2008-02-08 07:00:00 CET
2008-02-08 07:00:04 CET
REGLERAD INFORMATION
YIT - Financial Statement Release
YIT's financial statements bulletin for 2007:STRONG AND BALANCED PROFITABLE GROWTH CONTINUED
YIT CORPORATION FINANCIAL STATEMENTS BULLETIN Feb 8, 2008 at 8:00 am
YIT's financial statements bulletin for 2007:
STRONG AND BALANCED PROFITABLE GROWTH CONTINUED
YIT Group's strong and balanced growth continued in 2007. The Group met all its
published financial targets. Revenue increased by 13% and operating profit by
31% on the previous year. The order backlog also reached an all-time high level.
The Board of Directors proposes raising the dividend per share for the
thirteenth year in a row and that a dividend of EUR 0.80 per share be paid for
2007.
“Profitable growth continued in all our geographic areas of operation and
business segments, even though uncertainties in the economy increased towards
the end of the year. Brisk business premise construction increased the demand
for building equipment system services in the Nordic countries. There was
increase in deliveries of energy efficiency-related solutions and service
agreements. In Russia, residential sales picked up considerably towards the end
of the year. We expanded our network of branch offices in Russia by establishing
a joint venture in Rostov-na-Donu,” says President and CEO Hannu Leinonen.
“Service and maintenance agreements that increase stability in the long-term
accounted for 37% of the Group's revenue. In Finland, the rise in business
premise and infrastructure construction kept construction activity growing as a
whole, despite the slackening of residential demand, which has been strong for
several years. Partnership agreements and our specific competence maintained the
demand for our industrial services,” continues Leinonen.
Profitable growth in all business segments
In Building Systems, operating profit increased by 28% to EUR 112.2 million
(2006: EUR 87.6 million). Operating profit margin rose to 6.8% (6.2%). Revenue
increased by 17%. Order backlog grew by 18%.
Operating profit in Construction Services increased by 17% to EUR 200.6 million
(EUR 170.8 million). Operating profit margin remained excellent, amounting to
12.3% (11.8%). Revenue increased by 13%. Order backlog grew by 29%.
Operating profit in Industrial and Network Services was EUR 41.2 million (EUR
18.0 million) and operating profit margin 8.4% (3.8%). Profitability improved
compared to the previous year, even when excluding the non-recurring items
resulting from the sale of the Network Services business and adjustment expenses
from the operating profit. Revenue increased by 3% and order backlog by 19% on
the previous year.
Revenue increased by 13 per cent
YIT Group's revenue for 2007 grew by 13%, without significant acquisitions, to
EUR 3,706.5 million (2006: EUR 3,284.4 million). Finland accounted for 52% of
revenue (55%), other Nordic countries for 33% (32%), Russia for 9% (7%) and
Lithuania, Latvia and Estonia for 6% (6%). Revenue in Russia increased by 49% to
EUR 322.6 million (EUR 216.9 million).
Operating profit increased by 31 per cent
The Group's operating profit increased by 31% to EUR 337.8 million (EUR 258.8
million). Operating profit margin improved to 9.1% (7.9%). Earnings per share
increased by 30% to EUR 1.77 (EUR 1.36). Return on investment was 26.2% (24.8%).
The positive impact of non-recurring items from the sale of the Network Services
unit on operating profit amounted to EUR 14.4 million and on profit after taxes
EUR 9.0 million. Excluding these non-recurring items the comparable growth in
YIT Group's operating profit was 25%, operating profit margin 8.7%, earnings per
share EUR 1.70 and growth in earning per share 25%.
Stronger financial position
Cash flow from operations increased. The gearing ratio decreased to 62.9%
(75.1%). Net debt was EUR 514.8 million (EUR 506.5 million). Financial expenses
increased as a result of higher interest rates and increase in the amount of
capital invested in Russia. Capital investment in Russia increased as a result
of business growth, land acquisition and development and ongoing production. At
year's end, 33% (23%), or EUR 460 million (EUR 279 million), of the Group's
invested capital was tied up in Russia. The balance sheet total at the end of
the year was EUR 2,461.3 million (EUR 2,117.8 million). The Group's equity ratio
was 36.7% (34.5%).
Dividend proposal EUR 0.80
The Board of Directors proposes to the Annual General Meeting that a dividend of
EUR 0.80 per share (EUR 0.65) be paid for the 2007 financial year. YIT is
raising its dividends for the thirteenth year in a row.
Order backlog grew by 25 per cent
The Group's order backlog is solid. At year's end was the order backlog was 25%
bigger than the year before, reaching EUR 3,509.3 million (EUR 2,802.3 million).
The order backlog has a healthy margin.
The number of personnel grew
At the end of 2007, the Group employed 24,073 (22,311) people. Of YIT's
employees, 48% work in Finland, 36% in the other Nordic countries, 9% in Russia
and 7% in Lithuania, Latvia and Estonia. As a result of the sale of the Network
Services unit, approximately 1,000 Finnish employees left YIT at the beginning
of 2008.
Outlook for 2008
The demand for building system services is solid throughout the market area and
the segment's order backlog is good. YIT aims at increasing its market share in
building systems in all of the Nordic countries.
In Russia, strong demand for housing continues. YIT's strong order backlog and
volume of ongoing residential production provide good prerequisites for meeting
the targets set for the Russian business.
In Finland, construction remains at a good level on the whole but is more
focused on business premise and infrastructure construction that have a strong
order backlog. The outlook for residential production has weakened after last
summer.
Industrial Services enjoy a good order backlog. Business opportunities are found
particularly in outsourcing of industrial maintenance in Finland.
The economic outlook for YIT's area of operations remains favourable, even
though uncertainties in the economy have increased.
Consequently, we estimate that the revenue and profit before taxes for 2008 will
increase compared to the previous year.
Annual General Meeting
YIT Corporation's Annual General Meeting will be held on Thursday, March 13,
2008, from 1:00 pm (Finnish time) onwards at Finlandia Hall, Mannerheimintie 13
e, 00100 Helsinki, Finland. The 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 8, 2008.
Annual Report 2007 and Interim Reports in 2008
The Annual Report for 2007 will be published on YIT's Internet site in Finnish
and English during week of Feb 18th. Interim Reports will be released on April
25, July 25 and October 29, 2008. Financial reports and other investor
information can be viewed on our site, www.yitgroup.com.
YIT Group's business segment structure was revised as of the beginning of 2008,
with Construction Services being divided into two segments. The segments are
Building Systems, Construction Services Finland, International Construction
Services and Industrial Services. YIT will publish comparable figures for 2007
on the Construction Services Finland and International Construction Services
segments as a stock exchange release before the publishing of Jan-Mar/2008
Interim Report.
Information sessions, webcast and conference call
An event for investment analysts and portfolio managers will be held at YIT's
head office in English on Friday, 8 February. The address is Panuntie 11, 00620
Helsinki, Finland. Investment analysts and portfolio managers can also
participate in the event through a conference call. Conference call participants
are requested to call a minimum of 5 minutes prior to the start of the event in
Finland: +358 9 2313 9201 or UK: +44 20 7162 0025.
A webcast of the presentation given by CEO Hannu Leinonen in the analyst and
portfolio manager event can be viewed live at www.yitgroup.com/webcast.
The webcast replay will be available at the same address.
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| Time zone | The investor event, | Recording of the webcast |
| | conference call and webcast | presentation will be |
| | presentation will start at | available at |
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| EEST (Helsinki) | 10:00 a.m. | 12:00 a.m. |
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| CEST (Paris, | 9:00 a.m. | 11:00 a.m. |
| Stockholm) | | |
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| BST (London) | 8:00 a.m. | 10:00 a.m. |
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| US EDT (New York) | 3:00 a.m. | 5:00 a.m. |
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YIT CORPORATION
Hannu Leinonen
President and CEO
For further information, please contact:
Sakari Ahdekivi, Chief Financial Officer, +358 20 433 2258,
sakari.ahdekivi@yit.fi
Petra Thorén, Senior Vice President, Investor Relations, +358 40 764 5462,
petra.thoren@yit.fi
Distribution: OMX Nordic Exchange Helsinki, main media, www.yitgroup.com
FINANCIAL STATEMENTS BULLETIN JANUARY 1 - DECEMBER 31, 2007
REVENUE INCREASED BY 13 PER CENT
YIT Group's revenue for 2007 grew by 13%, without significant acquisitions, to
EUR 3,706.5 million (2006: EUR 3,284.4 million). Finland accounted for 52% of
revenue (55%), other Nordic countries for 33% (32%), Russia for 9% (7%) and
Lithuania, Latvia and Estonia for 6% (6%). Revenue in Russia increased by 49% to
EUR 322.6 million (EUR 216.9 million).
Revenue by segment (MEUR)
--------------------------------------------------------------------------------
| | 1-12/ | 1-12/ | Change | Proportion |
| | 2007 | 2006 | | of |
| | | | | the Group's |
| | | | | revenue |
| | | | | 1-12/2007 |
--------------------------------------------------------------------------------
| Building Systems | 1,650.0 | 1,415.1 | 17% | 45% |
--------------------------------------------------------------------------------
| Construction Services | 1,634.9 | 1,452.2 | 13% | 44% |
--------------------------------------------------------------------------------
| Industrial and Network | 489.8 | 476.9 | 3% | 13% |
| Services *) | | | | |
--------------------------------------------------------------------------------
| Other items | -68.3 | -59.8 | 14% | -2% |
--------------------------------------------------------------------------------
| YIT Group | 3,706.5 | 3,284.4 | 13% | 100% |
--------------------------------------------------------------------------------
*) Revenue of the Network Services unit amounted to EUR 77 million for 2007. The
sale of the business unit was completed on December 31, 2007.
YIT's service chain covers the entire investment life cycle. Life cycle strategy
aims at better service capability, business growth and steady cash flow. Service
and maintenance of buildings, industry and traditional infrastructure accounts
for a significant proportion of the Group's revenue. In 2007, service and
maintenance operations generated EUR 1,355.8 million (EUR 1,222.4 million), in
other words 37% (37%) of total revenue.
With regard to revenue trends, YIT also monitors the development of consumer
services, long-term service agreements, project development and contracting. In
2007, consumer services accounted for 20% of revenue (24%), long-term service
agreements for 28% (28%), project development for 15% (9%) and contracting for
37% (39%). YIT's strategic aim is to increase the relative share of revenue in
consumer services, long-term service agreements and project development.
YIT Group's strategic target for revenue growth is 10 per cent annually on
average. In addition, YIT has set a separate target to increase its revenue in
Russia by 50% annually on average in 2006 - 2009.
OPERATING PROFIT INCREASED BY 31 PER CENT
The Group's operating profit increased by 31% to EUR 337.8 million (EUR 258.8
million). Operating profit margin improved to 9.1% (7.9%).
Operating profit by segment (MEUR)
--------------------------------------------------------------------------------
| | 1-12/ | 1-12/ | Change | Proportion |
| | 2007 | 2006 | | of |
| | | | | the Group's |
| | | | | operating |
| | | | | profit |
| | | | | 1-12/2007 |
--------------------------------------------------------------------------------
| Building Systems *) | 112.2 | 87.6 | 28% | 33% |
--------------------------------------------------------------------------------
| Construction Services | 200.6 | 170.8 | 17% | 59% |
--------------------------------------------------------------------------------
| Industrial and Network | 41.2 | 18.0 | 129% | 12% |
| Services **) | | | | |
--------------------------------------------------------------------------------
| Other items | -16.2 | -17.6 | -8% | -5% |
--------------------------------------------------------------------------------
| YIT Group | 337.8 | 258.8 | 31% | 100% |
--------------------------------------------------------------------------------
Operating profit margin by segment
--------------------------------------------------------------------------------
| | 1-12/2007 | 1-12/2006 |
--------------------------------------------------------------------------------
| Building Systems *) | 6.8% | 6.2% |
--------------------------------------------------------------------------------
| Construction Services | 12.3% | 11.8% |
--------------------------------------------------------------------------------
| Industrial and Network Services **) | 8.4% | 3.8% |
--------------------------------------------------------------------------------
| YIT Group | 9.1% | 7.9% |
--------------------------------------------------------------------------------
*) Provisions associated with certain expired agreements were cancelled in
Building Systems. The positive impact on the operating profit for 2006 amounted
to EUR 7.2 million.
