Lemminkäinen and YIT will complete the merger
- Stock Exchange Releases
- 2/14/2008
Lemminkäinen Corporation, Financial Statements Bulletin 2007: Favourable business development, positive outlook for 2008
LEMMINKÄINEN CORPORATION STOCK EXCHANGE BULLETIN 14.2.2008, 9:00 am LEMMINKÄINEN CORPORATION, FINANCIAL STATEMENTS BULLETIN 2007: FAVOURABLE BUSINESS DEVELOPMENT, POSITIVE OUTLOOK FOR 2008 - Net sales rose 21.1% to EUR 2,174.1 million (1,795.9). - International operations accounted for EUR 581.6 million (530.3) of net sales. - Operating profit grew 16.8% to EUR 126.
LEMMINKÄINEN CORPORATION
STOCK EXCHANGE BULLETIN 14.2.2008, 9:00 am
LEMMINKÄINEN CORPORATION, FINANCIAL STATEMENTS BULLETIN 2007:
FAVOURABLE BUSINESS DEVELOPMENT, POSITIVE OUTLOOK FOR 2008
- Net sales rose 21.1% to EUR 2,174.1 million (1,795.9).
- International operations accounted for EUR 581.6 million (530.3) of net
sales.
- Operating profit grew 16.8% to EUR 126.3 million (108.1). The ratio of
operating profit to net sales was 5.8% (6.0).
- The profit before taxes was up by 18.0% at EUR 111.2 million (94.2).
- The return on investment was 20.7% (20.6) and the return on equity was 27.5%
(30.2)
- The equity ratio was 32.7% (31.2) and gearing 87.2% (105.7).
- The order book at the end of the accounting period was up by 6.6% at EUR
1,414.1 million (1,326.7).
- International operations accounted for EUR 284.0 million (331.8) of the order
book
- Earnings per share were up by 10.9% at EUR 4.29 (3.87).
- The Board of Directors propose that the Company pay a dividend of EUR 1.80
(1.50) per share.
The 2007 accounting period overall was a positive one for Lemminkäinen. The good
result was influenced especially by brisk activity in commercial construction
and profitable property developments. The continued growth of infrastructure
construction was sustained by major on-going projects. Demand for refurbishment
contracting and building materials was also good.
The net sales of Lemminkäinen rose by 21.1% to EUR 2,174.1 million (1,795.9).
International operations accounted for a full quarter of the Company's total net
sales.
The operating profit was EUR 126.3 million (108.1). The result in Q4 was
significantly impacted by a EUR 14 million infringement fine imposed by the
Market Court when it ruled that Lemminkäinen had participated in activities
contravening competition legislation. Excluding the EUR 14 million non-recurring
fine, the comparable operating profit was EUR 140.3 million, representing 6.5%
(6.0) of the net sales.
Earnings per share were EUR 4.29 (3.87).
THE OUTLOOK FOR 2008
Commercial, office and logistics construction in Finland will continue to be
quite active, but may slow down towards the end of the year. The number of
own-development housing starts will decline and selling times of housing units
will become longer. The construction projects started by Lemminkäinen in 2007
and already planned for 2008 will keep the company's construction volume at a
good level in 2008.
In Russia, demand for industrial, residential and commercial construction is
still good and the outlook for Lemminkäinen in the country over the next few
years is promising.
In infrastructure construction in Finland, 2008 is not expected to be as busy as
last year due mainly to reduced activity in the rock engineering segment. The
postponement of some major projects will weaken the market situation.
Lemminkäinen's ongoing, long-term road projects will ensure that the Company has
a reasonable stock of work for 2008 and 2009.
The volume of asphalt-paving work is expected to remain at the same level as in
2007. Demand for crushing contracting and ready-mix concrete is expected to
remain good due to ongoing infrastructure projects and the sustained level of
relatively active building construction. Infrastructure construction activity in
the Baltic Rim region will continue to be brisk.
Demand for servicing, maintenance and repair work in technical building services
business area is expected to remain high in Finland. Demand for industrial
maintenance services is expected to increase both in Finland and abroad.
The market situation for building materials will remain good on the whole in the
near future, although the slowdown in housing production will contribute towards
weaker demand for products and services. Urban environment construction will
grow steadily.
The outlook for other international operations, e.g. in Poland, India and China,
is expected to remain good. Major forest-industry projects that are of interest
to Lemminkäinen are being planned in various parts of the world. Demand for
3G-network construction will continue to grow.
The Group's order book as a whole is good, and the prerequisites for favourable
business development in 2008 are in place.
ANNUAL GENERAL MEETING, DIVIDEND AND FINANCIAL INFORMATION 2008
Lemminkäinen Corporation's Annual General Meeting will be held on 14 March 2008
at 3.00 p.m. at the Hotel Palace, 10th floor, Eteläranta 10, 00130 Helsinki.
The Board of Directors of Lemminkäinen Corporation will propose to the Annual
General Meeting that a dividend of EUR 1.80 (1.50) per share, i.e. a total of
EUR 30,638,250.00 (25,531,875.00) be paid for the accounting period ending on 31
December 2007. The dividend will be paid to shareholders recorded in the
Company's shareholders register kept by the Finnish Central Securities
Depository Ltd on the record date, which is 19 March 2008. The dividend payment
date will be 28 March 2008.
The Annual Report for 2007 will be published in Finnish and in English during
week 10/2008. The interim reports will be published on 8 May, 7 August and 6
November 2008
Lemminkäinen Corporation's stock exchange bulletins can be accessed on the
Company's website at www.lemminkainen.com.
LEMMINKÄINEN CORPORATION
Juhani Sormaala
Managing Director
Additional information:
Juhani Sormaala, Managing Director, tel. +358 2071 53302
Jukka Ovaska, CFO, tel. + 358 2071 53334
Financial Statements Briefing
Lemminkäinen will present its year-end financial statements to investors,
analysts and the press at 10:00 am on Thursday, 14 February at Restaurant
Sipuli, Kanavaranta 7, Helsinki. Participants are kindly asked to register in
advance either by phone +358 2071 53520 or by e-mail to
matti.aalto@lemminkainen.fi. Background material concerning the financial
statements as well as the presentation material can be accessed at
www.lemminkainen.com after the briefing.
APPENDICES
Board of Directors' Report 1.1.-31.12.2007
Tabulated Section of the financial statements
Distribution: OMX Nordic Exchange in Helsinki, key media
Lemminkäinen Group operates in all areas of the construction sector. Its main
business areas are building construction, infrastructure construction, technical
building services and building products. Net sales in 2007 were approximately
EUR 2.2 billion, of which international operations accounted for more than a
quarter. The Group employs some 9,200 people. Lemminkäinen Corporation's share
is listed on the OMX Nordic Exchange in Helsinki.
BOARD OF DIRECTORS' REPORT 1.1.-31.12.2007
OPERATING ENVIRONMENT
The construction sector in Finland has enjoyed a sustained period of favourable
economic conditions. The total volume of construction grew by approximately 6%
in 2007, but growth is expected to slow down and settle at about 3% in 2008.
Approximately 32,000 housing starts were made last year, which was slightly
fewer than in 2006 (34,000). The housing market remains stable, although the
selling times of housing units have clearly become longer. There are large
regional differences.
The positive development in the construction business in 2007 was above all due
to active commercial, office and logistics construction. The long-subdued
industrial construction market appears to be growing once again. Some major
industrial projects as well as the construction work on the fifth nuclear power
plant unit and the Talvivaara nickel mine will continue for a long time yet.
Furthermore, infrastructure construction continued to grow due to major ongoing
projects. Significant new projects will also be starting up in the coming years.
Refurbishment contracting grew by 2-3% and the growth rate is expected to remain
the same in 2008. Also, the production of the building materials industry grew
considerably. Basic products, most notably cement, were in greater demand,
mainly due to considerable production growth in the concrete industry.
The economies of our neighbouring countries and their construction markets
developed favourably. In Sweden, the rock engineering market remains good and is
expected to remain at least at the same level for the next few years. In the
Baltic states, the infrastructure market is still growing, and international
funding is being allocated for new projects. Finnish industry had many
investments in progress in Russia, China, India and Eastern Europe. The
construction of 3G networks continues in the United States and Latin America.
The deployment of second-generation GSM networks continues in the developing
countries.
GROUP NET SALES, EARNINGS AND BALANCE SHEET
The 2007 accounting period overall was a positive one for Lemminkäinen.
Net sales rose 21.1% to 2,174.1 EUR million (1,795.9). 73.3% of net sales was
generated in Finland, 14.0% in other Nordic countries, 3.0% in Russia and
Eastern Europe, 5.7% in the Baltic states, and 4.0% in other countries.
The operating profit rose 16.8% and was EUR 126.3 million (108.1). The result in
Q4 was significantly impacted by a EUR 14 million infringement fine imposed by
the Market Court when it ruled that Lemminkäinen had participated in activities
contravening competition legislation. Excluding the EUR 14 million non-recurring
fine, the comparable operating profit was EUR 140.3 million, representing 6.5%
(6.0) of the net sales. The operating margin (operating profit / net sales) was
5.8%.
Earnings per share were up by 10.9% at EUR 4.29 (3.87). The return on investment
was 20.7% (20.6), and the return on equity 27.5% (30.2). The equity ratio was
32.7% (31.2).
The liquid funds at the end of the accounting period were EUR 78.5 million
(60.6), and interest-bearing liabilities totalled EUR 357.0 million (343.6).
Gearing was 87.2% (105.7).
--------------------------------------------------------------------------------
| Group key figures, | 2007 | 2006 | 2005 |
--------------------------------------------------------------------------------
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, of which | 2,174.1 | 1,795.9 | 1,601.7 |
--------------------------------------------------------------------------------
| operations abroad | 581.6 | 530.3 | 499.6 |
--------------------------------------------------------------------------------
| Operating profit | 126.3 | 108.1 | 72.5 |
--------------------------------------------------------------------------------
| Operating margin, % | 5.8 | 6.0 | 4.5 |
--------------------------------------------------------------------------------
| Profit before taxes | 111.2 | 94.2 | 65.9 |
--------------------------------------------------------------------------------
| Profit for accounting period | 80.6 | 72.9 | 48.5 |
--------------------------------------------------------------------------------
| Profit share of parent company's | 72.9 | 65.8 | 43.7 |
| shareholders | | | |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 4.29 | 3.87 | 2.57 |
--------------------------------------------------------------------------------
| Dividend per share, EUR | 1.80 1) | 1.50 | 1.00 |
--------------------------------------------------------------------------------
| Return on investment, % | 20.7 | 20.6 | 16.5 |
--------------------------------------------------------------------------------
| Return on equity, % | 27.5 | 30.2 | 24.5 |
--------------------------------------------------------------------------------
| Equity ratio, % | 32.7 | 31.2 | 31.0 |
--------------------------------------------------------------------------------
| Gearing, % | 87.2 | 105.7 | 102.9 |
--------------------------------------------------------------------------------
| Liquid funds | 78.5 | 60.6 | 42.4 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 357.0 | 343.6 | 264.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1) Board of Directors' proposal to the AGM.
