Lemminkäinen and YIT will complete the merger
- Stock Exchange Releases
- 11/8/2006
LEMMINKÄINEN?S INTERIM FINANCIAL REVIEW 1.1. ? 30.9.2006
LEMMINKÄINEN CORPORATION STOCK EXCHANGE BULLETIN 8.11.2006 11:10 LEMMINKÄINENS INTERIM FINANCIAL REVIEW 1.1. 30.9.2006: Operating profit up by almost a third Lemminkäinen Groups Q1-Q3 net sales rose 11.3 % to EUR 1,305.1 million (1,172.2). The operating profit increased 30.4 % to EUR 74.6 million (57.2) and the profit before taxes was EUR 63.9 million (52.3). The order book grew by a fifth to reach EUR 1,227.7 million (1,
LEMMINKÄINEN CORPORATION STOCK EXCHANGE BULLETIN 8.11.2006
11:10
LEMMINKÄINENS INTERIM FINANCIAL REVIEW 1.1. 30.9.2006:
Operating profit up by almost a third
Lemminkäinen Groups Q1-Q3 net sales rose 11.3 % to EUR 1,305.1
million (1,172.2). The operating profit increased 30.4 % to EUR
74.6 million (57.2) and the profit before taxes was EUR 63.9
million (52.3). The order book grew by a fifth to reach EUR
1,227.7 million (1,010.9).
LEMMINKÄINEN CONTINUES TO GROW PROFITABLY
The Groups Q1-Q3 net sales rose 11.3 % to EUR 1,305.1 million
(1,172.2). Operations abroad accounted for 30.6 % (29.8) of total
net sales. Operating profit increased 30.4 % to EUR 74.6 million
(57.2). The Groups profit before taxes was EUR 63.9 million
(52.3) and the profit after taxes was EUR 48.7 million (38.4).
Earnings per share were EUR 0.31 (0.03).
The companys order book at the end of the accounting period was
EUR 1,227.7 million (1,010.9), of which foreign orders accounted
for 23.1 % (38.2 %).
IMPROVED RESULTS IN ALL BUSINESS SECTORS
The net sales, operating profit and order book of the Paving and
Mineral Aggregates Division were all higher than in the previous
year.
The operating profit of the Building Materials Division almost
doubled and the order book increased substantially.
Lemcons net sales and operating profit rose, but the order book
declined slightly.
Palmbergs net sales, operating profit and order book rose
significantly.
Tekmannis net sales fell, but the operating profit and order book
both rose.
LEMMINKÄINEN ACTIVE IN THE GROWING CONSTRUCTION MARKET
The growth of the construction market is expected picking up speed
this year. Civil engineering contracting has been growing and
major infrastructure project have provided work for Lemcon in both
Finland and Sweden. Commercial construction has remained brisk,
which has increased demand for Palmbergs services. A number of
logistics centres have been built. Palmbergs housing production
has also been growing. The recovery of the office construction
segment has boosted Lemminkäinens production of pre-cast concrete
staircase units.
Refurbishment contracting is expected to continue growing steadily
next year. Maintenance and repair work accounts for approximately
40 % of Lemminkäinen Groups entire business.
The total volume of construction is expected to grow this year.
Demand for housing in Finland has remained good and major
infrastructure projects will provide work for construction
companies over the coming years.
The international operations of the Finnish construction companies
have continued to grow, especially in Scandinavia, the Baltic
states and Russia, and some analysts are forecasting even faster
growth next year. Lemminkäinen Group generates about a quarter of
its total net sales in the above-mentioned markets, and that
proportion is expected to be at least maintained in the future.
GOOD SHORT-TERM OUTLOOK
The current year has been a good one for Lemminkäinen. The Groups
housing production is growing, and increased commercial
construction and the favourable development of operations abroad
have boosted the companys net sales and earnings.
The result for the 2006 accounting period is expected to be
clearly better than last year, and the companys strong order book
provides a good starting point for 2007.
LEMMINKÄINEN CORPORATION
Juhani Sormaala
Managing Director
Additional information:
Juhani Sormaala, Managing Director, +358 2071 53302
Jukka Ovaska, Finance Director, +358 2071 53334
Katri Sundström, Investor Relations Manager, +358 2071 54813
APPENDICES:
Lemminkäinen Corporations interim financial review 1.1.30.9 2006
Distribution: Helsinki Stock Exchange, key media
LEMMINKÄINEN CORPORATIONS INTERIM FINANCIAL REVIEW 1.1.-30.9.2006
MARKET SITUATION
The total volume of construction is expected to grow 4.5 % this
year and 2.5 % in 2007. Despite the anticipated slowdown in
growth, the outlook for construction remains favourable. Economic
growth in Finland is expected to reach about 4.5 % in 2006.