**) The operating profit for the Industrial and Network Services includes the
following non-recurring items:
In 2007: EUR +14.4 million due to the sale of the Network Services business unit
and EUR -1.0 million due to restructuring of the Network Services business unit.
In 2006: EUR -5.1 million due to restructuring of the Network Services business
unit.
Profit before taxes improved 28% on the previous year and was EUR 305.6 million
(EUR 238.2 million). The result after taxes and minority interest amounted to
224.9 million (EUR 171.0 million). Earnings per share increased by 30% to EUR
1.77 (EUR 1.36). Return on investment was 26.2% (24.8%).
The positive impact of non-recurring items from the sale of the Network Services
unit on operating profit amounted to EUR 14.4 million and on profit after taxes
EUR 9.0 million. Excluding these non-recurring items the comparable growth in
YIT Group's operating profit was 25%, operating profit margin 8.7%, earnings per
share EUR 1.70 and growth in earning per share 25%.
YIT's strategic target for 2007 - 2009 is to increase the operating profit
margin to 9% of revenue. The strategic target for return on investment is 22%.
DIVIDEND PROPOSAL EUR 0.80
The Board of Directors proposes to the Annual General Meeting that a dividend of
EUR 0.80 per share (EUR 0.65) be paid for the 2007 financial year, representing
45.2% (47.8%) of earnings per share.
YIT is raising its dividends for the thirteenth year in a row.
The strategic target for dividend payout is 40 - 60% of annual earnings after
taxes and minority interest.
The Board of Directors' proposal for the distribution of profit is presented at
the end of the financial statements bulletin.
ORDER BACKLOG GREW BY 25 PER CENT
The Group's order backlog is solid. At year's end was the order backlog was 25%
bigger than the year before, reaching EUR 3,509.3 million (EUR 2,802.3 million).
The order backlog has a healthy margin.
Order backlog by segment (MEUR)
--------------------------------------------------------------------------------
| | 12/ | 12/ | Change | Proportion |
| | 2007 | 2006 | | of |
| | | | | the Group's |
| | | | | order |
| | | | | backlog |
| | | | | 12/2007 |
--------------------------------------------------------------------------------
| Building Systems | 707.7 | 601.7 | 18% | 20% |
--------------------------------------------------------------------------------
| Construction Services | 2,646.5 | 2,053.5 | 29% | 76% |
--------------------------------------------------------------------------------
| Industrial and | 219.2 | 184.0 | 19% | 6% |
| Network Services | | | | |
--------------------------------------------------------------------------------
| Other items | -64.1 | -36.9 | 74% | -2% |
--------------------------------------------------------------------------------
| YIT Group | 3,509.3 | 2 802.3 | 25% | 100% |
--------------------------------------------------------------------------------
The order backlog comprises the uninvoiced portion of orders and contracts from
customers as well as residential and business premise development projects that
involve a sales risk. In accordance with the IFRS accounting principles,
residential development projects are recognised as income using the formula
percentage of completion multiplied by percentage of sale. Business premise
development projects are recognised as income using the principle percentage of
completion multiplied by percentage of sale multiplied by occupancy rate.
Contracted projects are recognised as income based on the percentage of
completion.
The order backlog of Construction Services comprises contracting production and
residential and business premise development projects. Contracted projects are
sold in full. Business premise development projects are sold to investors either
prior to construction or during an early phase of construction. Steadily growing
service and maintenance operations account for 63% of Building Systems' revenue
and 58% of Industrial and Network Services' revenue. Due to their nature, part
of the maintenance and servicing operations are not included in the order
backlog. The remainder of the order backlog of these business segments mainly
comprises contracted projects that have been sold in full.
THE GROUP STRENGTHENED ITS FINANCIAL POSITION
Cash flow from operations increased. The gearing ratio decreased to 62.9%
(75.1%). Net debt was EUR 514.8 million (EUR 506.5 million). Financial expenses
increased as a result of higher interest rates and increase in the amount of
capital invested in Russia. Capital investment in Russia increased as a result
of business growth, land acquisition and development and ongoing production. At
year's end, 33% (23%), or EUR 460 million (EUR 279 million), of the Group's
invested capital was tied up in Russia. The Group's equity ratio was 36.7%
(34.5%).
The target level for the equity ratio is 35%.
Short-term credit was converted into long-term credit by means of two EUR 50
million private placement bonds in March. The Group's financing sources were
increased in December by signing an agreement on a commercial paper and bond
loan programme for the Baltic capital market.
Financial income during the period amounted to EUR 2.6 million (EUR 2.6
million), exchange rate losses to EUR 3.8 million (EUR 2.7 million) and
financial expenses to EUR 31.0 million (EUR 20.5 million). Net financial
expenses were EUR 32.2 million (EUR 20.6 million), or 0.9% (0.6%) of revenue.
Fixed-interest loans accounted for 64% (39%) of the Group's entire loan
portfolio. Loans raised directly on the capital and money markets amounted to
56% (59%).
The construction-stage contract receivables sold to financing companies totalled
EUR 257.7 million (EUR 272.1 million) at the end of the period. Of this amount,
EUR 102.9 million (EUR 120.4 million) is included in interest-bearing
liabilities in the balance sheet and the remainder comprises off-balance sheet
items in accordance with IAS 39. The interest on receivables sold to financing
companies, EUR 10.9 million (EUR 9.3 million), is included in financial expenses
in its entirety.
Participations in the housing corporation loans of unsold completed residential
units, EUR 34.0 million (EUR 28.6 million), are also included in
interest-bearing liabilities, but the interest on them of EUR 1.8 million (EUR
0.7 million) is booked in project expenses, as it is included in housing
corporation maintenance charges.
Interest-bearing liabilities included EUR 1.7 million (EUR 3.1 million) in
leasing commitments.
The balance sheet total at the end of the review period was EUR 2,461.3 million
(EUR 2,117.8 million).
CAPITAL EXPENDITURES AND ACQUISITIONS
Gross capital expenditures on non-current assets included in the balance sheet
totalled EUR 51.6 million (EUR 50.4 million) during the financial period,
representing 1.4% (1.5%) of revenue. Investments in construction equipment
amounted to EUR 15.4 million (EUR 17.3 million) and investments in information
technology to EUR 7.5 million (EUR 5.1 million). Other investments including
acquisitions amounted to EUR 28.7 million (EUR 28.0 million). Acquired and
divested business operations are disclosed in the tables of the financial
statements bulletin.
CHANGES IN GROUP STRUCTURE
A separate business segment, International Construction Services, was formed
from YIT Construction Services' operations in the Russia and Baltic countries as
of the beginning of 2008. The Construction Services' operations in Finland
continues as a separate segment, Construction Services Finland.
The Industrial and Network Services segment was renamed Industrial Services as
of January 1, 2008 due to the sale of the Network Services business unit.
As of the beginning of 2008, YIT's four segments are: Building Systems,
Construction Services Finland, International Construction Services and
Industrial Services.
CHANGES IN GROUP MANAGEMENT
On June 1, 2007, Sakari Ahdekivi (44), M.Sc. (Econ.), was appointed as CFO of
YIT Corporation and as a member of the Group's Management Board as from
September 1, 2007.
In October, the division of tasks in YIT's Group management was realigned with
regard to Sakari AhdekiviAhdekivi, CFO, Sakari Toikkanen, Executive Vice
President, and Antero Saarilahti, Senior Vice President, Administration. Juha
Kostiainen, Senior Vice President, Business Development, was appointed as Senior
Vice President, Corporate Communications and Business Development.
Kari Kauniskangas, M.Sc. (Eng.) was appointed as Director of the International
Construction Services segment formed at the beginning of 2008. He has previously
headed the s Business Premises unit of Construction Service. Ilpo Jalasjoki,
M.Sc. (Eng.) was appointed as Director of the Construction Services Finland
segment. He has previously headed the Construction Services segment.
The Group's Management Board was condensed as of the beginning of 2008. The
Management Board comprises the Group's parent company's President and CEO,
Executive Vice President, CFO and Presidents of the business segments. The
extended Management Board also includes the Vice President, Corporate
Communications and Business Development and the Vice President, Investor
Relations.
RESOLUTIONS PASSED AT THE ANNUAL GENERAL MEETING
YIT Corporation's Annual General Meeting was held on March 16, 2007. The Annual
General Meeting adopted the 2006 financial statements and discharged the members
of the Board of Directors and the President and CEO from liability. It was
confirmed that a dividend of EUR 0.65 would be paid per share, or a total of EUR
82.4 million. March 21, 2007, was set as the record date and March 28, 2007, as
the payout date.
The Annual General Meeting elected the Board of Directors and the auditor. The
Annual General Meeting decided to amend Articles 3, 4, 6, 8, 9, 10 and 11 of the
Articles of Association and the terms and conditions of the share option
programmes in accordance with the amended Articles of Association. It was
decided to increase the share capital by means of a reserve fund transfer. The
amendment to the Articles of Association and the increase in the share capital
were entered in the Trade Register on March 30, 2007.
A stock exchange release on the resolutions passed at the Annual General Meeting
was published on March 16, 2007.
EMPLOYEE NUMBERS RISE
In 2007, the Group employed 23,394 (21,846) people on average. At the end of the
year, the Group had 24,073 employees (22,311). Of YIT's employees, 48% work in
Finland, 36% in the other Nordic countries, 9% in Russia and 7% in Lithuania,
Latvia and Estonia. As a result of the sale of the Network Services unit,
approximately 1,000 Finnish employees left YIT at the beginning of 2008.
Personnel by segment
--------------------------------------------------------------------------------
| | 12/2007 | 12/2006 | Change | Share of |
| | | | | the |
| | | | | Group's |
| | | | | employees |
--------------------------------------------------------------------------------
| Building Systems | 12,646 | 11,643 | 9% | 53% |
--------------------------------------------------------------------------------
| Construction Services | 6,419 | 5,693 | 13% | 27% |
--------------------------------------------------------------------------------
| Industrial and Network | 4,663 | 4,642 | - | 19% |
| Services | | | | |
--------------------------------------------------------------------------------
| Corporate Services | 345 | 333 | 4% | 1% |
--------------------------------------------------------------------------------
| YIT Group | 24,073 | 22,311 | 8% | 100% |
--------------------------------------------------------------------------------
Personnel by country
--------------------------------------------------------------------------------
| | 12/2007 | 12/2006 | Change | Share of |
| | | | | the |
| | | | | Group's |
| | | | | employees |
--------------------------------------------------------------------------------
| Finland | 11,586 | 11,355 | 2% | 48% |
--------------------------------------------------------------------------------
| Sweden | 4,403 | 4,137 | 6% | 18% |
--------------------------------------------------------------------------------
| Norway | 3,008 | 2,618 | 15% | 13% |
--------------------------------------------------------------------------------
| Denmark | 1,267 | 1,286 | -1% | 5% |
--------------------------------------------------------------------------------
| Russia | 2,154 | 1,293 | 67% | 9% |
--------------------------------------------------------------------------------
| Estonia, Latvia, | 1,655 | 1,622 | 2% | 7% |
| Lithuania | | | | |
--------------------------------------------------------------------------------
| YIT Group | 24,073 | 22,311 | 8% | 100% |
--------------------------------------------------------------------------------
DEVELOPMENT BY BUSINESS SEGMENT
BUILDING SYSTEMS
Building Systems continued improving profitability and focused on revenue
growth. Building Systems' revenue increased by 17% to EUR 1,650.0 million (2006:
EUR 1,415.1 million). Service and maintenance operations accounted for 63% of
the segment's revenue (64%).
