Lemminkäinen - Interim report (Q1 and Q3)

Lemminkäinen´s Interim Report, 1 January - 31 March 2011

Outlook for the rest of the year is good

LEMMINKÄINEN CORPORATION            INTERIM REPORT    5 MAY 2011 AT 9:00 A.M.



LEMMINKÄINEN'S INTERIM REPORT, 1 JANUARY - 31 MARCH 2011: Outlook for the rest
of the year is good 



  -- The order book amounted to EUR 1,471.7 million (1,296.3) at the end of
     March. Year-on-year growth was 14%.
  -- Q1 net sales were up 14% and amounted to EUR 316.3 million (276.4).
  -- The result for the review period was EUR -11.7 million (-26.4). The result
     for the review period includes capital gains of EUR 17.1 million from the
     sale of the roofing business.
  -- Only a small amount of income was recognised from completed own housing
     development in the first months of the year, and no business premises
     developed by the Company were sold.
  -- Lemminkäinen will keep its earlier profit guidance intact. The Company
     estimates that in 2011 its net sales will increase and that its pre-tax
     profit will clearly improve on 2010.




Key figures, IFRS, EUR million         1-3/2011  1-3/2010  Change, %  1-12/2010
-------------------------------------------------------------------------------
Net sales                                 316.3     276.4       14.4    1,829.6
-------------------------------------------------------------------------------
- of which operations outside Finland      71.9      64.0       12.3      543.5
Operating profit                          -28.0     -26.8                  29.6
Operating margin, %                        -8.9      -9.7                   1.6
Pre-tax profit                            -30.0     -32.2                   7.6
Earnings from discontinued operations      11.3      -1.3                  -0.6
Result for the period                     -11.7     -26.4                   1.2
-------------------------------------------------------------------------------
Earnings per share, EUR                   -0.59     -1.52                  0.02
-------------------------------------------------------------------------------
Cash flow from operations                 -38.3     -49.9                 -37.2
-------------------------------------------------------------------------------





Key figures, IFRS, EUR million        31.3.2011  31.3.2010   Change,  31.12.2010
                                                                   %            
--------------------------------------------------------------------------------
Order book                              1,471.7    1,296.3      13.5     1,226.4
--------------------------------------------------------------------------------
- of which unsold                         192.7      115.5      66.8       135.3
- of which operations outside             445.7      287.3      55.1       294.3
 Finland                                                                        
Equity ratio, %                            32.8       33.6                  35.2
Gearing, %                                116.0      114.8                 104.7
Return on investment (rolling 12            8.6        2.7                   7.0
 months), %                                                                     
Interest-bearing net debt                 369.9      349.0       6.0       349.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------



President & CEO Timo Kohtamäki:"We post a loss in the first quarter due to the seasonal nature of
infrastructure construction. Furthermore, the profitability of contracting in
building construction remained weak, and only a small amount of income was
recognised from completed own housing development. In fact, we estimate that
more than 80 per cent of our own housing development slated for completion in
2011 will be recognised as income in the second half of the year. The outlook
for the rest of the year is more upbeat than in 2010. Our net sales and order
book are higher than in the corresponding period of 2010 and the favourable
trends in the construction market support our earlier profit guidance," says
Timo Kohtamäki, President and CEO of Lemminkäinen. "In Finland, the volume of infrastructure construction is still at a low ebb,
which is clearly evident in the poor condition of Finnish roads and railways.
It is estimated that civil engineering investments in 2010 contracted by almost
10% compared with the previous year. In other Nordic countries, the investments
in civil engineering have been clearly bigger. The paving contracts we won from
the Norwegian state and our new mine excavation contract in Sweden further
bolster our position in Nordic infrastructure construction. Furthermore, the
profitability of our infrastructure construction operations outside Finland has
improved, as loss-making maintenance contracts have ended and we have
streamlined our cost structure to correspond to the market situation.""This year, we'll focus particularly on improving profitability. We're seeking
substantial savings from boosting the efficiency of both procurements and the
management of projects and resources. We launched a more centralised operating
model for internal support services at the turn of the year, and a more
streamlined Group structure eases administration. We believe that our
efficiency-boosting measures will already be reflected in our earnings in
2011," says Kohtamäki. 



