2016-02-05 07:00:04 CET
2016-02-05 07:00:04 CET
REGULATED INFORMATION
YIT - Financial Statement Release
Financial Statements Bulletin 2015: Cash flow strengthened by improved capital efficiency
Helsinki, Finland, 2016-02-05 07:00 CET (GLOBE NEWSWIRE) -- YIT CORPORATION
STOCK EXCHANGE RELEASE FEBRUARY 5, 2016 AT
8:00 A.M.
Financial Statements Bulletin 2015: Cash flow strengthened by improved capital
efficiency
Unless otherwise noted, the figures in brackets refer to the corresponding
period in the previous year.
October-December 2015 (Segment reporting, POC)
-- Revenue increased by 2% to EUR 468.5 (461.0) million. At comparable
exchange rates, revenue increased by 4%.
-- Operating profit excluding non-recurring items amounted to EUR 16.6 (31.4)
million and operating profit margin excluding non-recurring items was 3.6%
(6.8%).
-- In October-December 2015, there were no non-recurring items (10–12/14: EUR
-12.4 million)
-- Order backlog decreased by 6% from the end of September, amounting to EUR
2,172.9 million.
-- Operating cash flow after investments amounted to EUR 43.4 (139.9) million.
January-December 2015 (Segment reporting, POC)
-- Revenue decreased by 8% to EUR 1,651.2 (1,801.2) million. At comparable
exchange rates, revenue decreased by 3%.
-- Operating profit excluding non-recurring items amounted to EUR 76.0 (126.4)
million and operating profit margin excluding non-recurring items was 4.6%
(7.0%).
-- Non-recurring items were EUR -10.4 (-12.4) million.
-- Operating cash flow after investments amounted to EUR 183.7 (151.9)
million.
-- Board of Directors proposes a dividend of EUR 0.22 (0.18) per share, 137.8%
(40.0%) of earnings per share.
Guidance for 2016 (segment reporting, POC)
The Group revenue growth is estimated to be in the range of 0–10% at comparable
exchange rates.
The adjusted operating profit* is estimated to grow from the level of 2015
(2015: EUR 76.0 million).
* The adjusted operating profit does not include material reorganisation costs
or impairment.
Kari Kauniskangas, President and CEO:
The year 2015 was characterised by major changes in demand and our operating
volume. The Business Premises and Infrastructure segment’s order backlog and
residential sales in Finland and the CEE countries grew by a third, in spite of
the continued decline of consumer demand in Finland. In Russia, however, the
ruble was significantly weaker than in the previous year, and residential sales
declined by approximately a third. Adapting to these changes required rapid
renewal in all of our business segments. Our response to the changes included
the development of new affordable solutions for our customers. We also
continued our long-term effort to achieve the best customer experience in each
of our segments.
We achieved excellent results with regard to cash flow and capital efficiency,
and our net debt decreased from EUR 696 million to EUR 529 million during the
year. Cash flow was supported by our capital release programme, in which we
made significant progress particularly with regard to plot co-operation and the
sales of business premises projects. We also significantly reduced our capital
tied up in completed unsold apartments in Finland.
The most significant successes in our business operations were achieved in the
Business Premises and Infrastructure segment. The order backlog grew and its
margin content improved due to the increased share of high value-added
projects. In addition, the letter of intent signed regarding the implementation
of the Mall of Tripla represents a significant step towards ensuring positive
development in the coming years.
The situation in the Housing Finland and CEE segment was polarised. In Finland,
an exceptionally high proportion of revenue came from investor sales, which was
reflected in weaker profitability. In the CEE countries, sales growth was
strong and profitability improved from the previous year. We continued to focus
on growth in the CEE region by investing in new plots and establishing a new
business unit in Poland.
In Russia, we restructured and adjusted our operations to a significantly lower
volume than previously, as we do not expect the market environment to improve
in 2016. Our goal is to achieve a positive operating result and cash flow in
Russia, even under the prevailing circumstances.
Our main focus this year will be on improving profitability, strengthening our
growth initiatives and further improving our capital efficiency. We expect to
see results in these areas within the year.