The operating profit increased by 28% to EUR 112.2 million (EUR 87.6 million).
Operating profit margin improved to 6.8% (6.2%). Return on investment rose to
45.3% (34.4%).
Provisions associated with certain expired agreements were cancelled in Building
Systems during Oct-Dec/2006. The positive impact on the operating profit for
2006 amounted to EUR 7.2 million.
The order backlog at the end of the period grew by 18% to EUR 707.7 million (EUR
601.7 million).
At the end of the year, the segment employed 12,646 people (11,643).
Building Systems revenue by country, MEUR
--------------------------------------------------------------------------------
| | 1-12/ | 1-12/ | Change | % of the |
| | 2007 | 2006 | | segment's |
| | | | | revenue for |
| | | | | 1-12/2007 |
--------------------------------------------------------------------------------
| Sweden | 606.4 | 541.0 | 12% | 37% |
--------------------------------------------------------------------------------
| Norway | 440.3 | 345.9 | 27% | 27% |
--------------------------------------------------------------------------------
| Finland | 384.9 | 327.4 | 18% | 23% |
--------------------------------------------------------------------------------
| Denmark | 165.6 | 146.4 | 13% | 10% |
--------------------------------------------------------------------------------
| Estonia, | 52.8 | 54.4 | -3% | 3% |
| Latvia, | | | | |
| Lithuania | | | | |
| and Russia | | | | |
--------------------------------------------------------------------------------
| Total | 1,650.0 | 1,415.1 | 17% | 100% |
--------------------------------------------------------------------------------
Strengthening market position
Business operations were supplemented in accordance with the strategy through
minor acquisitions and transactions in Sweden, Norway, Denmark and Finland.
Competence in pipe installations was strengthened in Norway. In Denmark,
position was reinforced in the Copenhagen region.
Favourable demand continued throughout the operating area
The building system market development continued favourably in the Nordic
countries. Brisk construction of business premises increased the demand for
building system installations. There is a large volume of retail, office,
logistics and industrial premises with a high standard of building systems being
constructed during the next 1-1.5 years.
Increasing service agreements
There was an increase in repair and maintenance work and other service
agreements. Outsourcing technical services awakened increasing interest in both
the public and business sectors, particularly in Finland and Denmark. Growth in
the property management service market continued.
Growing demand for energy services
Increasing attention has been paid to the energy efficiency of buildings and
their building systems due to an increase in regulations and energy prices.
During 2007, several energy-saving agreements were signed in all Nordic
countries in order to reduce consumption and costs through building system
solutions. Energy consumption management is included in several service
agreements.
CONSTRUCTION SERVICES
The Construction Services revenue grew by 13% compared to the previous year to
EUR 1,634.9 million (EUR 1,452.2 million). The maintenance operations accounted
for 4% of revenue (4%).
Construction Services revenue by country, MEUR
--------------------------------------------------------------------------------
| | 1-12/ | 1-12/ | Change | % of the |
| | 2007 | 2006 | | segment's |
| | | | | revenue for |
| | | | | 1-12/2007 |
--------------------------------------------------------------------------------
| Finland | 1,134.8 | 1,083.0 | 5% | 69% |
--------------------------------------------------------------------------------
| Russia | 296.8 | 189.9 | 56% | 18% |
--------------------------------------------------------------------------------
| Baltic | 191.9 | 169.6 | 13% | 12% |
| countries | | | | |
--------------------------------------------------------------------------------
| Other | 11.4 | 9.7 | 18% | 1% |
| countries | | | | |
--------------------------------------------------------------------------------
| Total | 1,634.9 | 1,452.2 | 13% | 100% |
--------------------------------------------------------------------------------
The operating profit increased by 17% to EUR 200.6 million (EUR 170.8 million).
The operating profit margin remained excellent, amounting to 12.3% (11.8%).
Return on investment remained good, 21.9% (24.1%).
The order backlog increased by 29% to EUR 2,646.5 million (EUR 2,053.5 million).
At the end of the year, the segment employed 6,419 people (5,693).
Construction Services was divided into two segments as of the beginning of 2008.
The operations in Russia and the Baltic countries were formed into a separate
business segment, International Construction Services. Construction Services
Finland will continue as a segment of its own.
Strong growth in Finnish business premise and infrastructure construction
compensated for residential construction lag
Office, retail and logistics premise construction was brisk. Growth in business
premise construction compensated for the impact of decreased residential
construction. Demand for offices continued to be good in the Helsinki region.
Investor interest in the Finnish business premise market increased. YIT launched
and sold various property development projects in 2007.
Residential demand weakened after several strong years. The number of
residential units sold to providers of rental housing increased, while the
number of units sold directly to consumers decreased. Increased employment
rates, income and wealth, continuing migration and moderate interest rates
support residential demand in the long-term.
Growth in the construction of leisure-time residences and centres continued
according to plan. YIT collaborated with various cities with the aim of
developing the residential offering and commercial and tourism-related services.
The market situation for civil engineering remained favourable. With regard to
maintenance services, YIT won road and street maintenance projects in different
parts of Finland.
Brisk residential construction continued in Russia
In Russia, need and interest in new residential units remained high.
Exceptionally rapid growth in housing prices in 2006 weakened the ability to
purchase homes in early 2007. During 2007, the increase in housing prices
remained moderate. In the latter half of the year, YIT's residential sales
picked up considerably. Residential development project activity was accelerated
by establishing a joint venture in Rostov-na-Donu with Russian private
shareholders. In Russia, YIT has residential projects also in St. Petersburg,
Moscow, Moscow Oblast, Yaroslavl, Yekaterinburg and Kazan.
Construction of logistics premises and a production plant started on YIT's plots
in Gorelovo, in the vicinity of the St. Petersburg international airport, as did
the construction of an office building in the city of St. Petersburg.
Residential demand was satisfactory in Latvia and Lithuania during the first
half of the year. Towards the end of the year, demand weakened considerably and
flat prices declined in the Estonian and Latvian markets. Demand for office
premise construction remained satisfactory in all countries.
The average selling price of residential units built by YIT in Russia was about
51% (2006: 35%) of the average selling price of privately financed residences
sold in Finland in 2007, and in the Baltic countries about 59% (55%). In
October-December, the corresponding figures were 54% (43%) in Russia and 60%
(53%) in the Baltic countries.
Residential construction in 2007 (2006), number of residential units
--------------------------------------------------------------------------------
| | Finland | Finland | Finland | Russia | Estonia, |
| | | | | | Latvia, |
| | | | | | Lithuania |
--------------------------------------------------------------------------------
| | Market-fi- | State-fi- | Total | Total | Total |
| | nanced (incl| nanced, | | | |
| | leisure | rental | | | |
| | residences | housing | | | |
| | and | and | | | |
| | investor | tender- | | | |
| | deals) | based | | | |
--------------------------------------------------------------------------------
| Sold | 2,541 | 0 (0) | 2,541 | 2,168 | 372 (697) |
| | (2,619) | | (2,619) | (1,950) | |
--------------------------------------------------------------------------------
| Start-ups | 2,232 | 192 (186) | 2,424 | 4,441 | 541 (887) |
| | (2,818) | | (3,004) | (3,699) | |
--------------------------------------------------------------------------------
| Under | 2,617 | 192 (186) | 2,809 | 9,870 | 1,328 |
| construc- | (3,210) | | (3,396) | (7,248) | (1,858) |
| tion at | | | | | |
| year's | | | | | |
| end | | | | | |
--------------------------------------------------------------------------------
| Completed | 2,825 | 186 (153) | 3,011 | 1,573 | 1,090 (559)|
| | (3,025) | | (3,178) | (1,696) | |
--------------------------------------------------------------------------------
| Completed | 280 (235) | 0 (0) | 280 | 11 (7) | 100 (-) |
| and unsold | | | (235) | | |
| at | | | | | |
| year's | | | | | |
| end | | | | | |
--------------------------------------------------------------------------------
The method of recording the number of residential units in Russia has been
changed. Residential units are recorded as completed three months after the
official commissioning inspection. Previously, units were not recorded as
completed until the buyer had registered ownership with the authorities. The
numbers of residential units under construction, completed and completed and
unsold in Russia are presented in accordance with the new recording method.
Slight changes in the number of residential units in Russia and the Baltic
countries may take place during construction due to combining or dividing them.
In Finland, privately financed development projects sold to investors are
included in the residential units sold.
Plot reserves strengthened
In Finland, land for residential building was acquired in Helsinki, e.g., the
Leppäsuo city block, along with additional building rights at the old Konepaja
area, during the year. Acquisitions of office building rights included 15,000 m2
of floor area in Käpylä, Helsinki, and 10,000 m2 of floor area for the extension
of the Martinsilta Retail Village in Espoo.
The Russian plot reserves were consolidated particularly in Yekaterinburg with
the acquisition of investment rights to a large, approx. 90,000 m2 area
development project, the implementation of which will take several years.
Investment rights to two plots were transferred to the joint venture established
in Rostov-na-Donu.
In St Petersburg YIT has an area of 46 hectares for approximately 15,000
residential units, on the north side of the Novo-Orlovsky forest park. YIT owns
an industrial site covering 96.5 hectares in Gorelovo, close to the
international airport.
Plot reserves, December 31, 2007 (December 31, 2006) Building rights and
planning potential, 1,000 m2 of floor area
--------------------------------------------------------------------------------
| | Finland | Russia | Estonia, Latvia, |
| | | | Lithuania |
--------------------------------------------------------------------------------
| Residential plots | 1,735 (1,723) | 1,915 (1,761) | 420 (367) |
--------------------------------------------------------------------------------
| Business premise | 839 (927) | 521 (400) | 23 (35) |
| plots | | | |
--------------------------------------------------------------------------------
| Total | 2,574 (2,650) | 2,436 (2,161) | 443 (402) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital tied into | 344.3 (325.1) | 162.9 (129.2) | 59.9 (51.0) |
| plot reserves, EUR | | | |
| million | | | |
--------------------------------------------------------------------------------
Plot reserves include those that have been planned and an estimate of the
potential building rights on areas that are under land use planning. The
building rights provided by regional development agreements made with landowners
remain as off-balance sheet items until the construction of each phase of the
plan being implemented begins.
INDUSTRIAL AND NETWORK SERVICES
Industrial and Network Services revenue increased by 3% to EUR 489.8 million
(EUR 476.9 million). The maintenance and service operations accounted for 58% of
revenue (60%). Finland accounted for 92% of revenue, other countries for 8%.
Operating profit was EUR 41.2 million (EUR 18.0 million). Operating profit
margin was 8.4% (3.8%). Profitability improved compared to the previous year,
even when excluding the non-recurring items resulting from the sale of the
Network Services business and adjustment expenses from the operating profit.
The operating profit for the Industrial and Network Services includes the
following non-recurring items:
In 2007: EUR +14.4 million due to the sale of the Network Services business unit
and EUR -1.0 million due to restructuring of the Network Services business unit.
