Lemminkäinen and YIT will complete the merger
- Stock Exchange Releases
- 2/12/2009
Lemminkäinen's financial statement bulletin 2008: Net sales up, profit before taxes down on the previous year
LEMMINKÄINEN CORPORATION FINANCIAL STATEMENTS BULLETIN 12.2.2009 at 9:00 LEMMINKÄINEN'S FINANCIAL STATEMENT RELEASE 2008: Net sales up, profit before taxes down on the previous year JANUARY-DECEMBER 2008: - Net sales rose 14 % to EUR 2,481.8 million (2,174.1). - International operations accounted for 27 % or EUR 676.7 million (581.6) of net sales. - Operating pr
LEMMINKÄINEN CORPORATION FINANCIAL STATEMENTS BULLETIN 12.2.2009 at 9:00
LEMMINKÄINEN'S FINANCIAL STATEMENT RELEASE 2008:
Net sales up, profit before taxes down on the previous year
JANUARY-DECEMBER 2008:
- Net sales rose 14 % to EUR 2,481.8 million (2,174.1).
- International operations accounted for 27 % or EUR 676.7 million (581.6) of
net sales.
- Operating profit was EUR 123.2 million (127.2). The operating margin
(operating profit / net sales) was 5.0 %(5.8).
- The profit before taxes was down 18.0 % at EUR 91.0 million (111.2)
- Earnings per share were EUR 3.28 (4.29)
- The return on investment was 17.7% (20.7) and the return on equity 19.2%
(27.5)
- The equity ratio was 26.2 % (32.7) and gearing 98.4 %(87.2)
- The order book at the end of the accounting period was down 25 % at EUR
1,064.5 million (1,414.1).
- The Board of Directors proposes that the Company pay a dividend of EUR 0.90
(1.80) per share
OCTOBER-DECEMBER 2008:
- Net sales rose 16 % to EUR 742.5 million (638.5).
- Operating profit rose 59 % to EUR 37.5 million (23.6).
- Net financing expenses were EUR 14.5 million (4.0)
- The profit before taxes was EUR 23.0 million (19.6)
Highlights on Q4/2008:
Net sales and profit were boosted by real estate deals totalling EUR 200 million
at the turn of the year, most of which were recognised as income in the fourth
quarter of 2008. When comparing the Q4 performance with the previous year, it
should be noted that a EUR 14 million infringement fine was expensed in the
fourth quarter of 2007. The Company's net financing expenses were increased by
exchange rate losses and interest expenses stemming from the growth of
interest-bearing net debt. The payment received from IKEA concerning the
termination of the Mega shopping centre contract in St. Petersburg was
recognised in the final quarter.
Profitability and financial position in 2008:
Business volume grew in all of Lemminkäinen's business sectors in 2008. The
Company's net sales were boosted, especially in the first half of the year, by
continued brisk activity in commercial and office construction in Finland, which
also sustained demand for technical building services at a good level throughout
the year. In Russia, housing sales were good in the first half, but fell away
sharply in the final months of the years. Paving and mineral aggregate
operations in Finland were brisk, but in the Baltic states the market situation
for infrastructure remained weak. Lemminkäinen's order book at the end of the
accounting period was 25 % down on the previous year.
Profitability in 2008 was impacted by the poor market situation in the Baltic
states, the weak results of some projects, and reduced housing sales. The profit
before taxes was down 18 % on the previous year due to increased financing
costs. Financing expenses were raised by the growth of interest-bearing net
debt, higher interest rates and exchange rate losses.
The Company's cash funds at the end of the accounting period were EUR 250.1
million (78.5). The financial position was strengthened by drawing on the full
EUR 150 million credit limit. Good cash flows from operating activities in the
final quarter of the year also strengthened the Company's cash reserves. The
Company has unused TyEL pension premium loan allocations.
Managing Director Timo Kohtamäki commented:
”Lemminkäinen continued to grow in 2008 despite the weakened market situation.
Even though the Group's profit before taxes was unchanged from the previous
year, the profitability trend in some business sectors even exceeded
expectations.
