2012-02-02 07:00:01 CET
2012-02-02 07:00:35 CET
REGULATED INFORMATION
YIT - Financial Statement Release
YIT'S FINANCIAL STATEMENTS BULLETIN FOR 2011: High performance in construction services – residential sales improved compared to third quarter
Helsinki, 2012-02-02 07:00 CET (GLOBE NEWSWIRE) -- YIT CORPORATION FINANCIAL
STATEMENTS BULLETIN FEBRUARY 2, 2012 AT 8:00 A.M.
YIT'S FINANCIAL STATEMENTS BULLETIN FOR 2011: High performance in construction
services - residential sales improved compared to third quarter
SEGMENT REPORTING 1-12/2011 (1-12/2010): YIT Group's revenue and operating
profit increased, order backlog is strong
-- The operating profit of the segments was 5 percent higher than in the
previous year, increasing to EUR 240.5 million (1-12/2010: EUR 229.1
million). Operating profit more than doubled as the result of the
acquisition completed in Building Services Central Europe at the beginning
of September 2010 and successful measures to improve profitability. The
operating profit of International Construction Services increased, while in
Construction Services Finland the operating profit was on a par with the
previous year.
-- The revenue of the segments was 18 percent higher than in the previous
year, increasing to EUR 4,524.7 million (1-12/2010: EUR 3,847.0 million).
Revenue increased across all segments. The growth of revenue was supported
by an acquisition in Central Europe completed at the beginning of September
2010, the slight picking up of demand for building system services, picking
up of residential sales, especially in Russia, and the revival of the
infrastructure business and the business premises market in Finland.
-- The order backlog of the segments was 15 percent higher than the year
before, amounting to EUR 3,752.7 million (12/2010: EUR 3,250.1 million).
The order backlog increased from the end of September 2011 in Building
Services Northern Europe, Construction Services Finland and International
Construction Services.
-- The Group's profit before taxes based on segment reporting was 6 percent
higher than the year before, increasing to EUR 215.8 million (1-12/2010:
EUR 203.8 million).
-- The Group's profit for the period based on segment reporting was 8 percent
higher than the year before, increasing to EUR 156.7 million (1-12/2010:
EUR 145.5 million).
-- The Group's earnings per share for 2011 based on segment reporting
increased by 8 percent from the year before, amounting to EUR 1.25
(1-12/2010: EUR 1.16).
SEGMENT REPORTING 10-12/2011 (10-12/2010): Group's Operating profit increased
in construction services as a result of good performance
-- The operating profit of the segments was 9 percent higher than in the
previous year, amounting to EUR 76.2 million (10-12/2010: EUR 69.7
million).
-- The revenue of the segments was 6 percent higher than in the previous year,
amounting to EUR 1,264.5 million (10-12/2010: EUR 1,187.6 million).
-- The Group's profit before taxes based on segment reporting was 3 percent
higher than the year before, increasing to EUR 68.6 million (10-12/2010:
EUR 66.5 million).
-- The Group's profit for the period based on segment reporting was 10 percent
higher than the year before, increasing to EUR 51.8 million (10-12/2010:
EUR 47.2 million).
-- The Group's earnings per share based on segment reporting increased by 11
percent from the year before, amounting to EUR 0.41 (10-12/2010: EUR 0.37).
GUIDANCE: Combined revenue of the segments will remain on a par with 2011 and
operating profit will increase compared to 2011
YIT estimates that in 2012, the combined revenue of the business segments will
remain at the level of 2011 and that operating profit will increase compared to
2011.
The first quarter is typically the softest due to the normal seasonal nature of
the business, but with the improvement of profitability with the progress of
the efficiency improvement programme, the Building Services Northern Europe
business segment will support the growth of YIT's revenue for 2012, especially
during the last two quarters of the year.
The high uncertainty 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-level reporting, i.e. recognition of
income based on the percentage of completion.
DIVIDEND PROPOSAL: The Board of Directors proposes dividend increase to EUR 0.70
The Board of Directors proposes to the Annual General Meeting that a dividend
of EUR 0.70 per share be paid, representing 70.5 percent of the Group's net
profit for the period.
Juhani Pitkäkoski, President and CEO, in conjunction with the review:
Our aim has been to develop the company to withstand economic fluctuations
better and increase the share of service and maintenance operations. As a
result of the acquisition completed at the beginning of September 2010, the
significance of Building Services Central Europe to the Group has increased
clearly. We have succeeded in developing the acquired business operations and
improving their profitability: the operating profit of Building Services
Central Europe more than doubled in 2011.
During the fourth quarter, profitability improved in both Construction Services
Finland and International Construction Services compared to the third quarter.
Residential sales in Russia reached an all-time high in YIT's history during
the fourth quarter, and they also increased in Finland compared to the third
quarter. We are particularrly proud of our successes in construction of
infrastructure in Finland after a challenging first half of the year and our
success in business premises operations.
During 2012, we will focus particularly on improving the profitability of
Building Services Northern Europe. The prospects of the housing market are
favourable, especially in our most significant countries, Finland and Russia.
Our liquidity position is good, and we aim to utilise all market opportunities.
The Group's solid order backlog raises visibility to the new year in spite of
the macroeconomic uncertainty.
KEY FIGURES
Development of the segments (percentage of completion, POC)
Revenue, EUR million 1-12/11 1-12/10 Change 10-12/1 10-12/1 Change
1 0
--------------------------------------------------------------------------------
Building Services Northern 2,097.6 1,803.6 16% 600.1 519.2 16%
Europe
--------------------------------------------------------------------------------
Building Services Central 779.3 550.2 42% 200.3 258.7 -23%
Europe
--------------------------------------------------------------------------------
Construction Services 1,226.9 1,102.0 11% 335.7 294.2 14%
Finland
--------------------------------------------------------------------------------
International Construction 489.2 470.6 4% 145.9 139.7 4%
Services
--------------------------------------------------------------------------------
Other items -68.2 -79.4 -17.5 -24.2
--------------------------------------------------------------------------------
YIT's segments total 4,524.7 3,847.0 18% 1,264.5 1,187.6 6%
--------------------------------------------------------------------------------
Operating profit, EUR 1-12/11 1-12/10 Change 10-12/1 10-12/1 Change
million 1 0
--------------------------------------------------------------------------------
Building Services Northern 78.8 88.7 -11% 23.0 23.5 -2%
Europe
--------------------------------------------------------------------------------
Building Services Central 33.3 16.4 103% 9.3 8.9 4%
Europe
--------------------------------------------------------------------------------
Construction Services 111.6 108.1 3% 32.1 29.4 9%
Finland
--------------------------------------------------------------------------------
International Construction 37.2 34.7 7% 17.4 13.4 30%
Services
--------------------------------------------------------------------------------
Other items -20.4 -18.8 -5.6 -5.5
--------------------------------------------------------------------------------
YIT's segments total 240.5 229.1 5% 76.2 69.7 9%
--------------------------------------------------------------------------------
Operating profit margin, % 1-12/11 1-12/10 10-12/11 10-12/10
-------------------------------------------------------------------------
Building Services Northern Europe 3.8 4.9 3.8 4.5
-------------------------------------------------------------------------
Building Services Central Europe 4.3 3.0 4.6 3.4
-------------------------------------------------------------------------
Construction Services Finland 9.1 9.8 9.6 10.0
-------------------------------------------------------------------------
International Construction Services 7.6 7.4 11.9 9.6
-------------------------------------------------------------------------
YIT's segments total 5.3 6.0 6.0 5.9
-------------------------------------------------------------------------
Order backlog, EUR million 12/11 12/10 Change 12/11 9/11 Change
--------------------------------------------------------------------------------
Building Services Northern 913.1 757.4 21% 913.1 886.1 3%
Europe
--------------------------------------------------------------------------------
Building Services Central 449.5 507.0 -11% 449.5 523.9 -14%
Europe
--------------------------------------------------------------------------------
Construction Services 1,493.6 1,173.2 27% 1,493.6 1,289.3 16%
Finland
--------------------------------------------------------------------------------
International Construction 962.5 870.8 11% 962.5 850.1 13%
Services
--------------------------------------------------------------------------------
Other items -66.0 -58.3 -66.0 -60.3
--------------------------------------------------------------------------------
YIT's segments total 3,752.7 3,250.1 15% 3,752.7 3,489.0 8%
--------------------------------------------------------------------------------
Key ratios of segment reporting (percentage of completion, POC)
1-12/1 1-12/1 Change 10-12/1 10-12/1 Change
1 0 1 0
--------------------------------------------------------------------------------
Profit before taxes, EUR 215.8 203.8 6% 68.6 66.5 3%
million
--------------------------------------------------------------------------------
Profit for the review period, 156.7 145.5 8% 51.8 47.2 10%
EUR million
--------------------------------------------------------------------------------
Earrnings per share, EUR 1.25 1.16 8% 0.41 0.37 11%
--------------------------------------------------------------------------------
Development of the Group (IFRIC 15)
1-12/11 1-12/10 Change 10-12/1 10-12/1 Change
1 0
--------------------------------------------------------------------------------
Revenue, EUR million 4,382.1 3,787.6 16% 1,190.4 1,338.0 -11%
--------------------------------------------------------------------------------
Operating profit, EUR 200.0 220.1 -9% 57.5 116.4 -51%
million
--------------------------------------------------------------------------------
Operating profit margin, % 4.6 5.8 4.8 8.7
--------------------------------------------------------------------------------
Profit before taxes, EUR 175.2 194.8 -10% 49.9 113.2 -56%
million
--------------------------------------------------------------------------------
Profit for the review 124.4 140.6 -11% 34.4 82.6 -58%
period, EUR million
--------------------------------------------------------------------------------
Earnings/share, EUR 0.99 1.12 -12% 0.27 0.65 -58%
--------------------------------------------------------------------------------
Operating cash flow after -17.3 -61.7 14.1 -5.6
investments, EUR million
--------------------------------------------------------------------------------
12/11 12/10 Change 12/11 9/11 Change
--------------------------------------------------------------------------------
Order backlog, EUR million 4,148.6 3,535.7 17% 4,148.6 3,738.3 11%
--------------------------------------------------------------------------------
Personnel at the end of 25,996 25,832 1% 25,996 26,502 -2%
period
--------------------------------------------------------------------------------
Return on investment (last 12.0 14.4 12.0 15.5
12 months), %
--------------------------------------------------------------------------------
Equity ratio, % 30.2 31.9 30.2 29.2
--------------------------------------------------------------------------------
Gearing ratio, % 80.4 72.6 80.4 86.8
--------------------------------------------------------------------------------
Annual General Meeting 2012
YIT Corporation's Annual General Meeting will be held on Tuesday, February 13,
2012, starting at 11:00 a.m. (Finnish time, EEST) in Finlandia Hall, Conference
Wing, Hall A, located at the address: Mannerheimintie 13, Helsinki (entrance
through doors M1 and K1). Full notice of the meeting, including the Board of
Directors' proposals to the Annual General Meeting, will be published as a
separate stock exchange release on February 2, 2012.
Financial information in 2012
The Annual Report, including the financial statements for 2011, will be
published on YIT's website in Finnish and English on February 21, 2012. Interim
Reports will be published on April 27, July 26 and October 30, 2012.
INFORMATION SESSION, WEBCAST AND CONFERENCE CALL
YIT will hold a news conference on the financial statements bulletin on
Thursday, February 2, 2012, at 10:00 a.m. (Finnish Time, EEST). The news
conference will be held in English. The news conference will be held at YIT's
head office at Panuntie 11, 00620 Helsinki, Finland. The event is intended for
analysts, portfolio managers and the media.
The news conference and the presentation, given by the company's President and
CEO, Juhani Pitkäkoski, can be viewed live on YIT's website at
www.yitgroup.com/webcast. The live webcast will start at 10:00 a.m. The webcast
replay will be available at the same address starting at approximately 12:00
noon.
It is also possible to participate in the event through a conference call.
Participants are requested to call the assigned number (+44 (0)20 7162 0077) at
least five minutes before the conference call begins, at 9:55 a.m. (Finnish
time, EEST) at the latest.
During the webcast and conference call, questions must be asked in English.
After the session, there will also be an opportunity for the media to ask
questions in Finnish.
Schedule in different time zones:
Financial The investor and analyst event, Recorded
Statements conference call and live webcast
Bulletin published webcast available
--------------------------------------------------------------------------------
EEST 8.00 10.00 12.00
(Helsinki)
--------------------------------------------------------------------------------
CEST (Paris, 7.00 9.00 11.00
Stockholm)
--------------------------------------------------------------------------------
BST (London) 6.00 8.00 10.00
--------------------------------------------------------------------------------
US EDT (New 1.00 3.00 5.00
York)
--------------------------------------------------------------------------------
Financial reports and other investor information are available at YIT's
website, www.yitgroup.com/investors. The materials may be ordered via the
website, by sending 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
FINANCIAL STATEMENTS BULLETIN JANUARY 1 - DECEMBER 31, 2011
CONTENTS
-- Group's financial development
-- Strategic objectives
-- Development by business segment
-- Personnel
-- Resolutions passed at the Annual General Meeting
-- Shares and shareholders
-- Most significant short-term business risks and risk management
-- Outlook for 2012
-- Events after the financial period
-- Board of Directors' proposal for the use of distributable equity
-- Tables to the Financial Statements Bulletin
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 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 from 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 from June 29, 2011. Previously, he acted as the head
of building system services in Finland, Russia and the Baltic countries.
Pii Raulo (44), M.Sc. Econ., YIT Corporation's Senior Vice President, Human
Resources, was appointed as a member of YIT's Management Board from December
19, 2011. Raulo joined YIT in 2004, and she was appointed as YIT Group's Senior
Vice President, Human Resources, from July 1, 2011.
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.
Revenue of the segments increased from the previous year
Revenue, EUR million 1-12/11 1-12/10 Change 10-12/1 10-12/1 Change
1 0
--------------------------------------------------------------------------------
Building Services Northern 2,097.6 1,803.6 16% 600.1 519.2 16%
Europe
--------------------------------------------------------------------------------
Building Services Central 779.3 550.2 42% 200.3 258.7 -23%
Europe
--------------------------------------------------------------------------------
Construction Services 1,226.9 1,102.0 11% 335.7 294.2 14%
Finland
--------------------------------------------------------------------------------
International Construction 489.2 470.6 4% 145.9 139.7 4%
Services
--------------------------------------------------------------------------------
Other items -68.2 -79.4 -17.5 -24.2
--------------------------------------------------------------------------------
YIT's segments total 4,524.7 3,847.0 18% 1,264.5 1,187.6 6%
--------------------------------------------------------------------------------
IFRIC 15 adjustment -142.6 -59.4 -74.1 150.4
--------------------------------------------------------------------------------
YIT Group total 4,382.1 3,787.6 16% 1,190.4 1,338.0 -11%
--------------------------------------------------------------------------------
The revenue of YIT's segments increased by 18 percent in January-December
compared to the previous year, amounting to EUR 4,524.7 million (1-12/2010: EUR
3,847.0 million). Revenue increased across all segments. The revenue of
Building Services Central Europe increased compared to the year before,
particularly as the result of the acquisition completed in September 2010. The
growth in revenue was also supported by the slight picking up of demand for
building system services, picking up of residential sales, especially in
Russia, and the revival of the infrastructure business and the business
premises market in Finland. Changes in foreign exchange rates increased the
segments' revenue for 2011 by EUR 45.4 million compared to the previous year.