Outlook for 2011

According to the Confederation of Finnish Construction Industries RT,
construction will see growth of about five per cent in Finland this year.
Market-financed residential construction is growing, but state-supported
housing production is on the wane. Lemminkäinen estimates that it will start up
the construction of about 1,200 units in its own housing development in 2011.
Own housing development projects will largely be completed and recognised as
income towards the end of the year. The construction of business premises is
picking up. 

There is still a great demand for new housing in Russia, and Lemminkäinen
estimates that it will start building about 500 units in its own housing
development in St Petersburg in 2011. The Company expects that the housing
project kicked off last year - comprising about 150 residential units - will be
completed in the latter part of the year. 

The volume of infrastructure construction in Finland has remained unchanged for
a long time and is not expected to see growth this year, either. However,
Lemminkäinen's order book in infrastructure construction was larger at the end
of the review period than in the corresponding period of the previous year.
Thanks to the Company's strong market position and specialised expertise in all
subareas of infrastructure construction, it is well-poised for growth even in a
tough market. 

The volume of infrastructure construction in the other Nordic countries is
expected to grow by 3-5 per cent this year. Lemminkäinen's outlook for the rest
of the year is good in infrastructure construction in Sweden, Norway and
Denmark. The Company has already commenced paving operations in the other
Nordic countries, and thus the work season is expected to be longer than in the
previous year. In order to step up competitiveness, Lemminkäinen has downscaled
its operations in Norway and the Baltic countries, and streamlined its cost
structure to match the market situation. 

The technical building services market is expected to improve gradually, when
other types of new construction recover on the heels of housing construction.
In renovation, the focus is still on measures to boost the energy-efficiency of
residential buildings as well as piping renovation works. Lemminkäinen
estimates that renovation, servicing and upkeep will account for a greater
share of the Company's operations in the near future. 

Lemminkäinen will keep its earlier profit guidance intact. The Company
estimates that in 2011 its net sales will increase and that its pre-tax profit
will clearly improve on 2010. The estimate is based on the market situation,
which is better than in the previous year, and on the year-on-year growth in
the order book and its margins. 



Briefing

A Finnish-language briefing for analysts and the media will be held at 2.00
p.m. on Thursday, 5 May at Lemminkäinen's head office. The street address is
Salmisaarenaukio 2, Helsinki, Finland. The interim report will be presented by
President and CEO Timo Kohtamäki. Presentation material will be available in
Finnish and English on the Company's website at www.lemminkainen.com after the
briefing. 

Lemminkäinen Corporation's interim report for January-March 2011 is attached in
full to this stock exchange release. 



LEMMINKÄINEN CORPORATION

Corporate Communications



ADDITIONAL INFORMATION:

Timo Kohtamäki, President & CEO, tel. +358 2071 53263

Robert Öhman, CFO, tel. +358 2071 53515

Katri Sundström, Investor Relations, tel. +358 2071 54813



ATTACHMENTS:

Interim Report, 1 Jan. - 31 Mar. 2011

Tabulated section of the Interim Report



DISTRIBUTION:

NASDAQ OMX Helsinki Ltd

Key media

www.lemminkainen.com





Lemminkäinen Group operates in all areas of the construction sector. The
Group's business sectors are building construction, infrastructure construction
and technical building services. Net sales in 2010 were around EUR 2.0 billion,
of which international operations accounted for roughly a quarter. The Group
employs about 8,300 people. Lemminkäinen Corporation's share is quoted on
NASDAQ OMX Helsinki Ltd. www.lemminkainen.com

Attachments:

Osavuosikatsaus_Q1_2011_eng_FINAL.pdf