The threshold for new housing starts will be high in 2009. The statutory
procedure for codetermination negotiations has been initiated locally and in
individual business sectors. Rapid reaction to the changed level of demand is
also facilitated by customary adjustment measures stemming from the seasonal
nature of Lemminkäinen's operations. Investments are subject to special scrutiny
and due diligence. On the other hand, our plant and equipment is in excellent
condition and our competitiveness is good.
Operating in four different business sectors reduces Lemminkäinen's sensitivity
to cyclical fluctuations in new building construction. Maintenance, servicing
and refurbishment contracting account for a third of our whole business, and we
are expecting further growth in the volume of these operations.”
OUTLOOK FOR 2009
The volume of new building construction in Finland will contract in 2009. No
significant pick-up in the housing market is expected, and there will be a
marked reduction in commercial and office construction activity, especially
towards the end of the year. Refurbishment contracting will continue to grow
steadily. In Russia the uncertain economic situation will probably keep the
volume of construction at a low level.
The Finnish government has decided on a stimulus package that will boost
infrastructure appropriations for 2009. Major infrastructure projects now
starting up will keep the market situation favourable for the next few years. In
other Nordic countries the situation will be similar to Finland, but the markets
of the Baltic states will remain weak.
Forecasting economic development over the second half of the year is
exceptionally challenging. Based on the existing order book and the uncertain
market situation, Lemminkäinen expects its full-year net sales and profit before
taxes to fall well short of the 2008 level.
BRIEFING
Lemminkäinen will brief analysts and the media on its financial statements at
10.00 a.m. on 12 February 2009 at Katajanokan Kasino, address: Laivastokatu 1,
Helsinki. Those wishing to attend are cordially invited to register in advance
by phoning +358 2071 54813 or by e-mailing katri.sundstrom@lemminkainen.fi.
Presentation material on the financial statements will be available on the
Company's website at www.lemminkainen.com after the briefing.
ANNUAL GENERAL MEETING, DIVIDEND AND FINANCIAL INFORMATION 2009
Lemminkäinen Corporation's Annual General Meeting will be held at 3.00 p.m. on
17 March 2009 at Hotel Palace, 10th floor, Eteläranta 10, 00130 Helsinki,
Finland. The Board of Directors of Lemminkäinen Corporation will propose to the
Annual General Meeting that a dividend of EUR 0.90 (1.80) per share, i.e. a
total of EUR 15,319,125.00 (30,638,250.00), be paid for the 2008 accounting
period. The dividend will be paid to shareholders recorded on the Company's
register of shareholders kept by Euroclear Finland Ltd on the record date, i.e.
20 March 2009. The dividend payment date will be 27 March 2009.
The Annual Report 2008 will be published in Finnish and English during week
10/2009. The interim financial reviews will be published on 7 May, 6 August and
5 November 2009. Lemminkäinen Corporation's annual summary and stock exchange
bulletins can be viewed in their entirety on the Company's website at
www.lemminkainen.com.
LEMMINKÄINEN CORPORATION
Corporate Communications
Additional information:
Timo Kohtamäki, Managing Director, tel. +358 2071 53263
Jukka Ovaska, Finance Director, tel. + 358 2071 53334
Katri Sundström, Investor Relations Officer, tel. +358 2071 54813
APPENDICES
Board of Directors' Report 1.1.-31.12.2008
Tabulated Section of the Financial Statements Bulletin
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
www.lemminkainen.com
BOARD OF DIRECTORS' REPORT 1.1.-31.12.2008
OPERATING ENVIRONMENT
Finland
The year 2008 marked the onset of a downturn for both the global economy and the
construction sector. Uncertainty as to the development of construction demand
grew as the year progressed. The effects of the international financial crisis
became manifest in the real economy towards the end of the year, and the economy
drifted towards recession.
The volumes of commercial, logistics and industrial construction peaked and
began to decline in the second half of the year. Office construction was brisk
during the first half of the year, especially in the Helsinki Metropolitan Area,
and the interest shown by real estate investors in Finnish real estate
properties was good. The investment returns required by investors rose towards
the end of the year, and especially international real estate investors pulled
out of the market. Demand for housing fell sharply and the number of unsold
completed housing units rose. Barely 24,000 new housing starts were made in 2008
(2007: 31,000).
In infrastructure construction, especially the paving and mineral aggregates
market continued to enjoy good demand. However, the civil engineering market was
somewhat weaker than in the previous year.