Following the IFRIC 15 adjustment, YIT Group's revenue increased by 16 percent
from the previous year and was EUR 4,382.1 million for January-December
(1-12/2010: EUR 3,787.6 million). The completion schedules of own-based
property development projects affect the Group's revenue recognition, and
therefore Group-level figures may fluctuate greatly between different quarters.
In 2011, the number of residential units completed was slightly lower than the
year before. 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-December 2011, Finland accounted for 40 percent (38%) of the Group's
revenue, Sweden for 17 percent (15%), Germany for 14 percent (10%), Norway for
12 percent (12%), Russia for 7 percent (14%), Denmark for 4 percent (4%), the
Baltic countries for 2 percent (2%) and other countries for 4 percent (5%).
Operating profit of the segments increased from the previous year
Operating profit, EUR 1-12/11 1-12/10 Change 10-12/1 10-12/1 Change
million 1 0
--------------------------------------------------------------------------------
Building Services Northern 78.8 88.7 -11% 23.0 23.5 -2%
Europe
--------------------------------------------------------------------------------
Building Services Central 33.3 16.4 103% 9.3 8.9 4%
Europe
--------------------------------------------------------------------------------
Construction Services 111.6 108.1 3% 32.1 29.4 9%
Finland
--------------------------------------------------------------------------------
International Construction 37.2 34.7 7% 17.4 13.4 30%
Services
--------------------------------------------------------------------------------
Other items -20.4 -18.8 -5.6 -5.5
--------------------------------------------------------------------------------
YIT's segments total 240.5 229.1 5% 76.2 69.7 9%
--------------------------------------------------------------------------------
IFRIC 15 adjustment -40.5 -9.0 -18.7 46.7
--------------------------------------------------------------------------------
YIT Group total 200.0 220.1 -9% 57.5 116.4 -51%
--------------------------------------------------------------------------------
Operating profit margin, % 1-12/11 1-12/10 10-12/11 10-12/10
-------------------------------------------------------------------------
Building Services Northern Europe 3.8 4.9 3.8 4.5
-------------------------------------------------------------------------
Building Services Central Europe 4.3 3.0 4.6 3.4
-------------------------------------------------------------------------
Construction Services Finland 9.1 9.8 9.6 10.0
-------------------------------------------------------------------------
International Construction Services 7.6 7.4 11.9 9.6
-------------------------------------------------------------------------
YIT's segments total 5.3 6.0 6.0 5.9
-------------------------------------------------------------------------
YIT Group total 4.6 5.8 4.8 8.7
-------------------------------------------------------------------------
The operating profit of YIT's segments increased by 5 percent compared to the
previous year, amounting to EUR 240.5 million in January-December (1-12/2010:
EUR 229.1 million). The operating profit margin calculated on the basis of the
segment figures was 5.3 percent (1-12/2010: 6.0%). The operating profit of the
segments for 2011 includes EUR -9.4 million (1-12/2010: EUR -3.2 million) of
borrowing costs according to IAS 23. The IAS 23 standard defines the recording
method of borrowing costs in long-term construction projects.
The segments' operating profit for the fourth quarter increased by 9 percent
from the previous year to EUR 76.2 million (10-12/2010: EUR 69.7 million). The
fourth quarter operating profit margin of Building Services Northern Europe
fell short of the previous year due to strict price competition, especially in
project operations, and the continued relatively low demand for new building
system and industrial investments. The profitability of Building Services
Central Europe improved from the previous year as a result of successful
measures to improve profitability.
During the fourth quarter, the operating profit of Construction Services
Finland was improved by improved residential sales, picking up of the
infrastructure business and sale of the Business Park Safiiri property project.
The profitability of International Construction Services was improved by the
picking up of residential sales in Russia and increasing housing prices in
Russia.
In Group-level reporting, residential development projects are only recognised
as income upon project delivery. Following the IFRIC 15 adjustment, the Group's
operating profit decreased by 9 percent compared to the previous year,
amounting to EUR 200.0 million (1-12/2010: EUR 220.1 million). Following the
IFRIC 15 adjustment, the Group's operating profit margin was 4.6 (1-12/2010:
5.8%).
Financial expenses remained at the previous year's level
The financial expenses for the review period remained at the previous year's
level, amounting to EUR 24.7 million (1-12/2010: EUR 25.3 million).
The profit before taxes based on segment reporting increased by 6 percent on
the year before, amounting to EUR 215.8 million for January-December
(1-12/2010: EUR 203.8 million).
The profit before taxes based on Group reporting decreased by 10 percent from
the previous year to EUR 175.2 million in January-December (1-12/2010: EUR
194.8 million).
Earnings per share for 2011 based on segment reporting increased by 8 percent
on the year before, amounting to EUR 1.25 (1-12/2010: EUR 1.16).
Earnings per share for 2011 based on Group reporting decreased by 12 percent to
EUR 0.99 (1-12:2010: EUR 1.12).
Dividend proposal
YIT's target for dividend payout is 40-60 percent of net profit for the period.
The Board of Directors proposes to the Annual General Meeting that a dividend
of EUR 0.70 per share be paid, representing 70.5 percent of the Group's net
profit for the period.
Order backlog remained strong
Order backlog, EUR million 12/11 12/10 Change 12/11 9/11 Change
--------------------------------------------------------------------------------
Building Services Northern 913.1 757.4 21% 913.1 886.1 3%
Europe
--------------------------------------------------------------------------------
Building Services Central 449.5 507.0 -11% 449.5 523.9 -14%
Europe
--------------------------------------------------------------------------------
Construction Services 1,493.6 1,173.2 27% 1,493.6 1,289.3 16%
Finland
--------------------------------------------------------------------------------
International Construction 962.5 870.8 11% 962.5 850.1 13%
Services
--------------------------------------------------------------------------------
Other items -66.0 -58.3 -66.0 -60.3
--------------------------------------------------------------------------------
YIT's segments total 3,752.7 3,250.1 15% 3,752.7 3,489.0 8%
--------------------------------------------------------------------------------
IFRIC 15 adjustment 395.9 285.6 395.9 249.3 59%
--------------------------------------------------------------------------------
YIT Group total 4,148.6 3,535.7 17% 4,148.6 3,738.3 11%
--------------------------------------------------------------------------------
The order backlog of YIT's segments was EUR 3,752.7 million at the end of
December (12/2010: EUR 3,250.1 million); approximately 15 percent more than at
the end of December the previous year. The order backlog increased by 8 percent
from the end of September 2011, at which time it stood at EUR 3,489.0 million.
The order backlog of Building Services Northern Europe increased on the
previous year as the result of a slight revival in the demand for building
services. The order backlog of Construction Services increased as a result of
residential start-ups. In addition, the order backlog of Construction Services
Finland was improved by the two-fold increase in the order backlog of
infrastructure construction.
After the IFRIC 15 adjustment, YIT Group's order backlog was EUR 4,148.6
million at the end of December (12/2010: EUR 3,535.7 million).
Capital expenditure and acquisitions
Gross capital expenditure on non-current assets included on the balance sheet
totalled EUR 48.7 million (1-12/2010: EUR 129.8 million) during
January-December, representing 1.1 percent (1-12/2010: 3.4%) of revenue.
Investments in construction equipment amounted to EUR 15.5 million (1-12/2010:
EUR 9.1 million) and investments in information technology to EUR 9.5 million
(1-12/2010: EUR 9.5 million). Other investments, including acquisitions,
amounted to EUR 23.7 million (1-12/2010: EUR 111.2 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 Central 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 2011, YIT made a total of eight acquisitions, most of which were in the
Building Services Northern Europe business segment. During the financial
period, YIT sold its Hungarian business operations whose revenue for 2010
amounted to approximately EUR 10 million.
YIT acquired a 100 percent holding in the building management and property
maintenance company OOO Upravljajushjaja Kompanija Olimp in Yekaterinburg,
Russia, during the fourth quarter. The company is responsible for maintaining
approximately 100,000 square metres of property, and it was consolidated in the
Group as of November 1, 2011. In addition, in St Petersburg and the Moscow
region, YIT has separate companies that take care of the building management
and maintenance of property built by YIT.
Furthermore, YIT agreed on two acquisitions in Austria, during the last
quarter, YIT agreed to purchase P&P Kälteanlagenbau GmbH, a cooling solutions
and services provider, and WM Haustechnik GmbH, an HVAC solution provider. P&P
Kälteanlagenbau GmbH has approximately 50 employees, and its revenue for 2010
was approximately EUR 11 million. The annual revenue of WM Haustechnik GmbH is
approximately EUR 1 million. The companies acquired in Austria will be
consolidated in the Group as of January 1, 2012.
A more detailed description on the acquisitions made in 2011 can be found in
the tables to the financial statements bulletin.
Investments in growth impaired cash flow
The Group's operating cash flow after investments amounted to EUR -17.3 million
in January-December 2011 (1-12/2010: EUR -61.7 million). The Group's operating
cash flow after investments amounted to EUR 14.1 million in October-December
2011 (10-12/2010: EUR -5.6 million). Operating cash flow in the fourth quarter
was affected particularly by growth in the merchandise inventory of development
production in Finland and plot investments.
At the end of December, the Group's invested capital amounted to EUR 1,855.8
million (9/2011: EUR 1,838.2 million). Of the Group's invested capital, 26
percent (9/2011: 25%), or EUR 485.7 million (9/2011: EUR 465.3 million) was
invested in Russia. Exchange rate changes for the ruble increased the capital
invested in Russia by EUR 17.8 million in October-December.
The Group's capital invested in Russia is primarily accounted for by the
International Construction Services segment. The capital invested in Russia
remained almost unchanged during the fourth quarter 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, improved terms of payment and increasing the share of mortgage deals.
Return on investment amounted to 12.0 percent for the last 12 months
(10/2010-9/2011: 15.6%). Invested capital is calculated by deducting
non-interest bearing liabilities from the balance sheet total. Only operational
items are taken into account in calculating the segments' invested capital. The
balance sheet total at the end of December was EUR 3,504.5 million (9/2011: EUR
3,418.6 million).
The Group is also prepared for macroeconomic uncertainty, liquidity position is
strong
YIT has a diverse capital structure and a strong liquidity position. Cash
reserves amounted to EUR 206.1 million (9/2011: EUR 224.1 million) at the end
of December. In addition, committed credit and overdraft facilities amounting
to a total of EUR 355.4 million were unutilised. New committed credit
facilities amounting to a total of EUR 130 million were agreed upon in 2011.
YIT has a total of EUR 280 million in committed credit facilities, of which EUR
50 million are valid until December 2013, EUR 30 million until December 2014
and EUR 200 million until December 2015. The committed credit facilities do not
include an obligation to maintain financial key ratios, i.e. covenants.
The gearing ratio decreased compared with the end of September 2011, amounting
to 80.4 percent at the end of December 2011 (9/2011: 86.8%). The equity ratio
increased slightly to 30.2 percent (9/2011: 29.2%). Net financing liabilities
decreased from the end of September 2011 to EUR 740.4 million (9/2011: EUR
755.0 million).
Net financial expenses remained at the previous year's level and amounted to
EUR 24.8 million in 2011 (1-12/2010: EUR 25.3 million), or 0.6 percent
(1-12/2010: 0.7%) of the Group's revenue. The net financial expenses include
EUR 12.2 million (1-12/2010: EUR 8.0 million) of capitalisations in compliance
with IAS 23. The exchange rate differences included in the net financial
expenses, totalling EUR -4.1 million (1-12/2010: EUR -7.3 million), were
comprised almost entirely of costs of hedging debt investments in Russia. The
hedged ruble exposure has decreased further. At the end of December 2011, EUR
85.7 million (9/2011: EUR 90.7 million) of the capital invested in Russia was
comprised of debt investments and EUR 400.0 million (9/2011: EUR 374.6 million)
was 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 946.6 million (9/2011: EUR 979.1 million)
at the end of December, and their average interest rate was 3.2 percent
(9/2011: 3.3%). Fixed-interest loans accounted for 50 percent (9/2011: 50%) of
the Group's financial liabilities. Of the loans, 41 percent (9/2011: 46%) had
been raised directly from the capital and money markets, 45 percent from banks
and other financial institutions (9/2011: 40%) and 13 percent from insurance
companies (9/2011: 13%). The maturity distribution of long-term loans is
balanced. A total of EUR 96.2 million of long-term loans will mature in 2012.
During the second quarter of 2011, YIT issued, under the company's programme
for issuance of notes, a bond of EUR 100 million targeted at institutional and
other selected investors. Due by 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.
The total amount of construction-stage contract receivables sold to financial
institutions grew compared to the end of September 2011, amounting to EUR 265.6
million at the end of December (9/2010: EUR 208.3 million). Of this amount, EUR
221.8 million (9/2011: EUR 189.9 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 5.1 million (1-12/2010: EUR 2.6 million) in
2011 and these are fully included in the financial expenses of the review
period.
Participations in the housing corporation loans of unsold completed residential
units amounted to EUR 45.1 million (9/2011: EUR 38.7 million) at the end of
December, and they are included in interest-bearing liabilities. The interest
on the participations, EUR 3.0 million (1-12/2010: EUR 0.9 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. On the other hand, the Group has also prepared for
macroeconomic uncertainty by strengthening its liquidity position.
STRATEGIC OBJECTIVES
YIT Corporation's Board of Directors confirmed the Group's strategy for
2012-2014 on September 21, 2011. The key strategic objective is balanced and
profitable growth. The Group's other strategic long-term target levels remain
unchanged: average annual revenue growth of more than 10 percent, return on
investment of 20 percent, operating cash flow after investments sufficient for
dividend payout and reduction of debt, equity ratio of 35 percent and dividend
payout of 40-60 percent of net profit for the period. When determining the
target levels, the assumption was made that economic growth in YIT's market
areas will continue.
In terms of business operations, the focus areas of YIT's growth continue to be
building systems service and maintenance operations and residential
construction. Growth is sought both through acquisitions and organically.
Building system services will be increased in the Nordic countries and Central
Europe, and residential construction in Finland, Russia, the Baltic countries
and Central Eastern Europe. The Group's potential new market areas are
Switzerland in building system services and Poland in construction services.