The housing market has remained brisk despite the rise in interest
rates. Some 34,500 new housing starts are expected to be made this
year, compared with 34,275 last year. In the Helsinki metropolitan
area the worsening shortage of building plots has held back
private-sector housing starts.
Industrial and commercial construction continues to grow steadily
and office construction, especially in the Helsinki metropolitan
area, is clearly picking up. The civil engineering market has
grown this year due to major on-going projects, and large
transport infrastructure investments may be expected in 2007 too.
Employment in the construction sector is growing and skilled
labour remains in short supply.
The Finnish construction companies have been active
internationally in the key markets of Scandinavia, the Baltic
states and Russia, and in some of these markets a further pick up
in the growth rate is forecast for 2007.
GROUP NET SALES AND EARNINGS
The Q1-Q3 net sales of Lemminkäinen Group rose 11.3 % to EUR
1,305.1 million (1,172.2), of which operations abroad accounted
for EUR 399.8 million (348.8). The Group generated 69.4 % of its
net sales Finland, 14.0 % in other Nordic countries, 7.3 % in
Eastern Europe, 5.8 % in the Baltic states, and 3.6 % in other
countries. The net sales share of operations abroad was biggest in
the Paving and Mineral Aggregates Division and in Lemcon, both of
which derive about a half of their revenue from markets outside
Finland.
Net sales by business sector
EUR mill. 1-9/2006 1-9/2005 Change, %
Paving and Mineral
Aggregates Division 421.3 385.9 9.2
Building Materials
Division 78.7 80.8 -2.6
Lemcon Ltd 271.5 231.9 17.1
Oy Alfred A.
Palmberg Ab 426.5 375.2 13.7
Tekmanni Oy 135.4 139.8 -3.1
Others -28.3 -41.3 31.5
Group total 1 305.1 1 172.2 11.3
The Groups Q1-Q3 operating profit rose 30.4 % to EUR 74.6 million
(57.2). The profit before taxes was EUR 63.9 million(52.3)and the
profit after taxes EUR 48.7 million (38.4). Earnings per share
were EUR 2.57 (2.03).
Operating profit by business sector
EUR mill. 1-9/2006 1-9/2005 Change, %
Paving and Mineral
Aggregates Division 18.4 16.9 8.9
Building Materials
Division 4.0 2.2 81.8
Lemcon Ltd 11.5 10.1 13.9
Oy Alfred A.
Palmberg Ab 32.6 22.6 44.2
Tekmanni Oy 5.8 5.6 3.6
Others 2.3 -0.2 Over 100
Group total 74.6 57.2 30.4
BUSINESS SECTORS
Paving and Mineral Aggregates Division
The Q1-Q3 net sales of the Paving and Mineral Aggregates Division
rose to EUR 421.3 million (385.9). Operations abroad accounted for
EUR 198.8 million (173.0) of the Divisions net sales. The
Division generated 53 % of its net sales in Finland, 28 % in other
Nordic countries, and 19 % in the Baltic states and Russia.
The Divisions operating profit was EUR 18.4 million (16.9). The
order book was up on the previous year at EUR 196.7 million
(183.8), of which operations abroad contributed 58.7 % (52.6).
The total volume of asphalt paving works in Finland is down on the
previous year, and a further decline in volume is forecast for
2007. Overall, the profitability of the Finnish asphalt paving
companies has been weak. The Divisions order book for the
remainder of the year is still good.
The price level of asphalt paving contracts is still quite low in
Finland and Sweden, but slightly higher in Denmark and Norway.
Increased prices of raw materials, especially bitumen, have also
contributed to the industrys poor profitability. However, the
price of bitumen peaked during the review period and is now about
15 % lower than it was earlier in the year.
The volume of paving works in the Baltic states has remained high.
However, market growth has been retarded by the shortage of
skilled labour and the slow start-up of new EU-funded projects.
Nonetheless, Russia and the Baltic states will be the Divisions
most important growth areas in the near future.
Brisk housing production has supported sales of mineral aggregate
at a good level. Demand for stone crushing services has declined
slightly, although the situation is expected to improve in summer
2007.
Demand for ready-mix concrete has remained good. Forssan Betoni
continues to deliver ready-mix concrete to the Olkiluoto nuclear
power plant project in accordance with the original contract. The
delivered concrete has been found to satisfy the set quality
requirements in all respects, and in capacity tests conducted at
the request of the client Forssan Betoni has achieved all of the
set targets.
Building Materials Division
The Q1-Q3 net sales of the Building Materials Division were EUR
78.7 million (80.8) and the operating profit was EUR 4.0 million
(2.2). The Divisions order book rose to EUR 26.9 million (19.8).