Brisk building construction in the first half of the year boosted demand for
technical building services. The slowdown in new construction weakened demand
for some building products, such as pre-cast concrete staircase units and wall
elements.
Relevant markets for Lemminkäinen abroad
In Sweden and Norway the infrastructure construction market remained reasonably
good, demand being boosted by stimulus measures aimed at infrastructure
construction by the governments of both countries. In Sweden the rock
engineering market continued to be brisk, while in Denmark demand for paving
works weakened slightly.
In the Baltic states the construction market remained difficult. Some new road
construction and upgrade projects were launched with EU funding in the region,
but the total volume of construction was lower than in the previous year.
In Russia the economic growth rate slowed down in the second half of the year
due to the lower oil price and the global financial crisis. Demand for
construction collapsed and housing sales fell sharply towards the end of the
year.
LEMMINKÄINEN'S NEW STRUCTURE EFFECTIVE 1.1.2008
Lemminkäinen Group was reorganised into four business sector with effect from 1
January 2008. The business sectors are building construction, infrastructure
construction, technical building services, and building products.
Lemminkäinen's operations in the building construction and infrastructure
construction business sectors are the responsibility of two newly established
companies: Lemminkäinen Talo Oy and Lemminkäinen Infra Oy, respectively.
Tekmanni Oy is a provider of technical building services, technical facility
services and industrial services. The building products business sector,
Lemminkäinen Building Products, comprises the subsidiaries Lemminkäinen Katto Oy
(roofing), Lemminkäinen Betonituote Oy (concrete products) and Omni-Sica Oy
(sports construction).
NET SALES, PROFIT AND FINANCIAL POSITION IN 2008
October-December 2008:
The Group's net sales in the fourth quarter of 2008 were EUR 742.5 million
(638.5) and the operating profit EUR 37.5 million (23.6). Net sales and profit
were boosted by real estate deals totalling EUR 200 million at the turn of the
year, most of which were recognised as income in the fourth quarter of 2008.
When comparing the Q4 performance with the previous year, it should be noted
that a EUR 14 million infringement fine was expensed in the fourth quarter of
2007. The Q4 profit before taxes was EUR 23.0 million (19.6). Exchange rate
losses and higher interest expenses increased net financing expenses to EUR 14.5
million (4.0).
Year 2008:
Lemminkäinen Group's net sales were EUR 2,481.1 million (2,174.1). 73 % of net
sales was generated in Finland, 13 % (14) in other Nordic countries, 4 % (2) in
Russia, 7% (7) in the Baltic states and Eastern Europe, and 3 % (4) in other
countries. The operating profit for the accounting period was EUR 123.2 million
(127.2), and the operating margin (operating profit / net sales) was 5.0 %
(5.8).
--------------------------------------------------------------------------------
| Key figures, | 2008 | 2007 | 2006 |
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, of which | 2,481.8 | 2,174.1 | 1,795.9 |
--------------------------------------------------------------------------------
| Operations abroad | 676.7 | 581.6 | 530.3 |
--------------------------------------------------------------------------------
| Operating profit | 123.2 | 127.2 | 109.2 |
--------------------------------------------------------------------------------
| Operating margin, % | 5.0 | 5.8 | 6.1 |
--------------------------------------------------------------------------------
| Profit before taxes | 91.0 | 111.2 | 94.2 |
--------------------------------------------------------------------------------
| Profit for accounting period, of | 63.5 | 80.6 | 72.9 |
| which | | | |
--------------------------------------------------------------------------------
| Profit share of parent company's | 55.9 | 72.9 | 65.8 |
| shareholders | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, EUR | 3.28 | 4.29 | 3.87 |
--------------------------------------------------------------------------------
| Dividend per share, EUR | 0.90*) | 1.80 | 1.50 |
--------------------------------------------------------------------------------
| Return on investment, % | 17.7 | 20.7 | 20.6 |
--------------------------------------------------------------------------------
| Return on equity, % | 19.2 | 27.5 | 30.2 |
--------------------------------------------------------------------------------
| Equity ratio, % | 26.2 | 32.7 | 31.2 |
--------------------------------------------------------------------------------
| Gearing, % | 98.4 | 87.2 | 105.7 |
--------------------------------------------------------------------------------
| Liquid funds | 250.1 | 78.5 | 60.6 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 586.5 | 357.0 | 343.6 |
--------------------------------------------------------------------------------
*) Board of Directors' proposal to the AGM.
