalborg
University, with 130 new residential units for students. YIT will implement the
pipework and ventilation solutions as a subcontractor as a result of the order
secured during the second quarter. In addition, 142 residential units for
students will be renovated in the Aalborg area, with YIT responsible for the
delivery of the building system solutions. The agreement covers electrical,
piping and ventilation work.
In Norway, YIT signed an agreement on the delivery of an automatic Envac
pipeline system for waste collection in the Ranheim residential area with the
Trondheim municipality during the second quarter. The waste collection system
will cover 2,000 households and one school.
In Kiruna, Sweden, YIT will install 40 kilometres of new pipeline systems at an
LKAB (state-owned Swedish mining company) mine located 1,365 metres below sea
level. The pipeline is intended for water, pressurised air, gases and grease.
During the second quarter, YIT also agreed with PEAB on the implementation of
building system solutions at the new Siemens premises in Finspång, Sweden, for
750 employees after completion. The premises will be certified according to the
LEED certificate. YIT also agreed during the second quarter on the installation
of a new security system platform at all Swedish branch offices of one of the
world's leading pharmaceutical companies. The project will be implemented in
several phases, continuing until 2017.
YIT Industrial Services agreed with Andritz Oy on the delivery of 21
module-structured air treatment machines to a pulp mill built in Punta Pereira
in Uruguay. The module-structured air treatment machines will be used for
cooling the electrical rooms of the pulp mills and for pressurising the
facilities with chemically treated air. The machines will be delivered to
Uruguay in December 2011, and installed in early 2012.
BUILDING SERVICES CENTRAL EUROPE
Key figures
1-6/11 1-6/10 Change 4-6/11 4-6/10 Change
-----------------------------------------------------------------------------
Revenue, EUR million 368.2 157.2 134% 191.1 86.9 120%
-----------------------------------------------------------------------------
Operating profit, EUR million 16.1 4.9 229% 12.1 3.1 290%
-----------------------------------------------------------------------------
Operating profit margin, % 4.4 3.1 6.3 3.6
-----------------------------------------------------------------------------
6/11 6/10 Change 6/11 3/11 Change
----------------------------------------------------------------------
Order backlog, EUR million 554.1 276.8 100% 554.1 573.2 -3%
----------------------------------------------------------------------
Revenue, EUR million 1-6/11 1-6/10 Change 4-6/11 4-6/10 Change
--------------------------------------------------------------------------------
Germany 296.8 102.1 191% 155.7 58.1 168%
--------------------------------------------------------------------------------
Austria 46.6 46.5 0% 24.7 25.0 -1%
--------------------------------------------------------------------------------
Poland, the Czech Republic, 24.8 8.6 188% 10.7 3.8 182%
Hungary and other countries
--------------------------------------------------------------------------------
Total 368.2 157.2 134% 191.1 86.9 120%
--------------------------------------------------------------------------------
Building Services Central Europe revenue more than doubled in January-June
compared to the previous year, mainly as the result of an acquisition that took
effect at the beginning of September 2010. An increase in new building system
investments also contributed to the growth of the revenue for the review
period. Changes in foreign exchange rates did not have a substantial impact on
the revenue compared to the year before.
In Building Services Central Europe, operating profit improved particularly
with the German operations improving their performance. The divestment of the
Hungarian operations during the second quarter, which had an effect of EUR 5.0
million on the segment's operating result, improved the profitability of
Building Services Central Europe. Excluding divestment of the Hungarian
operations, the segment's operating profit margin for the second quarter was
3.7 percent (4-6/2010: 3.6%). Profitability was at a moderate level in Germany
and Austria.
The order backlog at the end of June was 100 percent higher than the previous
year, amounting to EUR 554.1 million (6/2010: EUR 276.8 million). In
particular, the order backlog increased as a result of the acquisition
completed at the beginning of September 2010. The improved market situation and
YIT's strengthened market position also contributed to the growth of the order
backlog.
Acquisition expanded operations in Central Europe
YIT aims to offer building system services, especially those requiring
technical expertise, close to its customers. The goal is to reinforce the local
market position organically and through acquisitions.
An acquisition whereby YIT acquired a company offering technical building
system services in Central Europe was completed at the beginning of September
2010. The profitability of the acquired company was below YIT's average
profitability, and YIT aims to improve the operating profit margin of the
acquired operations by one percentage point per year. The development of the
acquired business has proceeded as planned.
During the second quarter, YIT implemented its strategy by selling its share in
the German company AGO AG and its Hungarian business operations. The shares in
AGO AG were part of the acquisition that took effect at the beginning of
September 2010, whereby YIT acquired a holding of 59.25 percent in the German
company specialising in the production and sales of energy, with annual revenue
of approximately EUR 50 million. The revenue of the Hungarian operations
divested by YIT during the second quarter amounted to approximately EUR 10
million in 2010.
Service and maintenance revenue more than doubled
Service and maintenance operations generated EUR 94.3 million (1-6/2010: EUR
44.5 million), or 26 percent (1-6/2010: 28%) of the segment's total revenue for
the review period.
In Germany, YIT entered into a long-term agreement on 24-hour service and
maintenance with Wacker in Nünchritz, during the second quarter. YIT also
agreed on service deliveries with Hamburg Fairs, Infineon and Osram, among
others. In addition, YIT will provide services to the high level clean-room
premises of the University of Tübingen. In Cologne, YIT is responsible for the
operation of the energy centres of the head office of the television company
RTL. The head office is one of the largest office properties in Europe. In
Poland, YIT entered into several long-term service agreements, covering, among
others, more than 73,000 m² of logistics premises at the Airport Center
Modlniczka in the vicinity of Krakow and Swiecice and Blonie in the vicinity of
Warsaw. These logistics centres offer premises and services for the food,
retail and automotive industries, among others.
YIT's ServiFlex concept is in use in Germany and Austria, and it was also
implemented in Poland and the Czech Republic during the second quarter. Service
and maintenance agreements pursuant to the concept were signed during the
second quarter on the comprehensive technical maintenance of a park and riding
centre in Erdberg, Austria, the office building of the Raiffeisen travel bureau
in Vienna and several Austrian health centres, among others. In Germany, YIT
signed a ServiFlex agreement with a high-security laboratory in Essen and Ciba
Vision's production plant in Hessen, among others.
Demand for new investments remained at a favourable level in Germany
Demand for new building system investments remained at a favourable level in
Germany during the second quarter. Demand improved slightly in Austria. In
Central Eastern Europe, the market is recovering slowly.
During the second quarter, YIT entered into an extensive agreement with a food
packaging plant close to Poznan in Poland. The agreement covers the engineering
and implementation of an outdoor water and sewer system as well as gas, HPAC,
fire protection and property management systems. YIT will additionally install
a heating oil system in the plant. During the second quarter, YIT also entered
into an agreement on the delivery of electrical work to the Kaufland
supermarket built in Myszkow, Poland.
YIT made several significant agreements on new investments in Germany during
the second quarter. Among others, YIT agreed on the delivery of all building
system solutions to Bundesdruckerei's 36,000 m² building in Berlin. As part of
a project secured similarly in the second quarter, YIT will deliver all of the
electrical work to a pumping power station located in Kaprun, Austria, and the
tunnel leading to it.
CONSTRUCTION SERVICES FINLAND
Key figures
1-6/11 1-6/10 Change 4-6/11 4-6/10 Change
-----------------------------------------------------------------------------
Revenue, EUR million 621.8 528.1 18% 332.3 275.2 21%
-----------------------------------------------------------------------------
Operating profit, EUR million 58.4 49.5 18% 32.8 26.4 24%
-----------------------------------------------------------------------------
Operating profit margin, % 9.4 9.4 9.9 9.6
-----------------------------------------------------------------------------
6/11 6/10 Change 6/11 3/11 Change
------------------------------------------------------------------------------
Order backlog, EUR million 1,239.5 1,154.7 7% 1,239.5 1,176.0 5%
------------------------------------------------------------------------------
Revenue increased in January-June by 18 percent from the previous year as
production volumes remained at a high level in residential construction and
business premises construction picked up. The revenue for the second quarter
increased by 21 percent from the previous year to EUR 332.3 million (EUR 275.2
million). The volume of infrastructure services was normal in the second
quarter.
The operating profit for the review period increased by 18 percent compared to
the previous year, with residential and business premises construction focusing
on property development projects as planned. The operating profit of the
segment includes EUR -3.1 million of borrowing costs according to IAS 23
(1-6/2010: EUR -0.9 million). The operating profit margin for the review period
increased slightly compared to the previous year, while infrastructure services
continued to have a negative impact on the segment's profitability. The
operating profit for the second quarter increased clearly from the previous
year to EUR 32.8 million (4-6/2010: EUR 26.4 million). The operating profit for
the second quarter includes EUR -1.6 million of borrowing costs according to
IAS 23 (4-6/2010: EUR -0.6 million).
The order backlog increased by 7 percent from the previous year, particularly
as a result of new residential and business premises development project
start-ups. Compared to the end of March 2011, the order backlog increased by 5
percent, amounting to EUR 1,239.5 million (3/2011: EUR 1,176.0 million).
The segment's capital tied into plot reserves totalled EUR 293.4 million at the
end of June (6/2010: EUR 288.7 million). The plot reserves included 1,602,000
m2 of floor area of residential plots (6/2010: 1,675,000) and 855,000 m2 of
floor area of plots for business premises (6/2010: 943,000).
Residential sales to consumers continued at a good level - sales inventory was
increased with new start-ups
YIT's goal is to strengthen its position as the largest housing developer in
Finland. Residential sales continued at a good level in the second quarter.
During January-June, YIT sold a total of 1,048 residential units (1-6/2010:
977) directly to consumers, of which 513 in the second quarter (4-6/2010: 471).
Sales continued on a normal level in July. Housing prices increased at a
moderate rate during the review period.
The focus of YIT's housing construction is on residential development projects
aimed directly at consumers in accordance with market demand. In January-June,
YIT started the construction of a total of 1,280 residential units aimed
directly at consumers (1-6/2010: 1,236). Of the start-ups, 675 took place in
April-June (4-6 /2010: 783). 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. During the
second quarter, YIT and VR-Group Ltd. entered into letters of intent concerning
the acquisition of building rights in Helsinki, Turku and Hämeenlinna. If the
final agreements materialise, their value will be approximately EUR 70 million,
and they concern residential and commercial building rights for more than
100,000 square metres of floor area.
The new residential start-ups have maintained the sales inventory at a
sufficiently high level. At the end of June, YIT had 1,907 unsold residential
units (6/2010: 1,324). The number of completed, unsold residential units has
remained at a relatively low level, amounting to 208 (6/2010: 133) at the end
of June. Of the residential units under construction, 56 percent have been sold
(6/2010: 72%), which decreases YIT's sales risk.