BUSINESS SECTORS
Paving and Mineral Aggregates Division
The net sales of the Paving and Mineral Aggregates Division rose 13.8% to EUR
636.6 million (559.0). The Division generated 50.5% of its net sales in Finland,
29.2% in other Nordic countries, and 20.3% in the Baltic states and Russia.
The Division's operating profit was EUR 26.9 million (35.5). Excluding the EUR
14 million infringement fine imposed on Lemminkäinen by the Market Court, the
Division's comparable operating profit was EUR 40.9 million. The order book fell
by 7.4% and at the end of the accounting period was EUR 171.4 million (185.1),
of which operations abroad accounted for EUR 93.0 million (129.8).
--------------------------------------------------------------------------------
| Paving and Mineral Aggregates | 2007 | 2006 | 2005 |
| Division | | | |
--------------------------------------------------------------------------------
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, of which | 636.3 | 559.0 | 514.7 |
--------------------------------------------------------------------------------
| operations abroad | 314.9 | 276.6 | 239.9 |
--------------------------------------------------------------------------------
| Operating profit | 26.9 | 35.5 | 25.2 |
--------------------------------------------------------------------------------
| Operating margin, % | 4.2 | 6.3 | 4.9 |
--------------------------------------------------------------------------------
| Order book at end of period | 171.4 | 185.1 | 130.2 |
--------------------------------------------------------------------------------
| Personnel (average) | 2,952 | 2,733 | 2,579 |
--------------------------------------------------------------------------------
The net sales of the Paving and Mineral Aggregates Division continued to grow,
and, considering the market situation, its profit was good. The volume of paving
work remained on the same level as in 2006. Competition in the asphalt paving
industry remained fierce, which forced prices down to a poor level.
Lemminkäinen retained its position as the leading paving contractor in Finland.
The Company also has strong market positions in Norway, Denmark and the Baltic
states.
In the Nordic countries, the strongest growth in paving works was in Norway, and
the price of asphalt remained at a good level. In Denmark, the market was stable
and the price level reasonable. In Sweden, Kvalitetsasfalt i Mellansverige Ab
was sold. The transaction became effective 7 August 2007 and had no essential
bearing on the Division's profits.
In the Baltic states, EU funding increased the number of road projects.
Government funding for roads is on the increase in both Latvia and Lithuania in
particular.
During the contracting season, a total of 5.4 (5.3) million tonnes of asphalt
was produced at 96 (95) production plants. More than half of the total was
produced abroad.
The sustained level of active construction work kept demand for mineral
aggregate at a good level. The Division produced 16.5 million tonnes (16.6) of
mineral aggregates in 2007. Lemminkäinen acquired Lõhketööd OÜ, an Estonian
construction company that specialises in quarrying, blasting and demolition
work. With this transaction, Lemminkäinen aims to expand its quarrying
operations and to develop the processing of mineral aggregates in Estonia.
The ready-mix concrete producer Forssan Betoni Oy achieved a new production
record, almost 250,000 cubic metres, and significantly increased its net sales.
Among other contracts, the company was the concrete supplier for Talvivaara's
nickel mine investment.
There were occasional shortages of both mineral aggregate in the metropolitan
area and the cement that is used for concrete production.
The total volume of paving work in Finland this year should remain at the same
level as in 2007. The demand for crushing contracting and ready-mix concrete is
expected to remain good, mainly due to ongoing infrastructure projects and
relatively active building construction.
The situation on the Norwegian paving market continues to be reasonably good.
The volume of paving works in Denmark will fall slightly once the major motorway
projects come to an end. The demand for infrastructure construction will
increase in the Baltic states.
Building Materials Division
Three Lemminkäinen subsidiaries (Lemminkäinen Katto Oy, Lemminkäinen Betonituote
Oy and Omni-Sica Oy) are responsible for the business operations of the Building
Materials Division.
The net sales of the Building Materials Division rose by 28.2% to EUR 133.8
million (104.4). The Division generated 8.0% of its net sales abroad, mainly in
Russia and the countries of the Baltic Rim region. The Division's operating
profit was 11.1 million (5.0). The order book grew by 61.1% and at the end of
the accounting period was EUR 37.7 million (23.4).
--------------------------------------------------------------------------------
| Building Materials Division | 2007 | 2006 | 2005 |
--------------------------------------------------------------------------------
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, of which | 133.8 | 104.4 | 100.3 |
--------------------------------------------------------------------------------
| operations abroad | 10.7 | 7.7 | 6.4 |
--------------------------------------------------------------------------------
| Operating profit | 11.1 | 5.0 | 1.5 |
--------------------------------------------------------------------------------
| Operating margin, % | 8.3 | 4.8 | 1.5 |
--------------------------------------------------------------------------------
| Order book at end of period | 37.7 | 23.4 | 13.3 |
--------------------------------------------------------------------------------
| Personnel (average) | 749 | 609 | 599 |
--------------------------------------------------------------------------------
The profitability of the Building Materials Division in 2007 was good. The good
demand that continued throughout the contracting season and the corporate
acquisitions that were made both contributed towards the good result. The demand
for roofing materials continued to grow. Increased imports of roofing materials,
especially from Russia and some European countries, sustained the fierce level
of competition on the roofing materials market in Finland. Exports of
Lemminkäinen's roofing materials mainly to Russia and the countries of the
Baltic Rim region increased steadily. Roofing contracting experienced a lack of
skilled workforce. Roofing contracting was also impacted periodically by long
delivery times for rigid mineral wool insulation.
Demand for pre-cast concrete staircase and wall units increased in commercial
and office construction. In addition to domestic supply, staircase units were
delivered to Sweden and Norway. Demand for the types of staircase units used in
low-density residential construction also increased. The cement availability
problems that beset the industry did not have a significant effect on
Lemminkäinen's production of pre-cast concrete units.
Demand for urban environment products and related installation services has
grown steadily in recent years. Investments continue to be made in the
construction of new sports and athletics facilities and the refurbishment of old
ones.
Lemminkäinen strengthened its market position by acquiring full ownership of
K.M. Repo Oy in Savonlinna in February 2007. The company manufactures and sells
concrete units and ready-mix concrete. Since the acquisition, the company has
been operating under the name Elemento Oy Savonlinna.
The overall market situation of the building products business area will remain
good for some time. The slowdown in housing construction will weaken demand for
products and services. Urban environment construction will grow steadily. An
increase in demand is expected in both imports and exports of building
materials. Higher prices for raw materials such as bitumen and cement will raise
production costs.
The aim of the Building Materials Division is to maintain its strong market
position in all of its business areas in Finland and to grow its export business
with Russia and the countries of the Baltic Rim region.
Lemcon Ltd
Lemcon's net sales rose to EUR 389.9 million (344.0). The company generated
50.9% of its net sales in Finland, 13.8% in other Nordic countries, 13.5% in
Eastern Europe and the Baltic states, 12.0% in North and South America, and 9.8%
in other countries. The company expanded its business into a number of new
countries, most notably India, Tanzania, Australia, Paraguay, Bolivia and El
Salvador.
Lemcon's operating profit was EUR 13.0 million (12.5) and the profit before
taxes EUR 10.2 million (11.1). The order book decreased by 4.2% and at the end
of the accounting period was EUR 346.7 million (361.9), of which operations
abroad accounted for 46.0% (48.1).
--------------------------------------------------------------------------------
| Lemcon Ltd | 2007 | 2006 | 2005 |
--------------------------------------------------------------------------------
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, of which | 389.9 | 344.0 | 328.8 |
--------------------------------------------------------------------------------
| operations abroad | 191.4 | 191.6 | 210.6 |
--------------------------------------------------------------------------------
| Operating profit | 13.0 | 12.5 | 15.3 |
--------------------------------------------------------------------------------
| Operating margin, % | 3.3 | 3.6 | 4.6 |
--------------------------------------------------------------------------------
| Profit before taxes | 10.2 | 11.1 | 16.7 |
--------------------------------------------------------------------------------
| Order book at end of period | 346.7 | 361.9 | 439.5 |
--------------------------------------------------------------------------------
| Personnel (average) | 1,043 | 993 | 893 |
--------------------------------------------------------------------------------
Lemcon's order book for infrastructure construction was good and its ongoing
contracts are of long duration. Major transport infrastructure projects helped
the company to achieve profitable volume growth.
In Sweden, Lemcon's position as a tunnel and rock engineering contractor was
further strengthened by the award of some major tunnel construction contracts.
In Finland, demand for Lemcon's project management services was reasonably good
due to active commercial and office construction. Abroad, the focus was on
industrial construction, and the company was actively involved in the plant
projects of Finnish industrial companies around the world, including India for
the first time. A number of major projects were completed towards the end of the
year.
In accordance with Lemcon's revised Russian strategy, the company started up its
own production in both the housing and office segments. A decision was made to
start the construction of a building consisting of 530 housing units in St.
Petersburg. In the province of Kaluga, a project for a 135-hectar industrial
park was launched. The aim is to offer companies investing in Russia a fast and
low-risk way to establish themselves in the growing Russian market.
Lemcon also won several significant contracts in Russia. A contract for the
construction of a lightweight concrete production plant was signed with Danish
H+H International A/S as well as a contract for the construction of a production
plant for Nokia Tyres plc. Both projects are in the St. Petersburg area. A
contract for an office and logistics centre in the Moscow area was signed with
Tikkurila Oy.
Proceedings are underway at the court of arbitration in Stockholm concerning
Lemcon's contract for the construction of the MEGA shopping centre in St.
Petersburg, which IKEA terminated.