The Divisions order book for pre-cast concrete staircase units
has grown considerably thanks to the pick-up in office
construction. Demand for roofing and urban environment contracting
has also remained good. The year-end outlook for the Division is
favourable thanks to the increased order book and clearly improved
profitability.
On 31 May 2006 Lemminkäinen Betonituote Oy acquired RK-
Betoniporras Oy and the pre-cast concrete staircase operations of
Suonenjoen Sementtituote Oy. The combined net sales of these
acquired businesses is about EUR 3.5 million. After the
acquisitions Lemminkäinens new subsidiary, Suonenjoen Betonituote
Oy, continues to be based in Suonenjoki and its business mainly
involves the manufacture of pre-cast concrete staircase units.
Lemcon Ltd
The Q1-Q3 net sales of Lemcon Ltd rose to EUR 271.5 million
(231.9), of which operations abroad accounted for EUR 155.6
million (147.0). Some 43 % of the companys net sales came from
Finland, with the remainder being generated in Eastern Europe (30
%), other Nordic countries (9 %), North and South America (11 %),
and other countries (7 %).
Lemcons operating profit was EUR 11.5 million (10.1) and the
profit before taxes was EUR 11.0 million (11.5). The companys
order book was EUR 316.5 million (353.2), of which operations
abroad accounted for 44.2 % (76.0).
In infrastructure construction Lemcons Finnish and Swedish order
books are good, and the market situation in both countries is
expected to remain favourable in the near future. In Sweden Lemcon
has been actively involved in the countrys major railway tunnel
building projects, and in Finland the companys order book is
boosted by contracts such as the underground service tunnel in
downtown Helsinki and the fitting out of Vuosaari harbours
railway tunnel.
In Finland Lemcon is a significant project management contractor.
The construction of a maritime museum centre in Kotka is one of
the biggest contracts received this year.
In Russia, demand for industrial, logistical and commercial
facilities continues to be brisk. Lemcon aims to be actively
involved in Finnish industrys plant building projects in Russian
growth centres. The company is also studying future business
opportunities in growing areas of Eastern Europe, such as Romania,
Bulgaria and the Ukraine. Other growth areas for the near future
include China and India.
Demand for Lemcons technical expert services in
telecommunications network construction has remained good. With
the number of mobile phone users growing in the developing
countries, the company anticipates future business opportunities
in regions such as Southeast Asia and South America.
The dispute arising from IKEAs termination of the construction
contract for the MEGA shopping centre in St. Petersburg is pending
before the court of arbitration. The case is expected to proceed
in Stockholm during the first half of 2007.
Oy Alfred A. Palmberg Ab
The Q1-Q3 net sales of the Groups building contractor, Oy Alfred
A. Palmberg Ab, rose to EUR 426.5 million (375.2). The companys
operating profit improved significantly to EUR 32.6 million
(22.6), and profit before taxes was EUR 27.4 million (20.1).
Palmbergs order book at the end of the review period was EUR
613.2 million (387.6).
There has been considerable growth in building construction this
year. The growth rate is forecast to level off gradually, but
still to remain good next year too. Commercial construction has
remained brisk and office construction is expected to pick up,
especially in the Helsinki metropolitan area. The volume of
housing construction has remained good in both the new residential
building and refurbishment markets. New housing starts in 2006 are
forecast at about 34 500 units, compared with 34,275 last year.
The number of people intending to buy housing has remained high in
spite of raised interest rates. Migration to growth centres has
also supported the demand for housing in Finland.
Palmbergs regionally operating subsidiaries have increased their
housing production and significantly improved their profitability
compared with last year. Demand for housing has also been brisk in
the Helsinki metropolitan area, but a shortage of building plots
is expected to hold down the number of private-sector housing
starts in the area to some extent.
This year the company expects to start the construction of about
1,400 housing units, compared with 1 251 starts made in 2005.
Palmbergs private-sector housing production
1-9/2006 1-9/2005 Change, %
Housing starts 1 029 998 3.1
Housing units sold 791 904 -12.5
Unsold completed units 72 80 -10.0
Completed 885 752 17.7
Under construction at 30.9.2006 1 457 1 378 5.7
At the end of the review period the company owned a total of
755,000 m2 of unused building rights, of which about 470,000 m2
were residential building rights. The company also has binding or
conditional co-operation and zoning agreements for a further
550,000 m2, of which about 326,000 m2 are residential building
rights. Market conditions permitting, the company has the
possibility to increase its housing production thanks to the good
stock of building plots. At the present rate of production the
company owns enough unused building rights to meet its needs for
about four years.
Palmbergs full-year outlook is very good thanks to the increased
order book and favourable market development, and the companys
result is expected to be considerably better than last year.
Tekmanni Oy
The Q1-Q3 net sales of Tekmanni Oy were EUR 135.4 million (139.8).