I would like to thank our customers for their trust in our operations, and our
personnel for their uncompromising and enthusiastic work to support our renewal
and achieving our goals.
Segment reporting, POC
EUR million 10–12/1 10–12/1 Change 1–12/15 1–12/14 Change
5 4
--------------------------------------------------------------------------------
Revenue 468.5 461.0 2% 1,651.2 1,801.2 -8%
--------------------------------------------------------------------------------
Housing Finland and CEE 220.8 189.2 17% 777.8 726.5 7%
--------------------------------------------------------------------------------
Housing Russia 61.6 129.7 -52% 266.4 474.1 -44%
--------------------------------------------------------------------------------
Business Premises and 186.0 142.4 31% 607.1 599.3 1%
Infrastructure
--------------------------------------------------------------------------------
Other items 0.0 -0.4 -0.1 1.4
--------------------------------------------------------------------------------
Operating profit 16.6 19.0 -12% 65.7 114.0 -42%
--------------------------------------------------------------------------------
Operating profit margin, % 3.6% 4.1% 4.0% 6.3%
--------------------------------------------------------------------------------
Operating profit excluding 16.6 31.4 -47% 76.0 126.4 -40%
non-recurring items
--------------------------------------------------------------------------------
Housing Finland and CEE 13.4 17.5 -24% 56.0 63.7 -12%
--------------------------------------------------------------------------------
Housing Russia 0.7 18.1 -96% 10.9 55.8 -80%
--------------------------------------------------------------------------------
Business Premises and 7.4 3.0 145% 21.9 20.4 8%
Infrastructure
--------------------------------------------------------------------------------
Other items -4.8 -7.2 -12.8 -13.5
--------------------------------------------------------------------------------
Operating profit margin, % 3.6% 6.8% 4.6% 7.0%
excluding non-recurring
items
--------------------------------------------------------------------------------
Housing Finland and CEE 6.0% 9.2% 7.2% 8.8%
--------------------------------------------------------------------------------
Housing Russia 1.2% 14.0% 4.1% 11.8%
--------------------------------------------------------------------------------
Business Premises and 4.0% 2.1% 3.6% 3.4%
Infrastructure
--------------------------------------------------------------------------------
Profit before taxes 6.1 8.5 -29% 27.0 75.0 -64%
--------------------------------------------------------------------------------
Profit for the review 4.6 5.5 -17% 20.0 56.6 -65%
period1
--------------------------------------------------------------------------------
Earnings per share, EUR 0.04 0.04 -17% 0.16 0.45 -65%
--------------------------------------------------------------------------------
Earnings per share 0.04 0.12 -70% 0.23 0.53 -57%
excluding non-recurring
items, EUR
--------------------------------------------------------------------------------
Operating cash flow after 43.4 139.9 -69% 183.7 151.9 21%
investments
--------------------------------------------------------------------------------
Return on investment 5.3% 7.7% 5.3% 7.7%
(last 12 months), %
--------------------------------------------------------------------------------
Equity ratio at end of 35.5% 32.4% 35.5% 32.4%
period, %
--------------------------------------------------------------------------------
Net interest-bearing debt 460.8 616.6 -25% 460.8 616.6 -25%
at end of period
--------------------------------------------------------------------------------
Order backlog at end of 2,172.9 2,125.9 2% 2,172.9 2 ,125.9 2%
period
--------------------------------------------------------------------------------
1 Attributable to equity holders of the parent company
Group reporting, IFRS
EUR million 10–12/1 10–12/1 Change 1–12/15 1–12/14 Change
5 4
--------------------------------------------------------------------------------
Revenue 511.6 529.3 -3% 1,732.2 1,778.6 -3%
--------------------------------------------------------------------------------
Operating profit 28.4 35.2 -19% 81.6 94.8 -14%
--------------------------------------------------------------------------------
Operating profit margin, % 5.5% 6.7% 4.7% 5.3%
--------------------------------------------------------------------------------
Operating profit excluding 28.4 47.6 -40% 91.9 107.3 -14%
non-recurring items
--------------------------------------------------------------------------------
Operating profit margin, % 5.5% 9.0% 5.3% 6.0%
excluding non-recurring
items