The Botnia S.A. pulp mill in Uruguay and a hotel project in Tallinn were
completed at the end of the year. In Hungary, a logistics centre was built for
Nokia. A contract was signed with UPM Raflatac for the construction of a
labelstock factory in Poland. In the Chennai region of India, Lemcon built a
logistics centre for Nokia and a production plant for Perlos.
Lemcon Networks maintained its position as a global supplier of project
management , contracting and technical expertise services in the field of
telecommunications network construction. In addition to Europe, the company won
new business in Asia, South America and Africa.
Lemminkäinen's ongoing, long-term transport infrastructure projects will ensure
that it has a reasonable stock of work for 2008 and 2009. Due mainly to reduced
activity in rock engineering, however, infrastructure construction in Finland is
not expected to be as active in 2008 as it was in 2007. The postponement of some
major projects will weaken the market situation. Moreover, the slowdown in
housing construction will be reflected in infrastructure construction.
The positive developments in the Russian economy are reflected strongly in the
consumption demand of the middle class. Foreign investments are increasing
rapidly, and housing construction is active. The prospects for Lemminkäinen in
Russia over the next few years are promising.
The prospects for other international operations are expected to remain good in
Poland, India and China. Major forest industry projects that are of interest to
Lemminkäinen are being planned in various parts of the world. Telecommunications
network and 3G network construction is expected to continue to grow.
Oy Alfred A. Palmberg Ab
The net sales of Palmberg Group rose by 31.3% to EUR 837.0 million (637.5), of
which 6.8% was generated in Sweden. The operating profit was up 34.0% at EUR
70.2 million (52.4). The profit before taxes was EUR 65.5 million (46.0). The
order book grew by 9.5% and at the end of the accounting period was EUR 746.4
million (681.5). International operations accounted for 3.3% (3.8) of the order
book.
--------------------------------------------------------------------------------
| Oy Alfred A. Palmberg Ab, | 2007 | 2006 | 2005 |
--------------------------------------------------------------------------------
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, of which | 837.0 | 637.5 | 517.3 |
--------------------------------------------------------------------------------
| operations abroad | 56.5 | 45.4 | 30.8 |
--------------------------------------------------------------------------------
| Operating profit | 70.2 | 52.4 | 28.3 |
--------------------------------------------------------------------------------
| Operating margin, % | 8.4 | 8.2 | 5.5 |
--------------------------------------------------------------------------------
| Profit before taxes | 65.5 | 46.0 | 25.2 |
--------------------------------------------------------------------------------
| Order book at end of period | 746.4 | 681.5 | 366.9 |
--------------------------------------------------------------------------------
| Personnel (average) | 2,425 | 2,165 | 1,984 |
--------------------------------------------------------------------------------
The good result was mainly due to the sustained level of active office
construction as well as profitable property developments.
The shortage of skilled foremen and construction workers in the industry
continued, but Palmberg was very successful in its recruitment efforts.
The interest of foreign real estate investors in Finland remained good and the
investment return requirements remained unchanged. New investors also entered
the market. Palmberg sold, amongst others, three shopping centres and several
Tokmanni shops to foreign real estate investors.
In Finland, the number of Palmberg's own development housing starts, 852, was
well down on the previous year (1,558). The start-up of housing production was
still hampered by the lack of sites in the metropolitan area, prolonged building
permit processes, and in some cases local demand factors. The market situation
is still relatively good, but the selling times of housing units have become
longer.
--------------------------------------------------------------------------------
| Palmberg's private-sector | 1-9/2007 | 1-9/2006 | 1-12/2006 |
| housing production, units | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Housing starts | 852 | 1,558 | 1,249 |
--------------------------------------------------------------------------------
| Housing units sold | 883 | 1,156 | 1,258 |
--------------------------------------------------------------------------------
| Unsold completed units | 283 | 83 | 74 |
--------------------------------------------------------------------------------
| Completed | 1,488 | 1,173 | 1,068 |
--------------------------------------------------------------------------------
| Under construction at the end of | 1,063 | 1,698 | 1,313 |
| the period | | | |
--------------------------------------------------------------------------------
Most of the unsold completed units were located outside the Helsinki
Metropolitan Area.
At the end of the accounting period Palmberg owned a total of 815,000 m² of
unused building rights, of which about 590,000 m² were residential building
rights. The company also has binding or conditional co-operation and zoning
agreements for about 607,000 m², of which about 285,000 m² are residential
building rights. Market conditions permitting, the company has the possibility
to increase its housing production thanks to its good stock of building plots.
The balance-sheet value of the building plots is EUR 80.5 million. At the
present rate of production, the company owns enough unused building rights to
meet its needs for more than four years.
Palmberg's housing production in Russia is expanding. Palmberg acquired the
business operations of construction company Sulo Lipsanen Oy. The company has
experience in housing construction in Russia, in Svetogorsk and St. Petersburg
in particular. New projects have been launched in the St. Petersburg region.
Palmberg's housing production also grew in Sweden.
The commercial construction scene was very active. A number of projects were
completed and others launched during the year. The most important project to be
completed was the Galleria Shopping Centre in Lappeenranta.
Office construction is not expected to grow, but Palmberg has several major
projects underway in the metropolitan area. These include an office complex for
Varma Mutual Pension Insurance Company in Salmisaari, Helsinki, an office
building for Fennia Mutual Insurance Company in Pasila, Helsinki, and the
Polaris Business Park in Espoo.
Logistics construction continued actively, in South-Eastern Finland in
particular. The most significant project was the large Tokmanni logistics centre
in Mäntsälä.
Industrial construction, which has been subdued for a long time, began to grow
due to major long-term investment projects. Palmberg signed contracting
agreements with Talvivaara's nickel mine project for several concrete contracts.
Hotel construction in Finland has concentrated in Northern Finland and the
metropolitan area. Last year saw the completion of the hotel construction
projects built by Palmberg in Sotkamo and Oulu and new projects were launched in
Kittilä and Kuopio.
In Finland, commercial, office and logistics construction will continue on quite
an active level, but may slow down towards the end of the year. The decrease in
the number of Palmberg's own development housing starts and the longer selling
times of housing units are the clearest indications that the peak of the
economic cycle has passed.
The new projects that Palmberg launched in 2007 will ensure that the company's
construction volume will remain at a good level in 2008.
Tekmanni Oy
Tekmanni Oy's business areas are technical building services, technical facility
services and industrial services.
Tekmanni Oy's net sales rose by 20.1% to EUR 230.2 million (191.7), of which
4.2% was generated in Sweden and Russia.
The operating profit was EUR 11.9 million (6.9) and the profit before taxes was
EUR 13.6 million (7.8). The order book grew by 49.4% to EUR 111.9 million
(74.9). International operations accounted for 5.7% (2.7) of the order book.
--------------------------------------------------------------------------------
| Tekmanni Oy, | 2007 | 2006 | 2005 |
--------------------------------------------------------------------------------
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, of which | 230.2 | 191.7 | 191.1 |
--------------------------------------------------------------------------------
| operations abroad | 9.7 | 9.6 | 11.8 |
--------------------------------------------------------------------------------
| Operating profit | 11.9 | 6.9 | 6.8 |
--------------------------------------------------------------------------------
| Operating margin % | 5.2 | 3.6 | 3.5 |
--------------------------------------------------------------------------------
| Profit before taxes | 13.6 | 7.8 | 7.4 |
--------------------------------------------------------------------------------
| Order book at end of period | 111.9 | 74.9 | 61.5 |
--------------------------------------------------------------------------------
| Personnel (average) | 1,918 | 1,812 | 1,745 |
--------------------------------------------------------------------------------
The net sales and operating profit showed a very positive development in all
business sectors. Active commercial and office construction maintained the
demand for Tekmanni's services at a good level. In technical building services,
the demand for maintenance, servicing and repair work was high, The net sales of
Tekmanni Service Oy, which specialises in these services, rose profitably by
40%. Demand for industrial services remained stable.
The implemented structural reorganisation at Tekmanni, in which acquisitions and
the corporatisation of local units are used to improve regional service
capabilities, had a positive impact on the favourable development of the
company's business.
Tekmanni strengthened its regional service capabilities in electrical
contracting and electrical maintenance by acquiring a majority interest in Ab
Instel Oy from Pietarsaari and full ownership of Sähköraisio Oy. Tekmanni's
HVAC expertise was strengthened by acquiring Rakennus-Putkitus Oy from
Uusikaupunki. In June 2007 the company expanded its expertise into the area of
refrigeration technology by acquiring Jäähdytystaito Oy in Vantaa, which was
merged into Tekmanni Service Oy at the end of the year.
In June 2007 the business operations of the technical building services units of
Hyvinkää, Porvoo, Lohja, Kerava, Hämeenlinna and Forssa were corporatised to
form a new company named Tekmanni Uusimaa Oy. It acts as a multi-skilled
installation and contracting service provider in the provinces of Uusimaa and
Kanta-Häme.
Tekmanni has fixed places of business in 30 localities, from where it is also
able to serve its customers that operate on a national level. In July 2007,
Tekmanni Service concluded an agreement with Oy Teboil Ab for the servicing and
maintenance of technical systems at approximately 500 service stations.
In technical building services, the demand for maintenance, servicing and repair
work is expected to remain active in Finland. The market in this business sector
is expected to slow down slightly towards the end of the year. in 2007 Tekmanni
Service expanded its business into Russia, where the company believes there is
demand for its services.. There the company plans to introduce the preventative
facility servicing model that it has developed. The demand for industrial
maintenance services is expected to grow in Finland and abroad.
THE GROUP'S ORDER BOOK
The Group's order book grew to EUR 1,414.1 million (1,326.7). The market
breakdown of the order book was Finland 79.9%, the other Nordic countries 11.0%,
the Baltic countries 3.4%, Russia and Eastern Europe 3.4% and other countries
2.3%.
--------------------------------------------------------------------------------
| Order book by business sector | 2007 | 2006 | 2005 |
--------------------------------------------------------------------------------
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Paving and Mineral Aggregates | 171.4 | 185.1 | 130.2 |
| Division | | | |
--------------------------------------------------------------------------------
| Building Materials Division | 37.7 | 23.4 | 13.3 |
--------------------------------------------------------------------------------
| Lemcon Ltd | 346.7 | 361.9 | 439.5 |
--------------------------------------------------------------------------------
| Oy Alfred A. Palmberg Ab | 746.4 | 681.5 | 366.9 |
--------------------------------------------------------------------------------
| Tekmanni Oy | 111.9 | 74.9 | 61.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Group total, of which | 1,414.1 | 1,326.7 | 1,011.3 |
--------------------------------------------------------------------------------
| international orders | 284.0 | 331.8 | 343.4 |
--------------------------------------------------------------------------------
Significant orders received in 2007
Lemcon built a logistics centre for Nokia in Chennai, India. The EUR 17 million
contract includes both design and construction works. (Bulletin 8.1.2007)
Lemcon was awarded a tunnel construction contract worth EUR 43 million in
Sweden. The new railway tunnel will be built on a section of track that is being
upgraded between Härnösand and Veda and forms part of the Ådalsbana line.