Business volume grew in all of Lemminkäinen's business sectors in 2008. The
Company's net sales were boosted, especially in the first half of the year, by
continued brisk activity in commercial and office construction in Finland, which
also sustained demand for technical building services at a good level throughout
the year. In Russia, housing sales were good in the first half, but fell away
sharply in the final months of the years. Paving and mineral aggregate
operations in Finland were brisk, but in the Baltic states the market situation
for infrastructure remained weak. Lemminkäinen's order book at the end of the
accounting period was 25 % down on the previous year.
Profitability in 2008 was impacted by the poor market situation in the Baltic
states, the weak results of some projects, and reduced housing sales. The profit
before taxes was down 18 % on the previous year due to increased financing
costs. Financing expenses were raised by the growth of interest-bearing debt,
higher interest rates and exchange rate losses. The profit for the accounting
period was 21 % down at EUR 63.5 million (80.6).
The Company's cash funds at the end of the accounting period were EUR 250.1
million (78.5). The financial position was strengthened by drawing on the full
EUR 150 million credit limit. Good cash flows from operating activities in the
final quarter of the year also strengthened the Company's cash reserves. The
Company has unused TyEL pension premium loan allocations.
--------------------------------------------------------------------------------
| Net sales by business sector, | 2008 | 2007 | 2006 |
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Building construction | 1,205.7 | 1,042.9*) | 839.3*) |
--------------------------------------------------------------------------------
| Infrastructure construction | 902.8 | 820.3*) | 701.2*) |
--------------------------------------------------------------------------------
| Technical building services | 269.5 | 230.2 | 191.7 |
--------------------------------------------------------------------------------
| Building products | 156.0 | 133.8 | 104.4 |
--------------------------------------------------------------------------------
| Other functions and Group | -52.2 | -53.0 | -40.7 |
| illuminations | | | |
--------------------------------------------------------------------------------
| Group, total | 2,481.8 | 2,174.1 | 1,795.9 |
--------------------------------------------------------------------------------
*)pro forma
--------------------------------------------------------------------------------
| Operating profit by business | 2008 | 2007 | 2006 |
| sector, | | | |
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Building construction | 71.8 | 71.7*) | 58.4*) |
--------------------------------------------------------------------------------
| Infrastructure construction | 30.7 | 39.3*) | 43.1*) |
--------------------------------------------------------------------------------
| Technical building services | 17.0 | 11.9 | 6.9 |
--------------------------------------------------------------------------------
| Building products | 10.5 | 11.1 | 5.0 |
--------------------------------------------------------------------------------
| Others | -6.8 | -6.7 | -4.3 |
--------------------------------------------------------------------------------
| Group, total | 123.2 | 127.2 | 109.2 |
--------------------------------------------------------------------------------
*)pro forma
BUSINESS SECTORS
BUILDING CONSTRUCTION
The net sales of the building construction business sector rose 16 % to EUR
1,205.7 million (1,042.9), of which 80 % was generated in Finland, 5 % in other
Nordic countries, 6 % in Russia, and 9 % in other countries. Net sales were
boosted by the sustained level of commercial and office construction activity in
Finland and building construction in Russia, especially during the first half of
the year.
The operating profit of the building construction business sector remained at
the level of the previous year and was EUR 71.8 million (71.7)1.
The business sector's order book fell almost 40 % to EUR 576.3 million (938.0),
of which international orders were worth EUR 89.4 million (106.9).
--------------------------------------------------------------------------------
| Building construction | 2008 | 2007*) | 2006*) |
| Key figures, EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, of which | 1,205.7 | 1,042.9 | 839.3 |
--------------------------------------------------------------------------------
| Operations abroad | 243.9 | 196.1 | 203.3 |
--------------------------------------------------------------------------------
| Operating profit | 71.8 | 71.7 | 58.4 |
--------------------------------------------------------------------------------
| Operating margin, % | 6.0 | 6.9 | 7.0 |
--------------------------------------------------------------------------------
| Order book at end of period | 576.3 | 938.0 | 893.5 |
--------------------------------------------------------------------------------
| Personnel (average) | 3,159 | 3,055 | 2,819 |
--------------------------------------------------------------------------------
*)pro forma
Operations in Finland
The number of new private-sector housing starts made in 2008 was 504 (2007:
852). The proportion of completed units that remain unsold has grown
substantially in some localities, and after the summer not a single new housing
start was made. The Company estimates that it is currently selling 20-30 housing
units a month.