In 2006: EUR -5.1 million due to restructuring of the Network Services business
unit.
Return on investment was 68.6% (28.8%). If the positive impact of non-recurring
item of EUR 14.4 million due to the sale of Network Services business is
excluded from the operating profit, the return on investment was 45.3%.
The order backlog at the end of the period grew by 19% to EUR 219.2 million (EUR
184.0 million).
At the end of the year, the segment employed 4,663 people (4,642).
The Network Services business unit was divested
YIT Industrial and Network Services Ltd sold the Network Services business unit
to Relacom Finland Oy through an agreement signed on November 20, 2007. The
transaction price amounted to EUR 25 million. Following approval by the
Competition Authority, the transaction was agreed and the price paid on December
31, 2007. As of the beginning of 2008, the Industrial and Network Services
segment was renamed Industrial Services. The Network Services unit's revenue for
2007 amounted to EUR 77 million.
Strengthening competence in energy efficiency services
YIT increased its competence in energy-saving solutions and as a supplier of
special seals used in process and energy industry by means of two acquisitions.
Solid demand for industrial maintenance
The market situation for industrial maintenance services remained favourable.
Several end-to-end maintenance projects and large-scale shutdowns were performed
in 2007. All significant end-to-end maintenance agreements were updated with
partners in the first half of the year.
At the beginning of 2007, YIT and Botnia's joint venture Botnia Mill Service
took on the responsibility for the maintenance of Botnia's mills in Rauma and
Äänekoski, Finland, and approx. 100 employees joined the company. With the
agreement, Botnia Mill Service will be responsible for the maintenance of all of
Botnia's mills in Finland.
Investment projects gained, especially in exports
Demand for industrial investment projects remained solid, and particular
activity was seen in exports. Export deliveries of industrial piping systems,
tanks and boilers were agreed in, e.g. Sweden, Norway, Spain, United Kingdom and
Brazil.
In Finland, investments by the energy and process industry bolstered demand.
In Russia, agreements were made with Ahlstrom's production plant and
International Paper-owned OAO Svetogorsk's mill.
SHARES, SHARE OPTIONS AND SHAREHOLDERS
The company has one series of shares. Each share carries one vote and confers an
equal right to a dividend.
In 2007, shares in YIT Corporation could be subscribed for under the Series E
and F share options issued in 2004 and under the Series K and L share options
issued in 2006.
Share capital and number of shares
YIT Corporation's share capital was EUR 63,388,536.00 at the beginning of 2007
and the number of shares outstanding was 126,777,072.
The YIT Corporation's Annual General Meeting held on March 16, 2007, decided to
increase the company's share capital by EUR 82,822,459.92 to EUR 146,210,995.92
by means of transferring the funds in the share premium reserve into the share
capital. New shares were not issued when the share capital was increased. The
Articles of Association were amended by the resolution of the Annual General
Meeting so that references to the minimum and maximum share capital and the
nominal value of shares were deleted. The amendments to the Articles of
Association and the increase in the share capital were entered in the Trade
Register on March 30, 2007.
The Annual General Meeting held on March 16, 2007, also decided that the full
subscription price shall be entered into the share capital when shares are
subscribed for with the share options. In 2007, 441,200 shares were subscribed
for with the Series E and F share options from 2004 and Series K and L share
options from 2006. As a result of the subscriptions, the share capital was
increased by a total of EUR 2,893,770.80 in five instalments.
In April the number of shares declined by 400 due to invalidation of company's
own shares.
At the end of 2007, the share capital amounted to EUR 149,104,766.72 and the
number of shares was 127,217,872.
Own shares
At the beginning of 2007, YIT Corporation held 400 of its own shares,
representing 0.0% of the company's shares. The shares were purchased in December
2005. The Board of Directors of YIT Corporation decided to invalidate the shares
held by the company, and the invalidation was entered in the Trade Register on
April 10, 2007.
At the end of 2007, YIT Corporation did not hold any of its own shares. During
2007, no shares in the parent company were owned by subsidiaries.
Authorisations of the Board of Directors
In accordance with the 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.
No share issues were organised during the period and the company did not float
convertible bonds or bonds with warrants. At the end of the period, the Board of
Directors did not have valid share issue authorisations or authorisations to
issue convertible bonds or bonds with warrants or to purchase or dispose of the
company's own shares.
Trading in the share
At the end of 2007, the closing rate of YIT's share was EUR 14.99 (2006: EUR
20.95). YIT's share price decreased by 28% during 2007.
The highest price of the share during 2007 was EUR 27.90 (EUR 23.88) and the
lowest was EUR 14.79 (EUR 15.20). The average price was EUR 22.15 (EUR 19.24).
YIT Corporation's market capitalisation at the end of the year was EUR 1,907.0
million (EUR 2,656.0 million), 28% less than the previous year.
Share turnover grew significantly compared with 2006. Share turnover in 2007
amounted to 245,671,719 shares (184,576,963). The value of share turnover was
EUR 5,448.3 million (EUR 3,536.1 million). The average daily turnover was
982,687 shares (657,460).
Trading with share options
During the report year, 76,299 Series E share options were traded at an average
price of EUR 35.27, 120,791 Series F share options were traded at an average
price of EUR 37.42, 41,304 Series K share options were traded at an average
price of EUR 5.44, and 141,164 Series L share options were traded at an average
price of EUR 4.63.
Increase in non-Finnish ownership
During 2007, the number of registered shareholders rose from 14,364 to 15,265,
that is, by 6%. The number of private investors increased by approximately 760.
At the beginning of the year, a total of 45.9% (39.9%) of the shares were owned
by nominee-registered and non-Finnish investors, while this figure was 52.9%
(45.9%) at year's end.
During the year, four so-called flagging notifications of change in ownership
were made. Schroder Investment Management Compliance Limited announced on May 1,
2007 that its holding has increased to over 5% of YIT's shares as the result of
a share transaction on December 13, 2006, and on October 30, 2007 that its
holding had fallen to under 5% of YIT's shares as the result of a share
transaction on October 26, 2007. Varma Mutual Pension Insurance Company
announced on September 28, 2007 and Sampo Life Insurance Company Ltd on May 3,
2007 that their holdings had fallen to under 5% of YIT's shares.
MARKET SITUATION
In its January forecast, Nordea estimates that the Euro region's economic growth
will slow down moderately to 1.8%. Economic growth in the Nordic countries,
excluding Denmark, is expected to continue to outpace the EU average.
Installations of building equipment systems will increase by approximately 3%
annually in the Nordic countries in 2008 - 2009. Technical maintenance of
buildings will rise by approximately 3 - 4% annually. According to
Euroconstruct, construction will see average annual growth of 2 - 3% in Finland.
Residential demand has softened, but migration, increased employment rates and
positive income trends ensure stable long-term demand for new housing in Finland
and increased renovation of old residential units. This year, growth in business
premise construction will outpace residential construction in the Nordic
countries. Growth will slacken in exports and industrial output in Finland and
other Nordic countries, but modernisation requirements will increase the need
for industry and energy sector investments and maintenance.
In Russia, the economic growth outpaces the Nordic countries, and the country is
benefiting from the high oil prices. Confidence in the political and economic
stability of Russia has improved. The state is debt free, and the foreign
exchange reserves are higher than the economy's foreign debt. According to the
Bank of Finland Institute for Economies in Transition (BOFIT) the population's
buying power has improved and private consumption has become the driver for
economic growth. In 2008 - 2009 Construction will see average annual growth of 5
- 6% in Russia. Investments are on the rise, particularly in residential
construction. Construction is not among the industries specified as having
strategic significance to national security or foreign trade, and political
actors support growth in residential production. Solid demand for housing in the
Russian metropolises will continue also in the long-term.
In Estonia, Latvia and Lithuania, estimates of economic growth have lowered
considerably based on Nordea's review in January, but growth continues to
outpace the Nordic countries. Increased employment rates have significantly
improved consumer buying power, and the rapidly growing consumption is driving
the national economies. Economic growth that has been too rapid considering the
resources has led to overheating phenomena, the most severe of which is rapid
inflation. Rapid inflation impairs the economic outlook in Latvia and Estonia in
particular. VTT Technical Research Centre of Finland estimates that in the
Baltic countries, growth in construction activity will slow down to 6 - 7%.
Housing production has started to decline.
Global warming, increasing demand for consumer services and changes in the
public sector's service production have an effect on the demand for YIT's
services. The prevention of global warming and high energy prices increase the
demand for energy-saving services and low-energy construction and provide new
business opportunities, particularly in the Building Systems and Industrial
Services segments. Cities and municipalities aim to improve operational
efficiency by opening up the production of services to competition, which in
addition to service and maintenance, also creates demand for a variety of life
cycle responsibility models and energy saving solutions, extensive regional
development projects and community construction.
Competition for skilled labour is increasing in all of the countries where YIT
operates. In the Nordic countries, the ageing of the population reduces the
labour market pool. Education policy focuses on higher education on a
significantly broad scale, which worsens the labour shortage in manual trades.
According to VTT Technical Research Centre of Finland, rapid economic growth in
Russia and the Baltic countries has led to a greater shortage of skilled workers
as well as inflationary salaries and wages, and growth in foreign labour.
STRATEGIC TARGETS
On September 25, 2007, The Board of Directors of YIT Corporation confirmed the
Group's strategy and financial targets for 2008 - 2010. The financial targets
were confirmed without changes. The strategic annual growth target is 10% on
average, the operating profit target is 9% of revenue by 2009, return on
investment target is 22%, equity ratio target is 35% and dividend payout target
is 40 - 60% of annual earnings after taxes and minority interest. In addition,
YIT has set a separate target to increase its revenue in Russia by 50% annually
on average in 2006 - 2009.
Business operations in current YIT areas will be strengthened during the next
few years. In the Building Systems segment, the aim is to take a larger market
share throughout the area of operations, particularly in the Nordic countries
and additionally in the Baltic countries and Russia. In Construction Services,
growth focuses on Russia and increasing the proportion of business premise
development projects. Residential construction activity in Russia will be added
by strengthening YIT's presence in the cities where the company already operates
and by continuing to expand to new cities with populations in excess of a
million. In Industrial Services, the strategic focus is on outsourcing of
maintenance services in Finland.
In addition, expansion of the geographic area of operations will be pursued
during the period. With regard to International Construction Services, the
objective is to start up residential development projects in Central Eastern
Europe. In Building Systems, the opportunities for expanding the offering to
Western Europe are being explored.
A stock exchange release on the confirmation of the strategic targets was
published on September 26, 2007.
MAJOR BUSINESS RISKS AND UNCERTAINTIES IN THE NEAR FUTURE
YIT's risk management policy specifies the Group's most significant risks and
methods of mitigating strategic and administrative risks. A more detailed
account of YIT's risk management policy and the most significant risks will be
published in the Annual Report for 2007 and of financial risks in the notes to
the 2007 financial statements.
The most significant short-term business risks and uncertainties are connected
with the sales risk of the order backlog and foreseeing and reacting to changes
in the operating environment.
The sales risk included in the order backlog is mainly comprised of completed
but unsold residential units. Sales risk is managed by adjusting residential
start-ups with sales trends. In Russia, sales of residential units take place
mainly towards the end of the project, and the construction time is
approximately 2 years. In Finland and the Baltic countries, the construction
time is approximately a year. A more detailed account of the order backlog
structure is presented above under Order backlog.
YIT's geographic and business structure balance the impact of economic
fluctuation on the Group's revenue and profits. Nordic countries generate
approximately 85% of YIT's revenue and Russia and the Baltic countries 15%.