(Bulletin 10.1.2007)
Lemcon is building Oy Gustav Paulig Ab's new roastery in Vuosaari, Helsinki.
With a gross floor area of approx. 35,000 m2, the building comprises the office,
warehousing and production facilities. (Bulletin 5.4.2007)
Lemminkäinen Corporation and the Finnish Road Administration signed a service
agreement whereby the Company assumes responsibility for 12 years for the
condition of the main roads in the Häme, Uusimaa and Turku road districts of
Finland. This service agreement is the first of its kind in Finland. The
contract is worth approx. EUR 40 million. (Bulletin 19.4.2007)
Lemcon won yet another tunnel construction contract on the Ådalsbana line. When
completed, the 4.5 km long Kroksberg tunnel will be the longest tunnel on the
Ådalsbana line. The contract is worth EUR 54 million. (Bulletin 26.4.2007)
Palmberg signed a contracting agreement with Talvivaara concerning concrete work
of the Talvivaara nickel mine project. The contract is worth about EUR 15
million. Forssan Betoni Oy had already earlier made a contract for the concrete
deliveries for the entire mine project. (Bulletin 26.6.2007)
Lemcon won significant new construction contracts in Russia. Lemcon and H+H
International A/S, a Danish manufacturer of lightweight concrete elements,
signed an agreement to build a lightweight concrete production plant some 75
kilometres southwest of St. Petersburg in the Volosovo district of Leningrad
Oblast. An office and logistics centre is to be built in Moscow for Tikkurila.
Lemcon will also carry out the technical construction works for the enlargement
of Nokian Tyres' production plant in St. Petersburg. The combined value of the
new construction contracts is approx. EUR 40 million. (Bulletin 1.8.2007)
Lemminkäinen will construct a building of 530 housing units in St. Petersburg.
The building schedule of the 17-storey building in the district of Obuhovo is
two years. The total value of the project is approx. EUR 50 million. (Bulletin
6.9.2007)
A construction consortium formed by Lemminkäinen Group's Lemcon Ltd and
Kesälahden Maansiirto Oy will carry out the Highway 6 improvement work for the
Finnish Road Administration. The road will be widened to four lanes on the
Kärki-Mattila and Mattila-Muukko sections of the Lappeenranta bypass. The
contract is worth EUR 101 million in total. The road will be paved by
Lemminkäinen Paving Unit (Bulletin 9.10.2007)
Tekmanni Service Oy signed an agreement for servicing the technical building
systems of the Sokos hotels in St. Petersburg. The company will carry out the
scheduled servicing and necessary repair work on these new hotels' technical
building systems. The hotels will open by spring 2008. (Bulletin 5.10.2007)
Lemcon Ltd will build a labelstock factory for UPM Raflatac in Poland. The value
of UPM Raflatac‘s total investment is EUR 90 million. The construction works
will be completed in December 2008 (Bulletin 26.9.2007)
Lemminkäinen will build a shopping centre in Oulu. The complex will include a
Bauhaus DIY shop, an interior decoration department store as well as a home
appliance and decoration shopping centre. The gross floor area is 31,000 m2. The
total value of the project is EUR 40 million. The construction works started in
the autumn of 2007, and the shopping centre will be completed by Christmas 2008.
FINANCING
According to the cash flow statement, the cash flow from operating activities
was EUR 79.6 million (-7.2), the cash flow from investing activities EUR -29.5
million (-14.4) and the cash flow from financing activities EUR -32.0 million
(40.4). The cash flow for the accounting period includes dividends paid in 2006
totalling EUR 27.4 million (18.5). The EUR 14 million infringement fine imposed
by the Market Court has been recorded as a short-term, non-interest bearing
debt.
Interest-bearing liabilities at the end of the accounting period were EUR 357.0
million (343.6) and liquid funds were EUR 78.5 million (60.6). Interest-bearing
net debt was EUR 278.50 million (283.0).
The Company applies hedge accounting to interest rate swap contracts that were
used to hedge loans of a nominal value of EUR 74.3 million with
floating-interest rate loans, which are tied to the six-month euribor. The
hedgings have been made efficient and the change in fair value of the interest
rate swap agreements are recognised directly in the revaluation reserve under
the shareholders' equity as per the accounting principles for the financial
statements.
Net financing expenses were EUR -16.0 million (-14.9) representing 0.7% (0.8) of
net sales. The equity ratio was 32.7% (31.2) and gearing 87.2 % (105.7).
SHARES AND SHARE CAPITAL
The listed price of Lemminkäinen Corporation's share was EUR 36.10 (30.50) at
the beginning of the accounting period and EUR 31.50 (36.10) at the end of the
accounting period. The market capitalisation at the end of the accounting period
was EUR 536.2 million (614.5). Altogether 5,203,588 shares (4,113,868) were
traded during the accounting period. The total value of the trade was EUR 233.6
million (139.9). At the end of the year the Company had 3,643 (3,535)
shareholders.
Lemminkäinen's share capital is EUR 34,042,500. The Company has one share series
and the total number of issued shares is 17,021,250.
INVESTMENTS
Investments in the accounting period amounted to EUR 61.4 million (48.7). The
investments were mainly purchases of paving, crushing and excavation equipment,
production equipment for building materials, and building construction
equipment. The investments also include some acquisitions of businesses and
enterprises.
PERSONNEL
The average number of employees in the Group during the accounting period was
9,201 (8,418), of whom 72% (73) worked in Finland, 11% (11) in other Nordic
countries, 11% (10) in the Baltic states and 6% (6) in other countries.
--------------------------------------------------------------------------------
| Personnel (average), | 2007 | 2006 | 2005 |
--------------------------------------------------------------------------------
| persons | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Hourly paid workers | 6,084 | 5,480 | 5,162 |
--------------------------------------------------------------------------------
| Salaried staff | 3,117 | 2,938 | 2,750 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total personnel, of whom | 9,201 | 8,418 | 7,912 |
--------------------------------------------------------------------------------
| working abroad | 2,565 | 2,235 | 1,965 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel at end of period | 8,718 | 8,087 | 7,112 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total wages, salaries and other | | | |
| rewards | | | |
--------------------------------------------------------------------------------
| for the accounting period, EUR | 327.2 | 288.0 | 268.5 |
| million | | | |
--------------------------------------------------------------------------------
MARKET COURT'S DECISION IN THE ASPHALT INDUSTRY CARTEL CASE
(Bulletins 19.12.2007)
In December the Market Court ordered seven asphalt industry companies to pay a
total of EUR 19.4 million in infringement fines for contravention of competition
laws, EUR 14 million of which was imposed on Lemminkäinen. The Finnish
Competition Authority had proposed to the Market Court that Lemminkäinen be
fined EUR 68 million.
The Market Court ruled that the companies had contravened competition laws in
road paving operations in Finland. The first infringements were considered to
have taken place in 1994 and the last in 2001. Road paving operations in Finland
accounted for approximately 10% of Lemminkäinen Group's net sales in 2001.
Lemminkäinen acknowledges that the proceedings at the Market Court have, as
such, shown that the conduct of business by Lemminkäinen in the Finnish road
paving market has, to some extent, included aspects that are in contravention of
competition legislation. Lemminkäinen disagrees, however, with the Market Court
on both the extent of the geographical area and the period of time concerned,
and Lemminkäinen has appealed the decision to the Supreme Administrative Court.
Lemminkäinen also considers the amount of the infringement fine imposed on it to
be excessive both in the light of the evidence produced and the accepted legal
practice.
Lemminkäinen does not, under any circumstances, approve of the use of illegal
procedures in its operations. For several years now, particular attention has
been given within the Group to training and guidance in issues concerning
competition law.
In addition to Lemminkäinen, the Finnish Competition Authority and some asphalt
industry companies have appealed the decision to the Supreme Administrative
Court. Irrespective of the future of the proceedings, the competition
infringement fine of EUR 14 million imposed on Lemminkäinen by the Market Court
was charged as an expense in the fourth quarter of 2007. Since the decision has
been appealed, the total amount of the fine may change.
THE RISKS AND UNCERTAINTIES OF THE NEAR FUTURE
The risks of Lemminkäinen's business operations have been categorised into six
groups, which include market risks, project risks, financing risks, credit-loss
risks, environmental risks as well as accidents and damages. In order to control
the major, identified risks, necessary measures have been specified.
The most significant risk for Lemminkäinen in the near future is the market
risk. International financial market turbulence may extend to Finland and
reflect on the housing demand and other investments.
The starting point for Lemminkäinen's strategy is to direct operations to
business sectors that differ from one another in their business cycle
behaviours. The fluctuation in the demand for new construction in Finland is
balanced by international business operations as well as by repair construction
and maintenance. The Group's international business operations account for more
than a quarter of its net sales and the percentage is on the increase. The
Group's repair construction and maintenance operations account for approximately
40% of its business operations.
The Company's Annual Report and its website provide more information on
Lemminkäinen's risk management.
RESEARCH AND DEVELOPMENT
Lemminkäinen's research and development work focuses on the Company´s
development of operational prerequisites and the quality assurance of products
and services. Taking into account safety issues and environmental effects are
important principles in Lemminkäinen's development work. Products and services
are developed in long-term collaboration with customers.
The Group's business units and subsidiaries are responsible for their own
research and development activities. Lemminkäinen's Central Laboratory carries
out R&D at Group level. In 2007, the Group's research and development
expenditure represented for 0.4% of net sales.
THE ENVIRONMENT
Lemminkäinen's values include environment-considerate construction operations.
Lemminkäinen Group takes into account the life-cycle and environmental
perspectives when developing its operations, products and services. Environment
issue management and the environmental effects of the Group's operations are
under constant supervision with internal monitoring and control programs.