Particular focus areas for growth include residential construction in Russia
and building system services in Germany.
YIT published a stock exchange release on the confirmation of the strategy and
materials for the Capital Market Day focusing on the strategic focus areas on
September 22, 2011.
DEVELOPMENT BY BUSINESS SEGMENT
The development by business segment is presented using figures compliant with
segment reporting.
BUILDING SERVICES NORTHERN EUROPE
Key figures
1-12/11 1-12/10 Change 10-12/ 10-12/ Change
11 10
--------------------------------------------------------------------------------
Revenue, EUR million 2,097.6 1,803.6 16% 600.1 519.2 16%
--------------------------------------------------------------------------------
Operating profit, EUR million 78.8 88.7 -11% 23.0 23.5 -2%
--------------------------------------------------------------------------------
Operating profit margin, % 3.8 4.9 -24% 3.8 4.5 -15%
--------------------------------------------------------------------------------
Return on operative invested 23.8 35.9 - -
capital (last 12 months), %
--------------------------------------------------------------------------------
12/11 12/10 Change 12/11 9/11 Change
--------------------------------------------------------------------------------
Operative invested capital, EUR 372.9 289.2 29% - -
million
--------------------------------------------------------------------------------
Order backlog, EUR million 913.1 757.4 21% 913.1 886.1 3%
--------------------------------------------------------------------------------
Revenue, EUR million 1-12/11 1-12/10 Change 10-12/11 10-12/10 Change
--------------------------------------------------------------------------------
Finland 637.2 571.8 11% 173.1 153.3 13%
--------------------------------------------------------------------------------
Sweden 706.5 566.4 25% 213.9 174.0 23%
--------------------------------------------------------------------------------
Norway 528.6 480.8 10% 150.7 137.6 10%
--------------------------------------------------------------------------------
Denmark 170.6 141.3 21% 47.7 41.3 15%
--------------------------------------------------------------------------------
Russia and the Baltic 54.7 43.3 26% 14.7 12.9 14%
countries
--------------------------------------------------------------------------------
Total 2,097.6 1,803.6 16% 600.1 519.2 16%
--------------------------------------------------------------------------------
The revenue of Building Services Northern Europe increased by 16 percent in
January-December compared to the previous year, amounting to EUR 2,097.6
million (1-12/2010: EUR 1,803.6 million). Revenue for the fourth quarter
increased by 16 percent to EUR 600.1 million (10-12/2010: EUR 519.2 million).
Changes in foreign exchange rates increased the revenue for January-December by
EUR 51.7 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 previous year. This was due to
strict price competition, especially in project operations, and the demand for
new building system and industrial investments remained relatively low. The
segment's profitability turned to a slight increase during the second half of
the year, thanks to efficiency improvement measures, but was still lower than
YIT's objectives. Profitability improved during the fourth quarter in Denmark
in particular as operations have become more efficient, but the profitability
of industrial services still remained very weak.
The restructuring of operations underway in all countries where Building
Services Northern Europe operates proceeded according to plans during the
review period. During the review period, decisions were made on the reduction
of a total of approximately 800 employees as the result of the restructuring
efforts. The efforts are estimated to result in annual savings of approximately
EUR 40 million from 2013 onwards. Of the personnel reduction in industrial
services, 270 were made during the second half of the year. The aim is to
improve the segment's profitability also through rearrangements of the branch
office network, more selective project acquisition and making procurement more
efficient. In addition, material logistics, invoicing process and servicing
capacity planning will be made more efficient, the service culture will be
strengthened and the organisation structure will be adjusted to make servicing
activity more efficient.
The order backlog at the end of December increased by 21 percent on the
previous year, amounting to EUR 913.1 million (12/2010: EUR 757.4 million).
Large, long-term energy-saving projects in particular increased their share of
the order backlog during the fourth quarter.
Service and maintenance revenue continued to increase during the fourth quarter
YIT aims to be the leading provider of energy-efficient technical systems,
solutions and life-cycle services in the Nordic countries and in Central
Europe. The target is to increase service and maintenance operations at a
faster rate than other operations. Service and maintenance operations generated
EUR 1,319.3 million (1-12/2010: EUR 1,228.9 million), or 63 percent (1-12/2010:
68 %) of the segment's total revenue. Service and maintenance operations
generated EUR 396.5 million (10-12/2010: EUR 352.5 million), or approximately
66 percent of the segment's revenue for the fourth quarter (1-12/2010: 68%).
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 of 2011. In 2012, the service will
be complemented with the eServiFlex service with which YIT will deliver
energy-saving services to the customer's existing 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. Also, demand among
industrial customers focused on service and maintenance.
In Denmark, YIT launched a significant energy-saving project in Helsingør,
north of Copenhagen, during the fourth quarter. The project covers 90 buildings
with a total floor area of approximately 164,000 square meters. The value of
the agreement for the first phase of the project is approximately EUR 2.8
million, and it covers the energy renovation of seven buildings.
YIT and Torsby municipality expanded their energy efficiency agreement, the
most extensive in Sweden, during the fourth quarter. Torsby municipality is
investing over EUR 8 million in its properties to increase their
cost-efficiency and environmental friendliness. During the fourth quarter, YIT
and Kalmar municipality in Sweden signed an agreement in order to improve the
energy efficiency of the municipality's properties by 20 percent by 2013. The
agreement provides more than 20 full-time positions over two years.
In Norway, YIT entered into a framework agreement with the Norwegian Armed
Forces during the fourth quarter. In accordance with the agreement, YIT will
deliver electronic safety equipment, such as monitoring and access control
equipment to the Armed Forces' properties in Norway. As a result of the
agreement, YIT has a total of six service agreements with the Norwegian Armed
Forces. Furthermore, YIT will provide the electrical and demolition work for
the new Deloitte premises in Bjørvika, Norway.
BUILDING SERVICES CENTRAL EUROPE
Key figures
1-12/1 1-12/1 Change 10-12/ 10-12/ Change
1 0 11 10
--------------------------------------------------------------------------------
Revenue, EUR million 779.3 550.2 42% 200.3 258.7 -23%
--------------------------------------------------------------------------------
Operating profit, EUR million 33.3 16.4 103% 9.3 8.9 4%
--------------------------------------------------------------------------------
Operating profit margin, % 4.3 3.0 4.6 3.4
--------------------------------------------------------------------------------
Return on operative invested 53.8 46.4 - -
capital (last 12 months), %
--------------------------------------------------------------------------------
12/11 12/10 Change 12/11 9/11 Change
--------------------------------------------------------------------------------
Operative invested capital, EUR 72.0 51.6 42% - -
million
--------------------------------------------------------------------------------
Order backlog, EUR million 449.5 507.0 -11% 449.5 523.9 -14%
--------------------------------------------------------------------------------
Revenue, EUR million 1-12/1 1-12/1 Change 10-12/ 10-12/ Change
1 0 11 10
--------------------------------------------------------------------------------
Germany 633.2 408.2 55% 162.8 205.4 10%
--------------------------------------------------------------------------------
Austria 107.0 100.1 7% 31.4 28.7 13%
--------------------------------------------------------------------------------
Poland, the Czech Republic, 39.1 41.9 -7% 6.1 24.6 -57%
Hungary and other countries *)
--------------------------------------------------------------------------------
Total 779.3 550.2 42% 200.3 258.7 5%
--------------------------------------------------------------------------------
*) YIT divested its Hungarian operations during the second quarter of 2011.
Building Services Central Europe's revenue increased significantly in
January-December compared to the previous year, mainly as the result of an
acquisition that took effect at the beginning of September 2010. Revenue for
the fourth quarter decreased by 23 percent to EUR 200.3 million (10-12/2010:
EUR 258.7 million). The factors contributing to the decrease in revenue and
order backlog included the postponement of the customers' investment decisions
in a few large-scale projects in Germany, the low level of activity in Central
Europe due to market uncertainty and the discontinuation of international
projects.
The revenue for January-December increased by 103 percent compared to the year
before, with the German operations improving their performance in particular.
Operating profit for 2011 was EUR 33.3 million (1-12 /2010: EUR 16.4 million).
In spite of the decrease in revenue, operating profit for the fourth quarter
remained on a par with the corresponding period the previous year, amounting to
EUR 9.3 million (10-12/2010: EUR 8.9 million).
The order backlog at the end of December decreased by 11 percent from the
previous year, amounting to EUR 449.5 million (12/2010: EUR 507.0 million).
Acquisition that took effect in September 2010 increased business volume 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.
Service and maintenance revenue grew
Service and maintenance operations generated EUR 191.7 million (1-12/2010: EUR
126.1 million), or 25 percent (1-12/2010: 23%) of the segment's total revenue.
Service and maintenance operations generated EUR 52.2 million (10-12/2010: EUR
52.0 million), or approximately 26 percent of the segment's revenue for the
fourth quarter (1-12/2010: 20%).
During 2011, the share of service and maintenance was significantly lower in
Building Services Central Europe (25%) than in Building Services Northern
Europe (63%), and therefore the opportunities for increasing it in Building
Services Central Europe are good.
YIT concluded several long-term maintenance agreements, agreement expansions
and extensions during the fourth quarter. In Germany, YIT signed agreements on
the maintenance of the ADAC centre in Munich and the head offices of the
insurance companies Barmenia and DEVK Versicherungen. YIT's agreements on the
maintenance of O2's head office, the m.pire office complex, the technical
university in Garching and the Jenoptik buildings were extended during the
fourth quarter.
In Poland, YIT is responsible for the maintenance of two Decathlon sports
shops, the Goodman and Pannatton logistics centres and the parking facilities
of the City of Warsaw in accordance with agreements signed during the fourth
quarter. In Austria, the fourth quarter saw YIT enter into service and
maintenance agreements with Wiener Linien, Coca Cola and General Motors, among
others.
YIT's ServiFlex concept is in use in all countries where Building Services
Central Europe operates. Several service and maintenance agreements pursuant to
the concept were concluded during the fourth quarter, particularly in Austria,
in addition to which also old agreements were converted to the ServiFlex model.
Delays in customers' decision-making towards the end of the year
Demand for new building system investments remained at a relatively favourable
level in Germany and Austria during the fourth quarter, while price pressure
increased. In Poland, infrastructure investments in particular remained at a
favourable level, while in the Czech Republic the volume of new investments was
low during the review period.
During the fourth quarter, YIT concluded several agreements that require
state-of-the-art technology. In Germany, YIT will deliver the building system
services to the new BioCube R&D centre, Jenoptik's production plant and
Robert-Koch institute as well as automation and air conditioning work to the
department of molecular biology at the University of Tübingen. YIT will also
deliver the heating, cooling and sprinkler work to the Berlin state opera,
originally built in 1743, and the national library in Berlin. Furthermore, in
accordance with an agreement signed during the fourth quarter, YIT will deliver
the cooling and heating solutions for the Vodafone campus, covering
approximately 110,000 square metres.
In Austria, YIT will implement the large-scale renovation of the Vienna
sickness insurance company, converting the facilities to comply with high
hygiene and energy efficiency requirements.
In Poland, YIT concluded an agreement on the delivery of the modernisation work
of the Krakow hospital and the building system services of a logistics centre
in Myslowice.
CONSTRUCTION SERVICES FINLAND
Key figures
1-12/11 1-12/10 Change 10-12/ 10-12/ Change
11 10
--------------------------------------------------------------------------------
Revenue, EUR million 1,226.9 1,102.0 11% 335.7 294.2 14%
--------------------------------------------------------------------------------
Operating profit, EUR million 111.6 108.1 3% 32.1 29.4 9%
--------------------------------------------------------------------------------
Operating profit margin, % 9.1 9.8 9.6 10.0
--------------------------------------------------------------------------------
Return on operative invested 24.0 28.1 - -
capital (last 12 months), %
--------------------------------------------------------------------------------
12/11 12/10 Change 12/11 9/11 Change
--------------------------------------------------------------------------------
Operative invested capital, 558.4 419.3 33% - -
EUR million
--------------------------------------------------------------------------------
- of which plot reserves, 294.6 285.7 4% - -
MEUR
--------------------------------------------------------------------------------
Order backlog, EUR million 1,493.6 1,173.2 27% 1,493.6 1,289.3 16%
--------------------------------------------------------------------------------
Revenue increased in January-December by 11 percent from the previous year as
the volume of residential and business premises construction was at a good
level. The revenue for the fourth quarter increased by 14 percent from the
previous year to EUR 335.7 million (10-12/2010: EUR 294.2 million). The volume
of infrastructure services was good in the fourth quarter, and YIT agreed on
several significant orders.
The operating profit for 2011 increased slightly on the previous year. The
operating profit of the segment for 2011 includes EUR -5.7 million (1-12/2010:
EUR -2.5 million) of borrowing costs according to IAS 23. The operating profit
margin for 2011 decreased slightly on the previous year. The operating profit
for the fourth quarter increased by 9 percent from the previous year to EUR
32.1 million (10-12/2010: EUR 29.4 million). The operating profit for the
fourth quarter includes EUR -1.7 million (10-12/2010: EUR -0.9 million) of
borrowing costs according to IAS 23. During the fourth quarter, the operating
profit was improved by improved residential sales, picking up of the
infrastructure business and sale of the Business Park Safiiri property project.
The order backlog amounted to EUR 1,493.6 million at the end of December
(12/2010: 1,173.2). The order backlog increased by 27 percent from the previous
year, especially due to residential start-ups and the two-fold increase in the
order backlog of infrastructure construction. Compared to the end of September
2011, the order backlog increased by 16 percent (9/2011: EUR 1,289.3 million).
The segment's capital tied to plot reserves totalled EUR 294.6 million
(12/2010: EUR 285.7 million) at the end of December. The plot reserves included
1,624,000 (12/2010: 1,639,000) m2 of floor area of residential plots and
721,000 (12/2010: 857,000) m2 of floor area of plots for business premises.
Residential sales to consumers on a par with previous year, increase in sales
to investors
YIT's goal is to strengthen its position as the largest housing developer in
Finland. Residential sales picked up and reached a moderate level in the fourth
quarter. During 2011, YIT sold a total of 1,893 residential units (1-12/2010:
1,890) directly to consumers, of which 449 were sold in the fourth quarter
(10-12/2010: 478). Residential prices remained stable during the fourth
quarter. Residential sales continued at a good level in January.
The focus of YIT's housing construction is on residential development projects
aimed directly at consumers in accordance with market demand. In 2011, YIT
started the construction of a total of 2,349 (1-12/2010: 2,550) residential
units aimed directly at consumers. Of the start-ups, 508 took place in
October-December (10-12 /2010: 547). During the fourth quarter, YIT started up
the construction of approximately 500 investor residential units as well. YIT
has actively replenished its plot reserves by acquiring plots and making
preliminary agreements on plots in order to ensure good opportunities for
residential start-ups also in the future.