Steadily growing service and maintenance operations, that are not sensitive to
economic fluctuations, account for 37% of YIT's revenue. The majority of
business comprise operations, where investments are minor. Slightly under a
third of operations consist of more capital-intensive operations, residential
developer-contracted projects and property development projects where capital is
tied to plot reserves and ongoing production.
OUTLOOK FOR 2008
The demand for building system services is solid throughout the market area and
the segment's order backlog is good. YIT aims at increasing its market share in
building systems in all of the Nordic countries.
In Russia, strong demand for housing continues. YIT's strong order backlog and
volume of ongoing residential production provide good prerequisites for meeting
the targets set for the Russian business.
In Finland, construction remains at a good level on the whole but is more
focused on business premise and infrastructure construction that have a strong
order backlog. The outlook for residential production has weakened after last
summer.
Industrial Services enjoy a good order backlog. Business opportunities are found
particularly in outsourcing of industrial maintenance in Finland.
The economic outlook for YIT's area of operations remains favourable, even
though uncertainties in the economy have increased.
Consequently, we estimate that the revenue and profit before taxes for 2008 will
increase compared to the previous year.
BOARD OF DIRECTORS' PROPOSAL FOR THE DISTRIBUTION OF PROFIT
The distributable equity of YIT Corporation on December 31, 2007 is:
retained earnings 164,177,004.33
profit for the financial period 106,056,579.65
270,233,583.98
The Board of Directors proposes to the Annual General Meeting that the profit be
disposed of as follows:
Payment of a dividend EUR 0.80
per share to shareholder 101,774.297.60
Transfer to retained earnings 168,459,286.38
270,233,583.98
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 7, 2008
Reino Hanhinen Eino Halonen
Chairman Vice chairman
Sari Baldauf Antti Herlin
Teuvo Salminen Hannu Leinonen
President and CEO
FINANCIAL STATEMENTS BULLETIN JAN 1 - DEC 31, 2007: TABLES
(Financial statements bulletin is based on the audited Financial Statements of
2007.)
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, 2007
Consolidated income statement Jan 1 - Dec 31, 2007
Consolidated income statement Oct 1 - Dec 31, 2007
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
3. Notes
Accounting principles of the Financial Statements Bulletin
Financial risk management
Segment information
Unusual items affecting operating profit
Acquired businesses
Divested businesses
Changes in property, plant and equipment
Inventories
Notes on equity
Interest-bearing liabilities
Change in contingent liabilities and assets and commitments
Transactions with associated companies
1. KEY FIGURES OF YIT GROUP
KEY FIGURES
--------------------------------------------------------------------------------
| | 12/2007 | 12/2006 | change, % |
--------------------------------------------------------------------------------
| Earnings per share, EUR *) | 1.77 | 1.36 | 30 |
--------------------------------------------------------------------------------
| Diluted earnings per share, EUR | 1.77 | 1.35 | 31 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 6.40 | 5.29 | 21 |
--------------------------------------------------------------------------------
| Average share price during the | 22.15 | 19.24 | 15 |
| period, EUR | | | |
--------------------------------------------------------------------------------
| Share price at end of period, EUR | 14.99 | 20.95 | -28 |
--------------------------------------------------------------------------------
| Market capitalization at end of | 1,907.0 | 2,656.0 | -28 |
| period, MEUR | | | |
--------------------------------------------------------------------------------
| Weighted average share-issue adjusted | 126,872 | 125,357 | 1 |
| number of shares outstanding, | | | |
| thousands | | | |
--------------------------------------------------------------------------------
| Weighted average share-issue adjusted | 127,028 | 126,773 | - |
| number of shares outstanding, | | | |
| thousands, diluted | | | |
--------------------------------------------------------------------------------
| Share-issue adjusted number of shares | 127,218 | 126,777 | - |
| outstanding at end of period, | | | |
| thousands | | | |
--------------------------------------------------------------------------------
| Net interest-bearing debt at end of | 514.8 | 506.5 | 2 |
| period, MEUR | | | |
--------------------------------------------------------------------------------
| Return on investment, from the last | 26.2 | 24.8 | - |
| 12 months, % | | | |
--------------------------------------------------------------------------------
| Return on equity, % | 30.5 | 28.3 | - |
--------------------------------------------------------------------------------
| Equity ratio, % | 36.7 | 34.5 | - |
--------------------------------------------------------------------------------
| Gearing ratio, % | 62.9 | 75.1 | - |
--------------------------------------------------------------------------------
| Gross capital expenditures, MEUR | 51.6 | 50.4 | 2 |
--------------------------------------------------------------------------------
| % of revenue | 1.4 | 1.5 | -7 |
--------------------------------------------------------------------------------
| Order backlog at end of period, MEUR | 3,509.3 | 2,802.3 | 25 |
--------------------------------------------------------------------------------
| of which order backlog outside | 1,999.2 | 1,490.0 | 34 |
| Finland | | | |
--------------------------------------------------------------------------------
| Average number of personnel | 23,394 | 21,846 | 7 |
--------------------------------------------------------------------------------
*) The positive impact of non-recurring items from the sale of the Network
Services unit on net profit amounted to EUR 9.0 million.
YIT GROUP FIGURES BY QUARTER
--------------------------------------------------------------------------------
| | I/ | II/ | III/ | IV/ | I/ | II/ | III/ | IV/ |
| | 2006 | 2006 | 2006 | 2006 | 2007 | 2007 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Revenue, MEUR |768.8 | 818.0| 789.5 | 908.1 | 833.5 | 939.3 | 906.8 |1,027.0|
| | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 53.7 | 60.1 | 58.6 | 86.4 | 61.2 | 78.5 | 89.4 | 108.7 |
| profit, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| % of revenue | 7.0 | 7.3 | 7.4 | 9.5 | 7.3 | 8.4 | 9.9 | 10.6 |
--------------------------------------------------------------------------------
| Financial | 1.3 | 0.4 | 0.6 | 0.3 | 0.6 | 0.5 | 0.6 | 0.8 |
| income, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Exchange rate | -0.6 | -0.6 | -0.6 | -0.9 | -0.1 | -1.6 | 0.5 | -2.6 |
| differences, | | | | | | | | |
| MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Financial | -4.3 | -4.6 | -5.9 | -5.7 | -6.9 | -7.6 | -8.1 | -8.4 |
| expenses, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Profit before | 50.1 | 55.3 | 52.7 | 80.1 | 54.8 | 69.8 | 82.4 | 98.5 |
| taxes, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| % of revenue | 6.5 | 6.8 | 6.7 | 8.8 | 6.6 | 7.4 | 9.1 | 9.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet |1,722.|1,847.| 1,925 | 2,117 | 2,155 | 2,346 | 2,418 | 2,461 |
| total, MEUR | .0 | .2 | .5 | .8 | .9 | .1 | .4 | .3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | 0.29 | 0.31 | 0.28 | 0.48 | 0.31 | 0.42 | 0.47 | 0.57 |
| share, EUR | | | | | | | | |
--------------------------------------------------------------------------------
| Equity per | 4.23 | 4.54 | 4.83 | 5.29 | 4.95 | 5.38 | 5.85 | 6.40 |
| share, EUR | | | | | | | | |
--------------------------------------------------------------------------------
| Share price at |22.38 |19.17 | 18.27 | 20.95 | 25.80 | 23.35 | 20.84 | 14.99 |
| end of period, | | | | | | | | |
| EUR | | | | | | | | |
--------------------------------------------------------------------------------
| Market |2,792 | 2,406| 2,294 | 2,656 | 3,270 | 2,963 | 2,644 | 1,907 |
| capitalization | .9 | .7 | .4 | .0 | .8 | .1 | .7 | .0 |
| at end of | | | | | | | | |
| period, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | 28.1 | 28.2 | 25.2 | 24.8 | 25.4 | 25.7 | 25.8 | 26.2 |
| investment, | | | | | | | | |
| from the last | | | | | | | | |
| 12 months, % | | | | | | | | |
--------------------------------------------------------------------------------
| Equity ratio, | 33.5 | 34.5 | 34.6 | 34.5 | 31.8 | 32.4 | 33.8 | 36.7 |
| % | | | | | | | | |
--------------------------------------------------------------------------------
| Net |334.2 |342.5 | 416.8 | 506.5 | 540.9 | 548.9 | 591.4 | 514.8 |
| interest- | | | | | | | | |
| bearing debt at| | | | | | | | |
| end of period, | | | | | | | | |
| MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Gearing ratio, | 62.7 | 59.5 | 68.1 | 75.1 | 85.6 | 79.8 | 79.1 | 62.9 |
| % | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross capital | 9.1 | 18.7 | 29.9 | 50.4 | 15.8 | 21.5 | 33.5 | 51.6 |
| expenditures, | | | | | | | | |
| MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Order backlog |2,007 |2,151 | 2,246 | 2,802 | 2,995 | 3,275 | 3,172 | 3,509 |
| at end of | .2 | .3 | .2 | .3 | .4 | .2 | .5 | .3 |
| period, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Personnel at |21,140|21,873|22,188 |22,311 |22,418 |23,474 |23,836 |24,073 |
| end of period | | | | | | | | |
--------------------------------------------------------------------------------
SEGMENT INFORMATION BY QUARTER
Revenue by business segment (MEUR)
--------------------------------------------------------------------------------
| | I/ | II/ | III/ | IV/ | I/ | II/ | III/ | IV/ |
| | 2006| 2006 | 2006 | 2006 | 2007 | 2007 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Building |325.6|348.4 | 335.2 | 405.9 | 367.7 | 410.3 | 392.3 | 479.7 |
| Systems | | | | | | | | |
--------------------------------------------------------------------------------
| Construction |350.8|368.1 | 337.0 | 396.3 | 369.2 | 416.3 | 410.6 | 438.8 |
| Services | | | | | | | | |
--------------------------------------------------------------------------------
| Industrial and |107.7|116.9 | 128.3 | 124.0 | 110.7 | 129.6 | 118.7 | 130.8 |
| Network | | | | | | | | |
| Services *) | | | | | | | | |
--------------------------------------------------------------------------------
| Other items |-15.3|-15.4 | -11.0 | -18.1 | -14.1 | -16.9 | -14.9 | -22.3 |
| | | | | | | | | |
--------------------------------------------------------------------------------
| YIT Group, |768.8| 818.0| 789.5 | 908.1 | 833.5 | 939.3 | 906.7 |1,027.0|
| total | | | | | | | | |
--------------------------------------------------------------------------------
*) Revenue of the Network Services unit amounted to EUR 77 million for 2007. The
sale of the business unit was completed on December 31, 2007.
Operating profit by business segment (MEUR)
--------------------------------------------------------------------------------
| | I/ | II/ | III/ | IV/ | I/ | II/ | III/ | IV/ |
| | 2006 | 2006 | 2006 | 2006 | 2007 | 2007 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Building | 11.7 | 19.8 | 21.1 | 35.0 | 18.8 | 25.6 | 26.7 | 41.1 |
| Systems *) | | | | | | | | |
--------------------------------------------------------------------------------
| Construction | 40.7 | 40.5 | 39.6 | 50.0 | 41.2 | 51.5 | 57.3 | 50.6 |
| Services | | | | | | | | |
--------------------------------------------------------------------------------
| Industrial and | 5.3 | 5.0 | 2.5 | 5.2 | 5.0 | 5.8 | 8.1 | 22.3 |
| Network | | | | | | | | |
| Services **) | | | | | | | | |
--------------------------------------------------------------------------------
| Other items | -4.0 | -5.2 | -4.6 | -3.8 | -3.8 | -4.4 | -2.7 | -5.3 |
--------------------------------------------------------------------------------
| YIT Group, | 53.7 | 60.1 | 58.6 | 86.4 | 61.2 | 78.5 | 89.4 | 108.7 |
| total | | | | | | | | |
--------------------------------------------------------------------------------
*) In the October-December/2006 period, Building Systems released provisions for
certain contractual obligations that had come to an end. This had a positive
impact of EUR 7.2 million on operating profit.