Residential construction in Finland, number of residential units
1-6/11 1-6/10 Change 4-6/11 1-3/11 Change
--------------------------------------------------------------------------------
Sold 1,347 1,378 -2% 755 592 22%
--------------------------------------------------------------------------------
- of which directly to consumers 1,048 977 7% 513 535 -4%
--------------------------------------------------------------------------------
Start-ups 1,579 1,637 -4% 917 662 28%
--------------------------------------------------------------------------------
- of which directly to consumers 1,280 1,236 4% 675 605 10%
--------------------------------------------------------------------------------
Completed 2,134 1,119 91% 1,254 880 30%
--------------------------------------------------------------------------------
- of which directly to consumers 1,226 375 227% 701 525 25%
--------------------------------------------------------------------------------
Under construction at the end of 3,875 4,292 -10% 3,875 4,212 -9%
the period
--------------------------------------------------------------------------------
- of which sold at the end of 2,176 3,101 -30% 2,176 2,619 -20%
the period
--------------------------------------------------------------------------------
For sale at the end of the 1,907 1,324 44% 1,907 1,745 8%
period
--------------------------------------------------------------------------------
- of which completed 208 133 56% 208 152 27%
--------------------------------------------------------------------------------
Business premises market picked up
The positive development of the business and office premises market continued
during the second quarter. The decrease in business premises rents has stopped,
and investors' yield requirements have somewhat decreased. The order backlog of
YIT's business premises operations increased clearly from the year before.
Interest in Finland among international property investors has also increased.
The leasing of business premises under construction proceeded well during the
second quarter: lease agreements were signed on approximately 19,000 m² of
premises.
During the second quarter, YIT sold the Tiilitie Trade Park logistics property
in Vantaa, with a total floor area of approximately 27,000 m2 once complete.
The property will be constructed in two phases, of which the first phase of
approximately 10,000 m2 was completed in June 2011 and the second phase is
estimated to be complete in spring 2012. The total value of the transaction was
approximately EUR 40 million.
During the second quarter, YIT also sold the Triotto office building in Käpylä,
Helsinki. The construction of the office building with a floor area of
approximately 15,500 m2 was started in January 2011, and it is due for
completion in two phases during 2012. The total value of the transaction
amounted to approximately EUR 57 million.
During the review period, YIT announced that it will start the construction of
the energy-efficient office building Ratinankaari in Tampere in July 2011. The
value of the building is approximately EUR 35 million, and its first phase is
due for completion in spring 2013.
Turn for the better in infrastructure services
Demand for infrastructure construction was relatively low in the review period,
and competition in the field continued to be tight. Investments have decreased
in the municipal sector and decision-making has been postponed. Major road
projects are expected to start this year and next year, including the
construction and renovation of the E18 motorway between Koskenkylä and Kotka.
YIT is participating in the tenders for the E18 project, which will be
implemented using the Public-Private-Partnership, or PPP, model, in cooperation
with Destia. The order authorisation for the project is EUR 650 million. The
preferred bidder announcement is estimated to be made during the third quarter
of 2011.
In addition, opportunities will open up in road and regional maintenance
contracts, rock engineering and investments in mining operations.
During January-June, YIT had large-scale road projects under construction in
infrastructure services, such as the major project related to the improvement
of the Kehä I ring road, a project involving bridge and road work in
Savonlinna, and a tunnel for the Kehärata (Ring line) project in Vantaa. In
addition, YIT has the Helsinki western metro line project tunnel contracts
secured in early 2011 currently under construction.
After the review period, activity in infra services increased and YIT won a
project for the covering work of the Motorway 3 at Hämeenlinna, Finland, with a
value of approximately EUR 30 million. The construction of the covering will
begin in September 2011, and the entire project will be completed in phases
during spring 2013.
INTERNATIONAL CONSTRUCTION SERVICES
Key figures
1-6/11 1-6/10 Change 4-6/11 4-6/10 Change
-----------------------------------------------------------------------------
Revenue, EUR million 220.8 219.0 1% 120.5 112.1 7%
-----------------------------------------------------------------------------
Operating profit, EUR million 20.7 12.2 70% 12.3 7.6 62%
-----------------------------------------------------------------------------
Operating profit margin, % 9.4 5.6 10.2 6.8
-----------------------------------------------------------------------------
6/11 6/10 Change 6/11 3/11 Change
----------------------------------------------------------------------
Order backlog, EUR million 896.4 946.8 -5% 896.4 862.7 4%
----------------------------------------------------------------------
Revenue for the review period remained on par with the previous year, with
residential sales in Russia continuing at a favourable level and the Baltic
countries and Central Eastern European businesses experiencing growth. The
operating profit for the second quarter increased by 7 percent from the
previous year to EUR 120.5 million (4-6/2010: EUR 112.1 million). The segment's
residential sales continued at a good level in July as well.
The operating profit for the second quarter increased significantly from the
previous year to EUR 20.7 million (1-6/2010: EUR 12.2 million). Operating
profit improved particularly through increased residential selling prices,
successful balancing of sales and pricing, improved product and offering
portfolio and streamlining measures in YIT's own cost structure implemented in
2009. The operating profit of the segment includes EUR -1.3 million (1-6/2010:
EUR -0.1 million) of borrowing costs according to IAS 23. The operating profit
for the second quarter increased by 62 percent from the previous year to EUR
12.3 million (4-6/2010: EUR 7.6 million). The operating profit for the second
quarter includes EUR -0.8 million (4-6/2010: EUR -0.1 million) of borrowing
costs according to IAS 23.
The sale of projects at an earlier stage of construction than before had an
effect on the recognition of revenue and operating profit: little revenue is
recognised for projects that are sold in their early stage of construction. The
volume of operations increased in the Baltic countries, the Czech Republic and
Slovakia in the second quarter, but remained at a relatively low level
nevertheless, which impaired the segment's profitability.
The order backlog decreased slightly from the previous year, but increased by 4
percent from March 2011. The segment's order backlog was improved by the
strengthening of the ruble, which had an impact of EUR +7.7 million in
January-June. The order backlog includes two housing projects whose
construction was halted in Russia in October 2008 due to market uncertainties.
At the end of June 2011, the value of projects that were still suspended
amounted to EUR 90 million (6/2010: EUR 199 million). Restarting the suspended
projects will not increase the order backlog.
The segment's capital tied into plot reserves totalled EUR 370.9 million
(6/2010: EUR 294.4 million) at the end of June. The plot reserves included
2,504,000 m2 of floor area of residential plots (6/2010: 2,394,000) and 702,000
m2 of floor area of plots for business premises in Russia, the Baltic
countries, the Czech Republic and Slovakia (6/2010: 699,000).
Russian residential sales remained at a good level in the second quarter
YIT has operated in Russia for 50 years, and the company aims to increase
housing production in Russia according to market demand in the current
operating areas and to improve its reputation as a reliable housing
construction company. Russia generated 85 percent (1-6 /2010: 92%) of the
revenue of International Construction Services for January-June. Revenue
decreased by 7 percent in Russia compared to the previous year, amounting to
EUR 187.4 million (1-6/2010: EUR 201.8 million).
The capital tied into plot reserves in Russia totalled EUR 288.4 million at the
end of June (6/2010: EUR 217.5 million). The plot reserves included 2,149,000
m2 of floor area of residential plots (6/2010: 2,042,000) and 559,000 m2 of
floor area of plots for business premises (6/2010: 563,000). During the review
period, YIT acquired a 2.9-hectare plot in the centre of St. Petersburg.
Approximately 500 residential units, or more than 50,000 m² of residential
buildings, will be built on the plot. The construction of residential units on
the plot is scheduled to begin in 2012, and the project will be implemented in
several phases.
In Russia, the focus of operations is on residential development projects in St
Petersburg, Moscow and cities in the Moscow region, Yekaterinburg,
Rostov-on-Don and Kazan. The production under construction is concentrated in
St. Petersburg and cities in the Moscow region, but start-ups also took place
in Yekaterinburg and Rostov during the review period. YIT decided to expand its
operations to the city of Serpukhov, located 100 kilometres from Moscow. YIT
aims to take part in plot auctions that will be arranged in 2011 in Serpukhov.
During January-June, YIT sold a total of 1,475 residential units in Russia
(1-6/2010: 1,499), of which 782 in the second quarter (4-6/2010: 682).
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, the customer has taken out a housing loan in 51 percent of
YIT's residential sales. Residential demand is supported by the gradual
improvement of the economy, consumer confidence remaining at a good level,
increased availability of loans to customers and decreased housing loan
interest rates. During the review period, residential sales focused
increasingly on projects at an early stage of construction in Russia, meaning
that little revenue is recognised for the sold residential units.
During the review period, housing prices increased at a moderate rate in
Russia. YIT increased the prices of its residential units in all of the cities
where it operates in Russia. Residential demand improved compared to the
previous year, especially in Moscow Oblast.
YIT has actively started new residential projects in Russia, and the aim is to
increase the number of residential start-ups during 2011 compared to 2010.
There is a clearly higher number of projects at an early stage of construction,
i.e. the frame work stage, compared to the situation a year ago. The number of
residential start-ups in the second quarter remained on par with the first
quarter, amounting to 1,089 residential units (4-6 /2010: 1,074). The number of
residential units for sale has increased during the year, amounting to 4,993 at
the end of June (6/2010: 3,977). The number of completed unsold residential
units decreased from the previous year, amounting to 409 at the end of June
(6/2010: 646). Of the residential units under construction, 28 per cent have
been sold (6/2010: 39%).
A total of 343 residential units were completed in Russia during the review
period (1-6/2010: 641). After the handover of residential projects, YIT offers
its customers service and maintenance. At the end of the review period, YIT was
in charge of the service and maintenance of approximately 10,000 residential
units.
During the review period, YIT established a precast concrete plant in the city
of Voskresensk near Moscow, with the aim of producing precast concrete for
YIT's residential construction activity in the Moscow region. The production at
the plant will begin at the end of 2011, and the plant will reach its planned
production volume by the end of 2012. In the initial phase, the plant's
production volume will correspond to approximately one-third of the needs of
YIT's residential production in the Moscow region. The plant is also
responsible for the installation of its precast concrete elements at YIT sites.
The plant is a joint venture, with YIT holding 76 percent of the shares.
Residential construction in Russia, number of residential units
1-6/11 1-6/10 Change 4-6/11 1-3/11 Change
--------------------------------------------------------------------------------
Sold 1,457 1,499 -3% 782 675 14%
--------------------------------------------------------------------------------
Start-ups 2,240 1,872 20% 1,089 1,151 -6%
--------------------------------------------------------------------------------
Completed 1) 343 641 -46% 238 105 56%
--------------------------------------------------------------------------------
Under construction at the end of 6,346 5,425 17% 6,346 5,495 13%
the period 2)
--------------------------------------------------------------------------------
- of which sold at the end of 1,762 2,094 -16% 1,762 1,375 22%
the period
--------------------------------------------------------------------------------
For sale at the end of the 4,993 3,977 26% 4,993 4,687 6%
period
--------------------------------------------------------------------------------
- of which completed 409 646 -37% 409 567 -39%
--------------------------------------------------------------------------------
1) Completion of the projects requires commissioning by the authorities.
