Lemminkäinen financial statement bulletin 2012

LEMMINKÄINEN OYJ      FINANCIAL STATEMENT BULLETIN    7 FEBRUARY 2013 AT 8 A.M.

LEMMINKÄINEN FINANCIAL STATEMENT BULLETIN 2012: Successful efficiency measures; improved profitability and a stronger balance sheet

Year 2012 compared to 2011

- Net sales rose 4% and totalled EUR 2,267.6 million (2,183.9).
-
The order book grew 3%, standing at EUR 1,443.9 million (1,400.4) at the end of the period.
-
The operating profit improved by 14% to EUR 50.1 million (44.0). The operating margin was 2.2% (2.0). The operating profit for the comparison year includes EUR 11.0 million in negative goodwill recognised from an acquisition.
-
Pre-tax profit improved by 16% to EUR 29.0 million (25.0). The pre-tax profit for the comparison year includes EUR 11.0 million in negative goodwill recognised from an acquisition.
-
Earnings per share were EUR 2.04 (1.77), of which EUR 0.83 (0.83) was generated by continuing operations. Earnings per share for the comparison year include negative goodwill of EUR 0.56 per share from an acquisition.
-
Cash flow from operations totalled EUR 57.8 million (-7.1).
-
The equity ratio was 38.0% (30.8) and gearing 61.5% (114.5).
-
The Board of Directors proposes a divided of EUR 0.60 per share (0.50).

October-December 2012, compared with the corresponding period of 2011

- Net sales in October-December grew by 5% and totalled EUR 668.6 million (635.2).
-
Operating profit tripled to EUR 23.7 million (7.7). The operating margin was 3.5% (1.2).
-
Pre-tax profit amounted to EUR 14.7 million (1.4).
-
Earnings per share were EUR 0.28 (-0.03).
-
Cash flow from operations totalled EUR 19.0 million (-20.8).

Divested business functions are categorised as discontinued operations, and figures for the comparison periods have therefore been adjusted accordingly. On 28 September 2012, Lemminkäinen sold the entire share capital of Lemminkäinen Rakennustuotteet Oy, which comprised the company's concrete business. The transaction price was about EUR 55 million, from which Lemminkäinen recognised pre-tax capital gains of EUR 17.3 million mainly in the third quarter of 2012. On 31 January 2011, Lemminkäinen divested its roofing business at a price of about EUR 25 million, recognising pre-tax capital gains of EUR 17.1 million in the first quarter of 2011. 

Key figures, IFRS,
EUR million
1-12/
2012
1–12/
2011 1)

Change
10-12/
2012
10-12/
2011

Change
Net sales 2,267.6 2,183.9 4% 668.6 635.2 5%
Operating profit   50.1 44.0 14% 23.7 7.7 over 100
Operating margin, % 2.2 2.0   3.5 1.2  
Pre-tax profit 29.0 25.0 16% 14.7 1.4 over 100
Profit from continuing operations 20.4 17.1 19% 9.0 -1.3  
Profit from discontinued operations
 5.7

 5.8
   
 1.3
 
Capital gains from discontinued operations (after taxes)
18.0

12.7
 
0.2
   
Profit for the period   44.0 35.6 24% 9.2 -0.1 over 100
Earnings per share, EUR            
   From continuing operations 0.83 0.83   0.26 -0.09  
   From discontinued
   operations

1.21

0.94
 
0.02

0.06
 
   From the profit for the
   period

2.04

1.77
 
0.28

-0.03
 
Cash flow from operations 57.8 -7.1   19.0 -20.8  

1)  1-12/2011: The operating profit, pre-tax profit, earnings from continuing operations and the result for the period include EUR 11 million in negative goodwill recognised from an acquisition. Earnings per share include EUR 0.56 per share in negative goodwill.