The companys operating profit rose to EUR 5.8 million (5.6) and
the profit before taxes to EUR 6.4 million (6.2). The order book
grew and was EUR 74.4 million (66.4).
The companys first-half sales and earnings were adversely
impacted by reduced business volume and increased material costs.
Raw material prices, especially those of copper, steel and
aluminium, have been high. The company improved its profitability
in the third quarter, and Q1-Q3 earnings are better than last
year.
The sustained level of activity on the refurbishment market has
boosted demand for maintenance, upkeep and repair works in the
technical services sector. This trend is expected to continue
unchanged in 2007. In particular, the volume of plumbing
refurbishment works in residential buildings has grown nationwide.
The number of foreign workers employed in the industry has grown
strongly this year.
The business operations of Tekmanni Oy's technical building
service units in Seinäjoki, Vaasa and Kokkola were corporatised on
1 October 2006 to form Tekmanni Pohjanmaa Oy. The newly formed
company, a subsidiary of Tekmanni Oy, will generate annual net
sales of EUR 12 million.
On 7 September 2006 Tekmanni Oy acquired a majority interest in
the Oulu-based company LVI-Ykkönen Oy. The newly acquired company
and Tekmannis Oulu unit will operate together as an independent
profit centre belonging to Tekmanni Oy. LVI-Ykkönen Oy generates
net sales of EUR 10 million annually.
ORDER BOOK
The Groups order book rose 21.4 % to stand at EUR 1,227.7 million
(1,010.9), of which foreign orders accounted for EUR 283.1 million
(385.9). The market breakdown of the order book was Finland 77 %,
other Nordic countries 11 %, the Baltic states 3 %, and Eastern
Europe 6 %. Operations abroad make up about a half of the order
book of both the Paving and Mineral Aggregates Division and Lemcon
Ltd.
Order book by business sector
EUR mill. 9/06 9/05 Change, %
Paving and Mineral
Aggregates Division 196.7 183.8 7.0
Building Materials
Division 26.9 19.8 35.9
Lemcon Ltd 316.5 353.2 -10.4
Oy Alfred A. Palmberg Ab 613.2 387.6 58.2
Tekmanni 74.4 66.4 12.0
Total 1 227.7 1 010.9 21.4
Major orders received in the first half of the year
Of the new construction projects started by the Group, the most
significant was the new office building complex being built in the
Salmisaari district of Helsinki. Lemminkäinens own head office
will be relocated to the new building in 2009. The premises will
be constructed by Palmberg and leased from the developer, Varma
Mutual Pension Insurance Company. The contract is worth approx.
EUR 100 million.
Lemcon Ltd has signed a project management contract concerning the
construction of a maritime museum centre in Kotka, Finland.
Construction work on the site has begun and the museum centre will
be completed in November 2007. The contract is worth EUR 26.3
million.
Lemcon Ltd has signed an agreement with the City of Helsinki
concerning excavation and reinforcement works on the eastern part
of the city centres underground service tunnel. The contract is
worth EUR 21.7 million and Lemcon expects the contract to be
completed in summer 2008.
Lemcon Ltd has won the foundation building contract for Kiinteistö
Oy Helsingin Hiiliranta ja Hiilipiha in Salmisaari. The contract
is worth about EUR 9 million and the work will last until spring
2008.
A contract for the construction of two office buildings in West
Pasila has been signed by Palmberg and Fennia Mutual Insurance
Company. The contract is worth about EUR 50 million.
Oka Oy, a subsidiary of Palmberg, is building a shopping centre in
downtown Lappeenranta. The project also includes office space, a
parking facility and apartments. The total value of the contract
is approx. EUR 41 million. The project is partially included in
the order book for the review period.
Major orders received after the first half of the year
Lemcon Ltd has signed a project management agreement with Stora
Enso Packaging Oys Russian subsidiary concerning the construction
of a corrugated board mill in Russia. The contract is worth EUR
20.1 million.
Palmberg-Rakennus Oy has signed an agreement to build two new
Sokos hotels in Finland. The combined value of the projects is
about EUR 27 million.
The Finnish Road Administrations VUOLI Project and Lemcon Ltd
have signed a contract concerning the fitting out of the 13.5-
kilometre-long Savio Railway Tunnel, which forms part of the
transport infrastructure for the new Vuosaari Harbour. The
contract is worth about EUR 23 million, and the project is
Lemcons most notable tunnel fitting-out contract in Finland. The
project is not included in the order book for the review period.
GROUP STRUCTURE
At the beginning of 2006 the roofing and concrete products
businesses of the Building Materials Division were transferred to
two new subsidiaries: Lemminkäinen Katto Oy and Lemminkäinen
Betonituote Oy. The new companies together with Omni-Sica Oy still
constitute the Building Materials Division.