--------------------------------------------------------------------------------
Profit before taxes 21.4 30.7 -30% 61.3 74.3 -18%
--------------------------------------------------------------------------------
Profit for the review 16.0 22.4 -28% 47.2 55.9 -15%
period1
--------------------------------------------------------------------------------
Earnings per share, EUR 0.13 0.18 -28% 0.38 0.44 -15%
--------------------------------------------------------------------------------
Operating cash flow after 43.4 139.9 -69% 183.7 151.9 21%
investments
--------------------------------------------------------------------------------
Order backlog at end of 2,467.3 2,507.1 -2% 2,467.3 2,507.1 -2%
period
--------------------------------------------------------------------------------
Invested capital at end of 1,174.3 1,431.0 -18% 1,174.3 1,431.0 -18%
period
--------------------------------------------------------------------------------
Return on investment 6.4% 6.4% 6.4% 6.4%
(last 12 months), %
--------------------------------------------------------------------------------
Effective tax rate, % 24.4% 27.1% 22.9% 24.9%
--------------------------------------------------------------------------------
1 Attributable to equity holders of the parent company
12/15 12/14 Change 12/15 9/15 Change
--------------------------------------------------------------------------------
Net interest-bearing debt, EUR 529.0 696.0 -24% 529.0 574.6 -8%
million
--------------------------------------------------------------------------------
Gearing ratio, % 101.1% 129.9% 101.1% 106.1%
--------------------------------------------------------------------------------
Equity ratio, % 32.9% 29.2% 32.9% 33.1%
--------------------------------------------------------------------------------
Events after the review period
In January, residential sales to consumers were around 70 units in Finland
(1/15: around 80), around 50 units in the CEE countries (1/15: around 40) and
around 200 units in Russia (1/15: around 370). In Russia, the sales in the
comparison period were exceptionally strong.
Outlook for 2016
Guidance (segment reporting, POC)
The Group revenue growth is estimated to be in the range of 0–10% at comparable
exchange rates.
The adjusted operating profit* is estimated to grow from the level of 2015
(2015: EUR 76.0 million).
* The adjusted operating profit does not include material reorganisation costs
or impairment.
In addition to the market outlook, the 2016 guidance is based on the following
factors: At the end of 2015, 49% of YIT’s order backlog was sold. Projects
already sold and signed pre-agreements are estimated to contribute around half
of the 2016 revenue, assuming that large projects such as Tripla progress as
planned. The rest of the revenue estimate is based on estimated new sales
during 2016 and capital release actions.
In Business Premises and Infrastructure, the growing volume and the improved
margin content of the order backlog are estimated to support the segment’s
adjusted operating profit. The demanding market situation in Russia is expected
to keep the profitability of Housing Russia on a low level. Similarly to the
year 2015, the investor projects’ share of revenue is estimated to remain high
in Housing Finland and CEE, which will impact the segment’s adjusted operating
profit margin negatively. The execution of the capital release program started
in autumn 2013 will continue actively in 2016, and the capital release actions
are expected to have a negative effect on the adjusted operating profit margin.
In 2016, the first quarter is estimated to be the weakest quarter in terms of
the adjusted operating profit.
Market outlook
Finland
In Finland, the macroeconomic uncertainty is estimated to affect the
residential and business premises markets also in 2016.
Consumer demand is estimated to remain stable and consumers to be cautious in
their purchase decisions. However, the demand for small apartments in growth
centres is estimated to remain good. Residential price development is estimated
to be polarized especially between small and large apartments. Access to
mortgage financing is estimated to remain good. The investor activity is
estimated remain on a good level but even more focus will be paid on the
location.
In Finland, the tenants’ demand for business premises is estimated to remain
modest. The real estate investors’ activity is expected to remain on a good
level with focus on prime locations in the capital region. Business premises
contracting is estimated to pick up slightly. Infrastructure market is expected
to remain stable.