Lemminkäinen Corporation donated EUR 100,000 to the John Nurminen Foundation
Clean Baltic Sea project. Lemcon Ltd also donated its project-management
expertise to the project. This project helped perform an effective chemical
phosphorus removal at the major St. Petersburg wastewater treatment plants.
The Company's Annual Report and its website provide more information on
Lemminkäinen's environmental issues.
DECISIONS OF THE ANNUAL GENERAL MEETING AND CORPORATE GOVERNANCE
The Annual General Meeting of Lemminkäinen Corporation held on 16 March 2007
adopted the 2006 annual financial statements and granted the Board of Directors
and the Managing Director discharge from liability. In accordance with the Board
of Directors' proposal, the Annual General Meeting decided to pay a dividend of
EUR 1.50 per share, i.e. a total dividend of EUR 25,531,875.00. The record
date of the dividend payment was 21 March 2007 and the date of dividend payment
was 28 March 2007.
Messrs. Berndt Brunow, Heikki Pentti, Teppo Taberman and Sakari Tamminen were
re-elected to serve as members of the Company's Board of Directors. Ms. Kristina
Pentti, M.Sc., was elected to serve as a new member of the Company's Board of
Directors.
PricewaterhouseCoopers Oy, a firm of authorised public accountants, was elected
to serve as the Company's auditors, with Mr. Jan Holmberg, A.P.A. acting as the
auditor in charge.
The Board of Directors, at their organising meeting, elected Heikki Pentti to
serve as the Chairman and Teppo Taberman to serve as the Vice-Chairman.
The Board of Directors has chosen from among its members a Nominating Committee,
an Audit Committee, and a Remuneration and Appointments Committee. The
committees assist the Board of Directors by preparing pertinent matters for the
Board's consideration.
The role of the Nominating Committee is to prepare for the Annual General
Meeting a proposal on the number of members of the Board of Directors as well as
the names of the members and the remuneration that should be paid to them. Since
February 2007, Mr. Berndt Brunow has been the Chairman of the Nominating
Committee, with Messrs. Teppo Taberman and Sakari Tamminen serving as committee
members.
The role of the Audit Committee is to scrutinise the contents of the year-end
financial statements and interim financial reviews as well as the sufficiency of
the Company's risk management and internal audit and control systems, and it
deals with the reports and plans of the Company's internal auditing.
Furthermore, the Board of Directors' Audit Committee assesses the accounting
quality, independence and costs as well as prepares the election for accountants
for the Board of Directors. The meetings of the Audit Committee shall be
attended by the Company's Auditor and Internal Auditor as well as management
representatives as and when necessary. The Chairman of the Audit Committee is
Mr. Sakari Tamminen, with Messrs. Berndt Brunow, Teppo Taberman and Heikki
Pentti serving as committee members.
The Remuneration and Appointments Committee deals with matters relating to the
appointment of senior executives as well as their pay, rewards and benefits.
Final decisions are made by the Board of Directors on the basis of the
Committee's proposals. The Chairman of the Remuneration and Appointments
Committee is Mr. Heikki Pentti, with Messrs. Berndt Brunow and Teppo Taberman
serving as committee members.
Since the Board of Directors' number of members is low, and since the Board of
Directors convenes often, the Board of Directors is able to manage duties
relating to auditing, appointments and remuneration also at full strength. The
Board of directors can also choose to deal with procedural issues of the Audit
Committee as well as the Remuneration and Appointments Committee on the decision
of the Chairman.
THE GROUP'S STRATEGY
The Board of Directors revised the Group's business strategy and strategic
target levels (Bulletin 15.2.2007). The main strategic objectives are profitable
growth and the maintenance of good solvency. Good profitability is regarded as a
long-term average return on investment exceeding 18%. In 2007, the return on
investment was 20.7% (20.6). Good solvency is regarded as an equity ratio
exceeding 35%. In 2007, the equity ratio was 32.7% (31.2).
The Company's website provides more information on the strategy.
LEMMINKÄINEN'S NEW STRUCTURE EFFECTIVE 1.1.2008
Lemminkäinen Group was reorganised into four business sectors with effect from 1
January 2008. The business sectors are Building Construction, Infrastructure
Construction, Technical Building Services, and Building Products.
The new structure supports the confirmed strategy of February 2007 and clarifies
the Group's status in both the building construction market as well as in the
infrastructure construction sector. The new operating models correspond to the
needs of the Group's customer structure and improve Lemminkäinen's
competitiveness.
Building construction and infrastructure construction are the responsibility of
two new companies: Lemminkäinen Talo Oy and Lemminkäinen Infra Oy.
Lemminkäinen Talo Oy was formed from the Palmberg Group and the operations of
Lemcon Ltd except for its infrastructure business (Lemcon Infra). Lemminkäinen
Talo Oy has building construction and property development businesses through
its local subsidiaries in Finland, Russia, Estonia and Sweden. It also serves
customers globally as a specialist project contractor. Combining the expertise
of Lemcon and Palmberg strengthens Lemminkäinen's opportunities for growth
especially on the Russian housing construction and commercial construction
markets. Building construction accounted for 48% (46.7) of Lemminkäinen Group's
net sales in 2007. The Managing Director of Lemminkäinen Talo Oy is Juha Nurmi.
Lemminkäinen Infra Oy was formed from Lemminkäinen Corporation's Paving and
Mineral Aggregates Division and Lemcon Ltd's infrastructure business (Lemcon
Infra). In addition to asphalt, mineral aggregate and concrete production, the
company engages in the construction and maintenance of road, street and rail
networks as well as rock and foundation engineering. Lemminkäinen Infra Oy is
Finland's biggest infrastructure contractor and a major actor in the
infrastructure sector throughout the entire Baltic Sea region. Infrastructure
construction accounted for 37.7% (39) of Lemminkäinen Group's net sales in 2007.
The Managing Director of Lemminkäinen Infra Oy is Timo Kohtamäki.
Tekmanni Oy is a supplier of technical building and facility services as well as
industrial services. The Technical Building Services business sector's share of
the Group's net sales in 2007 was10.6% (10.6). The company's Managing Director
is Antero Huhta.
Lemminkäinen's Building Products business sector comprises Lemminkäinen Katto
Oy, Lemminkäinen Betonituote Oy and the sports building contractor Omni-Sica Oy.
The business sector's share of the Group's net sales in 2007 was 6.2% (5.8).The
Director of the Building Products business sector is Erkki Lönnrot.
Following the Lemminkäinen Group's established new structure, units whose
business operations are related will now also organisationally function under
the same management, which enables the Group to use Group-internal synergies to
its advantage. This furthermore helps maintain the flexibility of local
operational models and regional business operations as the Group's central
values.
Table: Business development in 2007 (2006 comparison figures) according to the
reorganised business sectors in proforma figures excluding the infringement fine
imposed by the Market Court.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR, million |
--------------------------------------------------------------------------------
| 2007 (2006) |
--------------------------------------------------------------------------------
| | Building | Infrastructur | Technical | Building |
| | Construction | e | Building | Products |
| | | Construction | Services | |
--------------------------------------------------------------------------------
| Net sales | 1,042 | (839. | 820. | (701.2 | 230.2 | (191.7 | 133.8 | (104.4 |
| | .9 | 3) | 3 | ) | | ) | | ) |
--------------------------------------------------------------------------------
| Share of | 48.0 | (46.7 | 37.7 | (39.0) | 10.6 | (10.6) | 6.2 | (5.8) |
| Group net | | ) | | | | | | |
| sales, % | | | | | | | | |
--------------------------------------------------------------------------------
| Internatio | 196.1 | (203. | 366. | (310.3 | 9.7 | (9.6) | 10.7 | (7.7) |
| nal | | 3) | 7 | ) | | | | |
| operations | | | | | | | | |
--------------------------------------------------------------------------------
| Share of | 18.8 | (24.2 | 44.7 | (44.3) | 4.2 | (5.0) | 8.0 | (7.4) |
| business | | ) | | | | | | |
| sector net | | | | | | | | |
| sales, % | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 71.5 | (58.5 | 52.6 | (41.9) | 11.9 | (6.9) | 11.1 | (5.0) |
| profit | | ) | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Net | 7.8 | (4.5) | 32.1 | (33.7) | 1.6 | (5.3) | 9.3 | (2.0) |
| investment | | | | | | | | |
| s | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Order book | 938.0 | (893. | 326. | (334.9 | 111.9 | (74.9) | 37.7 | (23.4) |
| | | 5) | 5 | ) | | | | |
--------------------------------------------------------------------------------
| -of which | 106.9 | (97.8 | 170. | (231.6 | 6.4 | (2.0) | 0.4 | (0.3) |
| internatio | | ) | 2 | ) | | | | |
| nal | | | | | | | | |
| operations | | | | | | | | |
--------------------------------------------------------------------------------
| Share of | 11.4 | (10.9 | 52.1 | (69.2) | 5.7 | (2.7) | 1.1 | (1.3) |
| business | | ) | | | | | | |
| sector | | | | | | | | |
| order | | | | | | | | |
| book, % | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Personnel | 3,055 | (2,81 | 3,36 | (3,072 | 1,918 | (1,812 | 749 | (609) |
| | | 9) | 5 | ) | | ) | | |
--------------------------------------------------------------------------------
| -of whom | 672 | (593) | 1 | (1,596 | 52 | (46) | | |
| abroad | | | 841 | ) | | | | |
--------------------------------------------------------------------------------
OUTLOOK FOR 2008
The new construction projects of 2007 that Lemminkäinen launched in building
construction in Finland will maintain the Company's construction volume at a
good level in 2008. The outlook for the Company in Russia is promising. The
ongoing, long-term civil engineering projects guarantee Lemminkäinen a
reasonable work stock for the next few years in the infrastructure construction
sector. The demand for the Company's products and services in both Technical
Building Services as well as Building Products will remain on a good level.
The Group's order book is good as a whole, and there are prerequisites for the
favourable development of the Company's business in 2007.
BOARD OF DIRECTORS' PROPOSAL FOR THE DISTRIBUTION OF PROFITS
The distributable shareholders' equity shown on the consolidated balance sheet
31 December 2007 amounts to EUR 238,399,846.06. The distributable shareholders'
equity shown on the balance sheet of the parent company, Lemminkäinen
Corporation, on 31 December 2007 amounts to EUR 31,378,058.07, consisting of EUR
45,052,647.82 in retained earnings from previous years and EUR 13,674,589.75 in
losses for the accounting period.