--------------------------------------------------------------------------------
| Lemminkäinen's private-sector | | 2008 | 2007 | 2006 |
| housing production, Finland | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Housing starts | | 504 | 852 | 1,558 |
--------------------------------------------------------------------------------
| Housing units sold | | 634 | 883 | 1,156 |
--------------------------------------------------------------------------------
| Unsold completed units | | 496 | 283 | 83 |
--------------------------------------------------------------------------------
| Completed | | 1,030 | 1,488 | 1,173 |
--------------------------------------------------------------------------------
| Under construction at end of | | 587 | 1 123 | 1,698 |
| period | | | | |
--------------------------------------------------------------------------------
At the end of the accounting period Lemminkäinen owned a total of 818,000 m² of
unused building rights, of which about 361,000 m² were residential building
rights. The Company also has binding or conditional co-operation and zoning
agreements for about 752,000 m², of which about 293,000 m² are residential
building rights. The balance sheet value of the building plots was EUR 74.8
million (80.5).
Commercial, office and logistics construction activity was brisk at the
beginning of the accounting period, but demand growth peaked and began to
decline in the autumn. The volume of office construction in the Helsinki
Metropolitan Area remained at a good level all year, but a marked fall-off in
demand is expected in 2009. Among other consequences, the international
financial crisis has weakened the financing opportunities open to foreign real
estate investors. The yield requirements of investors rose significantly during
the accounting period, especially in the case of properties located outside the
Helsinki Metropolitan Area.
Refurbishment contracting continued to grow steadily in 2008 and the outlook for
the near future is also favourable. Refurbishment contracting accounted for 17 %
of Lemminkäinen's building construction during the accounting period, and that
percentage is expected to rise in the future.
International operations
International operations accounted for EUR 243.9 million (196.1) of the building
construction business sector's net sales in 2008. Almost a third of this
international business was in Russia. As a result of the international financial
crisis the outlook in Russia has become gloomy and demand for construction has
collapsed. No significant pick-up in the housing market is expected in the near
future. The growth of private consumption in Russia will be weakened by factors
such as devaluation of the rouble and the greater difficulty of obtaining
consumer credit.
In 2008 new starts were made on 479 (91) private-sector housing units in Russia.
Towards the end of the year, work on 264 of these units was halted due to the
sharp decline in housing sales. At the end of the accounting period the Company
had 306 (91) housing units under construction. The number of housing units sold
in 2008 was 103.
Despite the growth of recent years, the amount of capital that Lemminkäinen has
tied up in Russia is still not significant. The region's seriously weakened
market situation and slowdown in demand for housing does not therefore have any
essential bearing on the Group's financial result.
In Sweden the Company made 84 new housing starts in the accounting period. The
number of sold units at the end of the accounting period was 42.
The focus of international project management contracting is still on the plant
investment projects of Finnish industrial companies in countries such as China
and India.
In telecom networks construction the volume of business remained unchanged in
2008, but price competition in this area was fierce. The market situation is not
expected to change greatly in the near future. The focus of Lemcon Networks'
business remains on Latin America and Asia.
IKEA and Lemminkäinen have settled their dispute over the termination of the
construction contract for the St. Petersburg MEGA shopping centre. In accordance
with the settlement, Lemminkäinen has received the payment from IKEA and all the
claims made by the parties at the arbitral tribunal regarding the termination of
the construction contract have been withdrawn (Bulletin 30.12.2008).
INFRASTRUCTURE CONSTRUCTION
The net sales of the infrastructure construction business sector rose 10 % to
EUR 902.8 million (820.3)1).The increase in business volume was mainly due to
paving and mineral aggregate operations in Finland. The business sector
generated 54 % of its net sales in Finland, 30 % in other Nordic countries, 14 %
in the Baltic states and 2 % in Russia.