The merchandise inventory has been strengthened further through new residential
start-ups: at the end of December, YIT had 2,180 (12/2010: 1,724) residential
units for sale to consumers. The number of completed, unsold residential units
has remained at a relatively low level, amounting to 283 (12/2010: 112) at the
end of December. Of the residential units under construction, 54 percent
(12/2010: 65%) have been sold, which decreases YIT's sales risk. The
merchandise inventory is focused on medium-priced residential production:
approximately 77 percent of the residential units for sale are priced at less
than EUR 300,000.
YIT is well prepared to adjust its residential production according to the
market situation. The costs of completing the current residential and business
premises development projects for sale amounted to EUR 346.4 million at the end
of December 2011.
Residential construction in Finland, number of residential units
1-12/1 1-12/1 Change 10-12/ 7-9/11 4-6/11 1-3/11
1 0 11
--------------------------------------------------------------------------------
Sold 2,765 2,432 14% 962 456 755 592
--------------------------------------------------------------------------------
- of which directly to 1,893 1,890 0% 449 396 513 535
consumers
--------------------------------------------------------------------------------
Start-ups 3,221 3,092 4% 1,021 621 917 662
--------------------------------------------------------------------------------
- of which directly to 2,349 2,550 -8% 508 561 675 605
consumers
--------------------------------------------------------------------------------
Completed 3,674 2,249 63% 543 869 1,344 918
--------------------------------------------------------------------------------
- of which directly to 2,477 857 189% 543 580 791 563
consumers
--------------------------------------------------------------------------------
Under construction at 4,105 4,559 -10% 4,105 3,627 3,875 4,302
the end of the period
--------------------------------------------------------------------------------
- of which sold at the 2,208 2,947 -25% 2,208 1,743 2,127 2,660
end of the period
--------------------------------------------------------------------------------
For sale at the end of 2,180 1,724 26% 2,180 2,121 1,956 1,794
the period
--------------------------------------------------------------------------------
- of which completed 283 112 153% 283 237 208 152
--------------------------------------------------------------------------------
Changes in the number of residential units may take place after the start of
construction due to the division or combination of residences.
Positive development of the business and office premises market continued
The positive development of the business and office premises market continued
also during the fourth quarter, and the order backlog of YIT's business and
office premises operations remained at a favourable level. The leasing of
business and office premises under construction proceeded moderately during the
fourth quarter: lease agreements were signed on approximately 16,600 m² of
premises. Business premises rents and investors' yield requirements remained
unchanged in the fourth quarter. Interest in Finland among international
property investors increased from the previous year.
During the fourth quarter, YIT sold the Business Park Safiiri, located in
Matinkylä, Espoo, to a German fund. When finished, the size of the entire
Business Park Safiiri will be approximately 14,000 m2, and the value of the
agreement was approximately EUR 50 million. Outotec will lease approximately 75
percent of the facilities. In addition, Hospital district of Helsinki and
Uusimaa and smaller-scale tenants will be located at Safiiri. The construction
of Safiiri was started in October 2010, and will be completed in two parts. The
first phase covers approximately 8,800 m2 and is estimated to be completed
during spring 2012. The second phase of approximately 5,300 m2 will be started
in March 2012 and is estimated to be completed during spring 2013.
Infrastructure construction picked up
Demand for infrastructure construction picked up towards the end of 2011, but
competition in the field continued to be tight. Investments have decreased in
the municipal sector and decision-making has been postponed.
The order backlog of YIT's infrastructure services consolidated due to projects
secured during the fourth quarter. Tieyhtiö Valtatie 7 Oy, a project company
with YIT, Destia, Meridiam Infrastructure Projects S.á.r.l and Ilmarinen Mutual
Pension Insurance Company as the shareholders, entered into a service agreement
with the Finnish Transport Agency (FTA) on the implementation of the E18
Koskenkylä-Kotka motorway. Construction work on the road has begun, and it is
estimated to be completed in 2015. The total value of the agreement is
approximately EUR 623 million. YIT is jointly responsible for the construction
and maintenance of the motorway with Destia. The project will have an effect of
approximately EUR 190 million on YIT's order backlog, and it will have a
significant impact on employment for YIT in the next few years.
In addition, the Haminan Kehä consortium, founded by YIT and Kesälahden
Maansiirto Oy, signed a contract with the Finnish Transport Agency to implement
the first construction phase of the E18 Hamina Bypass Road (Vt7) in the fourth
quarter. The value of the contract is about EUR 120 million, and YIT's share of
this is approximately EUR 60 million. Construction of the road section was
begun in December 2011, and it is scheduled for completion by 2015.
INTERNATIONAL CONSTRUCTION SERVICES
Key figures
1-12/1 1-12/1 Change 10-12/ 10-12/ Change
1 0 11 10
--------------------------------------------------------------------------------
Revenue, EUR million 489.2 470.6 4% 145.9 139.7 4%
--------------------------------------------------------------------------------
Operating profit, EUR million 37.2 34.7 7% 17.4 13,4 30%
--------------------------------------------------------------------------------
Operating profit margin, % 7.6 7.4 11.9 9.6
--------------------------------------------------------------------------------
Return on operative invested 6.5 5.3 - -
capital (last 12 months), %
--------------------------------------------------------------------------------
12/11 12/10 Change 12/11 9/11 Change
--------------------------------------------------------------------------------
Operative invested capital, EUR 602.2 661.0 -9% - -
million
--------------------------------------------------------------------------------
- of which plot reserves, MEUR 349.2 303.6 15% - -
--------------------------------------------------------------------------------
Order backlog, EUR million 962.5 870.8 11% 962.5 850.1 13%
--------------------------------------------------------------------------------
In International Construction Services, residential demand remained at a good
level in the review period, and residential sales in Russia increased to a
record-high level in the fourth quarter. Revenue for 2011 increased by 4
percent to EUR 489.2 million (1-12/2010: EUR 470.6 million). Revenue for the
fourth quarter increased by 4 percent from the previous year to EUR 145.9
million (10-12/2010: EUR 139.7 million).
The operating profit for 2011 increased by 7 percent from the previous year to
EUR 37.2 million (1-12/2010: EUR 34.7 million). The operating profit of the
segment includes EUR -3.7 million (1-12/2010: EUR -0.7 million) of borrowing
costs according to IAS 23. The sale of projects at an even earlier stage of
construction than before had an effect on the recognition of revenue and
operating profit: only a limited amount of revenue is recognised at the time of
the sale for projects that are sold in their early stage of construction. In
addition, the segment's profitability for 2011 was impaired by the costs of
rectifying the ammonia issue in residential units constructed by YIT in St.
Petersburg. The company made a cost provision of EUR 10 million in the third
quarter to cover these costs.
The operating profit for the fourth quarter increased by 30 percent from the
previous year to EUR 17.4 million (10-12/2010: EUR 13.4 million). The operating
profit for the fourth quarter includes EUR -1.5 million (10-12/2010: EUR -0.5
million) of borrowing costs according to IAS 23. The operating profit was
improved by the picking up of residential sales and the increase in housing
prices in Russia.
Owing to residential start-ups in the fourth quarter, the order backlog at the
end of December increased by 11 percent from the previous year and 13 percent
from the end of September 2011. The segment's order backlog was decreased by
the weakening of the ruble, which had an impact of EUR -22.5 million in
January-December. The order backlog includes two housing projects whose
construction was halted in Russia in October 2008 due to market uncertainties.
At the end of December 2011, the value of projects that were still suspended
amounted to EUR 86.5 million (12/2010: EUR 137.1 million). Restarting the
suspended projects will not increase the order backlog.
The costs of completing the current residential and business premises
development projects for sale amounted to EUR 350.0 million at the end of
December 2011.
The segment's capital tied into plot reserves totalled EUR 349.2 million
(12/2010: EUR 303.6 million) at the end of December. The plot reserves included
2,625,000 (12/2010: 2,498,000) m2 of floor area of residential plots and
695,000 (12/2010: 712,000) m2 of floor area of plots for business premises in
Russia, the Baltic countries, the Czech Republic and Slovakia.
Strong residential sales volume continued in Russia
Russia generated 80 percent (1-12 /2010: 83%) of the revenue of International
Construction Services for January-December. Revenue generated in Russia
remained on a par with the previous year, amounting to EUR 393.2 million
(1-12/2010 EUR 390.2 million).
The capital tied into plot reserves in Russia totalled EUR 269.3 million
(12/2010: EUR 223.6 million) at the end of December. The plot reserves included
2,293,000 (12/2010: 2,124,000) m2 of floor area of residential plots and
552,000 (12/2010: 563,000) m2 of floor area of plots for business premises.
Residential construction in Russia, number of residential units
1-12/1 1-12/1 Change 10-12/ 7-9/11 4-6/11 1-3/11
1 0 11
--------------------------------------------------------------------------------
Sold 3 561 3,073 16% 1,147 957 782 675
--------------------------------------------------------------------------------
Start-ups 4,492 3,683 22% 1,587 665 1,089 1,151
--------------------------------------------------------------------------------
Completed 1) 1,576 3,426 -54% 694 539 238 105
--------------------------------------------------------------------------------
Under construction at 7,365 4,457 65% 7,365 6,472 6,346 5,495
the end of the period
2)
--------------------------------------------------------------------------------
- of which sold at the 2,632 1,051 150% 2,632 2,164 1,762 1,375
end of the period
--------------------------------------------------------------------------------
For sale at the end of 5,142 4,211 22% 5,142 4,702 4,993 4,687
the period
--------------------------------------------------------------------------------
- of which completed 409 805 -49% 409 394 409 567
--------------------------------------------------------------------------------
Under construction at 1-12/1 1-12/1 Change 10-12/ 7-9/11 4-6/11 1-3/11
the end of the period 1 0 11
2)
--------------------------------------------------------------------------------
St. Petersburg 2,396 1,615 48% 2,396 1,988 1,801 1,935
--------------------------------------------------------------------------------
Moscow region 3,142 2,366 33% 3,142 3,141 3,570 2,646
--------------------------------------------------------------------------------
Yekaterinburg, Kazan, 1,827 476 284% 1,827 1,343 975 914
Rostov-on-Don and
Moscow
--------------------------------------------------------------------------------
1) Completion of the projects requires commissioning by the authorities.
2) At the end of December 2011, YIT had 365 (12/2010: 685) residential units at
Russian sites whose construction was suspended in the autumn of 2008. These
residential units are not included in the figure for residential units under
construction shown in the table. Changes in the number of residential units may
take place after the start of construction due to the division or combination
of residences.
In Russia, the focus of operations is on residential development projects in St
Petersburg, Moscow and cities in the Moscow region, Yekaterinburg,
Rostov-on-Don and Kazan. During the fourth quarter, YIT made plot investments
in the Moscow region, Yekaterinburg and Rostov-on-Don and expanded its
operations to Egorevsk, Bronnitsy and Lytkarino in the Moscow region.
During 2011, YIT sold a total of 3,561 residential units (1-12/2010: 3,073) in
Russia, of which 1,147 were sold in the fourth quarter (10-12/2010: 857).
Residential sales focused increasingly on projects at an early stage of
construction in Russia during the review period, meaning that at the time of
the sale only a smaller amount of revenue is recognised for the sold
residential units. Residential sales continued to be at the normal level in
Russia in January. Typically, the segment's first quarter is the softest in the
year due to the Russian holiday season at the beginning of the year.
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 fourth quarter, the customer has taken out a housing loan in 46 percent of
YIT's residential sales. Residential sales were also supported by the piling up
of the demand for new housing, continued favourable consumer confidence and oil
price and moderate interest rates of mortgages.
Housing prices increased at a moderate rate during the review period in Russia,
and YIT increased the prices of its residential units slightly throughout
Russia.
As a result of the favourable demand, YIT has actively started up new
residential projects in Russia, and in 2011 YIT started up the construction of
a total of 4,492 residential units (1-12/2010: 3,683). Of the start-ups, 1,587
took place in the fourth quarter (10-12/2010: 1,140). Start-ups took place in
St. Petersburg, the Moscow region, Rostov-on-Don and Yekaterinburg.
The number of residential units for sale was carefully increased during the
year, and the geographically balanced merchandise inventory amounted to 5,142
at the end of December (12/2010: 4,211). The number of completed, unsold
residential units decreased from the previous year, amounting to 409 at the end
of December (12/2010: 805). Of the residential units under construction, 36
percent had been sold (12/2010: 24%).
A total of 1,576 residential units (1-12/2010: 3,426) were completed in Russia
during 2011. After the handover of residential projects, YIT offers its
customers service and maintenance. At the end of 2011, YIT was responsible for
the service and maintenance of approximately 10,200 residential units.
YIT won several housing quality awards in Russia in the autumn 2011. YIT's
Prozorovskoye - Golitsino cottage village won the "New format" category in the
national RREF AWARDS 2011 competition. YIT's Trinity housing estate won "the
best residential project" series in the "Quality Leader in Construction 2011"
competition in St. Petersburg. In addition, Toreza 44, a residential estate
built by YIT in St. Petersburg, was ranked among the nine best projects that
will be nominated for the international FIABCI Prix d'excellence awards in May
2012. YIT's subsidiary YIT Moskovia won the High Reliability category of the
Company of the Year 2011 awards in Russia in the fourth quarter. As its name
suggests, YIT Moskovia operates in the Moscow region.
Volume of business premises construction continues to be low in Russia
YIT's volume in the Russian business premises market was at a low level during
the review period. Marketing of the Gorelovo industrial park close to St.
Petersburg was continued also in the fourth quarter. The competitive advantages
of the area are its good location and completed infrastructure connections, and
customers' interest in the area continued.
Revival of the residential market is slower 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 according to the market situation. YIT's residential
production volume increased in these countries during 2011. Estonia, Latvia,
Lithuania, the Czech Republic and Slovakia accounted for 20 percent (1-12/2010:
11%) of the revenue of International Construction Services for
January-December. Revenue generated in these countries increased by 64 percent
compared to the year before to EUR 96.0 million (1-12/2010: EUR 58.6 million).
The capital tied to plot reserves in the Baltic countries, the Czech Republic
and Slovakia totalled EUR 79.8 million (12/2010: EUR 80.0 million) at the end
of December. The plot reserves included 332,000 (12/2010: 374,000) m2 of floor
area of residential plots and 143,000 (12/2010: 149,000) m2 of floor area of
plots for business premises.
The weaker profitability of competitive tendering compared to residential
development projects and its continued high share of the revenue in the Baltic
countries continued to impair the segment's profitability in the fourth
quarter. YIT aims to shift the focus of its operations further from contract
production to residential development projects with new residential start-ups.