FINANCING
According to the source and application of funds statement, the
cash flow from operating activities was EUR 93.5 million (-34.7),
the cash flow from investing activities EUR 20.2 million
(-13.2) and the cash flow from financing activities EUR 122.2
million (55.8). The cash flow for the accounting period includes
dividends totalling EUR 18.1 million (11.1) for 2005.
Interest-bearing liabilities at the end of the accounting period
were EUR 421.2 million (358.9) and liquid funds were EUR 50.6
million (48.5). Interest-bearing net debt was EUR 370.7 million
(310.4). The change in interest-bearing net debt from the
comparative period was EUR 60.3 million.
The changes in cash flows and net debt compared with Q1-Q3 last
year stem from the larger dividend pay-out, the increase in
business volume, and changes in project financing.
Net financing expenses were EUR 11.4 million (5.9), representing
0.9 % (0.5) of net sales. The equity ratio was 25.4 % (25.7) and
gearing 152.2 % (149.2).
INVESTMENTS
Investments in the accounting period amounted to EUR 41.3 million
(26.2). The investments were mainly purchases of paving, crushing
and excavation equipment, production plant for building materials,
and building construction equipment. The investments also include
some fairly small acquisitions of businesses and enterprises.
PERSONNEL
The average number of employees in the Group over the accounting
period was 8,385 (7,937). At the end of the review period there
were 9,087 (8,590) employees on the payroll.
The number of employees abroad was 2,217 (1,951), of whom 46 %
were working in Eastern Europe, 40 % in other Scandinavian
countries, 8 % in North America and 6 % in other countries.
Personnel by business sector
9/2006 9/2005 Change
Paving and Mineral Aggregates
Division 2 840 2 698 142
Building Materials Division 614 626 -12
Lemcon Ltd 982 864 118
Oy Alfred A. Palmberg Ab 2 162 1 999 163
Tekmanni 1 787 1 750 37
Lemminkäinen Group, total 8 385 7 937 448
DECISIONS OF THE ANNUAL GENERAL MEETING
The Annual General Meeting of Lemminkäinen Corporation held on 17
March 2006 adopted the 2005 annual financial statements and
granted the Board of Directors and the Managing Director freedom
from responsibility. In accordance with the Board of Directors
proposal, the Annual General Meeting decided to pay a dividend of
EUR 1.00 per share, i.e. a total dividend pay-out of
17,021,250.00. The record date of the dividend payment was 22
March 2006 and the date of dividend payment was 29 March 2006.
Messrs. Berndt Brunow, Erkki J. Pentti, Heikki Pentti, Teppo
Taberman and Sakari Tamminen were elected to serve as members of
the Company's Board of Directors. The Board of Directors elected
Heikki Pentti to serve as the Chairman and Teppo Taberman to serve
as the Vice Chairman.
PricewaterhouseCoopers Oy, a firm of authorised public
accountants, were elected to serve as the Companys auditors, with
Mr. Jan Holmberg, A.P.A. acting as the auditor in charge.
SHARES
The listed price of Lemminkäinen Corporations share was EUR 30.50
(15.74) at the beginning and EUR 30.85 (27.50) at the end of the
review period. The trading volume was 2,625,862 shares
(3,887,548). The market capitalisation at the end of the
accounting period was EUR 525.1 million (468.1).
FCAs ALLEGATIONS CONCERNING THE ASPHALT PAVING AND BITUMINOUS
ROOFING INDUSTRIES
In March 2004 the Finnish Competition Authority (FCA) proposed to
the Market Court that a sanction of EUR 68 million should be
imposed on Lemminkäinen in connection with the operation of an
alleged cartel in the asphalt paving industry. In its rejoinder
submitted to the Market Court, Lemminkäinen has denied the FCAs
allegations as being unfounded in all respects and has called for
the Market Court to dismiss the FCAs sanction proposal in its
entirety. The Market Court will begin hearing the case this year
and expects to pronounce its judgement during the spring of 2007.
The parties will have an opportunity to appeal the Market Courts
decision to the Supreme Administrative Court.
In March 2006 the FCA sent companies of the bituminous roofing
industry a copy of its draft proposal to the Market Court for
comment. The draft proposal alleges that prohibited exchanges of
information took place on the bituminous roofing market during the
years 1996-2002. The amount of the fine sought by the FCA is not
specified in the document. Having studied the draft proposal,
Lemminkäinen has made it clear in its response to the FCA that the
companys activities have been in compliance with the competition
regulations.
OUTLOOK FOR THE 2006 ACCOUNTING PERIOD
The current year has been a good one for Lemminkäinen. The Groups
housing production is growing, and increased commercial
construction and the favourable development of operations abroad
have boosted the companys net sales and earnings.