The business sector's operating profit was down by a fifth at EUR 30.7 million
(39.3)1). The result was weakened by increased input costs, the poor market
situation in the Baltic states, and weak result in certain infrastructure
projects in Finland.
The infrastructure construction order book was 10 % up on the previous year.
--------------------------------------------------------------------------------
| Infrastructure construction | 2008 | 2007*) | 2006*) |
| Key figures, EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, of which | 902.8 | 820.3 | 701.2 |
--------------------------------------------------------------------------------
| Operations abroad | 420.0 | 366.7 | 310.3 |
--------------------------------------------------------------------------------
| Operating profit | 30.7 | 39.3 | 43.1 |
--------------------------------------------------------------------------------
| Operating margin, % | 3.4 | 4.8 | 6.2 |
--------------------------------------------------------------------------------
| Order book at end of period | 365.4 | 326.5 | 334.9 |
--------------------------------------------------------------------------------
| Personnel (average) | 3,658 | 3,365 | 3,072 |
--------------------------------------------------------------------------------
*)pro forma
Operations in Finland
Lemminkäinen's paving operations continued to be brisk all year and the work
season lasted well into the autumn. Approx. 6 million tonnes of asphalt mix was
produced in Finland in 2008. Lemminkäinen's share of this national total was
almost a half. However, the price level of asphalt paving remained low.
In civil engineering, competition for new infrastructure projects remained
fierce in 2008, and there was surplus capacity in the industry. Lemminkäinen's
order book was supported by on-going transport infrastructure projects.
Transport infrastructure construction is expected to pick up in the near future
as a result of the government's stimulus measures and the start-up of some major
projects in 2010-2011.
In foundation engineering there were plenty of deep stabilisation contracts and
foundation reinforcement works. In rock engineering Lemminkäinen strengthened
its expertise during the summer by acquiring Tolarock Oy, a company specialised
in mining excavation.
Demand for mineral aggregates and ready-mix concrete continued to be brisk in
2008. Lemminkäinen is a partner in Scandinavia Cement, a cement importing
company set up in autumn 2008 to ensure the supply of cement and improve
competitiveness. The slowdown of building construction will weaken demand for
mineral aggregates and ready-mix concrete in 2009.
International operations
Net sales from the infrastructure construction business sector's international
operations grew, but profitability was significantly weaker than in the previous
year. The result was weakened mainly by the poor market situation in the Baltic
states. Business volume will remain at a low level in the near future, even
though EU-funded development of the Baltic states' road network will continue.
In Sweden the rock engineering market remained brisk and in summer 2008
Lemminkäinen received new railway tunnel construction contracts from Ådalsbana.
To date, the Company has constructed no fewer than 14 railway tunnels in Sweden.
In Norway and Denmark the volume of paving work remained at the previous year's
level, but profitability was impacted by increased input costs.
In Sweden and Norway the outlook for infrastructure construction is good, and
demand will be boosted by stimulus measures aimed at infrastructure construction
by the governments of both countries. In Denmark the distressed state of
municipal finances may weaken demand for paving works to some extent.
TECHNICAL BUILDING SERVICES
The net sales of the technical building services business sector rose 17 % to
EUR 269.5 million (230.2). Operating profit was up 44 % at EUR 17.0 million
(11.9). Business volume grew profitably in all of segments of business sector.
The business sector's order book at the end of the accounting period was down 13
% at EUR 97.7 million (111.9).
--------------------------------------------------------------------------------
| Technical building services | 2008 | 2007 | 2006 |
| Key figures, EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, of which | 269.5 | 230.2 | 191.7 |
--------------------------------------------------------------------------------
| Operations abroad | 7.7 | 9.7 | 9.6 |
--------------------------------------------------------------------------------
| Operating profit | 17.0 | 11.9 | 6.9 |
--------------------------------------------------------------------------------
| Operating margin, % | 6.3 | 5.2 | 3.6 |
--------------------------------------------------------------------------------
| Order book at end of period | 97.7 | 111.9 | 74.9 |
--------------------------------------------------------------------------------
| Personnel (average) | 2,013 | 1,918 | 1,812 |
--------------------------------------------------------------------------------
Brisk activity in commercial and office construction sustained demand for
technical building services at a good level during the first half of the year.