Residential construction in the Baltic countries and Central Eastern Europe,
number of residential units
1-12/1 1-12/1 Change 10-12/ 7-9/11 4-6/11 1-3/11
1 0 11
--------------------------------------------------------------------------------
Sold 364 73 399% 97 111 99 57
--------------------------------------------------------------------------------
Start-ups 526 482 9% 58 152 181 135
--------------------------------------------------------------------------------
Completed 288 106 172% 147 60 0 81
--------------------------------------------------------------------------------
Under construction at 614 376 63% 614 698 611 430
the end of the period
--------------------------------------------------------------------------------
- of which sold at the 171 43 298% 171 183 108 47
end of the period
--------------------------------------------------------------------------------
For sale at the end of 611 449 36% 611 645 609 527
the period
--------------------------------------------------------------------------------
- of which completed 168 116 45% 168 130 106 144
--------------------------------------------------------------------------------
The construction of 526 (1-12/2010: 482) residential units was started in
Estonia, Latvia, Lithuania, the Czech Republic and Slovakia during 2011. YIT
started the construction of a total of 58 residential units in Lithuania and
the Czech Republic during the fourth quarter (10-12/2010: 153). At the end of
December, there were 614 (12/2010: 376) residential units under construction.
During the review period, housing prices increased slightly in the Baltic
countries and remained stable in the Czech Republic and Slovakia.
YIT's residential sales inventory has grown in the Baltic countries, the Czech
Republic and Slovakia, and YIT aims to increase the number of residential units
for sale in accordance with demand. In January-December, a total of 364
(1-12/2010: 73) residential units were sold in these countries, of which 97
were sold in October-December (10-12 /2010: 40). At the end of December, there
were 611 (12/2010: 449) residential units for sale, 168 of these (12/2010: 116)
were completed. The number of residential units completed during 2011 was 288
(1-12/2010: 106).
ENVIRONMENT AND ENERGY
Material and energy usage, waste management and emissions from service vehicles
and transportation are significant environmental issues in YIT's operations.
YIT aims to continuously reduce the environmental impacts of operations and
improve energy efficiency. All waste generated is managed appropriately, and
the aim is to minimise material wastage. The realisation of these objectives is
taken into account in production chain supervision and the training of
subcontractors. The prevention of environmental damage is part of the quality
and safety work. In 2011, ISO 14001-certified business operations covered 47
percent of the Group's revenue (2010: 42%). The certificate helps in developing
environmental management and improving the level of environmental protection
within the company.
The most significant environmental business services offered to customers
include energy-efficient homes, business and commercial premises as well as
services to boost energy efficiency in buildings and industry. In addition, YIT
offers solutions for area- or building-specific energy production and
area-specific waste collection. YIT also participates in the construction of
energy production plants. In 2011, YIT created a three-part action programme
aimed at maintaining its position as a leader in constructing and maintaining
sustainable living and working environments. YIT also established a new
business unit, focusing on the development of infrastructure services related
to wind power. During 2011, YIT implemented several energy-efficiency projects
extensively in the countries where it operates for private as well as public
sector customers.
In addition to the development of its in-house products and services, YIT is
active in networks related to environmentally friendly construction. The global
World Green Building Council is comprised of country-specific local networks in
which YIT is a member in Finland, Sweden, Norway, Germany and Russia. The
networks bring together parties involved in sustainable construction activity,
offer tools and arrange training in the subject matter. As a pioneer in the
field, YIT participates in various research programmes to develop environmental
aspects in construction in several countries. Furthermore, YIT has an in-house
research and development centre in Aachen, Germany, developing, among other
things, new solutions to promote the energy-efficiency of business premises.
PERSONNEL
In 2011, the Group employed 26,254 (1-12/2010: 24,317) people on average. At
the end of the year, the Group employed 25,996 (12/2010: 25,832) people. YIT
employed approximately 1,200 summer employees during the summer of 2011. At the
end of 2011, 88 percent (2010: 88%) of the Group's personnel were male and 12
percent (2010: 12%) female. The personnel expenses for 2011 amounted to a total
of EUR 1,357.2 million (1-12/2010: EUR 1,175.0 million).
The cost effect of YIT's share-based incentive scheme was about EUR 3.4 million
in January-December (1-12/2010: EUR 3.9 million).
Personnel by business segment 12/11 12/10 Change 12/11 9/11 Change
--------------------------------------------------------------------------------
Building Services Northern 15,900 15,844 0% 15,900 16,273 -2%
Europe
--------------------------------------------------------------------------------
Building Services Central Europe 3,506 3,767 -7% 3,506 3,569 -2%
--------------------------------------------------------------------------------
Construction Services Finland 3,429 3,209 7% 3,429 3,416 0%
--------------------------------------------------------------------------------
International Construction 2,753 2,656 4% 2,753 2,837 -3%
Services
--------------------------------------------------------------------------------
Corporate Services 408 356 15% 408 407 0%
--------------------------------------------------------------------------------
YIT Group total 25,996 25,832 1% 25,996 26,502 -2%
--------------------------------------------------------------------------------
Personnel by country 12/11 12/10 Change 12/11 9/11 Change
--------------------------------------------------------------------------------
Finland 9,165 9,209 0% 9,165 9,377 -2%
--------------------------------------------------------------------------------
Sweden 4,770 4,429 8% 4,770 4,790 0%
--------------------------------------------------------------------------------
Norway 3,602 3,505 3% 3,602 3,623 -1%
--------------------------------------------------------------------------------
Germany 2,627 2,816 -7% 2,627 2,677 -2%
--------------------------------------------------------------------------------
Russia 2,498 2,390 5% 2,498 2,516 -1%
--------------------------------------------------------------------------------
Denmark 1,218 1,386 -12% 1,218 1,370 -11%
--------------------------------------------------------------------------------
Baltic countries 1,067 983 9% 1,067 1,092 -2%
--------------------------------------------------------------------------------
Other countries (Central Europe 1,049 1,114 -6% 1,049 1,057 -1%
excluding Germany)
--------------------------------------------------------------------------------
YIT Group total 25,996 25,832 1% 25,996 26,502 -2%
--------------------------------------------------------------------------------
YIT wants to take care of its personnel and be a desired employer in the future
as well. The most important targets for development with regard to its
personnel have been YIT's culture, competence management and administration,
supervisor training, the well-being of employees and induction of new employees
in the field. YIT's culture means, above all, everyday operations guided by the
Group's strong values and ethical guidelines. All of these are promoted across
different functions and countries in accordance with each unit's needs and
development phases.
Occupational safety was a key focus area for YIT in 2011. Efforts to improve
occupational safety have included harmonised guidelines, additional training
and focus on preventive efforts. YIT's management monitors the development of
occupational safety comprehensively. Occupational safety is measured using a
common indicator (number of accidents per one million hours worked), and the
results have improved. In 2011, the accident frequency rate was 14 (2010: 19).
Efforts will be made to improve occupational safety in 2012 as well.
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), Kim Gran, Eino Halonen, 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 AND SHAREHOLDERS
The company has one series of shares. Each share carries one vote and confers
an equal right to a dividend.
Share capital and number of shares
YIT Corporation's share capital and the number of shares outstanding did not
change during 2011. 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
purchase the company's shares as proposed by the Board of Directors. In
addition to this, the Board of Directors has a valid share issue authorisation
issued by YIT's Annual General Meeting on March 10, 2010. The share issue
authorisation also includes an authorisation to decide on the conveyance of
treasury shares.
YIT Corporation held 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
during the review period. In the share issue, 196,910 YIT Corporation shares
were issued and conveyed without consideration to the key persons participating
in the Share Ownership Plan according to the terms and conditions of the plan.
By the end of 2011, 4,324 shares had been returned to YIT. At the end of the
year, the company held 1,952,414 own shares. During 2011, no shares in the
parent company were owned by subsidiaries.
At year end, 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 2011
was EUR 12.38 (December 30, 2010: EUR 18.65). YIT's share price decreased by
approximately 34 percent during 2011. The highest price of the share in 2011
was EUR 21.92 (1-12/2010: EUR 19.00), the lowest was EUR 10.04 (1-12/2010: EUR
12.98) and the average price was EUR 15.28 (1-12/2010: EUR 16.35). Share
turnover on Nasdaq OMX in January-December amounted to 151,023 thousand shares
(1-12/2010: 127,537 thousand). The value of turnover was EUR 2,314.0 million
(1-12:2010: EUR 2,085.0 million), source: Nasdaq OMX.
In addition to the Helsinki Stock Exchange, YIT shares are also traded on other
market places, such as Chi-X, BATS and Turquoise. During 2011, the alternative
market places increased their share of the annual trade volume in the YIT
share. During January-December, 40,504 thousand YIT Corporation shares changed
hands in alternative market places (1-12/2010: 21,580 thousand), corresponding
to approximately 21 percent of the total share trade (1-12/2010: 14%). Of the
alternative market places, YIT shares changed hands particularly in Chi-X,
which accounted for approximately 12 percent of the full-year total trading
volume (1-12/2010: 9%). Also, 240 thousand YIT Corporation shares also changed
hands in OTC transactions (1-12/2010: 62 thousand), source: Nasdaq OMX.
YIT Corporation's market capitalisation at the end of the review period was EUR
1,550.9 million (12/2010: EUR 2,332.7 million). The market capitalisation has
been calculated excluding the shares held by the company.
Number of shareholders and flagging notifications
At the end of December 2011, the number of registered shareholders was 36,547
(12/2010: 32,476). The number of private investors increased by approximately
3,500 during 2011. At the end of December, a total of 32.2 percent (12/2010:
37.9%) of the shares were owned by nominee-registered and non-Finnish
investors.
During 2011, the company received no "flagging notifications" of change in
ownership in YIT Corporation in accordance with Chapter 2, section 9 of the
Securities Market Act.
MAJOR SHORT-TERM BUSINESS RISKS AND RISK MANAGEMENT
YIT has specified the major risk factors and their management from the point of
view of the Group as a whole, taking the special characteristics of YIT's
business operations and environment into consideration. Risks are divided into
strategic, operational, financial and event risks.
YIT has developed the Group's business structure to be balanced and more
tolerant of economic fluctuations. The share of steadily developing service and
maintenance operations has been increased. Cash flow-generating (building
system and industrial services, contracting) and capital-intensive business
operations (residential and commercial development production) balance the
risks related to business operations and the use of capital and enable better
risk management at the Group level.
Operations have been expanded geographically so that economic fluctuations
impact operations at different times in different markets. Continuous
monitoring and analysis as well as alternative scenarios and action plans based
on them make it possible to react quickly to changes in the operating
environment and also to utilise the business opportunities provided by the
changes.
The Group's aim is to grow profitably, both organically and through
acquisitions. 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 and
changes in the availability of housing loans and property financing are key
risks related to the demand for residential units and business premises.
YIT tests the value of its plots as required by IFRS accounting principles.
Plot reserves are measured at acquisition cost and the plot value is impaired
when it is estimated that the building being constructed on the plot will be
sold at a price lower than the sum of the price of the plot and the
construction costs. No write-offs were made to plots during 2011.
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 485.7 million (9/2011: EUR 472.7
million) at the end of the period. The amount of net equity investments at the
end of the period was EUR 400.0 million (9/2011: EUR 374.6 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 85.7 million (9/2011: EUR 90.7 million) at the end
of the period, and this exposure was hedged in full. The differences in the
interest rates between the euro and ruble have an effect on hedging costs and
therefore net financial expenses.
Possible event risks include accidents related to personal or information
security and sudden and unforeseen material damage to premises, project sites
and other property, resulting from, for example, fire, collapse 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 will be published in the Annual Report 2011. Financing risks
are described in more detail in the notes to the Financial Statements for 2011.
OUTLOOK FOR 2012
YIT estimates that in 2012, the combined revenue of the business segments will
remain at the level of 2011 and that operating profit will increase compared to
2011.
The first quarter is typically the softest due to the normal seasonal nature of
the business, but with the improvement of profitability with the progress of
the streamlining programme, the Building Services Northern Europe business
segment will support the growth of YIT's revenue for 2012 during the last two
quarters of the year.
The high 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-level reporting, i.e. recognition of
income based on the percentage of completion.
Building Services Northern Europe
In the Nordic countries, the market situation for building services varies by
country. According to an estimate by the construction industry's Euroconstruct
expert network, the service and maintenance market is estimated to grow
slightly in all Nordic countries in 2012 (November 2011 report). The increase
in technology in buildings increases the need for new services. The demand for
energy efficiency services is expected to remain stable. The public sector is
expected to continue the outsourcing of real estate services.
According to the Euroconstruct forecast, the building system project market in
Finland and Denmark is expected to remain soft in 2012. New investments have
not increased much due to the continued low level of construction of business
premises and offices. According to an estimate by Prognoscentret, the project
market in Sweden and Norway will increase at a reasonable rate in 2012.The
construction of business premises is estimated to increase both in Sweden and
Norway, which will open up new opportunities for YIT. The building system
market is, however, post-cyclic by nature. The public sector will invest less
in new buildings than the year before, with governments aiming to balance their
budgets.
In the Baltic countries and Russia, both the project and service market is
estimated to develop and grow at a steady rate.
An investment survey by the Confederation of Finnish Industries EK,
manufacturing industry and energy sector investments in Finland will increase
slightly in 2012. The investments are mainly made to replace capacity, and the
amount of expansion investments is estimated to remain low. The industrial
maintenance market is estimated to remain stable.
Building Services Central Europe
In Building Services Central Europe, the service and maintenance market as well
as the project market, which is dependent on new investments, are expected to
grow at the same rates. The opportunities for growth in service and maintenance
are favourable, particularly in Germany and Austria. The building system
services market in Central Eastern Europe (Poland, the Czech Republic and
Romania) is developing.
New investments in building systems have recovered to a relatively good level
in the countries where YIT operates in Central Europe, but especially in
Germany, Austria and Poland. In spite of market uncertainty, new investments in
building systems are expected to increase by 1-2 percent in 2012.
Growth in the demand for energy-efficiency services is possible over the next
few years with high energy prices and tightening environmental legislation,
particularly in Austria and Germany. Investments by industrial customers are at
a good level, and the demand for business premises has also increased in 2011.
During the most recent slump, the building system services market in Central
Eastern Europe decreased significantly due to a decrease in foreign investments
and low domestic demand. In Poland, the market is expected to continue to
recover, but in the Czech Republic the market is expected to improve slowly.
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 for 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
The weakening of the European economic outlook has resulted in increasing
uncertainty in the Finnish construction market. According to VTT Technical
Research Centre of Finland's estimate, construction will decrease by
approximately 2 percent in 2012. According to the construction industry's
estimate, construction will remain at a relatively favourable level during the
first months of the year due to projects that have already started up. However,
construction may decline towards the end of the year.
According to the construction industry's forecast, the construction of 27,000
residential units will start in Finland during 2012 (2011: 30,500). The number
of completed but unsold residential units is still relatively low. According to
a report published by VTT Technical Research Centre of Finland in January, the
annual need for the production of new residential units amounts to
24,000-29,000 residential units in the long term. YIT's goal is to strengthen
its position as the leading housing developer in Finland.