The Board of Directors of Lemminkäinen Corporation proposes to the Annual
General Meeting that the Company pay a dividend of EUR 1.80 (1.50) per share
for the 2007 accounting period, i.e. a total of EUR 30,638,250.00
(25,531,875.00)
Helsinki, 13 February 2008
LEMMINKÄINEN CORPORATION
Board of Directors
TABULATED SECTION OF THE FINANCIAL STATEMENT BULLETIN
ACCOUNTING PRINCIPLES
This financial statement bulletin has been prepared in accordance with the IAS
34-standard. In the preparation of this financial statement bulletin, the same
IFRS measurement and preparation principles as in the financial statement of
2006 have been applied, with the changes that are stated here below.
During the accounting period, the Group has applied hedge accounting for
interest rate swap agreements that were used to hedge separately specified
floating-interest rate loans as well as for financing instruments that were used
to hedge foreign net investments. The change in fair value of the effective
portion of the interest rate swap agreements are recognised directly in the
revaluation reserve under the shareholders' equity, and the ineffective portion
under financial income and expenses of the income statement.
New and revised standards and interpretations that the Group has applied in 2007
- IFRS 7, Financial instruments: Amendment to the Disclosures-standard and IAS
1 Capital disclosures-standard. The introduction of this standard and amendment
increases the notes to the accounts related to financial instruments. The
standard requires the disclosure of qualitative and quantitative information on
exposure to risk due to financial instruments, and includes the requirement for
minimum notes on accounts regarding credit, liquidity and market risks including
a market risk sensitivity analysis. The amendment to the IAS 1-standard requires
disclosure of information on the company's equity level and its management.
Notes on accounts have been added to the Group's Financial Statement.
- IFRC 8, IFRS 2, scope of application. The interpretation requires that
transactions, in which equity instruments are issued and the received
individualized counterpart is less than the fair value of the issued equity
instruments, be assessed in order to ascertain whether they fall under the scope
of application of the IFRS 2. This interpretation does not have an impact on the
Group's financial statements.
- IFRIC 10, Interim Financial Reporting and Impairment. The Interpretation
concludes that where an entity has recognised an impairment loss in an interim
period in respect of goodwill or an investment in either an equity instrument or
a financial asset carried at cost, that impairment should not be reversed in
subsequent interim financial statements or in annual financial statements. This
interpretation does not have an impact on the Group's financial statements.
New and revised standards and interpretations that became effective in 2007 but
do not have an integral impact on the Group's financial statements.
- IFRIC 7, Applying the restatement approach under IAS 29, Financial reporting
in hyperinflationary economies
- IFRIC 9, Reassessment of embedded derivatives
The Auditors have not yet submitted their report on the Financial Statements
Bulletin.
FINANCIAL STATEMENTS AND OTHER TABULATED INFORMATION
1) Consolidated income statement
2) Consolidated balance sheet
3) Statement of source and application of funds
4) Statement of changes in equity
5) Consolidated income statement, quarterly
6) Net sales by business sector
7) Net sales by business sector, quarterly
8) Operating profit by business sector
9) Operating profit by business sector, quarterly
10) Economic trends and financial indicators
11) Share-specific indicators
12) Guarantees and contingent liabilities
--------------------------------------------------------------------------------
| 1) CONSOLIDATED INCOME STATEMENT | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | 12/2007 | 12/200 | Change | Change, | |
| | | 6 | | | |
--------------------------------------------------------------------------------
| | | | | | % | |
--------------------------------------------------------------------------------
| Net sales | 2,174.1 | 1,795. | 378.2 | 21.1 | |
| | | 9 | | | |
--------------------------------------------------------------------------------
| Other operating income | 13.2 | 17.1 | -3.9 | -22.8 | |
--------------------------------------------------------------------------------
| Operating expenses | 2,026.8 | 1,670. | 356.8 | 214 | |
| | | 0 | | | |
--------------------------------------------------------------------------------
| Depreciation | 34.2 | 35.0 | -0.8 | -2.3 | |
--------------------------------------------------------------------------------
| Operating profit | 126.3 | 108.1 | 18.2 | 16.8 | |
--------------------------------------------------------------------------------
| Financial expenses | 22.2 | 18.2 | 4.0 | 22.0 | |
--------------------------------------------------------------------------------
| Financial income | 6.2 | 3.3 | 2.9 | 87.9 | |
--------------------------------------------------------------------------------
| Share of the results of | | | | | |
--------------------------------------------------------------------------------
| affiliated companies | 0.9 | 1.1 | -0.2 | -18.2 | |
--------------------------------------------------------------------------------
| Result before taxes | 111.2 | 94.2 | 17.0 | 18.0 | |
--------------------------------------------------------------------------------
| Income taxes | -30.6 | -21.3 | -9.3 | 43.7 | |
--------------------------------------------------------------------------------
| Result for the | | | | | |
--------------------------------------------------------------------------------
| accounting period | 80.6 | 72.9 | 7.7 | 10.6 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution of the result for the accounting period | |
--------------------------------------------------------------------------------
| To shareholders of | | | | | |
--------------------------------------------------------------------------------
| the parent company | 72.9 | 65.8 | 7.1 | 10.8 | |
--------------------------------------------------------------------------------
| To minority interests | 7.6 | 7.1 | 0.5 | 7.0 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EPS calculated from result attributable to parent company shareholders |
--------------------------------------------------------------------------------
| Earnings per share, diluted | | | | | |
| and | | | | | |
--------------------------------------------------------------------------------
| undiluted, EUR | 4.29 | 3.87 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2) CONSOLIDATED BALANCE SHEET | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | | | | 2007 | 2006 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Tangible assets | 176.1 | 169.4 | | |
--------------------------------------------------------------------------------
| Goodwill | 75.1 | 68.2 | | |
--------------------------------------------------------------------------------
| Other intangible assets | 2.6 | 2.5 | | |
--------------------------------------------------------------------------------
| Investments | 9.7 | 9.4 | | |
--------------------------------------------------------------------------------
| Deferred tax asset | 4.9 | 4.3 | | |
--------------------------------------------------------------------------------
| Other non-current receivables | 3.7 | 2.2 | | |
--------------------------------------------------------------------------------
| Total | 272.1 | 255.9 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | 330.9 | 281.9 | | |
--------------------------------------------------------------------------------
| Trade and other receivables | 387.4 | 340.7 | | |
--------------------------------------------------------------------------------
| Cash funds | 78.5 | 60.6 | | |
--------------------------------------------------------------------------------
| Total | 796.9 | 683.2 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets, total | 1,069. | 939.2 | | |
| | 0 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity and liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity attributable to shareholders of the parent company |
--------------------------------------------------------------------------------
| Share capital | 34.0 | 34.0 | | |
--------------------------------------------------------------------------------
| Share premium account | 5.8 | 5.8 | | |
--------------------------------------------------------------------------------
| Revaluation reserve | 0.2 | 0.1 | | |
--------------------------------------------------------------------------------
| Translation differences | 0.1 | 0.1 | | |
--------------------------------------------------------------------------------
| Retained earnings | 182.5 | 142.2 | | |
--------------------------------------------------------------------------------
| Result for the period | 72.9 | 65.8 | | |
--------------------------------------------------------------------------------
| Shareholders' equity | | | | |
--------------------------------------------------------------------------------
| before minority interest | 295.5 | 248.0 | | |
--------------------------------------------------------------------------------
| Minority interest | 23.7 | 19.7 | | |
--------------------------------------------------------------------------------
| Shareholders' equity, total | 319.2 | 267.7 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 12.9 | 14.6 | | |
--------------------------------------------------------------------------------
| Pension liabilities | 0.6 | 1.1 | | |
--------------------------------------------------------------------------------
| Provisions | 1.7 | 1.7 | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 139.5 | 91.2 | | |
--------------------------------------------------------------------------------
| Other liabilities | 1.9 | 1.7 | | |
--------------------------------------------------------------------------------
| Total | 156.6 | 110.3 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Accounts payable and other liabilities | 369.2 | 303.0 | | |
--------------------------------------------------------------------------------
| Provisions | 6.4 | 5.7 | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 217.6 | 252.5 | | |
--------------------------------------------------------------------------------
| Total | 593.2 | 561.1 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity and | | | | |
--------------------------------------------------------------------------------
| liabilities, total | 1,069. | 939.2 | | |
| | 0 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 3) STATEMENT OF SOURCE AND APPLICATION OF FUNDS | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | | | | 2007 | 2006 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result before extraordinary items | 111.2 | 94.2 | | |
--------------------------------------------------------------------------------
| Depreciation according to plan | 34.2 | 35.0 | | |
--------------------------------------------------------------------------------
| Other adjustments | 7.7 | 4.1 | | |
--------------------------------------------------------------------------------
| Cash flow before change | | | | |
--------------------------------------------------------------------------------
| in working capital | 153.1 | 133.3 | | |
--------------------------------------------------------------------------------
| Change in working capital | -32.9 | -109.3 | | |
--------------------------------------------------------------------------------
| Financial items | -17.9 | -11.9 | | |
--------------------------------------------------------------------------------
| Direct taxes paid | -22.6 | -19.2 | | |
--------------------------------------------------------------------------------
| Cash flow from operating activities | 79.6 | -7.2 | | |
--------------------------------------------------------------------------------
| Cash flow provided by investing | | | | |
--------------------------------------------------------------------------------
| activities | 24.3 | 24.4 | | |
--------------------------------------------------------------------------------
| Cash flow used in investing activities | -53.8 | -38.9 | | |
--------------------------------------------------------------------------------
| Change in non-current receivables | -1.4 | -1.4 | | |
--------------------------------------------------------------------------------
| Drawings of loans | 329.3 | 273.6 | | |
--------------------------------------------------------------------------------
| Repayments of loans | -332.5 | -213.4 | | |
--------------------------------------------------------------------------------
| Dividends paid | -27.4 | -18.5 | | |
--------------------------------------------------------------------------------
| Cash flow from financing activities | -32.0 | 40.4 | | |
--------------------------------------------------------------------------------
| Change in cash funds | 18.1 | 18.8 | | |
--------------------------------------------------------------------------------
| Cash funds at beginning of period | 60.6 | 42.4 | | |
--------------------------------------------------------------------------------