However, demand growth peaked in the second half and there has been a clear
reduction in both the size and number of contracts. Regional variations are
large, and especially in Helsinki Metropolitan Area the market has clearly
become more subdued. The business sector's order book at the end of the
accounting period was down by about a tenth on the previous year.
The servicing and maintenance of technical building and facility systems is not
sensitive to cyclical fluctuations in new building construction, and demand for
such services continued to be brisk in 2008. The operations of Tekmanni Service
Oy, which specialises in these services, developed favourably and the outlook
for the near future is also good. Among other contracts, the company provided
energy certificates for over 80 properties and also assessed the condition and
replacement needs of the properties' technical systems.
Demand for the business sector's industrial services continued to be steady as
industry is investing in power and heat production. In November Tekmanni's
industrial services unit received five significant contract orders for the years
2008-2010. The orders include major installation contracts in Finland and
Sweden.
The slowdown in new building construction will weaken demand for technical
building services in 2009. However, the modernisation of piped systems in
residential buildings is expected to increase as a result of the grants promised
for the government's stimulus measures. Demand for the business sector's
servicing, maintenance and refurbishment works is expected to remain good. These
operations already account for over a half of the business sector's net sales.
BUILDING PRODUCTS
The net sales of the building products business sector rose 17 % to EUR 156.0
million (133.8). Business volume was up in all segments of the business sector.
Operating profit was slightly down at EUR 10.5 million (11.1).
The order book fell by a third and at the end of the review period was EUR 25.2
million (37.7).
--------------------------------------------------------------------------------
| Building products | 2008 | 2007 | 2006 |
| Key figures, EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, of which | 156.0 | 133.8 | 104.4 |
--------------------------------------------------------------------------------
| Operations abroad | 9.0 | 10.7 | 7.7 |
--------------------------------------------------------------------------------
| Operating profit | 10.5 | 11.1 | 5.0 |
--------------------------------------------------------------------------------
| Operating margin, % | 6.7 | 8.3 | 4.8 |
--------------------------------------------------------------------------------
| Order book at end of period | 25.2 | 37.7 | 23.4 |
--------------------------------------------------------------------------------
| Personnel (average) | 839 | 749 | 609 |
--------------------------------------------------------------------------------
In roofing and waterproofing products the volume of contracting was up and the
share of refurbishment contracting increased. The costs of raw materials, except
bitumen, fell and their availability improved. Exports of roofing materials to
Russia and countries of the Baltic Rim region remained at a good level, and the
exporting business was expanded into new market areas.
The slowdown in residential and office construction weakened demand for pre-case
concrete staircase units and wall elements. The market situation for sports and
urban environment construction remained good. For example, the municipalities
made significant investments in the construction of parks and sporting
facilities.
The weakened outlook for new building construction will result in less demand
for the business sector's products and services in 2009. In particular, the
production of pre-cast concrete staircase units and wall elements is very
sensitive to cyclical fluctuations in building construction. The aim in roofing
and waterproofing products is to increase the volume of refurbishment work and
contracting. The market situation in urban environment construction is expected
to remain good also in 2009.
THE GROUP'S ORDER BOOK
The Group's order book was down by a quarter on the previous year. The market
breakdown of the order book was Finland 75% (80), other Nordic countries 16 %
(11), Russia 2 % (2), the Baltic states 5 % (3), and other countries 2% (4).
--------------------------------------------------------------------------------
| Order book by business sector, | 2008 | 2007 | 2006 |
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Building construction | 576.3 | 938.0*) | 893.5*) |
--------------------------------------------------------------------------------
| Infrastructure construction | 365.4 | 326.5*) | 334.9*) |
--------------------------------------------------------------------------------
| Technical building services | 97.7 | 111.9 | 74.9 |
--------------------------------------------------------------------------------
| Building products | 25.2 | 37.7 | 23.4 |
--------------------------------------------------------------------------------
| Group, total, of which | 1,064.5 | 1,414.1 | 1,326.7 |
--------------------------------------------------------------------------------
| International orders | 263.1 | 284.0 | 331.8 |
--------------------------------------------------------------------------------
*)pro forma
Significant orders received in 2008
Work started on the construction of a plant for Nokia Siemens Networks Oy in
Chennai, India. The total floor area of the building is 33,000 m2.