**) The operating profit of the Industrial and Network Services business segment
in October-December/2007 includes a positive impact of EUR +14.4 million due to
divestment of Network Services business unit. Operating profit in
July-September/2006 includes EUR -5.1 million and in January-March/2007 EUR -1.0
million in costs for the downsizing of Network Services carried out in 2006.
Order backlog by business segment at end of period (MEUR)
--------------------------------------------------------------------------------
| | I/ | II/ | III/ | IV/ | I/ | II/ | III/ | IV/ |
| | 2006 | 2006 | 2006 | 2006 | 2007 | 2007 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Building |517.6 | 584.1| 582.7 | 601.7 | 670.3 | 721.8 | 740.5 | 707.7 |
| Systems | | | | | | | | |
--------------------------------------------------------------------------------
| Construction |1,296 |1,391 | 1,524 | 2,053 | 2,137 | 2,378 | 2,263 | 2,646 |
| Services | .5 | .8 | .4 | .5 | .9 | .3 | .3 | .5 |
--------------------------------------------------------------------------------
| Industrial and |219.5 |208.4 | 180.3 | 184.0 | 228.8 | 213.6 | 221.7 | 219.2 |
| Network | | | | | | | | |
| Services *) | | | | | | | | |
--------------------------------------------------------------------------------
| Other items |-26.4 |-33.0 | -41.2 | -36.9 | -41.6 | -38.5 | -53.0 | -64.1 |
| | | | | | | | | |
--------------------------------------------------------------------------------
| YIT Group, |2,007 |2,151 | 2,246 | 2,802 | 2,995 | 3,275 | 3,172 | 3,509 |
| total | .2 | .3 | .2 | .3 | .4 | .2 | .5 | .3 |
--------------------------------------------------------------------------------
2. CONSOLIDATED FINANCIAL STATEMENTS JAN 1 - DEC 31, 2007
CONSOLIDATED INCOME STATEMENT JAN 1 - DEC 31, 2007 (MEUR)
--------------------------------------------------------------------------------
| | 1-12/2007 | 1-12/2006 | change, % |
--------------------------------------------------------------------------------
| Revenue | 3,706.5 | 3,284.4 | 13 |
--------------------------------------------------------------------------------
| of which activities outside Finland | 1,798.5 | 1,477.4 | 22 |
--------------------------------------------------------------------------------
| Operating income and expenses | -3,342.7 | -3,002.8 | 11 |
--------------------------------------------------------------------------------
| Share of results of associated | 1.2 | 1.3 | -8 |
| companies | | | |
--------------------------------------------------------------------------------
| Depreciation and write-downs | -27.2 | -24.1 | 13 |
--------------------------------------------------------------------------------
| Operating profit | 337.8 | 258.8 | 31 |
--------------------------------------------------------------------------------
| % of revenue | 9.1 | 7.9 | - |
--------------------------------------------------------------------------------
| Financial income | 2.6 | 2.6 | - |
--------------------------------------------------------------------------------
| Exchange rate differences | -3.8 | -2.7 | 41 |
--------------------------------------------------------------------------------
| Financial expenses | -31.0 | -20.5 | 51 |
--------------------------------------------------------------------------------
| Profit before taxes | 305.6 | 238.2 | 28 |
--------------------------------------------------------------------------------
| % of revenue | 8.2 | 7.3 | - |
--------------------------------------------------------------------------------
| Income taxes | -77.6 | -62.8 | 24 |
--------------------------------------------------------------------------------
| Profit for the report period | 228.0 | 175.4 | 30 |
--------------------------------------------------------------------------------
| % of revenue | 6.2 | 5.3 | - |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to | | | |
--------------------------------------------------------------------------------
| Equity holders of the parent company | 224.9 | 171.0 | 32 |
--------------------------------------------------------------------------------
| Minority interests | 3.1 | 4.4 | -30 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share attributable to | | | |
| the equity holders of the parent | | | |
| company | | | |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 1.77 | 1.36 | 30 |
--------------------------------------------------------------------------------
| Diluted earnings per share, EUR | 1.77 | 1.35 | 31 |
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT OCT 1 - DEC 31, 2007 (MEUR)
--------------------------------------------------------------------------------
| | 10-12/2007 | 10-12/2006 | change, % |
--------------------------------------------------------------------------------
| Revenue | 1,027.0 | 908.1 | 13 |
--------------------------------------------------------------------------------
| of which activities outside Finland | 529.7 | 429.7 | 23 |
--------------------------------------------------------------------------------
| Operating income and expenses | -910.7 | -815.7 | 12 |
--------------------------------------------------------------------------------
| Share of results of associated | 0.2 | 0.5 | -60 |
| companies | | | |
--------------------------------------------------------------------------------
| Depreciation and write-downs | -7.8 | -6.5 | 20 |
--------------------------------------------------------------------------------
| Operating profit | 108.7 | 86.4 | 26 |
--------------------------------------------------------------------------------
| % of revenue | 10.6 | 9.5 | 11 |
--------------------------------------------------------------------------------
| Financial income | 0.8 | 0.3 | *) |
--------------------------------------------------------------------------------
| Exchange rate differences | -2.6 | -0.9 | *) |
--------------------------------------------------------------------------------
| Financial expenses | -8.4 | -5.7 | 47 |
--------------------------------------------------------------------------------
| Profit before taxes | 98.5 | 80.1 | 23 |
--------------------------------------------------------------------------------
| % of revenue | 9.6 | 8.8 | 9 |
--------------------------------------------------------------------------------
| Income taxes 3) | -24.6 | -19.2 | 28 |
--------------------------------------------------------------------------------
| Profit for the report period | 73.9 | 60.8 | 22 |
--------------------------------------------------------------------------------
| % of revenue | 7.2 | 6.7 | 7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to | | | |
--------------------------------------------------------------------------------
| Equity holders of the parent company | 72.8 | 60.3 | 21 |
--------------------------------------------------------------------------------
| Minority interests | 1.1 | 0.5 | *) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share attributable to | | | |
| the equity holders of the parent | | | |
| company | | | |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.57 | 0.48 | 19 |
--------------------------------------------------------------------------------
| Diluted earnings per share, EUR | 0.58 | 0.48 | 21 |
--------------------------------------------------------------------------------
*) Change over 100%.
CONSOLIDATED BALANCE SHEET (MEUR)
--------------------------------------------------------------------------------
| | 12/2007 | 12/2006 | change, % |
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 92.5 | 91.8 | 1 |
--------------------------------------------------------------------------------
| Goodwill | 240.6 | 248.8 | -3 |
--------------------------------------------------------------------------------
| Other intangible assets | 27.1 | 15.6 | 74 |
--------------------------------------------------------------------------------
| Shares in associated companies | 3.6 | 2.9 | 24 |
--------------------------------------------------------------------------------
| Investments | 2.5 | 3.0 | -17 |
--------------------------------------------------------------------------------
| Receivables | 15.1 | 13.4 | 13 |
--------------------------------------------------------------------------------
| Deferred tax assets | 27.2 | 21.1 | 29 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 1,265.0 | 1,006.4 | 26 |
--------------------------------------------------------------------------------
| Trade and other receivables | 727.5 | 688.9 | 6 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 60.2 | 25.9 | *) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 2,461.3 | 2,117.8 | 16 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity attributable to equity holders | | | |
| of the parent company | | | |
--------------------------------------------------------------------------------
| Share capital | 149.1 | 63.4 | *) |
--------------------------------------------------------------------------------
| Other equity | 665.4 | 607.1 | 10 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Minority interests | 3.8 | 3.9 | -3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity | 818.3 | 674.4 | 21 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 71.5 | 52.5 | 36 |
--------------------------------------------------------------------------------
| Pension liabilities | 7.5 | 11.6 | -35 |
--------------------------------------------------------------------------------
| Provisions | 34.2 | 32.2 | 6 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 356.9 | 275.8 | 29 |
--------------------------------------------------------------------------------
| Other liabilities | 1.7 | 8.4 | -80 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Trade and other payables | 928.3 | 788.0 | 18 |
--------------------------------------------------------------------------------
| Provisions | 24.8 | 18.3 | 36 |
--------------------------------------------------------------------------------
| Interest-bearing current liabilities | 218.1 | 256.6 | -15 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity and liabilities | 2,461.3 | 2,117.8 | 16 |
--------------------------------------------------------------------------------
*) Change over 100%.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (MEUR)
--------------------------------------------------------------------------------
| | Share| Share| Legal| Ot- | Cumula-| Fair | Re- | Mino- | Total |
| | capi-| pre- l re- | her | tive | value | tained| rity | equity|
| | tal | mium | serve| re- | trans- | re- | ear- | inte- | |
| | | re- | | ser-| lation | serve | nings | rest | |
| | | ser- | | ve | diffe- | | | | |
| | | ve | | | rences | | | | |
--------------------------------------------------------------------------------
| Equity | 63.4 | 83.8 | 0.8 |13.7 | -4.5 | 1.0 | 512.3 | 3.9 | 674.4 |
| on Jan | | | | | | | | | |
| 1, 2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| Bonus | 82.8 |-82.8 | - | - | - | - | - | - | - |
| issue | | | | | | | | | |
--------------------------------------------------------------------------------
| Shares | 2.9 | - | - | - | - | - | - | - | - |
| subscrib | | | | | | | | | |
| ed with | | | | | | | | | |
| options | | | | | | | | | |
--------------------------------------------------------------------------------
| Change | - | - | - | - | - | 1.0 | - | - | - |
| in the | | | | | | | | | |
| fair | | | | | | | | | |
| value of | | | | | | | | | |
| interest | | | | | | | | | |
| deriva- | | | | | | | | | |
| tives | | | | | | | | | |
--------------------------------------------------------------------------------
| Change | - | - | - | - | -4.5 | - | -1.3 | - | - |
| in | | | | | | | | | |
| trans- | | | | | | | | | |
| lation | | | | | | | | | |
| diffe- | | | | | | | | | |
| rences | | | | | | | | | |
--------------------------------------------------------------------------------
| Employee | - | -1.0 | - | 0.2 | - | - | 4.2 | - | - |
| share | | | | | | | | | |
| option | | | | | | | | | |
| scheme | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | - | - | - | - | - | - | 224.9 | 3.0 | - |
| profit | | | | | | | | | |
| for the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | - | - | - | - | - | - | -82.4 | -0.1 | - |
| paid | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | - | - | 0.2 | 0.0 | - | | -0.1 | -2.9 | - |
| change | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity |149.1 | 0.0 | 1.0 |13.9 | -9.0 | 2.0 | 657.6 | 3.8 | 818.4 |
| on Dec | | | | | | | | | |
| 31, 2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| | Share| Share| Legal| Ot- | Cumula-| Fair | Re- | Mino- | Total |
| | ca- | pre- | re- | her | tive | value |tained | rity | equity|
| | pital| mium | ser- | re- | trans- | reser-| ear- | inte- | |
| | | re- | ve | ser-| lation | ve | nings | rest | |
| | | serve| | ve | diffe- | | | | |
| | | | | | rences | | | | |
--------------------------------------------------------------------------------
| Equity | 62.4 | 77.2 | 0.7 | 2.5 | -3.0 | -0.1 | 420.0 | 3.8 | 563.5 |
| on Jan | | | | | | | | | |
| 1, 2006 | | | | | | | | | |
--------------------------------------------------------------------------------
| Shares | 1.0 | 5.6 | - | - | - | - | - | - | - |
|subscribed| | | | | | | | | |
| with | | | | | | | | | |
| options | | | | | | | | | |
--------------------------------------------------------------------------------
| Change | - | - | - | - | - | 0.9 | - | - | - |
| in the | | | | | | | | | |
| fair | | | | | | | | | |