| Translation difference of cash funds | -0.2 | -0.6 | | |
--------------------------------------------------------------------------------
| Cash funds at end of period | 78.5 | 60.6 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 4) STATEMENT OF CHANGES IN EQUITY | |
--------------------------------------------------------------------------------
| | | | | | | | Share- |
--------------------------------------------------------------------------------
| | | Share | Trans- | Revalu | | holders' |
| | | | | - | | |
--------------------------------------------------------------------------------
| EUR mill. | Share | premiu | lation | ation | Retaine | Minorit | equity |
| | | m | | | d | y | |
--------------------------------------------------------------------------------
| capital | accoun | differe | reserv | earning | interes | total |
| | t | nce | e | s | t | |
--------------------------------------------------------------------------------
| Shareholders' | | | | | | |
--------------------------------------------------------------------------------
| equity, | | | | | | |
--------------------------------------------------------------------------------
| 1.1.2006 | 34.0 | 5.8 | 0.4 | 1.5 | 159.2 | 14.6 | 215.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Translation | | | | | | |
--------------------------------------------------------------------------------
| difference | | -0.5 | | | | -0.5 |
--------------------------------------------------------------------------------
| Hedging of net | | | | | | |
--------------------------------------------------------------------------------
| investment in | | | | | | |
--------------------------------------------------------------------------------
| foreign | | | | | | |
--------------------------------------------------------------------------------
| subsidiary | | 0.3 | | | | 0.3 |
--------------------------------------------------------------------------------
| Change in | | | | | | |
--------------------------------------------------------------------------------
| fair value | | | 0.1 | | | 0.1 |
--------------------------------------------------------------------------------
| Effect of | | | | | | |
--------------------------------------------------------------------------------
| sold shares | | | -1.5 | | | -1.5 |
--------------------------------------------------------------------------------
| Reversal of | | | | | | |
--------------------------------------------------------------------------------
| dividend | | | | | | |
--------------------------------------------------------------------------------
| liability | | | | 0.0 | | 0.0 |
--------------------------------------------------------------------------------
| Dividend | | | | | | |
--------------------------------------------------------------------------------
| distribution | | | | -17.0 | | -17.0 |
--------------------------------------------------------------------------------
| Result for the | | | | | | |
--------------------------------------------------------------------------------
| accounting | | | | | | |
--------------------------------------------------------------------------------
| period | | | | 65.8 | 7.1 | 72.9 |
--------------------------------------------------------------------------------
| Change in | | | | | | |
--------------------------------------------------------------------------------
| minority | | | | | | |
--------------------------------------------------------------------------------
| interest | | | | | -2.0 | -2.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' | | | | | | |
--------------------------------------------------------------------------------
| equity, | | | | | | | |
--------------------------------------------------------------------------------
| 31.12.2006 | 34.0 | 5.8 | 0.1 | 0.1 | 208.0 | 19.7 | 267.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | | | | | Share- |
--------------------------------------------------------------------------------
| | | Share | Trans- | Revalu | | holders' |
| | | | | - | | |
--------------------------------------------------------------------------------
| EUR mill. | Share | premiu | lation | ation | Retaine | Minorit | equity |
| | | m | | | d | y | |
--------------------------------------------------------------------------------
| capital | accoun | differe | reserv | earning | interes | total |
| | t | nce | e | s | t | |
--------------------------------------------------------------------------------
| Shareholders' | | | | | | |
--------------------------------------------------------------------------------
| equity, | | | | | | |
--------------------------------------------------------------------------------
| 1.1.2007 | 34.0 | 5.8 | 0.1 | 0.1 | 208.0 | 19.7 | 267.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Translation | | | | | | |
--------------------------------------------------------------------------------
| difference | | 0.4 | | | | 0.4 |
--------------------------------------------------------------------------------
| Hedging of net | | | | | | |
--------------------------------------------------------------------------------
| investment in | | | | | | |
--------------------------------------------------------------------------------
| foreign | | | | | | |
--------------------------------------------------------------------------------
| subsidiary | | -0.4 | | | | -0.4 |
--------------------------------------------------------------------------------
| Cash flow | | | | | | |
--------------------------------------------------------------------------------
| hedges | | | | 0.2 | | | 0.2 |
--------------------------------------------------------------------------------
| Change in | | | | | | |
--------------------------------------------------------------------------------
| fair value | | | 0.0 | | | 0.0 |
--------------------------------------------------------------------------------
| Effect of | | | | | | |
--------------------------------------------------------------------------------
| sold shares | | | -0.1 | | | -0.1 |
--------------------------------------------------------------------------------
| Reversal of | | | | | | |
--------------------------------------------------------------------------------
| dividend | | | | | | |
--------------------------------------------------------------------------------
| liability | | | | 0.0 | | 0.0 |
--------------------------------------------------------------------------------
| Dividend | | | | | | |
--------------------------------------------------------------------------------
| distribution | | | | -25.5 | | -25.5 |
--------------------------------------------------------------------------------
| Result for the | | | | | | |
--------------------------------------------------------------------------------
| accounting | | | | | | |
--------------------------------------------------------------------------------
| period | | | | 72.9 | 7.6 | 80.6 |
--------------------------------------------------------------------------------
| Change in | | | | | | |
--------------------------------------------------------------------------------
| minority | | | | | | |
--------------------------------------------------------------------------------
| interest | | | | | -3.6 | -3.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' | | | | | | |
--------------------------------------------------------------------------------
| equity, | | | | | | |
--------------------------------------------------------------------------------
| 31.12.2007 | 34.0 | 5.8 | 0.1 | 0.2 | 255.4 | 23.7 | 319.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 5) CONSOLIDATED INCOME STATEMENT, QUARTERLY | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 4-6/ | 7-9/ | 10-12/ | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
--------------------------------------------------------------------------------
| EUR mill. | 2006 | 2006 | 2006 | 2007 | 2007 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 427.8 | 573.9 | 490.8 | 328.0 | 551.9 | 655.7 | 638.5 |
--------------------------------------------------------------------------------
| Other | | | | | | | |
| opera- | | | | | | | |
--------------------------------------------------------------------------------
| ting income | 2.1 | 2.5 | 8.5 | 7.9 | 2.6 | 1.0 | 1.7 |
--------------------------------------------------------------------------------
| Operating | | | | | | | |
--------------------------------------------------------------------------------
| expenses | 394.9 | 507.9 | 458.0 | 330.8 | 500.5 | 586.8 | 608.7 |
--------------------------------------------------------------------------------
| Depreciatio | 9.2 | 12.8 | 8.0 | 4.9 | 9.0 | 12.3 | 8.1 |
| n | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 25.8 | 55.7 | 33.4 | 0.3 | 45.0 | 57.6 | 23.4 |
| profit | | | | | | | |
--------------------------------------------------------------------------------
| Financial | | | | | | | |
--------------------------------------------------------------------------------
| expenses | 5.2 | 4.6 | 5.7 | 4.1 | 5.1 | 6.3 | 6.7 |
--------------------------------------------------------------------------------
| Financial | 0.0 | 0.4 | 2.1 | 1.0 | 1.9 | 0.6 | 2.7 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Share of the | | | | | | |
| results | | | | | | |
--------------------------------------------------------------------------------
| of affiliated | | | | | | |
--------------------------------------------------------------------------------
| companies | 0.2 | 0.8 | 0.5 | -0.1 | 0.1 | 0.7 | 0.3 |
--------------------------------------------------------------------------------
| Result | | | | | | | |
--------------------------------------------------------------------------------
| before | 20.7 | 52.3 | 30.3 | -3.0 | 41.9 | 52.6 | 19.6 |
| taxes | | | | | | | |
--------------------------------------------------------------------------------
| Income | -4.8 | -12.1 | -6.1 | 1.1 | -10.2 | -12.3 | -9.2 |
| taxes | | | | | | | |
--------------------------------------------------------------------------------
| Result for | | | | | | |
--------------------------------------------------------------------------------
| the accounting | | | | | | |
--------------------------------------------------------------------------------
| period | 15.9 | 40.1 | 24.2 | -1.8 | 31.7 | 40.3 | 10.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution of the result for the accounting period |
--------------------------------------------------------------------------------
| To shareholders | | | | | | |
--------------------------------------------------------------------------------
| of the parent | | | | | | |
--------------------------------------------------------------------------------
| company | 13.6 | 38.4 | 22.1 | -3.7 | 30.2 | 38.7 | 7.8 |
--------------------------------------------------------------------------------
| To minority | | | | | | | |
--------------------------------------------------------------------------------
| interests | 2.4 | 1.7 | 2.1 | 1.9 | 1.5 | 1.6 | 2.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EPS calculated from result attributable to parent company shareholders |
--------------------------------------------------------------------------------
| Earnings per share, diluted and undiluted |
--------------------------------------------------------------------------------
| EUR | 0.80 | 2.26 | 1.30 | -0.22 | 1.77 | 2.27 | 0.46 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 6) NET SALES BY BUSINESS SECTOR | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | | | 2007 | 2006 | Change | Change, | |
--------------------------------------------------------------------------------
| | | | | | | % | |
--------------------------------------------------------------------------------
| Paving and Mineral | | | | | |
--------------------------------------------------------------------------------
| Aggregates Division | 636.3 | 559.0 | 77.3 | 13.8 | |
--------------------------------------------------------------------------------
| Building Materials Division | 133.8 | 104.4 | 29.4 | 28.2 | |
--------------------------------------------------------------------------------
| Lemcon Ltd | 389.9 | 344.0 | 45.9 | 13.3 | |
--------------------------------------------------------------------------------
| Oy Alfred A. Palmberg Ab | 837.0 | 637.5 | 199.5 | 31.3 | |
--------------------------------------------------------------------------------
| Tekmanni Oy | 230.2 | 191.7 | 38.5 | 20.1 | |
--------------------------------------------------------------------------------
| Others | -53.0 | -40.7 | -12.3 | 30.2 | |
--------------------------------------------------------------------------------
| Group total | 2,174.1 | 1,795. | 378.2 | 21.1 | |
| | | 9 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 7) NET SALES BY BUSINESS SECTOR, QUARTERLY | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 4-6/ | 4-6/ | 7-9/ | 10-12/ | 1-3/ | 4-6/ | 7-9/ |
--------------------------------------------------------------------------------
| EUR mill. | 2 006 | 2006 | 2006 | 2006 | 2007 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Paving and Mineral | | | | | | |
--------------------------------------------------------------------------------
| Aggregates | | | | | | | |
--------------------------------------------------------------------------------