The result for the 2006 accounting period is expected to be
clearly better than last year, and the companys strong order book
provides a good starting point for 2007.
Helsinki, 8 November 2006
LEMMINKÄINEN CORPORATION
Board of Directors
The information contained in the interim financial review has not
been audited.
TABULATED SECTION OF THE INTERIM FINANCIAL REVIEW
ACCOUNTING PRINCIPLES
This interim financial review has been prepared in accordance with
IFRS measurement and recognition principles. The interim financial
review has been prepared in accordance with the same accounting
principles as those observed in the year-end financial statements
for 2005.
FINANCIAL STATEMENTS AND OTHER TABULATED INFORMATION
1) Consolidated income statement
2) Consolidated income statement, quarterly
3) Net sales by business sector
4) Net sales by business sector, quarterly
5) Operating profit by business sector
6) Operating profit/loss by business sector, quarterly
7) Consolidated balance sheet
8) Statement of changes in equity
9) Statement of source and application of funds
10) Economic trends and financial indicators
11) Share-specific indicators
12) Guarantees and contingent liabilities
CONSOLIDATED INCOME STATEMENT
EUR mill. 9/2006 9/2005 Change Change,% 12/2005
Net sales 1 305.1 1 172.2 132.9 11.3 1 601.7
Operating income and
expenses -1 203.5 -1 088.5 -115.0 -10.6 -1 495.3
Depreciation -27.0 -26.6 -0.4 -1.5 -34.0
Operating profit 74.6 57.2 17.4 30.4 72.5
Financial expenses -12.5 -8.8 -3.7 -42.0 -11.5
Financial income 1.2 2.9 -1.7 -58.6 3.8
Share of the results
of affiliated
companies 0.6 1.0 -0.4 -40.0 1.1
Profit before taxes 63.9 52.3 11.6 22.2 65.9
Income taxes -15.2 -14.0 -1.2 -8.6 -17.4
Profit for the
accounting period 48.7 38.4 10.3 26.8 48.5
Distribution of the profit for the accounting period
To shareholders of
the parent company 43.7 34.5 9.2 26.7 43.7
To minority
interests 5.1 3.8 1.3 34.2 4.7
EPS calculated from profit/loss attributable to parent company
shareholders, EUR
Earnings per share,
EUR 2.57 2.03 2.57
Earnings per share,
EUR, diluted 2.57 2.03 2.57
CONSOLIDATED INCOME STATEMENT, QUARTERLY
1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/
EUR mill. 2005 2005 2005 2005 2006 2006 2006
Net sales 231.2 424.3 516.7 429.5 303.5 427.8 573.9
Operating income
and expenses -237.2 -396.9 -454.4 -406.8 -305.3 -392.8 -505.4
Depreciation -5.0 -8.9 -12.7 -7.4 -5.0 -9.2 -12.8
Operating
profit/loss -11.0 18.5 49.6 15.3 -6.8 25.8 55.7
Financial
expenses -2.6 -3.5 -2.7 -2.7 -2.7 -5.2 -4.6
Financial income 0.9 1.2 0.9 0.9 0.8 0.0 0.4
Share of the
results of
affiliated
companies -0.1 0.3 0.8 0.0 -0.3 0.2 0.8
Profit/loss
before taxes -12.8 16.4 48.7 13.5 -9.1 20.7 52.3
Income taxes 3.2 -4.2 -13.0 -3.4 1.7 -4.8 -12.1
Profit/loss for
the accounting
period -9.6 12.2 35.7 10.1 -7.3 15.9 40.1
Distribution of the profit/loss for the accounting period
To shareholders
of the parent
company -10.9 11.3 34.1 9.2 -8.3 13.6 38.4
To minority
interests 1.3 0.9 1.6 0.9 1.0 2.4 1.7
EPS calculated from profit/loss
attributable to parent company
shareholders, EUR
Earnings per
share, EUR -0.64 0.66 2.00 0.54 -0.49 0.80 2.26
Earnings per
share, EUR,
diluted -0.64 0.66 2.00 0.54 -0.49 0.80 2.26
NET SALES BY BUSINESS SECTOR
EUR mill. 9/2006 9/2005 Change Change, % 12/2005
Lemminkäinen
Corporation
Paving and Mineral
Aggregates Division 421.3 385.9 35.4 9.2 514.7
Building Materials
Division 78.7 80.8 -2.1 -2.6 100.3
Lemcon Ltd 271.5 231.9 39.6 17.1 328.8
Oy Alfred A.