| value of | | | | | | | | | |
| interest | | | | | | | | | |
| deriva- | | | | | | | | | |
| tives | | | | | | | | | |
--------------------------------------------------------------------------------
| Change | - | - | - | - | - | 0.2 | - | - | - |
| in the | | | | | | | | | |
| fair | | | | | | | | | |
| value of | | | | | | | | | |
| other | | | | | | | | | |
| invest- | | | | | | | | | |
| ments | | | | | | | | | |
--------------------------------------------------------------------------------
| Change | - | - | - | - | -1.5 | - | -0.3 | - | - |
| in | | | | | | | | | |
| trans- | | | | | | | | | |
| lation | | | | | | | | | |
| diffe- | | | | | | | | | |
| rences | | | | | | | | | |
--------------------------------------------------------------------------------
| Employee | - | 1.0 | - | 11. | - | - | -9.6 | - | - |
| share | | | | 2 | | | | | |
| option | | | | | | | | | |
| scheme | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | - | - | - | - | - | - | 171.0 | 4.4 | - |
| profit | | | | | | | | | |
| for the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | - | - | - | - | - | - | -68.9 | - | - |
| paid | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | - | - | 0.1 | - | - | - | 0.1 | -4.3 | - |
| change | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 63.4 | 83.8 | 0.8 |13.7 | -4.5 | 1.0 | 512.3 | 3.9 | 674.4 |
| on Dec | | | | | | | | | |
| 31, 2006 | | | | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT (MEUR)
--------------------------------------------------------------------------------
| | 1-12/2007 | 1-12/2006 | change, % |
--------------------------------------------------------------------------------
| Cash flows from operating activities | | | |
--------------------------------------------------------------------------------
| Net profit for the period | 228.0 | 175.4 | 30 |
--------------------------------------------------------------------------------
| Reversal of accrual-based items | 120.5 | 106.8 | 13 |
--------------------------------------------------------------------------------
| Change in working capital | | | |
--------------------------------------------------------------------------------
| Change in trade and other receivables | -32.9 | -140.0 | -77 |
--------------------------------------------------------------------------------
| Change in inventories | -259.8 | -319.5 | -19 |
--------------------------------------------------------------------------------
| Change in current liabilities | 118.7 | 105.6 | 12 |
--------------------------------------------------------------------------------
| Change in working capital, total | -174.0 | -353.9 | -51 |
--------------------------------------------------------------------------------
| Interest paid | -27.3 | -24.9 | 10 |
--------------------------------------------------------------------------------
| Interest received | 2.4 | 2.4 | - |
--------------------------------------------------------------------------------
| Taxes paid | -66.2 | -54.1 | 22 |
--------------------------------------------------------------------------------
| Net cash generated from operating | 83.4 | -148.3 | *) |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from investing activities | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries, net of | -14.1 | -11.1 | 27 |
| cash | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of shares in | 0.4 | 0.0 | - |
| associated companies | | | |
--------------------------------------------------------------------------------
| Purchase of property, plant and | -28.7 | -33.8 | -15 |
| equipment | | | |
--------------------------------------------------------------------------------
| Purchase of intangible assets | -6.4 | -3.1 | *) |
--------------------------------------------------------------------------------
| Increases in other investments | -0.1 | - | *) |
--------------------------------------------------------------------------------
| Disposals of subsidiaries and | 31.7 | 2.5 | *) |
| businesses | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of property, plant | 4.4 | 3.0 | 47 |
| and equipment | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of other | 0.0 | 0.5 | *) |
| investments | | | |
--------------------------------------------------------------------------------
| Net cash used in investing activities | -12.9 | -42.0 | -69 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing activities | | | |
--------------------------------------------------------------------------------
| Proceeds from share issues | 2.9 | 6.6 | -56 |
--------------------------------------------------------------------------------
| Decrease in loan receivables | 0.1 | 0.1 | - |
--------------------------------------------------------------------------------
| Change in current liabilities | -49.1 | 61.9 | *) |
--------------------------------------------------------------------------------
| Proceeds from borrowings | 168.1 | 175.0 | -4 |
--------------------------------------------------------------------------------
| Repayments of borrowings | -74.2 | -37.4 | 98 |
--------------------------------------------------------------------------------
| Payments of financial leasing debts | -1.4 | -1.9 | -26 |
--------------------------------------------------------------------------------
| Dividends paid | -82.6 | -68.9 | 20 |
--------------------------------------------------------------------------------
| Net cash used in financing activities | -36.2 | 135.4 | *) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net change in cash and cash | 34.3 | -54.8 | *) |
| equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the | 25.9 | 80.6 | -68 |
| beginning of the period | | | |
--------------------------------------------------------------------------------
| Change in the fair value of the cash | - | 0.1 | *) |
| equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end | 60.2 | 25.9 | *) |
| of the period | | | |
--------------------------------------------------------------------------------
*) Change over 100%.
3. NOTES
ACCOUNTING PRINCIPLES OF THE FINANCIAL STATEMENTS BULLETIN
YIT Corporation's financial statements bulletin for January 1 - December 31,
2007 has been drafted in line with the IAS 34 Interim Financial Reporting
standard. The consolidated financial statements have been drafted in compliance
with the International Financial Reporting Standards, and the IAS/IFRS standards
approved by the EU Commission by December 31, 2007 and SIC and IFRIC
interpretations have been complied with in the drafting of the statements. The
financial statements are based on the audited Financial Statements of 2007.
Application of amended or interpreted IFRS standards as from January 1, 2007
The Group has applied the following amendments to the standards or new
interpretations as from January 1, 2007:
IFRS 7 Financial Instruments: Disclosures and IAS 1, Presentation of Financial
Statements (Amendment). Due to the application of these standards, the notes to
the consolidated financial statements have been supplemented, and notes 29 and
30 have been added.
.
The following interpretations that have come into force have not had an effect
on the Group's financial reporting:
IFRIC 7, Applying the Restatement Approach under IAS 29 Financial Reporting in
Hyperinflationary Economies.
IFRIC 8, Scope of IFRS 2, applying to share-based payment transactions.
IFRIC 9, Reassessment of Embedded Derivatives.
IFRIC 10, Interim Financial Reporting and Impairment. The adoption has not had
an effect on the Group's financial reporting.
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. During the period Jan-Mar/2007, the
Board of Directors amended exchange rate risk management so that the value of
YIT's equity is no longer hedged against exchange rate changes. Foreign exchange
positions are reported once per year to the Audit Committee.
The Group's strategic financial targets guide the use and management of the
Group's capital. Achieving the profitable growth target is supported by
maintaining an optimum Group capital structure. Capital structure is mainly
influenced by controlling the amount of working capital tied to business
operations.
A more detailed account of financial risks will be published in the notes to the
financial statements for 2007.
SEGMENT INFORMATION
In 2007 YIT's business operations were divided into three business segments:
Building Systems, Construction Services and Industrial and Network Services
Revenue by business segment (MEUR)
--------------------------------------------------------------------------------
| | 1-12/2007 | 1-12/2006 | change, % |
--------------------------------------------------------------------------------
| Building Systems | 1,650.0 | 1,415.1 | 17 |
--------------------------------------------------------------------------------
| Construction Services | 1,634.9 | 1,452.2 | 13 |
--------------------------------------------------------------------------------
| Industrial and Network Services *) | 489.8 | 476.9 | 3 |
--------------------------------------------------------------------------------
| Other items | -68.2 | -59.8 | 14 |
--------------------------------------------------------------------------------
| YIT Group, total | 3,706.5 | 3,284.4 | 13 |
--------------------------------------------------------------------------------
*) Revenue of the Network Services unit amounted to EUR 77 million for 2007. The
sale of the business unit was completed on December 31, 2007.
Operating profit by business segment (MEUR)
--------------------------------------------------------------------------------
| | 1-12/2007 | 1-12/2006 | change, % |
--------------------------------------------------------------------------------
| Building Systems | 112.2 | 87.6 | 28 |
--------------------------------------------------------------------------------
| Construction Services | 200.6 | 170.8 | 17 |
--------------------------------------------------------------------------------
| Industrial and Network Services | 41.2 | 18.0 | *) |
--------------------------------------------------------------------------------
| Other items | -16.2 | -17.6 | -8 |
--------------------------------------------------------------------------------
| YIT Group, total | 337.8 | 258.8 | 31 |
--------------------------------------------------------------------------------
*) Change over 100%.
Order backlog by business segment at end of period (MEUR)
--------------------------------------------------------------------------------
| | 12/2007 | 12/2006 | change, % |
--------------------------------------------------------------------------------
| Building Systems | 707.7 | 601.7 | 18 |
--------------------------------------------------------------------------------
| Construction Services | 2,646.5 | 2,053.5 | 29 |
--------------------------------------------------------------------------------
| Industrial and Network Services | 219.2 | 184.0 | 19 |
--------------------------------------------------------------------------------
| Other items | -64.1 | -36.9 | 74 |
--------------------------------------------------------------------------------
| YIT Group, total | 3,509.3 | 2802.3 | 25 |
--------------------------------------------------------------------------------
UNUSUAL ITEMS AFFECTING OPERATING PROFIT (MEUR)
--------------------------------------------------------------------------------
| | 1-12/2007 | 1-12/2006 |
--------------------------------------------------------------------------------
| Building Systems | | |
--------------------------------------------------------------------------------
| Released provisions | - | 7.2 |
--------------------------------------------------------------------------------
| Industrial and Network Services | | |
--------------------------------------------------------------------------------
| Rearrangements | -1.0 | -5.1 |
--------------------------------------------------------------------------------
| Divestment of Network Services business | 14.4 | - |
| unit | | |
--------------------------------------------------------------------------------
| YIT Group, total | 13.4 | 2.1 |
--------------------------------------------------------------------------------
In the October-December/2006 period, Building Systems released provisions for
certain contractual obligations that had come to an end. This had a positive
impact of EUR 7.2 million on operating profit.
The operating profit of the Industrial and Network Services business segment in
October-December/2007 includes a positive impact of EUR +14.4 million due to
divestment of Network Services business unit. Operating profit in
July-September/2006 includes EUR -5.1 million and in January-March/2007 EUR -1.0
million in costs for the downsizing of Network Services carried out in 2006.
ACQUIRED BUSINESSES (MEUR)
In 2007, YIT Group made minor company and business acquisitions in Finland,
Sweden, Norway and Denmark in the Building Systems and Industrial and Network
Services segments. The most significant of these acquisitions were Comford Nord
AS, Brodrene Hagenes AS and Halden Automasjon AS in Norway, Cellpipe AB in
Sweden, Monies & Andersens Eftf. A/S in Denmark and Inesco Oy in Finland.
The total cost of these acquisitions amounted to EUR 14.6 million. The
acquisitions did not result in unallocated goodwill. Goodwill was mainly
allocated to intangible assets.
During the financial period, shareholding in ZAO YIT Moskovia was increased by
5.1% to 92.9% in the Construction Services segment.