Residential demand continues to be supported by low interest rates, the
relatively stable employment situation and migration to growth centres.
Interest rates are estimated to decrease slightly in 2012. Migration will
continue to be strong in Finland, with people increasingly moving to growth
centres. Furthermore, the population and the number of household-dwelling units
will increase with continued immigration and the increasing number of
one-person households.
YIT estimates that housing prices will remain stable in 2012. The increase in
construction costs is estimated to level off in 2012.
According to VTT's estimate, the volume of office construction will decrease by
approximately 8 to 9 percent during 2012. Underutilisation rates of offices
continue to be rather high after the last recession, with the building stock
also including old office premises. YIT estimates that the demand will focus on
modern and energy-efficient offices. According to the VTT estimate, the volume
of business premises construction will begin to decrease. The shift of the
retail trade towards larger and larger business properties and the expansion of
foreign retail chains in Finland maintain the volume of construction.
Underutilisation rates of business premises are rather low. The decrease in the
willingness to take risks due to the European credit crunch may be reflected in
the level of new investments in the business premises market in 2012.
Infrastructure construction is estimated to begin to increase moderately in
2012, and especially the volume of road construction is estimated to pick up.
Rail and metro construction is expected to continue to increase, at least
during 2012 and 2013. The market situation of rock construction is expected to
remain favourable due to mine investments and underground rock excavation
projects. The road maintenance market is expected to remain stable, and new
tenders will open opportunities for YIT to strengthen its market share.
International Construction Services
The volume of residential construction is estimated to increase in Russia in
2012. According to an estimate by the Russian government, residential
construction in Russia will amount to approximately 67 million square metres,
showing an increase of approximately 5 percent on the previous year.
Moscow, the Moscow region and St. Petersburg make up the largest residential
market in Russia: these areas account for approximately one-fifth of all
residential construction. Even though the volume of residential construction
has been increasing during the past few years, there is still a shortage of new
residential units in certain areas. Residential demand has remained favourable
due to strong economic development in Russia, good consumer confidence and
favourable development in the housing loan market. However, housing loan
interest rates began to increase at the end of 2011.
The future outlook for Russian residential construction is good. Living space
per person is still clearly lower than in Western Europe and the housing is in
poor condition, which creates the need for new, high-quality housing.
Furthermore, the number of household-dwelling units is expected to increase,
and the middle class to increase as a share of the population. The development
of the housing loan market in Russia has also contributed to the demand for new
residential units. YIT has promoted the availability of loans to consumers
through extensive cooperation with banks. YIT expects housing prices to
increase in Russia in 2012. YIT is the largest Western residential developer in
Russia, and its aim is to strengthen its market position further in the
selected YIT cities.
Construction of business premises is expected to grow at a moderate rate in
2012. The largest individual market is St. Petersburg, where YIT will continue
the marketing and sales of the Gorelovo industrial park.
In the Baltic countries, residential demand has been increasing as a result of
improved consumer confidence and the employment situation. VTT estimates that
the number of residential units completed in 2012 will increase to 11,200 or by
approximately 9 percent from the previous year.
According to VTT's forecast, the number of residential start-ups in the Czech
Republic is expected to be on a par with the previous year in 2012. Interest
and unemployment rates are increasing, which typically decreases the demand for
residential units. Residential prices have remained stable in Slovakia. VTT
estimates that residential start-ups will remain low in 2012 due to the high
stocks of unsold residential units. The residential market is supported by the
favourable economic growth in Slovakia and the interest rates remaining low.
EVENTS AFTER THE FINANCIAL PERIOD
In December, YIT agreed on two acquisitions in Austria, during the last
quarter. YIT agreed to purchase P&P Kälteanlagenbau GmbH, a cooling solutions
and services provider, and WM Haustechnik GmbH, an HVAC solution provider. P&P
Kälteanlagenbau GmbH has approximately 50 employees, and its revenue for 2010
was approximately EUR 11 million. The annual revenue of WM Haustechnik GmbH is
approximately EUR 1 million. The companies acquired in Austria will be
consolidated in the Group as of January 1, 2012.
YIT has acquired the entire share capital of Elektriska Installationer i
Finspång AB and Kraftmontage i Finspång AB in January 2012. The companies have
approximately 20 employees and their combined annual revenues amount to
approximately EUR 2 million.
The estimated acquisition price of the companies is approximately EUR 3.4
million. The acquisitions are not expected to result in goodwill.
BOARD OF DIRECTORS' PROPOSAL FOR THE DISTRIBUTION OF DISTRIBUTABLE EQUITY
The distributable equity of YIT Corporation on December 31, 2011 is:
Retained earnings
208,652,040.26
Profit/loss for the period
98,200,896.78
Retained earnings, total
306,852,937.04
Reserve of unrestricted equity
2,825,024.41
Distributable equity, total
309,677,961.45
The Board of Directors proposes to the Annual General Meeting that the
distributable equity be disposed of as follows:
Payment of a dividend to shareholders EUR 0.70 per share, or 87,689,705.60
Remains in distributable equity
221,988,255.85
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.
Helsinki, February 1, 2012
Henrik Ehrnrooth Reino Hanhinen
Chairman Vice Chairman
Kim Gran Eino Halonen
Antti Herlin Satu Huber
Michael Rosenlew Juhani Pitkäkoski
President and
CEO
FINANCIAL STATEMENT BULLETIN JAN 1 - DEC 31, 2011: TABLES
The information presented in the Financial Statements bulletin 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 - Dec 31, 2011
Consolidated income statement January 1 - Dec 31, 2011
Statement of comprehensive income January 1 - Dec 31, 2011
Consolidated income statement Oct 1 - Dec 31, 2011
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
3. Notes
Accounting principles of the Interim report, exchange rates
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
1. KEY FIGURES OF YIT GROUP
KEY FIGURES (GROUP REPORTING, IFRIC 15)
12/11 12/10 Change
--------------------------------------------------------------------------------
Earnings per share, EUR 0.99 1.12 -12%
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 0.99 1.12 -12%
--------------------------------------------------------------------------------
Equity per share, EUR 7.33 7.04 4%
--------------------------------------------------------------------------------
Average share price during the period, EUR 15.28 16.35 -2%
--------------------------------------------------------------------------------
Share price at the end of period, EUR 12.38 18.65 -34%
--------------------------------------------------------------------------------
Market capitalization, MEUR 1,550.9 2,332.7 -34%
--------------------------------------------------------------------------------
Weighted average share-issue adjusted number of shares 125,210 125,078 0%
outstanding, thousands
--------------------------------------------------------------------------------
Weighted average share-issue adjusted number of shares 125,210 125,078 0%
outstanding, thousands, diluted
--------------------------------------------------------------------------------
Share-issue adjusted number of shares outstanding at 125,271 125,078 0%
end of period, thousands
--------------------------------------------------------------------------------
Net interest-bearing debt at the end of period, MEUR 740.4 640.9 16%
--------------------------------------------------------------------------------
Return on investment, from the last 12 months, % 12.0 14.4 -17%
--------------------------------------------------------------------------------
Equity ratio, % 30.2 31.9 -5%
--------------------------------------------------------------------------------
Gearing ratio, % 80.4 72.6 11%
--------------------------------------------------------------------------------
Net debt / Operting profit before depreciations and 3.0 2.5 20%
impairments
--------------------------------------------------------------------------------
Gross capital expenditures, MEUR 48.7 129.7 -62%
--------------------------------------------------------------------------------
% of revenue 1.1 3.4
--------------------------------------------------------------------------------
Unrecognised order backlog at the end of period, MEUR 4,148.6 3,535.7 17%
--------------------------------------------------------------------------------
of which order backlog outside Finland 2,066.9 1,857.7 11%
--------------------------------------------------------------------------------
Average number of personnel 26,254 24,317 8%
--------------------------------------------------------------------------------
YIT GROUP FIGURES BY QUARTER (GROUP REPORTING, IFRIC 15)
10-12/1 7-9/11 4-6/11 1-3/11 10-12/1 7-9/10 4-6/10 1-3/10
1 0
--------------------------------------------------------------------------------
Revenue, 1,190.4 1,084.8 1,137.2 969.7 1,338.0 829.6 854.8 765.3
MEUR
--------------------------------------------------------------------------------
Operatin 57.5 35.4 67.9 39.2 116.4 33.9 35.9 33.9
g
profit,
MEUR
--------------------------------------------------------------------------------
% of 4.8 3.3 6.0 4.0 8.7 4.1 4.2 4.4
revenue
--------------------------------------------------------------------------------
Financia 1.4 0.0 0.3 2.4 0.7 1.1 1.1 0.7
l
income,
MEUR
--------------------------------------------------------------------------------
Exchange -2.1 0.0 -0.8 -1.3 -0.8 -2.3 -1.9 -2.3
rate
differe
nces,
MEUR
--------------------------------------------------------------------------------
Financia -6.9 -7.8 -4.4 -5.6 -3.1 -5.7 -7.2 -5.6
l
expense
s, MEUR
--------------------------------------------------------------------------------
Profit 49.9 27.6 63.0 34.7 113.2 27.0 27.9 26.7
before
taxes,
MEUR
--------------------------------------------------------------------------------
% of 4.2 2.5 5.7 3.6 8.5 3.3 3.3 3.5
revenue
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Balance 3,504.5 3,418.6 3,387.4 3,274.8 3,117.1 3,234.6 3,067.9 2,994.8
sheet
total,
MEUR
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings 0.27 0.15 0.37 0.20 0.65 0.16 0.16 0.15
per
share,
EUR
--------------------------------------------------------------------------------
Equity 7.33 6.93 7.00 6.64 7.04 6.30 6.35 6.08
per
share,
EUR
--------------------------------------------------------------------------------
Share 12.38 11.33 17.24 20.92 18.65 17.39 14.78 17.10
price
at end
of
period,
EUR
--------------------------------------------------------------------------------
Market 1,550.9 1,419.3 2,159.7 2,616.6 2,332.7 2,175.1 1,848.7 2,138.8
capital
ization,
MEUR
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return 12.0 15.6 15.7 14.0 14.4 10.6 10.7 11.3
on
investm
ent,
from
the
last 12
months,
%
--------------------------------------------------------------------------------
Equity 30.2 29.2 29.7 28.5 31.9 29.2 31.8 30.2
ratio,
%
--------------------------------------------------------------------------------
Net 740.4 755.0 702.7 626.1 640.9 636.6 514.8 496.0
interes
t-bearin
g debt
at the
end of
period,
MEUR
--------------------------------------------------------------------------------
Gearing 80.4 86.8 79.9 75.2 72.6 80.5 64.7 65.0
ratio,
%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gross 7.1 18.3 14.6 8.7 30.7 81.0 8.7 9.4
capital
expendi
tures,
MEUR
--------------------------------------------------------------------------------
Order 4,148.6 3,738.3 3,796.9 3,699.0 3,535.7 3,727.5 3,329.2 3,152.5
backlog
at the
end of
period,
MEUR
--------------------------------------------------------------------------------
Personne 25,996 26,502 26,807 25,748 25,832 25,943 23,877 23,211
l at the
end of
period
--------------------------------------------------------------------------------
SEGMENT INFORMATION BY QUARTER (SEGMENT REPORTING, POC)
Revenue by business segment (EUR million)
10-12/1 7-9/11 4-6/11 1-3/11 10-12/1 7-9/10 4-6/10 1-3/10
1 0
--------------------------------------------------------------------------------
Building 600.1 511.9 509.4 476.2 519.2 416.8 460.8 406.8
Services
Northern
Europe
--------------------------------------------------------------------------------
Building 200.3 210.8 191.1 177.1 258.7 134.2 86.9 70.4
Services
Central
Europe
--------------------------------------------------------------------------------
Constructio 335.7 269.4 332.3 289.5 294.2 279.7 275.2 252.9
n Services
Finland
--------------------------------------------------------------------------------
Internation 145.9 122.5 120.5 100.3 139.7 111.9 112.1 106.9
al
Constructi
on Services
--------------------------------------------------------------------------------
Other items -17.5 -18.1 -16.4 -16.2 -24.2 -18.4 -20.7 -16.2
--------------------------------------------------------------------------------
YIT's 1,264.5 1,096.5 1,136.9 1,026.9 1,187.6 924.2 914.3 820.8
segments
total
--------------------------------------------------------------------------------
IFRIC 15 -74.1 -11.6 0.3 -57.2 150.4 -94.6 -59.6 -55.5
adjustment
s
--------------------------------------------------------------------------------
YIT Group 1,190.4 1,084.9 1,137.2 969.7 1,338.0 829.6 854.7 765.3
total
--------------------------------------------------------------------------------
Operating profit by business segment (EUR million)
10-12/ 7-9/11 4-6/11 1-3/11 10-12/ 7-9/10 4-6/10 1-3/10
11 10
--------------------------------------------------------------------------------
Building 23.0 19.9 18.8 17.1 23.5 20.2 25.1 19.9
Services
Northern Europe
--------------------------------------------------------------------------------
Building 9.3 7.9 12.1 4.0 8.9 2.7 3.1 1.7
Services
Central Europe
--------------------------------------------------------------------------------
Construction 32.1 21.1 32.8 25.6 29.4 29.3 26.4 23.1
Services
Finland
--------------------------------------------------------------------------------
International 17.4 -0.9 12.3 8.4 13.4 9.2 7.6 4.6
Construction
Services
--------------------------------------------------------------------------------
Other items -5.6 -4.4 -5.7 -4.7 -5.5 -3.4 -5.1 -4.8
--------------------------------------------------------------------------------
YIT's segments 76.2 43.6 70.3 50.4 69.7 57.9 57.1 44.5
total
--------------------------------------------------------------------------------
IFRIC 15 -18.7 -8.2 -2.4 -11.2 46.7 -24.0 -21.2 -10.6
adjustments
--------------------------------------------------------------------------------
YIT Group total 57.5 35.4 67.9 39.2 116.4 33.9 35.9 33.9
--------------------------------------------------------------------------------
Operating profit margin by business segment (%)
10-12/ 7-9/11 4-6/11 1-3/11 10-12/ 7-9/10 4-6/10 1-3/10 11 10
--------------------------------------------------------------------------------
Building 3.8 3.9 3.7 3.6 4.5 4.8 5.4 4.9
Services
Northern Europe
--------------------------------------------------------------------------------
Building 4.6 3.7 6.3 2.3 3.4 2.0 3.6 2.4
Services
Central Europe
--------------------------------------------------------------------------------
Construction 9.6 7.8 9.9 8.8 10.0 10.5 9.6 9.1
Services
Finland
--------------------------------------------------------------------------------
International 11.9 -0.7 10.2 8.4 9.6 8.2 6.8 4.3
Construction
Services
--------------------------------------------------------------------------------
YIT's segments 6.0 4.0 6.2 4.9 5.9 6.3 6.2 5.4
total
--------------------------------------------------------------------------------
YIT Group total 4.8 3.3 6.0 4.0 8.7 4.1 4.2 4.4
--------------------------------------------------------------------------------
International Construction Services segment's operating profit is weakened by a
provision of EUR 10 million related to the rectifying of the ammonia problem
booked in the third quarter of 2011.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)
12/11 9/11 6/11 3/11 12/10 9/10 6/10 3/10
--------------------------------------------------------------------------------
Building 913.1 886.1 879.5 804.9 757.4 743.0 748.5 697.9
Service
s
Norther
n Europe
--------------------------------------------------------------------------------
Building 449.5 523.9 554.1 573.2 507.0 589.1 276.8 266.3
Service
s
Central
Europe
--------------------------------------------------------------------------------
Construc 1,493.6 1,289.3 1,239.5 1,176.0 1,173.2 1,205.2 1,154.7 905.4
tion
Service
s
Finland
--------------------------------------------------------------------------------
Internat 962.5 850.1 896.4 862.7 870.8 884.8 946.8 1,013.2
ional
Constru
ction
Service
s 1)
--------------------------------------------------------------------------------
Other -66.0 -60.3 -60.2 -61.2 -58.3 -55.2 -59.4 -45.8
items
--------------------------------------------------------------------------------
YIT's 3,752.7 3,489.0 3,509.4 3,355.6 3,250.1 3,366.9 3,067.4 2,837.0
segment
s total
--------------------------------------------------------------------------------
IFRIC 15 395.9 249.3 287.5 343.4 285.6 360.6 261.8 315.5
adjustm
ents
--------------------------------------------------------------------------------
YIT 4,148.6 3,738.3 3,796.9 3,699.0 3,535.7 3,727.5 3,329.2 3,152.5
Group
total
--------------------------------------------------------------------------------
1) At the end of December 2011, the value of projects that were still suspended
amounted to EUR 86.5 million (12/10: EUR 137.1 million).