Palmberg Ab 426.5 375.2 51.3 13.7 517.3
Tekmanni Oy 135.4 139.8 -4.4 -3.1 191.1
Others -28.3 -41.3 13.0 31.5 -50.4
Group total 1 305.1 1 172.2 132.9 11.3 1 601.7
NET SALES BY BUSINESS SECTOR, QUARTERLY
1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/
EUR mill. 2005 2005 2005 2005 2006 2006 2006
Lemminkäinen Corporation
Paving and Mineral
Aggregates Division 21.5 140.6 223.8 128.8 23.9 147.8 249.6
Building Materials
Division 13.2 28.9 38.7 19.4 11.6 29.8 37.2
Lemcon Ltd 66.0 83.3 82.6 96.9 100.9 71.8 98.8
Oy Alfred A.
Palmberg Ab 99.4 135.8 140.0 142.2 129.7 141.7 155.2
Tekmanni Oy 40.5 52.5 46.8 51.4 42.9 44.8 47.6
Others -9.4 -16.9 -15.0 -9.2 -5.6 -8.2 -14.5
Group total 231.2 424.3 516.7 429.5 303.5 427.8 573.9
OPERATING PROFIT BY BUSINESS SECTOR
EUR mill. 9/2006 9/2005 Change Change, % 12/2005
Lemminkäinen
Corporation
Paving and Mineral
Aggregates Division 18.4 16.9 1.5 8.9 20.5
Building Materials
Division 4.0 2.2 1.8 81.8 0.6
Lemcon Ltd 11.5 10.1 1.4 13.9 15.3
Oy Alfred A.
Palmberg Ab 32.6 22.6 10.0 44.2 28.3
Tekmanni Oy 5.8 5.6 0.2 3.6 6.8
Others 2.3 -0.2 2.5 1.0
Group total 74.6 57.2 17.4 30.4 72.5
OPERATING PROFIT/LOSS BY BUSINESS SECTOR, QUARTERLY
1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/
EUR mill. 2005 2005 2005 2005 2006 2006 2006
Lemminkäinen Corporation
Paving and Mineral
Aggregates Division -16.2 4.4 28.7 3.7 -20.6 6.1 33.0
Building Materials
Division -3.4 1.8 3.8 -1.6 -2.6 1.9 4.6
Lemcon Ltd 2.6 2.1 5.4 5.2 4.1 3.1 4.3
Oy Alfred A.
Palmberg Ab 4.6 8.5 9.5 5.7 7.5 14.3 10.8
Tekmanni Oy 1.5 1.6 2.5 1.1 2.2 0.1 3.4
Others -0.1 0.1 -0.2 1.1 2.5 0.2 -0.4
Group total -11.0 18.5 49.6 15.3 -6.8 25.8 55.7
CONSOLIDATED BALANCE SHEET
EUR mill. 9/2006 9/2005 12/2005
Non-current assets
Tangible assets 170.6 167.7 164.4
Goodwill on consolidation 68.4 62.6 63.5
Other intangible assets 2.7 2.6 2.5
Investments 8.9 11.6 10.9
Deferred tax asset 4.5 4.9 4.0
Other non-current receivables 1.7 0.2 0.7
Total 256.7 249.6 245.9
Current assets
Inventories 278.3 238.1 223.7
Trade and other receivables 443.9 359.2 263.4
Cash funds 50.6 48.5 42.4
Total 772.7 645.8 529.5
Assets, total 1 029.5 895.4 775.4
Shareholders equity and
liabilities
Equity attributable to shareholders of the
parent company
Share capital 34.0 34.0 34.0
Other shareholders equity 191.8 157.9 166.8
before minority interest
Minority interest 17.6 16.0 14.6
Shareholders equity, total 243.5 208.0 215.5
Non-current liabilities
Deferred tax liabilities 14.1 22.2 19.4
Pension liabilities 1.0 0.5 0.5
Provisions 1.3 4.6 4.9
Interest-bearing liabilities 96.7 125.4 103.5
Other liabilities 1.6 1.1 2.5
Total 114.7 153.9 130.8
Current liabilities
Accounts payable and other 342.4 298.3 267.1
liabilities
Provisions 4.3 1.7 1.5
Interest-bearing liabilities 324.5 233.4 160.5
Total 671.2 533.4 429.2
Shareholders equity and 1 029.5 895.4 775.4
liabilities, total
STATEMENT OF CHANGES IN EQUITY
EUR mill. Share Share Translat Revalua Retai Minorit Share-
capit premium ion tion ned y holder
al account differen reserve earni interes s'
ce ngs t equity
reserve ,
total
Adjusted
shareholders
equity,
1.1.2005 34.0 5.8 -0.2 1.4 125.7 15.2 181.9
Translation
difference 0.8 0.8
Hedging of net
investment in
foreign
subsidiary -0.2 -0.2
Transfer from
revaluation
reserve -0.2 -0.2
Change in fair
value 0.2 0.2
Reversal of
dividend
liability 0.0 0.0
Dividend
distribution -10.2 -10.2
Result for the
accounting
period 43.7 4.7 48.5