--------------------------------------------------------------------------------
| | The fair value | Seller's carrying |
| | in balance | amount before the |
| | sheet | consolidation |
--------------------------------------------------------------------------------
| The effect on balance sheet assets an | | |
| liabilities: | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 1.1 | 1.1 |
--------------------------------------------------------------------------------
| Intangible assets | 11.9 | 0.0 |
--------------------------------------------------------------------------------
| Inventories | 2.6 | 2.6 |
--------------------------------------------------------------------------------
| Trade and other receivables | 8.7 | 8.7 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 2.4 | 2.4 |
--------------------------------------------------------------------------------
| Other liabilities | -10.1 | -10.1 |
--------------------------------------------------------------------------------
| Acquired net assets | 16.6 | 4.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total consideration | 16.6 | |
--------------------------------------------------------------------------------
| Goodwill | 0.0 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The effect on cash flow: | | |
--------------------------------------------------------------------------------
| To be paid in cash | 17.6 | |
--------------------------------------------------------------------------------
| Cash and cash equivalents in acquired | -2.4 | |
| entity | | |
--------------------------------------------------------------------------------
| Accrued payments | -1.1 | |
--------------------------------------------------------------------------------
| Cash flow on acquisitions | 14.1 | |
--------------------------------------------------------------------------------
DIVESTED BUSINESSES (MEUR)
YIT Industrial and Network Services Ltd sold the Network Services business unit
to Relacom Finland Oy through an agreement signed on November 20, 2007. The
transaction price amounted to EUR 25 million. Following approval by the
Competition Authority, the transaction was agreed and the price paid on December
31, 2007.
YIT Construction Ltd and its Lithuanian subsidiary AB YIT Kausta signed an
agreement on October 2, 2007 on the sale of their shares in UAB Kausta Guder.
The transaction was completed following approval of the Lithuanian competition
authorities on November 30, 2007.
--------------------------------------------------------------------------------
| | 1-12/2007 |
--------------------------------------------------------------------------------
| The effect on revenue and net profit: | |
--------------------------------------------------------------------------------
| Revenue | 91.5 |
--------------------------------------------------------------------------------
| Operating expenses | -88.7 |
--------------------------------------------------------------------------------
| Profit before taxes | 2.8 |
--------------------------------------------------------------------------------
| Taxes | 0.6 |
--------------------------------------------------------------------------------
| Net profit | 2.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The effect on balance sheet assets an liabilities : | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 3.7 |
--------------------------------------------------------------------------------
| Intangible assets | 8.3 |
--------------------------------------------------------------------------------
| Inventories | 3.7 |
--------------------------------------------------------------------------------
| Trade and other receivables | 1.4 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 0.2 |
--------------------------------------------------------------------------------
| Trade and other liabilities | 1.6 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 0.1 |
--------------------------------------------------------------------------------
| Minority interest | 1.4 |
--------------------------------------------------------------------------------
| Net assets | 14.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The effect on cash flow: | |
--------------------------------------------------------------------------------
| Paid in cash | 32.2 |
--------------------------------------------------------------------------------
| Direct costs related to disposals | 0.3 |
--------------------------------------------------------------------------------
| Cash and cash equivalents in disposed entity | 0.2 |
--------------------------------------------------------------------------------
| Cash flow on disposals | 31.7 |
--------------------------------------------------------------------------------
CHANGES IN PROPERTY, PLANT AND EQUIPMENT (MEUR)
--------------------------------------------------------------------------------
| | 1-12/2007 | 1-12/2006 | change, % |
--------------------------------------------------------------------------------
| Carrying value at the beginning of | 91.8 | 77.1 | 19 |
| period | | | |
--------------------------------------------------------------------------------
| Increase | 29.4 | 33.6 | -13 |
--------------------------------------------------------------------------------
| Increase through acquisitions | 1.1 | 2.4 | -54 |
--------------------------------------------------------------------------------
| Decrease | -4.0 | -2.6 | 54 |
--------------------------------------------------------------------------------
| Decrease through disposals | -2.4 | -0.3 | *) |
--------------------------------------------------------------------------------
| Depreciation and value adjustments | -20.3 | -18.6 | 9 |
--------------------------------------------------------------------------------
| Reclassification | -3.1 | 0.2 | *) |
--------------------------------------------------------------------------------
| Carrying value at the end of period | 92.5 | 91.8 | 1 |
--------------------------------------------------------------------------------
*) Change over 100%.
INVENTORIES (MEUR)
--------------------------------------------------------------------------------
| | 12/2007 | 12/2006 | change, % |
--------------------------------------------------------------------------------
| Raw materials and consumables | 19.4 | 19.5 | - |
--------------------------------------------------------------------------------
| Work in progress | 488.3 | 378.2 | 29 |
--------------------------------------------------------------------------------
| Land areas and plot owing companies | 567.1 | 500.0 | 13 |
--------------------------------------------------------------------------------
| Shares in completed housing and real | 80.0 | 64.9 | 23 |
| estate companies | | | |
--------------------------------------------------------------------------------
| Advance payments | 104.4 | 35.2 | *) |
--------------------------------------------------------------------------------
| Other inventories | 5.7 | 8.6 | -33 |
--------------------------------------------------------------------------------
| Total inventories | 1,265.0 | 1,006.4 | 26 |
--------------------------------------------------------------------------------
*) Change over 100%.
NOTES ON EQUITY (MEUR)
--------------------------------------------------------------------------------
| Share capital and share | Number of | Share | Share | Treasury| Total |
| premium reserve | shares | capital | premium | shares | |
| | | | reserve | | |
--------------------------------------------------------------------------------
| Jan 1, 2007 |126,777,072| 63.4 | 83.8 | 0.0 | 147.2 |
| | | | | | |
--------------------------------------------------------------------------------
| Bonus issue | - | 82.8 | -82.8 | - | 0.0 |
--------------------------------------------------------------------------------
| Reclassification | - | - | -1.0 | - | -1.0 |
--------------------------------------------------------------------------------
| Annulment of treasury | -400 | - | - | 0.0 | 0.0 |
| shares | | | | | |
--------------------------------------------------------------------------------
| Share subscription with | 441,200 | 2.9 | - | - | 2.9 |
| options | | | | | |
--------------------------------------------------------------------------------
| Dec 31, 2007 |127,217,872| 149.1 | 0.0 | 0.0 | 149.1 |
| | | | | | |
--------------------------------------------------------------------------------
INTEREST-BEARING LIABILITIES (MEUR)
Bonds
--------------------------------------------------------------------------------
| | Fair | Carrying | Nominal |
| | value | value | value |
--------------------------------------------------------------------------------
| Bonds in financial statements December | 275.3 | 275.0 | 275.0 |
| 31, 2006 | | | |
--------------------------------------------------------------------------------
| Redemptions during to period | -50.0 | -50.0 | -50.0 |
--------------------------------------------------------------------------------
| Valuation of the above bonds on Sept | 223.5 | 225.0 | 225.0 |
| 30, 2007 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bonds raised during the review period | | | |
--------------------------------------------------------------------------------
| (1) 1/2007-2014, interest rate 5.284%, | 49.2 | 50.0 | 50.0 |
| EUR | | | |
--------------------------------------------------------------------------------
| (2) 2/2007-2012, interest rate 5.165%, | 49.2 | 49.9 | 50.0 |
| EUR | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total bonds Dec 31, 2007 | 321.9 | 324.9 | 325.0 |
--------------------------------------------------------------------------------
Terms of the bonds raised during the review period in brief:
1) Loan-period March 26, 2007 - March 26, 2014, interest payments by quarter in
arrear, starting on June 26, 2007. The bond is unsecured. ISIN code
FI0003024216. The interest rate is 3 months Euribor + 0.50%. (Private
Placement).
2) Loan-period March 29, 2007 - March 29, 2012, interest payments by quarter in
arrear, starting on June 29, 2007. The bond is unsecured. ISIN code
SE0001991068. The interest rate is 3 months Euribor + 0.40%. (Private
Placement).
Interest rate risk associated with interest-bearing liabilities
On the closing date, interest-bearing liabilities accounted for 64% (39%) of the
Group's total loan portfolio and the weighted average interest rate was 4.555%
(4.291%).
The weighted average interest rate of floating rate loans was 5.563% (4.108%).
The weighted average interest rate of the entire loan portfolio 4.921% (4.180
%). These figures include the effect of interest rate swaps.
Interest rate swaps are used to hedge against rate adjustments of floating rate
loans: 3 month Euribor-linked loans with a nominal value of EUR 175 million and
6 month Euribor-linked loans with a nominal value of EUR 35 million. These
hedges qualify for effective hedging requirements and changes in fair value of
the interest rate swaps are, according to company accounting principles,
recognised in fair value reserve. Interest rate swaps decrease the weighted
average interest of the entire loan portfolio by 0.349 percentage point.
Interest rate swaps are also used to hedge against readjustments of 3 month
Euribor-linked loans with a nominal value of EUR 100 million and 1 month
Euribor-linked trade receivables with a nominal value of EUR 62 million. IAS
39-compliant hedge accounting is not applied to these derivative instruments,
and changes in their fair value have been recognised in the income statement in
accordance with the accounting principles applied in the financial statements.
At the end of 2007, the duration of long-term liabilities and interest rate
swaps hedging them was 1.28 years (1.52 years).
CHANGE IN CONTINGENT LIABILITIES AND ASSETS AND COMMITMENTS (MEUR)
--------------------------------------------------------------------------------
| | 12/2007 | 12/2006 | muutos, % |
--------------------------------------------------------------------------------
| Collateral given for own commitments | | | |
--------------------------------------------------------------------------------
| Corporate mortgages | 29.3 | 29.3 | - |
--------------------------------------------------------------------------------
| Pledged shares | - | 1.5 | *) |
--------------------------------------------------------------------------------
| Other commitments | | | |
--------------------------------------------------------------------------------
| Repurchase commitments | 202.9 | 252.5 | -20 |
--------------------------------------------------------------------------------
| Operating leases | 294.3 | 202.1 | 46 |
--------------------------------------------------------------------------------
| Rental guarantees for clients | 7.8 | 6.5 | 20 |
--------------------------------------------------------------------------------
| Other contingent liabilities | 0.7 | 0.8 | *) |
--------------------------------------------------------------------------------
| Other guarantees | 12.4 | - | *) |
--------------------------------------------------------------------------------
| Liability under derivative contracts | | | |
--------------------------------------------------------------------------------
| Value of underlying instruments | | | |
--------------------------------------------------------------------------------
| Interest rate derivatives | 399.8 | 173.4 | *) |
--------------------------------------------------------------------------------
| Foreign currency forward contracts | 245.5 | 202.7 | 21 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Market value | | | |
--------------------------------------------------------------------------------
| Interest rate forward contracts | 3.5 | 2.0 | 75 |
--------------------------------------------------------------------------------
| Foreign currency forward contracts | 3.6 | 1.7 | *) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contingent assets | 11.1 | 11.1 | - |
--------------------------------------------------------------------------------
*) Change over 100%.
TRANSACTIONS WITH ASSOCIATED COMPANIES (MEUR)
--------------------------------------------------------------------------------
| | 1-12/2007 | 1-12/2006 | change, % |
--------------------------------------------------------------------------------
| Sales to associated companies | 4.8 | 1.2 | *) |
--------------------------------------------------------------------------------
| Purchases from associated companies | 40.1 | 0.4 | *) |
--------------------------------------------------------------------------------
| Trade and other receivables | 0.1 | 2.6 | -96 |
--------------------------------------------------------------------------------
| Trade and other liabilities | 0.8 | - | *) |
--------------------------------------------------------------------------------
*) Change over 100%.
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