Key figures of segment reporting by quarter (POC)
10-12/ 7-9/11 4-6/11 1-3/11 10-12/ 7-9/10 4-6/10 1-3/10
11 10
--------------------------------------------------------------------------------
Profit before 68.6 35.8 65.5 45.9 66.5 50.9 49.1 37.3
taxes, EUR
million
--------------------------------------------------------------------------------
Profit for the 51.8 24.5 47.6 32.7 47.2 36.4 35.5 26.4
review period
,EUR million
--------------------------------------------------------------------------------
Earnings per 0.41 0.20 0.38 0.26 0.37 0.29 0.29 0.21
share, EUR
--------------------------------------------------------------------------------
2. CONSOLIDATED FINANCIAL STATEMENTS JAN 1 - DEC 31, 2011 (GROUP REPORTING,
IFRIC 15)
CONSOLIDATED INCOME STATEMENT JAN 1 - DEC 31, 2011 (EUR million)
1-12/11 1-12/10 Change
--------------------------------------------------------------------------------
Revenue 4,382.1 3,787.6 16%
--------------------------------------------------------------------------------
of which activities outside Finland 2,607.7 2,343.6
--------------------------------------------------------------------------------
Other operating income and expenses -4,142.9 -3,531.1 17%
--------------------------------------------------------------------------------
Share of results of associated companies 0.4 -0.5 -180%
--------------------------------------------------------------------------------
Depreciation and impairments -39.6 -35.9 10%
--------------------------------------------------------------------------------
Operating profit 200.0 220.1 -9%
--------------------------------------------------------------------------------
% of revenue 4.6 5.8
--------------------------------------------------------------------------------
Financial income 4.2 3.7 14%
--------------------------------------------------------------------------------
Exchange rate differences -4.1 -7.3 -44%
--------------------------------------------------------------------------------
Financial expenses -24.8 -21.7 14%
--------------------------------------------------------------------------------
Profit before taxes 175.3 194.8 -10%
--------------------------------------------------------------------------------
% of revenue 4.0 5.1
--------------------------------------------------------------------------------
Income taxes -50.2 -54.2 -7%
--------------------------------------------------------------------------------
Profit for the report period 125.1 140.6 -11%
--------------------------------------------------------------------------------
% of revenue 2.9 3.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 124.5 140.3 -11%
--------------------------------------------------------------------------------
Minority interests 0.6 0.3 100%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share attributable to the equity
holders of the parent company
--------------------------------------------------------------------------------
Earnings per share, EUR 0.99 1.12 -12%
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 0.99 1.12 -12%
--------------------------------------------------------------------------------
STATEMENT OF COMPREHENSIVE INCOME JAN 1 - DEC 31, 2011 (EUR million)
1-12/11 1-12/10 Change
--------------------------------------------------------------------------------
Profit for the report period 125.1 140.6 -11%
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Cash flow hedges -2.0 -1.0 100%
--------------------------------------------------------------------------------
- Deferrred tax 0.4 0.3 33%
--------------------------------------------------------------------------------
Change in fair value for available for sale 0.5
investments
--------------------------------------------------------------------------------
- Deferrred tax -0.1
--------------------------------------------------------------------------------
Change in translation differences -8.4 29.2 -129%
--------------------------------------------------------------------------------
Other change 0.1 0.0
--------------------------------------------------------------------------------
Other comprehensive income, total -9.7 28.5 -134%
--------------------------------------------------------------------------------
Total comprehensive result 115.4 169.1 -32%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 114.5 168.7 -32%
--------------------------------------------------------------------------------
Non-controlling interest 0.9 0.4 125%
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT OCT 1 - DEC 31, 2011 (EUR million)
10-12/11 10-12/20 Change
10
--------------------------------------------------------------------------------
Revenue 1,190.3 1,338.0 -11%
--------------------------------------------------------------------------------
of which activities outside Finland 734.5 962.2 -24%
--------------------------------------------------------------------------------
Other operating income and expenses -1,123.3 -1,211.5 -7%
--------------------------------------------------------------------------------
Share of results of associated companies 0.5 -0.2 -350%
--------------------------------------------------------------------------------
Depreciation and impairments -10.0 -9.9 1%
--------------------------------------------------------------------------------
Operating profit 57.5 116.4 -51%
--------------------------------------------------------------------------------
% of revenue 4.8 8.7
--------------------------------------------------------------------------------
Financial income 1.4 0.7 100%
--------------------------------------------------------------------------------
Exchange rate differences -2.1 -0.8 163%
--------------------------------------------------------------------------------
Financial expenses -6.9 -3.1 123%
--------------------------------------------------------------------------------
Profit before taxes 49.9 113.2 -56%
--------------------------------------------------------------------------------
% of revenue 4.2 8.5
--------------------------------------------------------------------------------
Income taxes -14.9 -30.6 -51%
--------------------------------------------------------------------------------
Profit for the report period 35.1 82.6 -58%
--------------------------------------------------------------------------------
% of revenue 2.9 6.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to
--------------------------------------------------------------------------------
Equity holders of the parent company 34.9 81.5 -57%
--------------------------------------------------------------------------------
Minority interests 0.2 1.1 -82%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share attributable to the equity
holders of the parent company
--------------------------------------------------------------------------------
Earnings per share, EUR 0.27 0.65 -58%
--------------------------------------------------------------------------------
Diluted earnings per share, EUR 0.27 0.65 -58%
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET (EUR million)
12/11 12/10 Change
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Property, plant and equipment 110.8 106.7 4%
--------------------------------------------------------------------------------
Goodwill 347.5 350.9 -1%
--------------------------------------------------------------------------------
Other intangible assets 54.1 50.5 7%
--------------------------------------------------------------------------------
Shares in associated companies 3.1 2.7 15%
--------------------------------------------------------------------------------
Other investments 3.8 3.4 12%
--------------------------------------------------------------------------------
Other receivables 18.8 15.9 18%
--------------------------------------------------------------------------------
Deferred tax assets 60.3 44.7 35%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Inventories 1,672.6 1,484.9 13%
--------------------------------------------------------------------------------
Trade and other receivables 1,027.3 889.3 16%
--------------------------------------------------------------------------------
Cash and cash equivalents 206.1 148.3 39%
--------------------------------------------------------------------------------
Assets held for sale 19.8
--------------------------------------------------------------------------------
Total assets 3,504.5 3,117.1 12%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders of the parent
company
--------------------------------------------------------------------------------
Share capital 149.2 149.2
--------------------------------------------------------------------------------
Other equity 769.5 730.8 5%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-controlling interest 2.5 2.9 -14%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity 921.1 882.9 4%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 88.3 77.2 14%
--------------------------------------------------------------------------------
Pension liabilities 26.5 26.9 -1%
--------------------------------------------------------------------------------
Provisions 54.1 49.5 9%
--------------------------------------------------------------------------------
Borrowings 522.9 504.6 4%
--------------------------------------------------------------------------------
Other liabilities 47.9 10.3 365%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Advances received 458.3 349.3 13%
--------------------------------------------------------------------------------
Trade and other payables 909.3 869.5 5%
--------------------------------------------------------------------------------
Provisions 52.3 45.1 16%
--------------------------------------------------------------------------------
Current borrowings 423.6 284.6 49%
--------------------------------------------------------------------------------
Liabilities of assets held for sale 17.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 3,504.5 3,117.1 12%
--------------------------------------------------------------------------------
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 124.5 124.5 0.6
125.1
for
the
perio
d
--------------------------------------------------------------------------------
-----
Other
compr
ehensi
ve
incom
e:
--------------------------------------------------------------------------------
-----
Change -2.0 -2.0
-2.0
in
the
fair
value
of
intere
st
deriv
atives
--------------------------------------------------------------------------------
-----
- 0.4 0.4
0.4
Defer
red
tax
asset
--------------------------------------------------------------------------------
-----
Change 0.5 0.5
0.5
in
fair
value
--------------------------------------------------------------------------------
-----
- -0.1 -0.1
-0.1
Defer
rred
tax
--------------------------------------------------------------------------------
-----
Change -9.1 0.4 -8.7 0.3
-8.4
in
trans
lation
diffe
rences
--------------------------------------------------------------------------------
-----
Other -0.1 -0.1
-0.1
chang
e
--------------------------------------------------------------------------------
-----
Compre 0.0 -0.1 0.0 -9.1 -1.2 0.0 124.9 114.5 0.9
115.4
hensiv
e
incom
e,
total
--------------------------------------------------------------------------------
-----
Transa
ctions
with
owner
s
--------------------------------------------------------------------------------
-----
Divide -81.3 -81.3 -0.2
-81.5
nd
paid
--------------------------------------------------------------------------------
-----
Share- 2.8 0.9 0.7 4.4
4.4
based
incen
tive
schem
e
--------------------------------------------------------------------------------
-----
Transa 0.0 0.0 2.8 0.0 0.0 0.9 -80.6 -76.9 -0.2
-77.1
ctions
with
owner
s,
total
--------------------------------------------------------------------------------
-----
Change
s in
owner
ship
share
s in
subsi
diarie
s
--------------------------------------------------------------------------------
-----
Change 1.0 1.0 -1.0
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 1.0 1.0 -1.0
0.0
s in
owner
ship
share
s in
subsi
diarie
s,
total
--------------------------------------------------------------------------------
-----
Equity 149.2 1.9 2.8 -23.4 -3.6 -9.7 801.5 918.7 2.5
921.1
on
Decem
ber
31,
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 140.3 140.3 0.3
140.6
for
the
perio
d
--------------------------------------------------------------------------------
-----
Other
compr
ehensi
ve
incom
e:
--------------------------------------------------------------------------------
-----
Change -1.0 -1.0
-1.0
in
the
fair
value
of
intere
st
deriv
atives
--------------------------------------------------------------------------------
-----
- 0.3 0.3
0.3
Defer
red
tax
asset
--------------------------------------------------------------------------------
-----
Change 28.2 0.9 29.1 0.1
29.2
in
trans
lation
diffe
rences
--------------------------------------------------------------------------------
-----
Compre 28.2 -0.7 141.2 168.7 0.4
169.1
hensiv
e
incom
e,
total
--------------------------------------------------------------------------------
-----
Transa
ctions
with
owner
s
--------------------------------------------------------------------------------
-----
Divide -50.5 -50.5 -0.8
-51.3
nd
paid
--------------------------------------------------------------------------------
-----
Purcha -11.6 11.6 0.0
0.0
se of
treas
ury
share
s
--------------------------------------------------------------------------------
-----
Transf 0.3 -0.3 0.0
0.0
er
from
retai
ned
earni
ngs
--------------------------------------------------------------------------------
-----
Share 0.9 0.9
0.9
incen
tive
schem
e
--------------------------------------------------------------------------------
-----
Transa 0.0 0.3 -11.6 0.0 0.0 0.0 -38.3 -49.6 -0.8
-50.4
ctions
with
owner
s,
total
--------------------------------------------------------------------------------
-----
Change
s in
inter
ests
in
subsi
diarie
s
--------------------------------------------------------------------------------
-----
Change -1.0 -1.0 1.0
0.0
s in
holdi
ngs in
subsi
diarie
s
- no
loss
of
contr
ol
--------------------------------------------------------------------------------
-----
Non-co 0.1
0.1
ntroll
ing
inter
ests
from
busin
ess
combi
nation
s
--------------------------------------------------------------------------------
-----
Change -1.0 -1.0 1.1
0.1
s in
inter
ests
in
subsi
diarie
s
--------------------------------------------------------------------------------
-----
Balanc 149.2 2.0 0.0 -14.2 -2.4 -10.6 756.1 880.1 2.9
882.9
e at
31
Decem
ber
2010
--------------------------------------------------------------------------------
-----
CONSOLIDATED CASH FLOW STATEMENT (EUR million)
1-12/11 1-12/10 Change
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
Net profit for the period 125.1 140.6 -11%
--------------------------------------------------------------------------------
Reversal of accrual-based items 143.5 130.3 10%
--------------------------------------------------------------------------------
Change in working capital
--------------------------------------------------------------------------------
Change in trade and other receivables -159.2 -77.3 106%
--------------------------------------------------------------------------------
Change in inventories -196.3 60.3 -426%
--------------------------------------------------------------------------------
Change in current liabilities 189.4 -135.4 -239%
--------------------------------------------------------------------------------
Change in working capital, total -166.1 -152.4 9%
--------------------------------------------------------------------------------
Interest paid -34.3 -27.5 25%
--------------------------------------------------------------------------------
Other financial items, net -5.3 -37.2 -86%
--------------------------------------------------------------------------------
Interest received 4.1 3.5 17%
--------------------------------------------------------------------------------
Taxes paid -49.6 -50.5 -2%
--------------------------------------------------------------------------------
Net cash generated from operating activities 17.4 6.8 146%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------
Acquisition of subsidiaries, net of cash -8.8 -45.4 -81%
--------------------------------------------------------------------------------
Purchase of property, plant and equipment -30.0 -19.9 51%
--------------------------------------------------------------------------------
Purchase of intangible assets -8.9 -8.4 6%
--------------------------------------------------------------------------------
Increases in other investments -0.1 -1.3 -92%
--------------------------------------------------------------------------------
Disposal of subsidiaries, net of cash 5.9
--------------------------------------------------------------------------------
Proceeds from sale of fixed assets 4.5 6.5 31%
--------------------------------------------------------------------------------
Proceeds from sale of other investments 2.7 0.0
--------------------------------------------------------------------------------
Net cash used in investing activities -34.7 -68.5 -49%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating cash flow after investments -17.3 -61.7 -72%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing activities
--------------------------------------------------------------------------------
Change in current liabilities 139.4 34.2 308%
--------------------------------------------------------------------------------
Proceeds from borrowings 175.0 100.0 75%
--------------------------------------------------------------------------------
Repayments of borrowings -157.4 -50.4 212%
--------------------------------------------------------------------------------
Payments of financial leasing debts -0.9 -0.1 800%
--------------------------------------------------------------------------------
Dividends paid and other distribution of assets -81.5 -51.2 59%
--------------------------------------------------------------------------------
Net cash used in financing activities 74.6 32.5 130%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents 57.3 -29.3 -296%
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the 147.6 173.1 -15%
period
--------------------------------------------------------------------------------
Change in the fair value of the cash equivalents -0.2 3.8 -100%
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 204.7 147.6 39%
--------------------------------------------------------------------------------3. NOTES
ACCOUNTING PRINCIPLES OF THE INTERIM REPORT
YIT Corporation's financial statements bulletin for January 1 - December 31,
2011 has been drawn up in line with IAS 34: Interim Financial Reporting. The
consolidated financial statement have been prepared in compliance with the
International Financial Reporting standards, and IAS/IFRS standards approved
the EU Commission by Decemebr 31, 2011 and SIC and IFRIC interpretations have
been complied with in the drafting of the financial statements for 2011.