Russia
The visibility is weak in Russia and economic uncertainty is estimated to
continue to have a negative impact also on the residential market. The
construction costs are estimated to increase, while nominal residential prices
are estimated to remain stable. The demand is estimated to focus especially on
small apartments that are either close to completion or completed.
There is uncertainty regarding the mortgage market due to the unpredictable
future of the government mortgage subsidy program.
The CEE countries
In the CEE countries, the demand in the residential and business premises
markets is expected to be supported by the improved economic situation.
Residential prices are estimated to increase in the Czech Republic, Slovakia
and Lithuania, and to remain stable in Poland, Estonia and Latvia. Access to
mortgage financing is expected to remain good and interest rates to remain on a
low level.
Board of Directors’ proposal for the distribution of distributable equity
The parent company’s distributable equity on December 31, 2015 was EUR
303,743,378.12, of which the net profit for the financial year was EUR
4,480,908.50.
The Board of Directors proposes to the Annual General Meeting that a dividend
of EUR 0.22 per share be paid, resulting in a total amount of proposed
dividends of EUR 27,627,345.02.
After the distribution of dividends, the remaining profits will be left in the
company's distributable assets.
No significant changes have taken place in the company’s financial position
after the end of the financial year. The company’s liquidity is good and, in
the view of the Board of Directors, the proposed dividend payout does not
jeopardise the company’s solvency.
News conference for investors and media
YIT will arrange a news conference on February 5, 2016 at 10:00 a.m. Finnish
time (EET) at YIT's head office, Panuntie 11, 00620 Helsinki, Finland. The
event is in English and targeted for analysts, portfolio managers and the
media.
Webcast
The news conference and presentation by the President and CEO of YIT
Corporation Kari Kauniskangas can also be followed through a live webcast at
www.yitgroup.com/webcast. The live webcast starts at 10:00 a.m. (EET) and a
recording of the webcast will be available at approximately 12 noon (EET) at
the same address.
Conference call
The news conference can be participated also through a conference call.
Conference call participants are requested to dial in at least five minutes
prior to the start of the conference, at 9:55 a.m. (EET), to number +44 20 300
89 801.
During the webcast and conference call, all questions should be presented in
English. At the end of the event the media has the opportunity to ask questions
also in Finnish.
Schedule in different time zones:
Financial The investor and analyst event, Recorded
Statements Bulletin conference call and live webcast
published webcast available
EET 8:00 10:00 12:00
(Helsinki)
CET(Paris, 7:00 9:00 11:00
Stockholm)
GMT 6:00 8:00 10:00
(London)
EST (New 1:00 3:00 5:00
York)
Annual Report and Financial Statements
YIT Corporation's Annual Report and Financial Statements for 2015 will be
published on the company's website on week 8.
Annual General Meeting 2016
YIT Corporation’s Annual General Meeting 2016 will be held on Tuesday, March
15, 2016 starting at 10 a.m. in the congress wing of Finlandia Hall, Helsinki.
The notice of the General Meeting, which contains the Board of Directors’
proposals to the Annual General Meeting, will be published in its entirety as a
separate stock exchange release on February 5, 2016.
For additional information, please contact:
Timo Lehtinen, Chief Financial Officer, YIT Corporation, tel. +358 45 670 0626,
timo.lehtinen@yit.fi
Sanna Kaje, Vice President, Investor Relations and M&A, YIT Corporation, tel.
+358 50 390 6750,sanna.kaje@yit.fi
YIT CORPORATION
Kari Kauniskangas
President and CEO
Distribution: NASDAQ OMX, principal media, www.yitgroup.com
YIT is a construction industry leader that creates sustainable urban
environments by constructing housing, business premises, infrastructure and
entire areas. We focus on providing a first-class customer experience, high
quality and continuous development of our diverse expertise. Our operating area
covers Finland, Russia, the Baltic countries, the Czech Republic, Slovakia and
Poland. Our vision is to stay one step ahead – while caring for our customers,
partners and personnel. We have over 5,300 employees in eight countries. In
2015, our revenue amounted to nearly EUR 1.7 billion. Our share is listed on
Nasdaq OMX Helsinki. www.yitgroup.com
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