Change in
minority
interest -5.3 -5.3
Shareholders
equity,
31.12.2005 34.0 5.8 0.4 1.5 159.2 14.6 215.5
Translation
difference -0.6 -0.6
Hedging of net
investment in
foreign
subsidiary 0.3 0.3
Change in fair
value 0.1 0.1
Effect of sold
shares -1.4 -1.4
Reversal of
dividend
liability 0.0 0.0
Dividend
distribution -17.0 -17.0
Result for the
accounting
period 43.7 5.1 48.7
Change in
minority
interest -2.1 -2.1
Shareholders
equity,
30.9.2006 34.0 5.8 0.0 0.1 185.9 17.6 243.5
STATEMENT OF SOURCE AND
APPLICATION OF FUNDS
EUR mill. 9/2006 9/2005 12/2005
Profit before extraordinary 63.9 52.3 65.9
items
Depreciation according to plan 27.0 26.6 34.0
Other adjustments 5.8 2.8 4.3
Cash flow before change in
working capital 96.7 81.7 104.2
Change in working capital -168.0 -93.7 -17.6
Financial items -7.0 -5.6 -7.0
Direct taxes paid -15.3 -17.0 -20.1
Cash flow from operating
activities -93.5 -34.7 59.5
Cash flow from investing
activities -20.2 -13.2 -18.3
Change in loans 140.3 67.0 -28.1
Dividends paid -18.1 -11.1 -11.1
Cash flow from financing
activities 122.2 55.8 -39.3
Change in cash funds 8.6 8.0 1.9
Cash funds at beginning of
period 42.4 39.9 39.9
Translation difference of cash
funds -0.4 0.6 0.6
Cash funds at end of period 50.6 48.5 42.4
ECONOMIC TRENDS AND FINANCIAL 9/2006 9/2005 12/2005
INDICATORS
Return on equity, % 1) 21.2 19.7 24.5
Return on investment, % 1) 13.4 11.9 16.5
Operating profit,
% of net sales 5.7 4.9 4.5
Equity ratio, % 25.4 25.7 31.0
Gearing, % 152.2 149.2 102.9
Gross investments, EUR million
(incl. leasing purchases) 41.3 33.5 37.4
Order book, EUR mill. 1 227.7 1 010.9 1 011.3
- of which foreign orders, EUR
mill. 283.1 385.9 343.4
Average number of employees 8 385 7 937 7 912
Employees at end of period 9 087 8 590 7 112
Net sales, EUR mill. 1 305.1 1 172.2 1 601.7
- of which operations abroad,
EUR mill. 399.8 348.8 499.6
% of net sales 30.6 29.8 31.2
1)Only the result for the accounting period has been included in
the calculation of ROE and ROI.
SHARE-SPECIFIC INDICATORS 9/2006 9/2005 12/2005
Earnings per share, EUR 2.57 2.03 2.57
Equity per share, EUR 13.27 11.28 11.80
Dividend per share, EUR 1.00
Dividend to earnings ratio, % 38.9
Market capitalisation,
EUR mill. 525.1 468.1 519.1
Share price at end of period,
EUR 30.85 27.50 30.50
Trading volume during period,
1,000 shares 2 626 3 888 4 610
Number of issued shares, 1,000
shares 17 021 17 021 17 021
GUARANTEES AND CONTINGENT LIABILITIES
EUR mill. 9/2006 9/2005 12/2005
Securities for own commitments
Property mortgages 2.1 3.4 3.3
Business mortgages 99.1 99.7 99.2
Bonds pledged as security 0.5 4.1 0.7
Total 101.8 107.2 103.3
Guarantees
On behalf of affiliated
companies 1.0 0.7 0.4
On behalf of others 0.8 0.0 5.3
Leasing liabilities 48.5 22.1 27.7
Derivative contracts
Forward foreign exchange
contracts
Nominal value 9.7 22.4 18.1
Fair value -0.1 0.0 -0.2
Currency options, calls
purchased
Nominal value 0.0 1.7 1.7
Fair value 0.0 0.0 0.0
Currency options, puts written
Nominal value 0.0 1.7 1.7
Fair value 0.0 -0.1 -0.2
Interest rate options, calls
purchased
Nominal value 35.3 7.9 36.4
Fair value 0.0 0.0 0.0
Interest rate options, puts
written
Nominal value 5.9 7.9 6.9
Fair value -0.2 -0.6 -0.4
Interest rate swap contracts
Nominal value 39.4 12.8 12.1
Fair value -2.5 -0.1 -0.1
The fair value of contracts is the gain or loss arising from
closure of the contract based on the market price on the
accounting date.