2) At the end of June 2011, YIT had 365 (6/2010: 1,204) residential units at
Russian sites whose construction was suspended in the autumn of 2008. These
residential units are not included in the figure for residential units under
construction shown in the table. Changes in the number of residential units may
take place after the start of construction due to the division or combination
of residences.
Construction of business premises is picking up slowly in Russia
YIT's volume in the Russian business premises market remained at a low level
during the review period. Marketing of the Gorelovo industrial park close to
St. Petersburg has been continued. The competitive advantages of the area are
its good location and completed infrastructure connections. The demand for the
area is good, and negotiations with potential customers will continue.
Residential demand increased in the Baltic countries and Central Eastern Europe
YIT's aim is to increase its residential production in the Baltic and Central
Eastern European countries. The volume of YIT's residential production
increased in these countries during the second quarter, but continues to be at
a low level. Estonia, Latvia, Lithuania, the Czech Republic and Slovakia
accounted for 15 percent of the revenue of International Construction Services
for January-June (1-6/2010: 8%). Revenue generated in these countries increased
by 94 percent compared to the year before to EUR 33.4 million (1-6/2010: EUR
17.2 million). The capital tied into plot reserves in the Baltic countries, the
Czech Republic and Slovakia totalled EUR 82.5 million at the end of June
(6/2010: EUR 75.8 million). The plot reserves included 335,000 m2 of floor area
of residential plots (6/2010: 352,000) and 143,000 m2 of floor area of plots
for business premises (6/2010: 136,000).
The focus of YIT's operations has been shifted from project contracting to
residential construction with new residential start-ups. The construction of
316 residential units was started in Estonia, Latvia, Lithuania and the Czech
Republic during January-June (1-6/2010: 233). Of the start-ups, 181 took place
in the second quarter (4-6 /2010: 122). At the end of June, there were 611
residential units under construction (6/2010: 233).
YIT's residential inventory is still relatively low in the Baltic countries,
the Czech Republic and Slovakia. In January-June, a total of 156 residential
units were sold in these countries (1-6/2010: 20). At the end of June, there
were 609 residential units for sale (6/2010: 253) and of these 106 were
completed (6/2010: 26). The number of residential units completed during the
review period was 81 (1-6/2010: 0).
Residential demand has turned to growth in the Baltic countries, the Czech
Republic and Slovakia. In particular, the demand for residential units in
central locations has picked up.
Residential construction in the Baltic countries and Central Eastern Europe,
number of residential units
1-6/11 1-6/10 Change 4-6/11 1-3/11 Change
--------------------------------------------------------------------------------
Sold 156 20 680% 99 57 42%
--------------------------------------------------------------------------------
Start-ups 316 233 36% 181 135 25%
--------------------------------------------------------------------------------
Completed 81 0 212% 0 81
--------------------------------------------------------------------------------
Under construction at the 611 233 162% 611 430 30%
end of the period
--------------------------------------------------------------------------------
- of which sold at the 108 6 more than a 108 47 56%
end of the period thousand
--------------------------------------------------------------------------------
For sale at the end of 609 253 141% 609 527 13%
the period
--------------------------------------------------------------------------------
- of which completed 106 26 308% 106 144 -36%
--------------------------------------------------------------------------------
BUILDINGS AND INDUSTRY NEED ENERGY-SAVING SERVICES
YIT aims to be a leader in energy-saving services for buildings and industry,
where demand is expected to increase in the next few years. The demand for
energy efficiency services is supported by the tightening of legislation and
the increase in energy prices: customers increasingly pay attention to energy
consumption and savings potential. Energy-saving may be part of both new
construction and renovation projects as well as maintenance agreements.
Energy-saving is an essential part of business in all of YIT's segments.
In Sweden, YIT agreed on the installation of the electrical grid of 40
windmills to be installed in Gabrielsberget. In Norway, YIT will deliver
energy-saving services to 80 Statkraft hydropower plants. The project was
preceded by a successful pilot phase where YIT was responsible for the
energy-saving services of ten power plants. The value of the final agreement is
approximately EUR 6 million. In Finland, YIT signed an agreement on the energy
reviews of seven airports with Finavia. The agreement is an extension of energy
reviews that YIT has already carried out at three other Finnish airports.
During the second quarter, YIT agreed on a project in which the modern building
system solutions of the University of Bielefeld, Germany, will be developed and
simulated in YIT's research and development laboratory in Aachen. These
solutions include, among others, utilisation of ground heat, exhaust air
cooling and concrete core cooling. In Hamburg, Germany, YIT will modernise the
60,000 m² Kapstadtring office building to meet the strictest energy
regulations. YIT will utilise its research centre also in this project in
developing the special technology related to the energy-saving solutions for
the building.
In Austria, YIT will deliver heating, air conditioning, plumbing, ventilation
and automation systems to the new head office of Andritz, among others. The
floor area of the eight-storey office building constructed in Vienna is
approximately 30,000 m²: YIT will provide ground heat-based energy solutions
for the building, utilising also solar panels and other energy-efficient
solutions.
The public sector is among the most important and active customers for
energy-saving services. During the second quarter, YIT agreed on a project to
construct one of the most energy-efficient residential areas in Sweden with the
municipalities of Morastrand and Mora, among others. The project includes the
auditing of municipal buildings and housing corporations in the areas and the
implementation of the identified energy efficiency measures. YIT signed an
agreement with the municipality of Piteå on improving the energy efficiency of
the municipality's 12 schools.
In Central Europe, YIT signed agreements during the second quarter on the
implementation of energy-saving services in a hospital in Stade, Germany, and a
school in Austria, among others. The lighting, heating, air conditioning and
automation of the Stade hospital will be modernised. The solutions to be
implemented in Austria include a solar panel-based solution that aims to cut
the school's energy consumption by a minimum of 25 percent.
In Construction Services Finland, all of YIT's property development projects
are built as low-energy buildings that consume 30 percent less energy on
average. Interest in energy-saving services is also increasing in Russia.
PERSONNEL
In January-June 2011, the Group employed 26,021 (1-6/2010: 23,400) people on
average. At the end of the period, the Group employed 26,807 (6/2010: 23,877)
people. In connection with the acquisition made in Central Europe,
approximately 2,000 employees were transferred to YIT's Building Services
Central Europe at the beginning of September 2010.
During 2010, it was decided to adopt a new share-based incentive scheme, aimed
at supporting the company's strategy of profitable growth and supplementing the
already available incentive schemes. The scheme covers approximately 250 people
in 2011. The cost effect of the incentive scheme was about EUR 2.7 million in
January-June (1-6/2010: EUR 1.0 million).
Personnel by business segment
The largest segment by personnel was Building Services Northern Europe,
employing 61 percent (6/2010: 65%) of YIT's personnel. Building Services
Central Europe employed 13 percent (6/2010: 8%), Construction Services Finland
14 percent (6/2010: 14%), International Construction Services 10 percent
(6/2010: 11%) and Corporate Services 2 percent (6/2010: 2%) of the personnel.
Personnel by business segment 6/11 6/10 Change 6/11 3/11 Change
--------------------------------------------------------------------------------
Building Services Northern 16,269 15,527 5% 16,269 15,712 4%
Europe
--------------------------------------------------------------------------------
Building Services Central Europe 3,597 1,994 80% 3,597 3,712 -3%
--------------------------------------------------------------------------------
Construction Services Finland 3,730 3,403 10% 3,730 3,253 15%
--------------------------------------------------------------------------------
International Construction 2,785 2,591 7% 2,785 2,677 4%
Services
--------------------------------------------------------------------------------
Corporate Services 426 362 18% 426 394 8%
--------------------------------------------------------------------------------
YIT Group, total 26,807 23,877 12% 26,807 25,748 4%
--------------------------------------------------------------------------------
Personnel by country
Of YIT's employees, 37 percent worked in Finland (6/2010: 41%), 35 percent in
the other Nordic countries (6/2010: 36%), 10 percent in Germany (6/2010: 4), 9
percent in Russia (6/2010: 10%), 4 percent in the Baltic countries (6/2010: 4%)
and 5 percent in other countries (6/2010: 5%).
Personnel by country 6/11 6/10 Change 6/11 3/11 Change
--------------------------------------------------------------------------------
Finland 10,031 9,694 3% 10,031 9,144 10%
--------------------------------------------------------------------------------
Sweden 4,681 4,222 11% 4,681 4,484 4%
--------------------------------------------------------------------------------
Norway 3,423 3,277 4% 3,423 3,462 -1%
--------------------------------------------------------------------------------
Germany 2,706 1,066 154% 2,706 2,771 -2%
--------------------------------------------------------------------------------
Russia 2,465 2,433 1% 2,465 2,410 2%
--------------------------------------------------------------------------------
Denmark 1,369 1,211 13% 1,369 1,357 1%
--------------------------------------------------------------------------------
Baltic countries 1,074 1,032 4% 1,074 1,013 6%
--------------------------------------------------------------------------------
Other countries (Central Europe 1,058 942 12% 1,058 1,107 -4%
excluding Germany)
--------------------------------------------------------------------------------
YIT Group, total 26,807 23,877 12% 26,807 25,748 4%
--------------------------------------------------------------------------------
RESOLUTIONS PASSED AT THE ANNUAL GENERAL MEETING
YIT Corporation's Annual General Meeting was held on March 11, 2011. The Annual
General Meeting adopted the 2010 financial statements, discharged the members
of the Board of Directors and the President and CEO from liability, confirmed
the dividend as proposed by the Board of Directors, decided on the Board of
Directors' fees and elected the auditor. The Annual General Meeting confirmed
the composition of the Board of Directors: Henrik Ehrnrooth (Chairman), Reino
Hanhinen (Vice Chairman), Eino Halonen, Kim Gran, Antti Herlin and Satu Huber
were re-elected as Board members. In addition, Michael Rosenlew was elected as
a new Board member.
In its organisational meeting on March 11, 2011, the Board elected the chairmen
and members of the Audit Committee and the Nomination and Rewards Committee
from among its 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 11, 2011. The stock exchange releases and a presentation of the members
of the Board of Directors are available at YIT's website, www.yitgroup.com.
SHARES, SHARE OPTIONS AND SHAREHOLDERS
The company has one series of shares. Each share carries one vote and confers
an equal right to dividends.
The company has no outstanding share option programmes.