 

Key figures 31.12.2012 31.12.2011 Change
Order book, EUR million 1,443.9 1,400.4 3%
Balance sheet total, EUR million 1,300.4 1,242.8 5%
Interest-bearing net debt, EUR million 277.3 401.2 -31%
Equity ratio, % 38.0 30.8  
Gearing, % 61.5 114.5  
Return on investment (rolling 12 months), % 10.7 10.8  


President & CEO Timo Kohtamäki:

"On the whole, the year 2012 met our expectations. The efficiency program launched in late 2011 had a positive impact on the result of all our businesses in Finland. Especially the Finnish infrastructure construction and commercial construction in the Helsinki Metropolitan Area improved their competitiveness in a challenging market situation. Our housing sales in Finland remained on a good level throughout the year. Also the demand for our repair and maintenance services for technical building systems developed nicely.

In Russia, brisk infrastructure and industrial construction complemented the delay in residential construction. In Sweden, we made a strong come-back in the infrastructure construction after a few quiet years. The biggest disappointment was the performance of our Norwegian infrastructure business. I am confident that the corrective measures initiated in the autumn will yield results already this year.

Despite positive development, I am not satisfied with our profitability as we have not yet reached our long-term profitability targets. On the other hand, our financial position and solvency have improved. This year we are focusing on enhancing our operational efficiency and customer service. Both these factors have a direct impact on our profitability, and by improving them we will create a solid platform for Lemminkäinen's future profitable growth."

Market outlook

Of Lemminkäinen's key market areas, construction is growing quickest in Russia, where infrastructure construction in particular holds significant growth potential. In Norway, Sweden and Denmark, multi-year national investment plans in energy production and road and railway networks are supporting growth in infrastructure construction. The market outlook in Finland is cautious, and the total volume of construction is expected to either remain at the same level as in 2012 or fall slightly. Migration to urban growth centres and low interest rates support the housing demand. On the other hand tax increases have reduced consumers' purchasing power, and this is expected to dampen the housing market. 

Profit guidance realisation in 2012

On 9 February 2012, Lemminkäinen estimated that its 2012 net sales would remain at the same level as in 2011, and that the result before taxes would improve on 2011. This estimate was based on an improved order book and order book margin. Lemminkäinen's guidance remained unaltered throughout the year. In 2012, Lemminkäinen's net sales grew by 4 per cent and its result before taxes rose by 16 per cent. 

Profit guidance for 2013

Lemminkäinen estimates that its 2013 net sales will remain at the same level as in 2012 and that its operating profit will improve on 2012. In 2012, Lemminkäinen's net sales totalled EUR 2,268 million and its operating profit amounted to EUR 50 million.

This guidance is based on the company estimate that the efficiency programme proceeds as planned and that the construction market will not weaken significantly. 

Briefing 

A Finnish-language briefing for analysts and the media will be held at 2.00 p.m. on Thursday, 7 February at Lemminkäinen's head office. The street address is Salmisaarenaukio 2, Helsinki, Finland. President & CEO Timo Kohtamäki will present the financial statement bulletin. Presentation material is available in Finnish and English on the company's website, www.lemminkainen.com.

Interim Reports for 2013

The Interim Reports for 2013 will be published as follows:
8 May 2013                 Interim Report, 1 Jan - 31 Mar 2013
8 August 2013             Interim Report, 1 Jan - 30 Jun 2013
7 November 2013        Interim Report, 1 Jan - 30 Sept 2013

LEMMINKÄINEN CORPORATION
Corporate Communications

ADDITIONAL INFORMATION:
Timo Kohtamäki, President & CEO, tel. +358 (0)2071 53263
Robert Öhman, Chief Financial Officer, tel. +358 (0)2071 53515
Katri Sundström, Vice President, Investor Relations, tel.  +358 (0)2071 54813

APPENDICES:
Financial statement bulletin 2012
Tabulated sections of the financial statement bulletin.

DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Key media
www.lemminkainen.com

Lemminkäinen Group operates in all areas of the construction sector. The Group's business segments are building construction, infrastructure construction, technical building services and international operations. Net sales in 2012 were about EUR 2.3 billion, of which international operations accounted for roughly 40 per cent. The Group employs an average of 8,000 people. Lemminkäinen Corporation's share is quoted on NASDAQ OMX Nordic Exchange Helsinki. www.lemminkainen.com