The standards and interpretations that have been applied as of Janunary 1, 2011
have minor effects on YIT during the report period. The effects are described
in the accounting principles of financial statements for the year 2011.
Currency exchange rates used in the financial statements bulletin
Average Balance sheet rate Dec Average Balance sheet rate
rate 31, 2011 rate Dec 31, 2010
1-12/11 1-12/10
--------------------------------------------------------------------------------
1 EUR CZK 24.5910 25.7870 25.2910 25.061
=
--------------------------------------------------------------------------------
DKK 7.4506 7.4342 7.4471 7.4535
--------------------------------------------------------------------------------
EEK 15.6466 15.6466
--------------------------------------------------------------------------------
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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 2011.
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 Services 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. In the case of YIT's commercial real estate development projects,
the recognition practice will be evaluated on a case-by-case basis and in
accordance with the terms and conditions of each contract. Sold projects are
recognised either when the construction work has started or when the project is
complete. The share of income and expenses to be recognised is calculated by
multiplying the percentage of completion by the percentage of sale multiplied
by the occupancy rate. YIT usually sells commercial real estate development
projects to investors either prior to construction or during an early phase.
The impact on revenue and operating profit of two revenue recognition
principles is shown in the line IFRIC 15 - adjustment. As a result of the
accounting policy, Group figures can fluctuate greatly between quarters.
Revenue by business segment (EUR million)
1-12/11 1-12/10 Change
-------------------------------------------------------------
Building Services Northern Europe 2,097.6 1,803.6 16%
-------------------------------------------------------------
- Group internal -63.2 -71.0
-------------------------------------------------------------
- external 2,034.4 1,732.6 17%
-------------------------------------------------------------
Building Services Central Europe 779.3 550.2 42%
-------------------------------------------------------------
- Group internal -0.3 -0.5
-------------------------------------------------------------
- external 779.0 549.6 42%
-------------------------------------------------------------
Construction Services Finland 1,226.9 1,102.0 11%
-------------------------------------------------------------
- Group internal -1.9 -1.9
-------------------------------------------------------------
- external 1,225.0 1,100.1 11%
-------------------------------------------------------------
International Construction Services 489.2 470.6 4%
-------------------------------------------------------------
- Group internal -4.2 -7.1
-------------------------------------------------------------
- external 485.0 463.5 5%
-------------------------------------------------------------
Other items 1.5 1.2
-------------------------------------------------------------
YIT's segments total 4,524.7 3,847.0 18%
-------------------------------------------------------------
IFRIC 15 adjustments -142.6 -59.4
-------------------------------------------------------------
YIT Group total - external 4,382.1 3,787.6 16%
-------------------------------------------------------------
Operating profit by business segment (EUR million)
1-12/11 1-12/10 Change
-------------------------------------------------------------
Building Services Northern Europe 78.8 88.7 -11%
-------------------------------------------------------------
Building Services Central Europe 33.3 16.4 103%
-------------------------------------------------------------
Construction Services Finland 111.6 108.1 3%
-------------------------------------------------------------
International Construction Services 37.2 34.7 7%
-------------------------------------------------------------
Other items -20.4 -18.8
-------------------------------------------------------------
YIT's segments total 240.5 229.1 5%
-------------------------------------------------------------
IFRIC 15 adjustments -40.5 -9.0
-------------------------------------------------------------
YIT Group total 200.0 220.1 -9%
-------------------------------------------------------------
International Construction Services segment's operating profit is weakened by a
provision of EUR 10 million related to the rectifying of the ammonia problem
booked in the third quarter of. 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 million 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)
1-12/11 1-12/10 Change
----------------------------------------------------------------
Building Services Northern Europe 913.1 757.4 21%
----------------------------------------------------------------
Building Services Central Europe 449.5 507.0 -11%
----------------------------------------------------------------
Construction Services Finland 1,493.6 1,173.2 27%
----------------------------------------------------------------
International Construction Services 1) 962.5 870.8 11%
----------------------------------------------------------------
Other items -66.0 -58.3
----------------------------------------------------------------
YIT's segments total 3,752.7 3,250.1 15%
----------------------------------------------------------------
IFRIC 15 adjustments 395.9 285.6
----------------------------------------------------------------
YIT Group total 4,148.6 3,535.7 17%
----------------------------------------------------------------
1) At the end of December 2011, the value of projects that were still suspended
amounted to EUR 86.5 million (12/10: EUR 137.1million)
Key figures of segment reporting (POC)
1-12/11 1-12/10 Change
--------------------------------------------------------------------
Profir before taxes, EUR million 215.8 203.8 6%
--------------------------------------------------------------------
Priofit for the review period ,EUR million 156.7 145.5 8%
--------------------------------------------------------------------
Earnings per share, EUR 1.25 1.16 8%
--------------------------------------------------------------------
UNUSUAL ITEMS AFFECTING OPERATING PROFIT (EUR million)
1-12/11 1-12/10
-----------------------------------------------------
Building Services Northern Europe -3.0 -1.4
-----------------------------------------------------
Building Services Central Europe 5.0 -4.9
-----------------------------------------------------
International Construction Services -10.0
-----------------------------------------------------
YIT Group total -8.0 -6.3
-----------------------------------------------------
International Construction Services segment's operating profit is weakened by a
provision of EUR 10 million related to the rectifying of the ammonia problem
booked in the third quarter of. 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 million 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, Frisk Ventilation AB a supplier of ventilation - related services
in May, MISAB Sprinkler & VVS AB and Sakari Timonen business operations in
Julyand Mercur VVS group in September. In October International Construction
Services acquired 100 percent holding in the building management and property
maintenance company OOO Upravljajushjaja Kompanija Olimp in Yekateringburg,
Russia. Total acquisition price amounted to EUR 9,5 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)
1-12/11
--------------------------------------------------------------------------------
Consideration
--------------------------------------------------------------------------------
Cash 9.5
--------------------------------------------------------------------------------
Total consideration 9.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Acquisition -related costs, 0.3
--------------------------------------------------------------------------------
recognised as other operating expenses
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Recognised amounts of identifiable assets acquired and liabilities 12/11
assumed
--------------------------------------------------------------------------------
Cash and cash equivalents 0.6
--------------------------------------------------------------------------------
Tangible assets 0.9
--------------------------------------------------------------------------------
Customer relations 11.7
--------------------------------------------------------------------------------
Inventories 0.5
--------------------------------------------------------------------------------
Trade and other receivables 10.6
--------------------------------------------------------------------------------
Deferred tax liabilities, net -1.1
--------------------------------------------------------------------------------
Trade and other payables -13.6
--------------------------------------------------------------------------------
Total identifiable net assets 9.5
--------------------------------------------------------------------------------
Non-controlling interest (minority share)
--------------------------------------------------------------------------------
Goodwill
--------------------------------------------------------------------------------
Total entity value 9.5
--------------------------------------------------------------------------------
Building Services Central Europe - segment disposed its 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: 1-12/11
--------------------------------------------------------
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: 12/11
--------------------------------------------------------
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: 12/11
--------------------------------------------------------
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)
1-12/11 1-12/10 Change
-------------------------------------------------------------------
Carrying value at the beginning of period 106.7 99.8 7%
-------------------------------------------------------------------
Increase 30.1 24.4 23%
-------------------------------------------------------------------
Increase through acquisitions 1.1 12.4 -91%
-------------------------------------------------------------------
Decrease -3.7 -6.1 -39%
-------------------------------------------------------------------
Decrease through disposals -0.1
-------------------------------------------------------------------
Depreciation and value adjustments -23.9 -23.9 0%
-------------------------------------------------------------------
Other changes 0.6 0.1 500%
-------------------------------------------------------------------
Carrying value at the end of period 110.8 106.7 4%
-------------------------------------------------------------------
INVENTORIES (EUR million)
1-12/11 1-12/10 Change
-------------------------------------------------------------------------------
Raw materials and consumables 27.6 26.4 5%
-------------------------------------------------------------------------------
Work in progress 792.8 639.0 19%
-------------------------------------------------------------------------------
Land areas and plot owing companies 643.8 589.3 9%
-------------------------------------------------------------------------------
Shares in completed housing and real estate companies 158.2 181.2 6%
-------------------------------------------------------------------------------
Advance payments 49.5 48.2 3%
-------------------------------------------------------------------------------
Other inventories 0.7 0.9 -22%
-------------------------------------------------------------------------------
Total inventories 1,672.6 1,484.9 13%
-------------------------------------------------------------------------------
NOTES ON EQUITY (EUR million)
Share capital and share premium Number of Share capital (EUR Treasury
reserve shares million) shares
(EUR
million)
--------------------------------------------------------------------------------
Shares outstanding on January 1, 125,078,422 149.2 -10.6
2011
--------------------------------------------------------------------------------
Transfer of treasury shares May 196,910 0.9
27, 2011
--------------------------------------------------------------------------------
Return of treasury shares June -1,524 0.0
30, 2011
--------------------------------------------------------------------------------
Return of treasury shares -1,778
September 30, 2011
--------------------------------------------------------------------------------
Return of treasury shares -1,022
December 31, 2011
--------------------------------------------------------------------------------
Shares outstanding on December 125,271,008 149.2 -9.7
31, 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 230.9 235.5 235.7
December 31, 2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Bonds raised during the review
period:
--------------------------------------------------------------------------------
Fixed-rate bonds
--------------------------------------------------------------------------------
1/2011 -2016, interest rate 4,75 % EUR 99.9 99.6 100.0
1)
--------------------------------------------------------------------------------
Total bonds on December 31, 2011 330.8 335.1 335.7
--------------------------------------------------------------------------------
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)
12/11 12/10 Change
--------------------------------------------------------------------------------
Collateral given for own commitments
--------------------------------------------------------------------------------
- Corporate mortgages 31.2 29.8 5%
--------------------------------------------------------------------------------
- Other pledged assets 0.9 0.1 800%
--------------------------------------------------------------------------------
Other commitments to associated companies 7.0 0.2 100%
--------------------------------------------------------------------------------
Other commitments
--------------------------------------------------------------------------------
- Repurchase commitments 293.1 141.0 108%
--------------------------------------------------------------------------------
- Operating leases 330.7 322.5 3%
--------------------------------------------------------------------------------
- Rental guarantees for clients 4.1 8.0 -49%
--------------------------------------------------------------------------------
- Other contingent liabilities 1.5 4.2 -64%
--------------------------------------------------------------------------------
- Guarantees given
--------------------------------------------------------------------------------
Liability under derivative contracts
--------------------------------------------------------------------------------
- Value of underlying instruments
--------------------------------------------------------------------------------
-- Interest rate derivatives 329.4 304.6 8%
--------------------------------------------------------------------------------
-- Foreign exchange derivatives 194.1 203.2 -4%
--------------------------------------------------------------------------------
-- Commodity derivatives 0.5 -100%
--------------------------------------------------------------------------------
- Market value
--------------------------------------------------------------------------------
-- Interest rate derivatives -11.9 -7.7 -55%
--------------------------------------------------------------------------------
-- Foreign exchange derivatives 1.1 0.3 267%
--------------------------------------------------------------------------------
-- Commodity derivatives 0.1 -100%
--------------------------------------------------------------------------------
YIT Corporation's guarantees on behalf of its 1,515.4 1,207.7 25%
subsidiaries
--------------------------------------------------------------------------------
TRANSACTIONS WITH ASSOCIATED COMPANIES (EUR million)
1-12/11 1-12/10 Change
-------------------------------------------------------------
Sales to associated companies 1.5 1.5 0%
-------------------------------------------------------------
Purchases from associated companies 0.1 0.2 -50%
-------------------------------------------------------------
Trade and other receivables 0.0 0.0
-------------------------------------------------------------
Trade and other liabilities 0.0 0.0
-------------------------------------------------------------
EVENTS AFTER BALANCE SHEET DATE
In December, YIT agreed on two acquisitions in Austria, during the last
quarter,. YIT agreed to purchase P&P Kälteanlagenbau GmbH, a cooling solutions
and services provider, and WM Haustechnik GmbH, an HVAC solution provider. P&P
Kälteanlagenbau GmbH has approximately 50 employees, and its revenue for 2010
was approximately EUR 11 million. The annual revenue of WM Haustechnik GmbH is
approximately EUR 1 million. The companies acquired in Austria will be
consolidated in the Group as of January 1, 2012.
YIT has acquired the entire share capital of Elektriska Installationer i
Finspång AB and Kraftmontage i Finspång AB in January 2012. The companies have
approximately 20 employees and their combined annual revenues amount to
approximately EUR 2 million.
The estimated acquisition price of the companies is approximately EUR 3.4
million. The acquisitions are not expected to result in goodwill.
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