Share capital and number of shares
YIT Corporation's share capital and the number of shares outstanding did not
change during the review period. YIT Corporation's share capital was EUR
149,216,748.22 at the beginning of 2011 (2010: EUR 149,216,748.22), and the
number of shares outstanding was 127,223,422 (2010: 127,223,422).
Treasury shares and authorisations of the Board of Directors
In accordance with the Limited Liability Companies Act, the General Meeting
decides on the buyback and conveyance of shares, as well as any decisions
leading to changes in the share capital. The Annual General Meeting of YIT
Corporation resolved on March 11, 2011, to authorise the Board of Directors to
decide on purchases of the company's shares and on share issues as proposed by
the Board of Directors. The share issue authorisation also includes an
authorisation to decide on the conveyance of treasury shares.
YIT Corporation held 2,145,000 treasury shares at the beginning of the review
period, purchased on the basis of the authorisation given by the General
Meeting of October 6, 2008.
YIT Corporation's Board of Directors confirmed the rewards for the 2010 earning
period under the share-based incentive scheme for YIT's management on April 28,
2011, which were conveyed as a directed share issue without consideration. In
the share issue, 196,910 YIT Corporation shares were issued and conveyed to the
key persons participating in the Share Ownership Plan according to the terms
and conditions of the plan. By the end of the review period, 1,524 shares had
been returned to YIT. At the end of the review period, the company held
1,949,614 of it's own shares. During the review period, no shares in the parent
company were owned by subsidiaries.
At the end of the period, the parent company's Board of Directors did not have
authorisations to issue convertible bonds or bonds with warrants.
Trading in shares
The price of YIT's share was EUR 18.65 at the beginning of the year (January 1,
2010: EUR 14.44). The closing rate of the share on the last trading day of the
review period was EUR 17.24 (June 30, 2010: EUR 14.78). The share price
decreased by 8 percent during January-June. The highest price of the share in
January-June was EUR 21.92 (1-6/2010: EUR 17.96), the lowest was EUR 15.41
(1-6/2010: EUR 12.98) and the average price was EUR 19.58 (1-6/2010: EUR
15.85). Share turnover on Nasdaq OMX in January-June amounted to 61,761,586
shares (1-6/2010: 76,363,340). The value of turnover was EUR 1,204.7 million
(1-6:2010: EUR 1,210.6 million).
YIT Corporation's market capitalisation at the end of the review period was EUR
2,159.7 million (6/2010: EUR 1,848.7 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, the number of registered shareholders was 32,975 (6/2010:
32,702). At the end of March 2011, the number of shareholders was 32,278. The
number of private investors increased by approximately 450 during the second
quarter. At the end of June, a total of 39.3 percent (6/2010: 38.7%) of the
shares were owned by nominee-registered and non-Finnish investors.
During January-June, the company received no "flagging notifications" of change
in ownership in YIT Corporation in accordance with Chapter 2, section 9 of the
Securities Market Act.
MAJOR SHORT-TERM BUSINESS RISKS AND RISK MANAGEMENT
YIT has specified the major risk factors and their management from the point of
view of the Group as a whole, taking the special characteristics of YIT's
business operations and environment into consideration. Risks are divided into
strategic, operational, financial and event risks.
YIT has developed the Group's business structure to be balanced and tolerant of
economic fluctuations. The share of steadily developing service and maintenance
operations has been increased. Cash flow-generating (building system and
industrial services, contracting) and capital-intensive business operations
(residential and commercial development production) balance the risks related
to business operations and the use of capital and enable better risk management
at the Group level.
Operations have been expanded geographically so that economic fluctuations
impact operations at different times in different markets. Continuous
monitoring and analysis make it possible to react quickly to changes in the
operating environment and also to utilise the business opportunities provided
by the changes.
The Group's aim is to grow profitably, both organically and through
acquisitions. The building services operations in Central Europe have grown as
the result of the acquisition completed at the beginning of September 2010. The
integration and development of the acquired companies has proceeded as planned.
YIT's typical operational risks include risks related to plot investments,
sales risk of residential and commercial development projects and risks related
to contract tenders, service agreements, project management and personnel. YIT
manages sales risk by matching the number of housing start-ups with the
estimated residential demand and the number of unsold residential units (the
figures for residential production are presented under Development by business
segment) and by normally securing key tenants and/or the investor prior to
starting a business premises project. A strong increase in interest rates is a
key risk related to the demand for residential units.
YIT tests the value of its plots as required by the IFRS accounting principles.
Plot reserves are measured at acquisition cost and the plot value is impaired
when it is estimated that the building being constructed on the plot will be
sold at a price lower than the sum of the price of the plot and the
construction costs. No write-offs were made to plots in the review period.
Financing and financial risks include liquidity, credit and counterparty,
interest rate and currency risks and risks related to the reporting process.
Financing and financial risks are managed through accounting and financing
policies, internal control as well as internal and external audit.
YIT's most significant currency risk is related to investments in ruble terms.
Capital invested in Russia totalled EUR 531.9 million (3/2011: EUR 558.2
million) at the end of the period. The amount of net equity investments at the
end of the period was EUR 414.4 million (3/2011: EUR 417.9 million). The net
investments in the Russian subsidiaries are unhedged in accordance with the
treasury policy, and a potential devaluation of the ruble would have a negative
impact equal to the amount of equity on the Group's shareholders' equity. Debt
investments amounted to EUR 117.9 million (3/2011: EUR 140.3 million) at the
end of the period, and this exposure was hedged in full. The difference in the
interest rates between the euro and ruble have an effect on hedging costs and
therefore net financial expenses.
Possible event risks include accidents related to personal or information
security and sudden and unforeseen material damage to premises, project sites
and other property, such as due to fire, collapse and theft. YIT complies with
a group-wide security policy covering the different areas of security.
A more detailed account of YIT's risk management policy and the most
significant risks was published in the Annual Report 2010. Financing risks are
described in more detail in the notes to the financial statements for 2010.
OUTLOOK FOR 2011
YIT Corporation reiterates its estimate issued in connection with the financial
statements for 2010 according to which, in 2011, the combined revenue of the
business segments will grow and operating profit will grow clearly compared to
2010.
YIT estimates residential sales to continue to be good in both Finland and
Russia. In particular, residential construction activity in Russia, German
building services and Building Services Northern Europe will provide
opportunities for improving profitability.
The increased uncertainty of 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.
The profit outlook is based on the segment reporting, i.e. recognition of
income based on the percentage of completion.
Building Services Northern Europe
In Building Services Northern Europe, the service and maintenance market is
estimated to grow at a faster rate than the project market, which is dependent
on new investments. The opportunities for growth in service and maintenance are
favourable in all Nordic countries. The building system services market is
developing in the Baltic countries and Russia, but it will take some time for
the culture of purchasing services to strengthen. New investments in building
systems are expected to begin to increase slightly compared to the low level of
the previous year, and typically a growth in new investments can be seen in the
demand for building system services with a delay. New investments in building
systems are expected to grow by 2-3 percent in business premises construction
and 3-5 percent in residential construction during 2011.
The efficiency enhancement measures of companies and government open up
opportunities for the outsourcing of real estate services. Investments by
industrial customers began to increase in Finland in the previous year, and
their increase is expected to continue. The demand for industrial maintenance
services will continue to be relatively steady.
Building Services Central Europe
In Building Services Central Europe, the service and maintenance market as well
as the project market, which is dependent on new investments, are expected to
grow. The opportunities for growth in service and maintenance are favourable in
all countries, the German and Austrian markets in particular offer good growth
opportunities. The building system services market in Central Eastern Europe
(Poland, the Czech Republic and Romania) is developing.
New investments in building systems are expected to return to a relatively good
level in Central Europe, and the outlook for the project business is moderately
good, especially in Germany and Austria. New investments in building systems
are expected to increase by 2-4 percent in 2011. Investments by industrial
customers are expected to continue to increase.
YIT has an extensive network of local offices in both the Nordic countries and
the markets where Building Services Central Europe operates, and a strong
market position in building system and industrial service and maintenance
operations, projects and energy-efficiency services. Growth in the demand for
energy-efficiency services is possible in the next few years with high energy
prices and tightening environmental legislation. There are many small companies
operating in the technical building system market, and the consolidation of the
market will provide opportunities for acquisitions. YIT's strength is its
extensive service portfolio and possibility to guarantee a high level of
service to its customers. YIT's goal is to be the leading provider of technical
system maintenance in the Nordic countries and Central Europe.
Construction Services Finland
With regard to Construction Services Finland, housing demand is expected to
continue to be good. In Finland, residential demand is supported by relatively
low interest rates and structural factors, such as migration, population growth
and decreasing family sizes. According to the construction industry's
estimates, the construction of 33,500 residential units will start in 2011,
while VTT's long-term estimate of the need for new housing is 35,000
residential units per year.
The supply situation of new residential units has normalised, and the supply of
new residential units on the market is higher than in recent years. YIT
actively started new residential projects in 2010 and the first half of 2011,
which offers the company a solid starting point for the rest of 2011.
The increase in housing prices has levelled off, and YIT expects moderate
growth in prices in the future. Construction costs have begun to increase
moderately. YIT's good plot reserves and geographically extensive operations
make it possible to continue residential development start-ups and residential
production at a high level in 2011. YIT aims to increase the number of
residential start-ups in 2011 compared to 2010.
The business premises market has picked up: investors' yield requirements have
decreased, and business premises rents are expected to begin to increase in
2011. Vacancy rates are still high, and new investments in office property is
likely to remain at a relatively low level. A number of offices, especially old
and vacant ones, will not return into use as business premises due to their
poor location or condition. The demand for the construction of logistics and
business premises is moderate. The need for renovation will rise steadily.
YIT has major road projects underway in infrastructure services, and the
Finnish infrastructure market will see new traffic-related projects being
started in 2011 and 2012. Opportunities will also open up in road and regional
maintenance contracts, rock engineering and investments in mining operations.
The need for stabilising public finance has an impact on the public sector's
investments, and there is an element of uncertainty connected with the project
start-up decisions. The competition in infrastructure construction will remain
tight, but the latter half of 2011 is expected to be brisker than the first two
quarters. YIT has special expertise in infrastructure and a solid position as
the largest private provider of road maintenance services in Finland.
International Construction Services
YIT aims to consolidate its position throughout the business area of the
International Construction Services segment.
There is a great need for new housing in Russia, and therefore the demand
outlook for residential units aimed at YIT's customer segment is strong in the
long term. The demand for housing in Russia is supported by continued
relatively good consumer confidence and improved availability of housing loans.
In Russia, housing demand also depends on oil prices and the ruble exchange
rate.
During the review period, housing prices increased at a moderate rate in
Russia. The supply in the residential market has normalised with the start-up
of new residential projects. YIT has strengthened its reputation as a reliable
construction company and developed its sales process. The availability of loans
to customers has been improved through extensive cooperation with banks.