| Division | 147.8 | 249.6 | 137.7 | 41.9 | 174.0 | 253.8 | 166.6 |
--------------------------------------------------------------------------------
| Building Materials | | | | | | |
--------------------------------------------------------------------------------
| Division | 29.8 | 37.2 | 25.8 | 18.5 | 39.5 | 41.2 | 34.5 |
--------------------------------------------------------------------------------
| Lemcon Ltd | 71.8 | 98.8 | 72.5 | 76.2 | 88.5 | 108.6 | 116.7 |
--------------------------------------------------------------------------------
| Oy Alfred | | | | | | | |
| A. | | | | | | | |
--------------------------------------------------------------------------------
| Palmberg Ab | 141.7 | 155.2 | 211.0 | 155.3 | 207.9 | 207.3 | 266.5 |
--------------------------------------------------------------------------------
| Tekmanni Oy | 44.8 | 47.6 | 56.3 | 46.2 | 57.2 | 58.5 | 68.3 |
--------------------------------------------------------------------------------
| Others | -8.2 | -14.5 | -12.4 | -10.1 | -15.2 | -13.6 | -14.1 |
--------------------------------------------------------------------------------
| Group total | 427.8 | 573.9 | 490.8 | 328.0 | 551.9 | 655.7 | 638.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 8) OPERATING PROFIT/LOSS BY BUSINESS SECTOR | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | | | 2007 | 2006 | Change | Change, | |
--------------------------------------------------------------------------------
| Paving and Mineral | | | | % | |
--------------------------------------------------------------------------------
| Aggregates Division | | | | | |
--------------------------------------------------------------------------------
| excluding the infringement | 40.9 | 35.5 | 5.4 | 15.2 | |
| fine | | | | | |
--------------------------------------------------------------------------------
| Infringement fine | | -14.0 | | | | |
--------------------------------------------------------------------------------
| Paving and Mineral | | | | | |
--------------------------------------------------------------------------------
| Aggregates Division | 26.9 | 35.5 | -8.6 | -24.2 | |
--------------------------------------------------------------------------------
| Building Materials Division | 11.1 | 5.0 | 6.1 | over | |
| | | | | 100 | |
--------------------------------------------------------------------------------
| Lemcon Ltd | 13.0 | 12.5 | 0.5 | 4.0 | |
--------------------------------------------------------------------------------
| Oy Alfred A. Palmberg Ab | 70.2 | 52.4 | 17.8 | 34.0 | |
--------------------------------------------------------------------------------
| Tekmanni Oy | 11.9 | 6.9 | 5.0 | 72.5 | |
--------------------------------------------------------------------------------
| Others | -6.7 | -4.3 | -2.4 | 55.8 | |
--------------------------------------------------------------------------------
| Group total | 126.3 | 108.1 | 18.2 | 16.8 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 9) OPERATING PROFIT/LOSS BY BUSINESS SECTOR, QUARTERLY | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 4-6/ | 7-9/ | 10-12/ | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
--------------------------------------------------------------------------------
| EUR mill. | 2006 | 2006 | 2006 | 2007 | 2007 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Paving and Mineral | | | | | |
--------------------------------------------------------------------------------
| Aggregates Division | | | | | | |
--------------------------------------------------------------------------------
| excluding the infringement | | | | | 6.5 |
| fine | | | | | |
--------------------------------------------------------------------------------
| Infringement fine | | | | | | -14.0 |
--------------------------------------------------------------------------------
| Paving and Mineral | | | | | | |
--------------------------------------------------------------------------------
| Aggregates | | | | | | | |
--------------------------------------------------------------------------------
| Division | 7.6 | 33.7 | 13.3 | -16.4 | 17.8 | 32.9 | -7.5 |
--------------------------------------------------------------------------------
| Building Materials | | | | | | |
--------------------------------------------------------------------------------
| Division | 1.9 | 4.6 | 0.3 | -1.3 | 4.7 | 5.6 | 2.0 |
--------------------------------------------------------------------------------
| Lemcon Ltd | 3.1 | 4.3 | 1.0 | 4.5 | 1.9 | 1.7 | 4.8 |
--------------------------------------------------------------------------------
| Oy Alfred | | | | | | | |
| A. | | | | | | | |
--------------------------------------------------------------------------------
| Palmberg Ab | 14.3 | 10.8 | 19.8 | 13.9 | 18.0 | 15.7 | 22.7 |
--------------------------------------------------------------------------------
| Tekmanni Oy | 0.1 | 3.4 | 1.1 | 1.3 | 3.3 | 3.5 | 3.8 |
--------------------------------------------------------------------------------
| Others | -1.3 | -1.2 | -2.2 | -1.8 | -0.8 | -1.7 | -2.4 |
--------------------------------------------------------------------------------
| Group total | 25.8 | 55.7 | 33.4 | 0.3 | 45.0 | 57.6 | 23.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 10) ECONOMIC TRENDS AND FINANCIAL INDICATORS |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 2007 | 2006 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity, % | 27.5 | 30.2 | | |
--------------------------------------------------------------------------------
| Return on investment, % | 20.7 | 20.6 | | |
--------------------------------------------------------------------------------
| Operating profit, % of net sales | 5.8 | 6.0 | | |
--------------------------------------------------------------------------------
| Equity ratio, % | 32.7 | 31.2 | | |
--------------------------------------------------------------------------------
| Gearing, % | 87.2 | 105.7 | | |
--------------------------------------------------------------------------------
| Interest-bearing net debt, EUR million | 278.5 | 283.0 | | |
--------------------------------------------------------------------------------
| Gross investments, EUR million | | | | |
--------------------------------------------------------------------------------
| (incl. leasing purchases) | 61.4 | 48.7 | | |
--------------------------------------------------------------------------------
| Order book, EUR mill. | 1,414. | 1,326.7 | | |
| | 1 | | | |
--------------------------------------------------------------------------------
| - of which foreign orders, EUR mill. | 284.0 | 331.8 | | |
--------------------------------------------------------------------------------
| Average number of employees | 9,201 | 8,418 | | |
--------------------------------------------------------------------------------
| Employees at end of period | 8,718 | 8,087 | | |
--------------------------------------------------------------------------------
| Net sales, EUR mill. | 2,174. | 1,795.9 | | |
| | 1 | | | |
--------------------------------------------------------------------------------
| - of which operations abroad, | | | | |
--------------------------------------------------------------------------------
| EUR mill. | 581.6 | 530.3 | | |
--------------------------------------------------------------------------------
| % of net sales | 26.8 | 29.5 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 11) SHARE-SPECIFIC INDICATORS | 2007 | 2006 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, EUR | 4.29 | 3.87 | | |
--------------------------------------------------------------------------------
| Equity per share, EUR | 17.36 | 14.57 | | |
--------------------------------------------------------------------------------
| Dividend per share, EUR | 1.801) | 1.50 | | |
--------------------------------------------------------------------------------
| Dividend to earnings ratio, % | 42.0 | 38.8 | | |
--------------------------------------------------------------------------------
| Market capitalisation, EUR mill. | 536.2 | 614.5 | | |
--------------------------------------------------------------------------------
| Share price at end of period, EUR | 31.5 | 36.1 | | |
--------------------------------------------------------------------------------
| Trading volume during period, | | | | |
--------------------------------------------------------------------------------
| 1,000 shares | 5,204 | 4,114 | | |
--------------------------------------------------------------------------------
| Number of issued shares, 1,000 shares | 17,021 | 17,021 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Board of Directors' proposal to the | | | | |
| AGM | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 12) GUARANTEES AND CONTINGENT LIABILITIES | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | | | | 2007 | 2006 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Securities for own commitments | | | |
--------------------------------------------------------------------------------
| Property mortgages | 3.1 | 2.4 | | |
--------------------------------------------------------------------------------
| Business mortgages | 95.3 | 100.1 | | |
--------------------------------------------------------------------------------
| Bonds pledged as security | 0.8 | 0.8 | | |
--------------------------------------------------------------------------------
| Total | 99.2 | 103.3 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Guarantees | | | | |
--------------------------------------------------------------------------------
| On behalf of affiliated companies | | 0,8 | | |
--------------------------------------------------------------------------------
| On behalf of others | 9.9 | 5.3 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Minimum lease payments of irrevocable | | | | |
| lease agreements | | | | |
--------------------------------------------------------------------------------
| One year or less | 5.7 | 6.0 | | |
--------------------------------------------------------------------------------
| Over one year but no | | | | |
--------------------------------------------------------------------------------
| more than five years | 20.8 | 17.9 | | |
--------------------------------------------------------------------------------
| Over five years | 20.2 | 20.8 | | |
--------------------------------------------------------------------------------
| Total | 46.7 | 44.7 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Purchase commitments of investments | 11.3 | 2.9 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The proceedings at the court of arbitration in Stockholm | | |
| concerning | | |
--------------------------------------------------------------------------------
| Lemcon's contract for the construction of the MEGA | | |
--------------------------------------------------------------------------------
| shopping centre in St. Petersburg, which IKEA terminated, | | |
--------------------------------------------------------------------------------
| continue. | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The Market Court imposed an infringement fine of EUR 14 | | |
| million on Lemminkäinen | | |
--------------------------------------------------------------------------------
| for circumvention of competition laws in road-paving | | |
| operations in | | |
--------------------------------------------------------------------------------
| Finland. The infringement fine has been recognised as an | | |
| expense | | |
--------------------------------------------------------------------------------
| in the fourth quarter of the current year. Since the | | |
| decision has | | |
--------------------------------------------------------------------------------
| been appealed, the total amount of the fine may change. | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Derivative contracts | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Forward foreign exchange contracts | | | |
--------------------------------------------------------------------------------
| Nominal value | 54.6 | 11.2 | | |
--------------------------------------------------------------------------------
| Fair value | -0.2 | 0.1 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest rate options, calls purchased | | | |
--------------------------------------------------------------------------------
| Nominal value | 3.5 | 34.5 | | |
--------------------------------------------------------------------------------
| Fair value | 0.0 | 0.0 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest rate options, puts written | | | |
--------------------------------------------------------------------------------
| Nominal value | 3.5 | 5.0 | | |
--------------------------------------------------------------------------------
| Fair value | 0.0 | -0.1 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest rate swap contracts | | | |
--------------------------------------------------------------------------------
| Nominal value | 95.6 | 30.2 | | |
--------------------------------------------------------------------------------
| Fair value | -0.5 | -2.0 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 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. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------