The residential market is showing signs of picking up in the Baltic countries
and Central Eastern Europe as well. Consumers need more room and quality of
housing in the long term in the Baltic countries and Central Eastern Europe.
Residential demand has improved in these countries.
Residential start-ups will be increased in 2011 in accordance with the demand
throughout the area of operations of International Construction Services:
Russia, the Baltic countries, the Czech Republic and Slovakia. YIT aims to
increase the number of residential start-ups in 2011 compared to 2010. So far,
the business premises market has been softer than residential construction in
all of the countries where International Construction Services are present.
Construction of offices is low in Russia, but the demand for industrial and
business premises is increasing. Several business premises projects are being
prepared in the Baltic countries and Central Eastern Europe and will probably
start before the end of the year.
Residential demand and housing prices are expected to increase throughout the
area of operations of International Construction Services, which provides
opportunities for improving profitability, particularly in Russia, which
provides opportunities for improving profitability. Construction costs are
expected to increase in all of the countries in which International
Construction Services operates.
EVENTS AFTER THE REVIEW PERIOD
The Building Services Northern Europe segment has acquired the business
operations of Sakari Timonen Oy in Finland. The transaction took effect on July
1, 2011. The acquired operations cover the installation, servicing and repair
of air conditioning and refrigeration equipment. The company's revenue was
approximately EUR 1 million in 2010. In addition, the Building Services
Northern Europe segment acquired all of the shares in MISAB Sprinkler & VVS AB
in Sweden. The company's core business consists of sprinkler and pipeline
deliveries to fire protection systems. The company's revenue for 2010 was
approximately EUR 7 million, and it will be consolidated into the YIT Group as
of July 1, 2011. The total purchase prices of the acquisitions made after the
review period amount to approximately EUR 2.3 million. The acquisitions are not
expected to result in goodwill.
INTERIM REPORT JAN 1 - JUN 30, 2011: TABLES
The information presented in the Interim Report has not been audited.
1. Key figures of YIT Group
Key figures
YIT Group figures by quarter
Segment information by quarter
2. Consolidated financial statements Jan 1 - Jun 30, 2011
Consolidated income statement January 1 - June 30, 2011
Statement of comprehensive income January 1 - June 30, 2011
Consolidated income statement April 1 - June 30, 2011
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
3. Notes
Accounting principles of the Interim Report
Financial risk management
Segment information
Unusual items affecting operating profit
Business combinations and disposals
Changes in property, plant and equipment
Inventories
Notes on equity
Borrowings
Change in contingent liabilities and assets and commitments
Transactions with associated companies
Events after the review period
1. KEY FIGURES OF YIT GROUP
KEY FIGURES
6/11 6/10 Change 12/10
--------------------------------------------------------------------------------
Earnings per share, EUR 0.57 0.31 84% 1.12
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 0.57 0.31 84% 1.12
--------------------------------------------------------------------------------
Equity per share, EUR 7.00 6.35 10% 7.04
--------------------------------------------------------------------------------
Average share price during the period, EUR 19.58 15.85 26% 16.35
--------------------------------------------------------------------------------
Share price at the end of period, EUR 17.24 14.78 17% 18.65
--------------------------------------------------------------------------------
Market capitalization, MEUR 2,159.7 1,848.7 17% 2,332.7
--------------------------------------------------------------------------------
Weighted average share-issue adjusted number 125,113 125,078 0% 125,078
of shares outstanding, thousands
--------------------------------------------------------------------------------
Weighted average share-issue adjusted number 125,113 125,078 0% 125,078
of shares outstanding, thousands, diluted
--------------------------------------------------------------------------------
Share-issue adjusted number of shares 125,274 125,078 0% 125,078
outstanding at end of period, thousands
--------------------------------------------------------------------------------
Net interest-bearing debt at the end of 702.7 514.8 36% 640.9
period, MEUR
--------------------------------------------------------------------------------
Return on investment, from the last 12 15.6 10.7 14.3
months, %
--------------------------------------------------------------------------------
Equity ratio, % 29.7 31.8 31.9
--------------------------------------------------------------------------------
Gearing ratio, % 79.9 64.7 72.6
--------------------------------------------------------------------------------
Gross capital expenditures, MEUR 23.1 18.1 28% 129.8
--------------------------------------------------------------------------------
% of revenue 1.1 1.1 3.4
--------------------------------------------------------------------------------
Unrecognised order backlog at the end of 3,796.9 3,329.2 14% 3,535.7
period, MEUR
--------------------------------------------------------------------------------
of which order backlog outside Finland 2,068.3 1,769.8 17% 1,857.7
--------------------------------------------------------------------------------
Average number of personnel 25,754 23,400 11% 24,317
--------------------------------------------------------------------------------
YIT GROUP FIGURES BY QUARTER
4-6/11 1-3/11 10-12/1 7-9/10 4-6/10 1-3/10
0
--------------------------------------------------------------------------------
Revenue, MEUR 1,137.2 969.7 1,338.0 829.6 854.8 765.3
--------------------------------------------------------------------------------
Operating profit, MEUR 67.9 39.2 116.4 33.9 35.9 33.9
--------------------------------------------------------------------------------
% of revenue 6.0 4.0 8.7 4.1 4.2 4.4
--------------------------------------------------------------------------------
Financial income, MEUR 0.3 2.4 0.7 1.1 1.1 0.7
--------------------------------------------------------------------------------
Exchange rate differences, -0.8 -1.3 -0.8 -2.3 -1.9 -2.3
MEUR
--------------------------------------------------------------------------------
Financial expenses, MEUR -4.4 -5.6 -3.1 -5.7 -7.2 -5.6
--------------------------------------------------------------------------------
Profit before taxes, MEUR 63.0 34.7 113.2 27.0 27.9 26.7
--------------------------------------------------------------------------------
% of revenue 5.7 3.6 8.5 3.3 3.3 3.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Balance sheet total, MEUR 3,387.4 3,274.8 3,117.1 3,234.6 3,067.9 2,994.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.37 0.20 0.65 0.16 0.16 0.15
--------------------------------------------------------------------------------
Equity per share, EUR 1) 7.00 6.64 7.04 6.30 6.35 6.08
--------------------------------------------------------------------------------
Share price at end of 17.24 20.92 18.65 17.39 14.78 17.10
period, EUR
--------------------------------------------------------------------------------
Market capitalization, 2,159.7 2,616.6 2,332.7 2,175.1 1,848.7 2,138.8
MEUR
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return on investment, from 15.6 14.0 14.3 10.6 10.7 11.3
the last 12 months, %
--------------------------------------------------------------------------------
Equity ratio, % 29.7 28.5 31.9 29.2 31.8 30.2
--------------------------------------------------------------------------------
Net interest-bearing debt 702.7 626.1 640.9 636.6 514.8 496.0
at the end of period,
MEUR
--------------------------------------------------------------------------------
Gearing ratio, % 79.9 75.2 72.6 80.5 64.7 65.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gross capital 14.6 8.7 ,30.7 81.0 8.7 9.4
expenditures, MEUR
--------------------------------------------------------------------------------
Order backlog at the end 3,796.9 3,699.0 3,535.7 3,727.5 3,329.2 3,152.5
of period, MEUR
--------------------------------------------------------------------------------
Personnel at the end of 26,807 25,748 25,832 25,943 23,877 23,211
period
--------------------------------------------------------------------------------
SEGMENT INFORMATION BY QUARTER
Revenue by business segment (EUR million)
4-6/11 1-3/11 10-12/1 7-9/10 4-6/10 1-3/10
0
--------------------------------------------------------------------------------
Building Services Northern 509.4 476.2 519.2 416.8 460.8 406.8
Europe
--------------------------------------------------------------------------------
Building Services Central 191.1 177.1 258.7 134.2 86.9 70.4
Europe
--------------------------------------------------------------------------------
Construction Services Finland 332.3 289.5 294.2 279.7 275.2 252.9
--------------------------------------------------------------------------------
International Construction 120.5 100.3 139.7 111.9 112.1 106.9
Services
--------------------------------------------------------------------------------
Other items -16.4 -16.2 -24.2 -18.4 -20.7 -16.2
--------------------------------------------------------------------------------
YIT's segments total 1,136.9 1,026.9 1,187.6 924.2 914.3 820.8
--------------------------------------------------------------------------------
IFRIC 15 adjustments 0.3 -57.2 150.4 -94.6 -59.6 -55.5
--------------------------------------------------------------------------------
YIT Group total 1,137.2 969.7 1,338.0 829.6 854.7 765.3
--------------------------------------------------------------------------------
Operating profit by business segment (EUR million)
4-6/11 1-3/11 10-12/10 7-9/10 4-6/10 1-3/10
--------------------------------------------------------------------------------
Building Services Northern 18.8 17.1 23.5 20.2 25.1 19.9
Europe
--------------------------------------------------------------------------------
Building Services Central 12.1 4.0 8.9 2.7 3.1 1.7
Europe
--------------------------------------------------------------------------------
Construction Services Finland 32.8 25.6 29.4 29.3 26.4 23.1
--------------------------------------------------------------------------------
International Construction 12.3 8.4 13.4 9.2 7.6 4.6
Services
--------------------------------------------------------------------------------
Other items -5.7 -4.7 -5.5 -3.4 -5.1 -4.8
--------------------------------------------------------------------------------
YIT's segments total 70.3 50.4 69.7 57.9 57.1 44.5
--------------------------------------------------------------------------------
IFRIC 15 adjustments -2.4 -11.2 46.7 -24.0 -21.2 -10.6
--------------------------------------------------------------------------------
YIT Group total 67.9 39.2 116.4 33.9 35.9 33.9
--------------------------------------------------------------------------------
Operating profit margin by business segment (%)
4-6/11 1-3/11 10-12/10 7-9/10 4-6/10 1-3/10
--------------------------------------------------------------------------------
Building Services Northern 3.7 3.6 4.5 4.8 5.4 4.9
Europe
--------------------------------------------------------------------------------
Building Services Central 6.3 2.3 3.4 2.0 3.6 2.4
Europe
--------------------------------------------------------------------------------
Construction Services Finland 9.9 8.8 10.0 10.5 9.6 9.1
--------------------------------------------------------------------------------
International Construction 10.2 8.4 9.6 8.2 6.8 4.3
Services
--------------------------------------------------------------------------------
YIT's segments total 6.2 4.9 5.9 6.3 6.2 5.4
--------------------------------------------------------------------------------
YIT Group total 6.0 4.0 8.7 4.1 4.2 4.4
--------------------------------------------------------------------------------
In the second quarter 2011, a EUR 3.0 million provision booked affects
negatively Building Services Northern Europe's operating profit and a EUR 5.0
million gain on the sale of Hungarian businesses affects positively Building
Services Central Europe's operating profit.
In 2010, the operating profit of Building Systems segment included EUR 6.3
million non- recurring expenses related to acquisitions made during the year.
Of the non-recurring items, EUR 1.4 million was recognised in the third quarter
of the year in Building Services Northern Europe and EUR 1.9 million in
Building Services Central Europe. EUR 3.0 milliom of non-recurring expenses
were booked in Building Services Central Europe in the fourth quarter.
Order backlog by business segment at end of period (EUR million)
6/11 3/11 12/10 9/10 6/10 3/10
--------------------------------------------------------------------------------
Building Services Northern 879.5 804.9 757.4 743.0 748.5 697.9
Europe
--------------------------------------------------------------------------------
Building Services Central 554.1 573.2 507.0 589.1 276.8 266.3
Europe
--------------------------------------------------------------------------------
Construction Services 1,239.5 1,176.0 1,173.2 1,205.2 1,154.7 905.4
Finland
--------------------------------------------------------------------------------
International Construction 896.4 862.7 870.8 884.8 946.8 1,013.2
Services 1)
--------------------------------------------------------------------------------
Other items -60.2 -61.2 -58.3 -55.2 -59.4 -45.8
--------------------------------------------------------------------------------
YIT's segments total 3,509.4 3,355.6 3,250.1 3,366.9 3,067.4 2,837.0
--------------------------------------------------------------------------------
IFRIC 15 adjustments 287.5 343.4 285.6 360.6 261.8 315.5
--------------------------------------------------------------------------------
YIT Group total 3,796.9 3,699.0 3,535.7 3,727.5 3,329.2 3,152.5
--------------------------------------------------------------------------------
1) At the end of June 2011, the value of projects that were still suspended
amounted to EUR 90 million (6/10: EUR 199 million)
2. CONSOLIDATED FINANCIAL STATEMENTS JAN 1 - JUN 30, 2011
CONSOLIDATED INCOME STATEMENT JAN 1 - JUN 30, 2011 (EUR million)
1-6/11 1-6/10 Change 1-12/10
--------------------------------------------------------------------------------
Revenue 2,106.9 1,620.0 30% 3,787.6
--------------------------------------------------------------------------------
of which activities outside Finland 1,219.6 908.0 34% 2,343.6
--------------------------------------------------------------------------------
Other operating income and expenses -1,980.3 -1,532.8 29% -3,531.1
--------------------------------------------------------------------------------
Share of results of associated companies -0.1 -0.4 -75% -0.5
--------------------------------------------------------------------------------
Depreciation and write-downs -19.4 -17.0 14% -35.9
--------------------------------------------------------------------------------
Operating profit 107.1 69.8 53% 220.1
--------------------------------------------------------------------------------
% of revenue 5.1 4.3 5.8
--------------------------------------------------------------------------------
Financial income 2.7 1.8 50% 3.7
--------------------------------------------------------------------------------
Exchange rate differences -2.1 -4.2 -50% -7.3
--------------------------------------------------------------------------------
Financial expenses -10.0 -12.8 -22% -21.7
--------------------------------------------------------------------------------
Profit before taxes 97.7 54.6 79% 194.8
--------------------------------------------------------------------------------
% of revenue 4.6 3.4 5.1
--------------------------------------------------------------------------------
Income taxes 1) -26.7 -15.2 76% -54.2
--------------------------------------------------------------------------------
Profit for the report period 71.0 39.4 80% 140.6
--------------------------------------------------------------------------------
% of revenue 3.4 2.4 3.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 70.9 39.1 81% 140.3
--------------------------------------------------------------------------------
Minority interests 0.1 0.3 -67% 0.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share attributable to the
equity holders of the parent company
--------------------------------------------------------------------------------
Earnings per share, EUR 0.57 0.31 84% 1.12
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 0.57 0.31 84% 1.12
--------------------------------------------------------------------------------
1) Taxes for the review period are based on the taxes for the whole financial
year.
STATEMENT OF COMPREHENSIVE INCOME JAN 1 - JUN 30, 2011 (EUR million) 1-6/11 1-6/10 Change 1-12/10
--------------------------------------------------------------------------------
Profit for the report period 71.0 39.4 80% 140.6
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
- Change in the fair value of interest 1.4 -3.0 -1.0
derivatives
--------------------------------------------------------------------------------
-- Deferred tax -0.4 0.7 0.3
--------------------------------------------------------------------------------
- Change in translation differences 1.8 46.0 -96% 29.2
--------------------------------------------------------------------------------
- Other change -0.5 0.0 0.0
--------------------------------------------------------------------------------
Other comprehensive income. total 2.3 43.7 -95% 28.5
--------------------------------------------------------------------------------
Total comprehensive income 73.3 83.1 -12% 169.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 72.8 82.5 -12% 168.7
--------------------------------------------------------------------------------
Minority interests 0.5 0.6 -17% 0.4
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT APR 1 - JUN 30, 2011 (EUR million)
4-6/11 4-6/10 Change
--------------------------------------------------------------------------------
Revenue 1,137.2 854.7 33%
--------------------------------------------------------------------------------
of which activities outside Finland 628.1 471.1 33%
--------------------------------------------------------------------------------
Other operating income and expenses -1,059.6 -810.3 31%
--------------------------------------------------------------------------------
Share of results of associated companies 0.1 0.0
--------------------------------------------------------------------------------
Depreciation and write-downs -9.8 -8.5 15%
--------------------------------------------------------------------------------
Operating profit 67.9 35.9 89%
--------------------------------------------------------------------------------
% of revenue 6.0 4.2
--------------------------------------------------------------------------------
Financial income 0.3 1.1 -73%
--------------------------------------------------------------------------------
Exchange rate differences -0.8 -1.9 -58%
--------------------------------------------------------------------------------
Financial expenses -4.4 -7.2 -39%
--------------------------------------------------------------------------------
Profit before taxes 63.0 27.9 126%
--------------------------------------------------------------------------------
% of revenue 5.5 3.3
--------------------------------------------------------------------------------
Income taxes 1) -16.9 -7.5 125%
--------------------------------------------------------------------------------
Profit for the report period 46.1 20.4 126%
--------------------------------------------------------------------------------
% of revenue 4.1 2.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 46.1 20.2 128%
--------------------------------------------------------------------------------
Minority interests 0.0 0.2 -100%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share attributable to the equity holders
of the parent company
--------------------------------------------------------------------------------
Earnings per share, EUR 0.37 0.16 131%
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 0.37 0.16 131%
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET (EUR million)
6/11 6/10 Change 12/10
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Property, plant and equipment 106.4 97.0 10% 106.7
--------------------------------------------------------------------------------
Goodwill 349.4 291.0 20% 350.9
--------------------------------------------------------------------------------
Other intangible assets 52.3 36.7 43% 50.5
--------------------------------------------------------------------------------
Shares in associated companies 2.6 2.8 -7% 2.7
--------------------------------------------------------------------------------
Other investments 3.4 2.0 70% 3.4
--------------------------------------------------------------------------------
Other receivables 18.2 15.6 17% 15.9
--------------------------------------------------------------------------------
Deferred tax assets 51.8 53.9 -4% 44.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Inventories 1,592.0 1,579.5 1% 1,484.9
--------------------------------------------------------------------------------
Trade and other receivables 977.2 717.8 36% 889.3
--------------------------------------------------------------------------------
Cash and cash equivalents 234.1 271.6 -14% 148.3
--------------------------------------------------------------------------------
Assets held for sale 19.8
--------------------------------------------------------------------------------
Total assets 3,387.4 3,067.9 10% 3,117.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders of the
parent company
--------------------------------------------------------------------------------
Share capital 149.2 149.2 0% 149.2
--------------------------------------------------------------------------------
Other equity 727.9 645.0 13% 730.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-controlling interest 2.2 2.0 10% 2.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity 879.3 796.2 10% 882.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 91.6 75.3 22% 77.2
--------------------------------------------------------------------------------
Pension liabilities 26.9 17.1 57% 26.9
--------------------------------------------------------------------------------
Provisions 49.6 46.3 7% 49.5
--------------------------------------------------------------------------------
Borrowings 555.5 580.1 -4% 504.6
--------------------------------------------------------------------------------
Other liabilities 20.5 6.6 211% 10.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Trade and other payables 1,338.5 1,301.6 3% 1,218.8
--------------------------------------------------------------------------------
Provisions 44.2 38.4 15% 45.1
--------------------------------------------------------------------------------
Current borrowings 381.4 206.3 85% 284.6
--------------------------------------------------------------------------------
Liabilities of assets held for sale 17.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 3,387.4 3,067.9 10% 3,117.1
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR million)
Attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-----
Share Legal Other Cumula Fair Treasu Retain Total Non-co
Total
capita reserv reserv tive value ry ed ntroll
equity
l e e transl reserv shares earnin ing
ation e gs intere
differ st
ences
--------------------------------------------------------------------------------
-----
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:
--------------------------------------------------------------------------------
-----
Change 1.4 1.4
1.4
in
the
fair
value
of
intere
st
deriv
atives
--------------------------------------------------------------------------------
-----
- -0.4 -0.4
-0.4
Defer
red
tax
asset
--------------------------------------------------------------------------------
-----
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 0.0 -0.2 0.0 1.6 1.0 0.0 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
e
--------------------------------------------------------------------------------
-----
Transf 0.2 1.8 -2.0 0.0
0.0
er
from
retai
ned
earni
ngs
--------------------------------------------------------------------------------
-----
Transa 0.0 0.2 4.7 0.0 0.0 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 0.0 0.0 0.0 0.0 0.0 0.0 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
--------------------------------------------------------------------------------
-----
Attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-----
Share Legal Other Cumula Fair Treasu Retain Total Non-co
Total
capita reserv reserv tive value ry ed ntroll
equity
l e e transl reserv shares earnin ing
ation e gs intere
differ st
ences
--------------------------------------------------------------------------------
-----
Equity 149.2 1.7 11.6 -42.4 -1.7 -10.6 654.1 761.9 2.2
764.1
on
Janua
ry 1.
2010
--------------------------------------------------------------------------------
-----
Compre hensiv
e
incom
e
--------------------------------------------------------------------------------
-----
Profit 39.1 39.1 0.3
39.4
for
the
perio
d
--------------------------------------------------------------------------------
-----
Other
compr
ehensi
ve
incom
e:
--------------------------------------------------------------------------------
-----
Change -3.0 -3.0
-3.0
in
the
fair
value
of
intere
st
deriv
atives
--------------------------------------------------------------------------------
-----
- 0.7 0.7
0.7
Defer
red
tax
asset
--------------------------------------------------------------------------------
-----
Change 44.1 1.6 45.7 0.3
46.0
in
trans
lation
diffe
rences
--------------------------------------------------------------------------------
-----
Compre 44.1 -2.3 40.7 82.5 0.6
83.1
hensiv
e
incom
e,
total
--------------------------------------------------------------------------------
-----
Transa
ctions
with
owner
s
--------------------------------------------------------------------------------
-----
Divide -50.5 -50.5 -0.8
-51.3
nd
paid
--------------------------------------------------------------------------------
-----
Transf 0.3 -0.3 0.0
0.0
er
from
retai
ned
earni
ngs
--------------------------------------------------------------------------------
-----
Share- 0.3 0.3
0.3
based
incen
tive
schem
e
--------------------------------------------------------------------------------
-----
Transa 0.3 -50.5 -50.2 -0.8
-51.0
ctions
with
owner
s,
total
--------------------------------------------------------------------------------
-----
Equity 149.2 2.0 11.6 1.7 -4.0 -10.6 644.3 794.2 2.0
796.2
on
June
30,
2010
--------------------------------------------------------------------------------
-----
CONSOLIDATED CASH FLOW STATEMENT (EUR million)
1-6/11 1-6/10 Change 1-12/1
0
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
Net profit for the period 71.0 39.4 80% 140.6
--------------------------------------------------------------------------------
Reversal of accrual-based items 53.1 41.9 27% 130.3
--------------------------------------------------------------------------------
Change in working capital
--------------------------------------------------------------------------------
Change in trade and other receivables -76.2 -38.7 97% -77.3
--------------------------------------------------------------------------------
Change in inventories -98.0 -6.6 over 60.3
thousand
--------------------------------------------------------------------------------
Change in current liabilities 135.1 123.0 10% -135.4
--------------------------------------------------------------------------------
Change in working capital, total -39.1 77.7 -152.4
--------------------------------------------------------------------------------
Interest paid -18.2 -16.6 10% -27.5
--------------------------------------------------------------------------------
Other financial items, net -4.3 -35.3 -88% -37.2
--------------------------------------------------------------------------------
Interest received 1.6 1.7 -6% 3.5
--------------------------------------------------------------------------------
Taxes paid -36.5 -28.6 28% -50.5
--------------------------------------------------------------------------------
Net cash generated from operating 27.6 80.2 -66% 6.8
activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------
Acquisition of subsidiaries, net of cash -5.0 -5.4 -7% -45.4
--------------------------------------------------------------------------------
Purchase of property, plant and equipment -13.4 -7.6 76% -19.9
--------------------------------------------------------------------------------
Purchase of intangible assets -4.1 -3.8 8% -8.4
--------------------------------------------------------------------------------
Increases in other investments 0.0 -0.1 -1.3
--------------------------------------------------------------------------------
Proceeds from sale of subsidiaries, net of 5.9
cash
--------------------------------------------------------------------------------
Proceeds from sale of tangible and 2.2 2.2 0% 6.5
intangible assets
--------------------------------------------------------------------------------
Proceeds from sale of other investments 2.7 0.0 0.0
--------------------------------------------------------------------------------
Net cash used in investing activities -11.7 -14.7 -20% -68.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating cash flow after investments 15.9 65.5 -76% -61.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing activities
--------------------------------------------------------------------------------
Change in current liabilities 46.8 5.5 751% 34.2
--------------------------------------------------------------------------------
Proceeds from borrowings 175.0 100.0 75% 100.0
--------------------------------------------------------------------------------
Repayments of borrowings -71.2 -24.1 195% -50.4
--------------------------------------------------------------------------------
Payments of financial leasing debts -1.6 -0.3 433% -0.1
--------------------------------------------------------------------------------
Dividends paid and other distribution of -81.5 -51.4 59% -51.2
assets
--------------------------------------------------------------------------------
Net cash used in financing activities 67.5 29.7 127% 32.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents 83.4 95.2 -12% -29.3
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning 147.6 173.1 -15% 173.1
of the period
--------------------------------------------------------------------------------
Change in the fair value of the cash 0.3 2.4 -88% 3.8
equivalents
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the 231.3 270.7 -15% 147.6
period
--------------------------------------------------------------------------------
3. NOTES
ACCOUNTING PRINCIPLES OF THE INTERIM REPORT
YIT Corporation's Interim Report for January 1 - June 30, 2011 has been drawn
up in line with IAS 34: Interim Financial Reporting. The information presented
in the Interim Report has not been audited. YIT has applied the same accounting
policy and IFRS standards and interpretations in the drafting of the Interim
Report as in its annual financial statements for 2010. However, the following
new standards, interpretations and amendments on current standards that have
been approved by EU have been applied as of January 1. 2011:
-- IAS 24 (revised): Related party disclosures
-- IFRIC 14 (amendment): Prepayments of a minimum funding requirement
-- IFRIC 19: Extinguishing financial liabilities with Equity instruments
-- IAS 32 (amendment): Classification of Rights Issues
-- Improvements to IFRSs, issued in July 2010
Currency exchange rates used in the Interim Report
Average Balance sheet rate Average Balance sheet rate
rate June 30, 2011 rate June 30, 2010
1-6/11 1-6/10
--------------------------------------------------------------------------------
1 EUR CZK 24.3490 24.3450 25.732 25.691
=
--------------------------------------------------------------------------------
DKK 7.4561 7.4587 7.4418 7.4488
--------------------------------------------------------------------------------
EEK - - 15.6466 15.6466
--------------------------------------------------------------------------------
HUF 269.4200 266.1100 271.63 286
--------------------------------------------------------------------------------
MYR 4.2552 4.3626 - -
--------------------------------------------------------------------------------
NOK 7.8235 7.7875 8.007 7.9725
--------------------------------------------------------------------------------
PLN 3.9520 3.9903 4.0025 4.147
--------------------------------------------------------------------------------
RUB 40.1453 40.4000 39.9143 38.282
--------------------------------------------------------------------------------
SEK 8.9391 9.1739 9.7944 9.5259
--------------------------------------------------------------------------------
SGD 1.7655 1.7761 - -
--------------------------------------------------------------------------------
USD 1.4033 1.4453 - -
--------------------------------------------------------------------------------
LTL 3.4528 3.4528 3.4528 3.4528
--------------------------------------------------------------------------------
LVL 0.7028 0.7028 0.7028 0.7028
--------------------------------------------------------------------------------
FINANCIAL RISK MANAGEMENT
Financial risks include liquidity, interest rate, currency and credit risk, and
their management is a part of the Group's financing policy. The Board of
Directors has approved the Corporate Finance Policy. The Group's Finance
Department is responsible for the practical implementation of the policy in
association with the business segments and units.
The Group's strategic financial targets guide the use and management of the
Group's capital. Achieving the strategic targets is supported by maintaining an
optimum Group capital structure. Capital structure is mainly influenced by
controlling the investments and the amount of working capital tied to business
operations.
A more detailed account of financial risks has been published in the notes to
the financial statements for 2010.
SEGMENT INFORMATION
The chief operating decision-maker has been identified as the YIT Group's
Management Board, which review the Group's internal reporting in order to
assess performance and allocate resources to the segments.
Building Services Northern Europe and Building Services Central Europe
segments' reporting to YIT Group's management board is based on YIT Group's
accounting principles. Construction Sevices Finland and International
Construction Services segments' reporting to the Management board do not apply
Group's accounting principles in revenue recognition of own residential and
commercial real estate development projects. The revenue from own residential
and commercial development projects is recognised on the basis of the
percentage of degree of completion and the degree of sale, using percentage of
completion method.
According to Group's accounting principles revenue from own residential and
commercial development projects is recognised at the completion. The impact on
revenue and operating profit of two revenue recognition principles is shown in
the line IFRIC 15 - adjustment.
Revenue by business segment (EUR million)
1-6/11 1-6/10 Change 1-12/10
----------------------------------------------------------------------
Building Services Northern Europe 985.6 867.6 14% 1,803.6
----------------------------------------------------------------------
- Group internal -28.9 -33.9 -15% -71.0
----------------------------------------------------------------------
- external 956.7 833.7 15% 1,732.6
----------------------------------------------------------------------
Building Services Central Europe 368.2 157.2 134% 550.2
----------------------------------------------------------------------
- Group internal -0.1 -0.2 -50% -0.5
----------------------------------------------------------------------
- external 368.1 157.0 134% 549.6
----------------------------------------------------------------------
Construction Services Finland 621.8 528.1 18% 1,102.0
----------------------------------------------------------------------
- Group internal -0.7 -0.6 17% -1.9
----------------------------------------------------------------------
- external 621.1 527.5 18% 1,100.1
----------------------------------------------------------------------
International Construction Services 220.8 219.0 1% 470.6
----------------------------------------------------------------------
- Group internal -3.7 -2.6 42% -7.1
----------------------------------------------------------------------
- external 217.1 216.4 0% 463.5
----------------------------------------------------------------------
Other items 0.8 0.4 1.2
----------------------------------------------------------------------
YIT's segments total 2,163.8 1,735.1 25% 3,847.0
----------------------------------------------------------------------
IFRIC 15 adjustments -56.9 -115.1 -59.4
----------------------------------------------------------------------
YIT Group total - external 2,106.9 1,620.0 30% 3,787.6
----------------------------------------------------------------------
Operating profit by business segment (EUR million)
1-6/11 1-6/10 Change 1-12/10
---------------------------------------------------------------------
Building Services Northern Europe 1) 35.9 44.9 -20% 88.7
---------------------------------------------------------------------
Building Services Central Europe 2) 16.1 4.9 229% 16.4
---------------------------------------------------------------------
Construction Services Finland 58.4 49.5 18% 108.1
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International Construction Services 20.7 12.2 70% 34.7
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Other items -10.4 -9.9 -18.8
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YIT's segments total 120.7 101.6 19% 229.1
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IFRIC 15 adjustments -13.6 -31.8 -9.0
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YIT Group total 107.1 69.8 53% 220.1
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In the second quarter 2011, a EUR 3.0 million provision booked affects
negatively Building Services Northern Europe's operating profit and a EUR 5.0
million gain on the sale of Hungarian businesses affects positively Building
Services Central Europe's operating profit.
In 2010, the operating profit of Building Systems segment included EUR 6.3
million non- recurring expenses related to acquisitions made during the year.
Of the non-recurring items, EUR 1.4 million was recognised in the third quarter
of the year in Building Services Northern Europe and EUR 1.9 million in
Building Services Central Europe. EUR 3.0 milliom of non-recurring expenses
were booked in Building Services Central Europe in the fourth quarter.
Order backlog by business segment at end of period (EUR million)
1-6/11 1-6/10 Change 1-12/10
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Building Services Northern Europe 879.5 748.5 18% 757.4
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Building Services Central Europe 554.1 276.8 100% 507.0
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Construction Services Finland 1,239.5 1,154.7 7% 1,173.2
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International Construction Services 1) 896.4 946.8 -5% 870.8
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Other items -60.2 -59.4 -58.3
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YIT's segments total 3,509.4 3,067.4 14% 3,250.1
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IFRIC 15 adjustments 287.5 261.8 285.6
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YIT Group total 3,796.9 3,329.2 14% 3,535.7
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1) At the end of June 2011, the value of projects that were still suspended
amounted to EUR 90 million (6/10: EUR 199 million)
UNUSUAL ITEMS AFFECTING OPERATING PROFIT (EUR million)
1-6/11 1-6/10 1-12/10
----------------------------------------------------------
Building Services Northern Europe -3.0 0.0 -1.4
----------------------------------------------------------
Building Services Central Europe 5.0 0.0 -4.9
----------------------------------------------------------
YIT Group total 2.0 0.0 -6.3
----------------------------------------------------------
In the second quarter 2011, a EUR 3.0 million provision booked affects
negatively Building Services Northern Europe's operating profit and a EUR 5.0
million gain on the sale of Hungarian businesses affects positively Building
Services Central Europe's operating profit.
In 2010, the operating profit of Building Systems segment included EUR 6.3
million non- recurring expenses related to acquisitions made during the year.
Of the non-recurring items, EUR 1.4 million was recognised in the third quarter
of the year in Building Services Northern Europe and EUR 1.9 million in
Building Services Central Europe. EUR 3.0 milliom of non-recurring expenses
were booked in Building Services Central Europe in the fourth quarter.
BUSINESS COMBINATIONS AND DISPOSALS (EUR million)
Building Services Nothern Europe - segment acquired during the review period in
Sweden NNE Pharmaplan AB in January, Orab I Sydost AB specialising in
industrial pipe works in April and Johnson Control's Commercial Refridgeration
- businesses and Frisk Ventilation AB a supplier of ventilation - related
services in May. Total acquisition price amounted to EUR 5,9 million. With
these local acquisitions YIT strengthen the market share and the acquisition
price over the net assets acquired will be allocated to customer base.
Composition of acquired net assets and goodwill (EUR million)
1-6/11
--------------------------------------------------------------------------------
Consideration
--------------------------------------------------------------------------------
Cash 5.5
--------------------------------------------------------------------------------
Contingent consideration 0.4
--------------------------------------------------------------------------------
Total consideration 5.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Acquisition -related costs ( recognised as expenses) 0.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Recognised amounts of identifiable assets acquired and liabilities 6/11
assumed
--------------------------------------------------------------------------------
Cash and cash equivalents 0.5
--------------------------------------------------------------------------------
Property, plant and equipment 0.1
--------------------------------------------------------------------------------
Intangible rights 5.4
--------------------------------------------------------------------------------
Inventories 0.2
--------------------------------------------------------------------------------
Trade and other receivables 2.8
--------------------------------------------------------------------------------
Current liabilities -3.1
--------------------------------------------------------------------------------
Total identifiable net assets 5.9
--------------------------------------------------------------------------------
Non-controlling interest 0.0
--------------------------------------------------------------------------------
Goodwill 0.0
--------------------------------------------------------------------------------
Total entity value 5.9
--------------------------------------------------------------------------------
Building Services Central Europe - segment disposed it's businesses in Hungary
by selling three subsidiaries in Hungary at May 31, 2011. The companies were
included in the acquisitions in years 2008 and 2010 in Central Europe. The
goodwill related to Central Europe were reduced by EUR 1,4 million in Hungarian
business divestment.
Disposals (milj. e)
Effect on revenue and net profit: 1-6/11
-------------------------------------------------------
Revenue 4.7
-------------------------------------------------------
Operating expenses -4.1
-------------------------------------------------------
Profit before taxes 0.6
-------------------------------------------------------
Taxes -0.1
-------------------------------------------------------
Net profit 0.5
-------------------------------------------------------
-------------------------------------------------------
Effect on balance sheet assets and liabilities: 6/11
-------------------------------------------------------
Property, plant and equipment 0.1
-------------------------------------------------------
Goodwill 1.4
-------------------------------------------------------
Inventories 0.2
-------------------------------------------------------
Trade receivables 3.4
-------------------------------------------------------
Cash and cash equivalents 5.7
-------------------------------------------------------
Trade and other liabilities -4.2
-------------------------------------------------------
Interest bearing liabilities 0.0
-------------------------------------------------------
Net assets 6.6
-------------------------------------------------------
-------------------------------------------------------
Effect on cash flow: 6/11
-------------------------------------------------------
Received in cash 12.2
-------------------------------------------------------
Direct costs related to disposals -0.6
-------------------------------------------------------
Cash and cash equivalents in disposed entity -5.7
-------------------------------------------------------
Cash flow on disposals 5.9
-------------------------------------------------------
CHANGES IN PROPERTY, PLANT AND EQUIPMENT (EUR million)
1-6/11 1-6/10 Change 1-12/10
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Carrying value at the beginning of period 106.7 99.8 7% 99.8
--------------------------------------------------------------------------
Increase 13.4 7.7 74% 24.4
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Increase through acquisitions 0.1 0.6 -67% 12.4
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Decrease -2.0 -1.8 11% -6.1
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Decrease through disposals -0.1
--------------------------------------------------------------------------
Depreciation and value adjustments -12.1 -11.7 3% -23.9
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Reclassification 0.4 2.4 -83% 0.1
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Carrying value at the end of period 106.4 97.0 10% 106.7
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INVENTORIES (EUR million)
1-6/11 1-6/10 Change 1-12/10
--------------------------------------------------------------------------------
Raw materials and consumables 27.7 22.2 25% 26.4
--------------------------------------------------------------------------------
Work in progress 701.7 747.6 -6% 639.0
--------------------------------------------------------------------------------
Land areas and plot owing companies 665.4 583.2 14% 589.3
--------------------------------------------------------------------------------
Shares in completed housing and real estate 157.6 177.4 -11% 181.2
companies
--------------------------------------------------------------------------------
Advance payments 38.6 48.0 -20% 48.2
--------------------------------------------------------------------------------
Other inventories 1.0 1.1 -9% 0.9
--------------------------------------------------------------------------------
Total inventories 1,592.0 1,579.5 -1% 1,484.9
--------------------------------------------------------------------------------
NOTES ON EQUITY (EUR million)
Share capital and share Number of Share capital (EUR Treasury
premium reserve shares million) shares
(EUR
million)
--------------------------------------------------------------------------------
Shares outstanding on January 125,078,422 149.2 -10.6
1, 2011
--------------------------------------------------------------------------------
Transfer of treasury shares 196,910 0.9
27.5.2011
--------------------------------------------------------------------------------
Return of treasury shares -1,524 0.0
30.6.2011
--------------------------------------------------------------------------------
Shares outstanding on June 6, 125,273,808 149.2 -9.7
2011
--------------------------------------------------------------------------------
BORROWINGS (EUR million)
Fair Carrying Nominal
value value value
--------------------------------------------------------------------------------
Bonds in financial statements 285.4 292.6 292.9
December 31, 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Valuation of the above bonds on June 285.8 289.0 289.3
30, 2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Bonds raised during the review
period:
--------------------------------------------------------------------------------
Fixed-rate bonds
--------------------------------------------------------------------------------
1/2011 -2016, interest rate 4,75 % 1) EUR 101.9 99.6 100.0
--------------------------------------------------------------------------------
Total bonds on June 30, 2011 387.7 388.6 389.3
--------------------------------------------------------------------------------
Terms of the bonds raised during the revenue period in brief:
1) Loan period June 20, 2011 - June 20, 2016, interest payments in arrear at
June 20. The bond is unsecured. ISIN code FI4000026653.
CHANGE IN CONTINGENT LIABILITIES AND ASSETS AND COMMITMENTS (EUR million)
6/11 6/10 Change 12/10
--------------------------------------------------------------------------------
Collateral given for own commitments
--------------------------------------------------------------------------------
- Corporate mortgages 29.3 29.3 0% 29.8
--------------------------------------------------------------------------------
- Other mortgages 0.6 0.0 0.6
--------------------------------------------------------------------------------
Other commitments
--------------------------------------------------------------------------------
- Repurchase commitments 228.1 124.7 83% 141.0
--------------------------------------------------------------------------------
- Operating leases 321.0 306.7 5% 322.5
--------------------------------------------------------------------------------
- Rental guarantees for clients 5.2 12.6 -59% 8.0
--------------------------------------------------------------------------------
- Other contingent liabilities 4.0 0.5 700% 4.2
--------------------------------------------------------------------------------
- Other guarantees 5.2 5.2 0% 5.2
--------------------------------------------------------------------------------
Liability under derivative contracts
--------------------------------------------------------------------------------
- Value of underlying instruments
--------------------------------------------------------------------------------
-- Interest rate derivatives 385.9 308.6 25% 304.6
--------------------------------------------------------------------------------
-- Currency derivatives 174.8 283.7 -38% 203.2
--------------------------------------------------------------------------------
-- Commodity derivatives 0.2 0.7 -71% 0.5
--------------------------------------------------------------------------------
- Market value
--------------------------------------------------------------------------------
-- Interest rate derivatives -5.8 -11.1 -48% -10.6
--------------------------------------------------------------------------------
-- Currency derivatives -2.9 -4.7 -38% 0.3
--------------------------------------------------------------------------------
-- Commodity derivatives 0.0 0.0 0.1
--------------------------------------------------------------------------------
YIT Corporation's guarantees on behalf of its 1,279.5 1,021.0 24% 1,202.5
subsidiaries
--------------------------------------------------------------------------------
TRANSACTIONS WITH ASSOCIATED COMPANIES (EUR million)
1-6/11 1-6/10 Change 1-12/10
--------------------------------------------------------------------
Sales to associated companies 0.7 0.9 -22% 1.5
--------------------------------------------------------------------
Purchases from associated companies 0.0 0.1 0.2
--------------------------------------------------------------------
Trade and other receivables 0.3 0.0 0.0
--------------------------------------------------------------------
Trade and other liabilities 0.0 0.1 0.0
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EVENTS AFTER THE REVIEW PERIOD
The Building Services Northern Europe segment has acquired the business
operations of Sakari Timonen Oy in Finland. The transaction took effect on July
1, 2011. The acquired operations cover the installation, servicing and repair
of air conditioning and refrigeration equipment. The company's revenue was
approximately EUR 1 million in 2010. In addition, the Building Services
Northern Europe segment acquired all of the shares in MISAB Sprinkler & VVS AB
in Sweden. The company's core business consists of sprinkler and pipeline
deliveries to fire protection systems. The company's revenue for 2010 was
approximately EUR 7 million, and it will be consolidated into the YIT Group as
of July 1, 2011. The total purchase prices of the acquisitions made after the
review period amount to approximately EUR 2.3 million. The acquisitions are not
expected to result in goodwill.
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