Construction work began on a spa resort for the City of Sundsvall in Sweden. The
construction works are worth approx. EUR 19 million.
Lemminkäinen signed an agreement with Nokian Tyres Plc concerning the technical
building works on an extension to the company's tyre production plant in
Vsevolozhsk, Russia. The total floor area of the new plant extension is 29,000
m².
A service agreement was signed with the Estonian Road Administration whereby
Lemminkäinen assumed responsibility for the summer and winter maintenance of the
road network in Ida-Viru County for a period of 8 years.
In Russia, Lemminkäinen won a remix paving contract for a 150-kilometre-section
of the M18 highway between St. Petersburg and Murmansk.
In the summer, excavation work began on underground spaces of the CityCenter and
Tallberg commercial buildings that connect to Helsinki's downtown service
tunnel. In addition, fitting-out work began on the eastern end of the service
tunnel. The combined value of the new works is approximately EUR 18 million.
Lemminkäinen received two significant railway tunnel construction contracts from
Ådalsbana in Sweden. The combined length of the tunnels is approx. 5.5
kilometres and the contracts are together worth EUR 43 million.
Significant orders received after the accounting period
Lemminkäinen has received a substantial road contract from Moldova that involves
basic improvement works on a 14-kilometre-long section of the highway. The
contract will be completed at the end of 2010 and is worth EUR 13.5 million.
CASH FLOW, FINANCING AND BALANCE SHEET
According to the source and application of funds statement, the cash flow from
operating activities was EUR 24.6 million (79.6), the cash flow from investing
activities EUR -27.9 million (-29.5) and the cash flow from financing activities
EUR 177.3 million (-32.0). The cash flow for the accounting period includes
dividends paid in 2007 totalling EUR 32.6 million (27.4).
The Company's net working capital rose 18 % to EUR 411.4 million (342.7), Net
working capital was increased by housing production in progress and growth in
trade receivables.
Liquid funds at the end of the accounting period were EUR 250.1 million (78.5).
The financial position was strengthened by drawing on the full EUR 150 million
credit limit. Good cash flows from operating activities in the final quarter of
the year also strengthened the Company's cash reserves. The Company has unused
TyEL pension premium loan allocations.
Interest-bearing debt at the end of the accounting period were EUR 586.5 million
(357.0) and interest-bearing net debt was EUR 336.4 million (278.5). Net
financing expenses were EUR 32.1 million (16.0), representing 1.3 % (0.7) of net
sales. Financing costs were increased by the growth of net debt and higher
interest rates.
Short-term interest-bearing liabilities at the end of the accounting period were
EUR 467.7 million, about 60 % of which were loans from financial institutions.
The remainder was composed of commercial paper issued on the Finnish market,
finance leasing liabilities, and project loans associated with the Company's own
housing production. Long-term interest-bearing liabilities were EUR 118.8
million.
The balance sheet total was EUR 1,413.3 million (1,069.0). The return on
investment was 17.7 % (20.7) and the equity ratio was 26.2% (31.2). Gearing was
98.4 % (87.2).
SHARES AND SHARE CAPITAL
The listed price of Lemminkäinen Corporation's share was EUR 31.50 (36.10) at
the beginning of the accounting period and EUR 13.05 (31.50) at the end of the
accounting period. The market capitalisation at the end of the accounting period
was EUR 222.1 million (536.2). Altogether 3,185,174 shares (5,203,588) were
traded during the accounting period. The total value of the turnover was EUR
87.3 million (233.6). At the end of the accounting period the Company had 4,511
(3,643) 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.
During the accounting period Lemminkäinen was informed, in accordance with
Chapter 2, Section 9 of the Finnish Securities Markets Act, of a change in the
ownership of the Company's shares. The Estate of Heikki Pentti disclosed that
its holdings of Lemminkäinen Corporation shares had decreased from 3,813,956 to
1,906,976 shares, i.e. to approximately 11.2 per cent of all the shares and
votes in Lemminkäinen Corporation.
INVESTMENTS
Investments in the accounting period amounted to EUR 60.2 million (61.4). 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 fairly small
businesses and enterprises.
PERSONNEL
The average number of employees in the Group during the accounting period was
9,776 (9,201), of whom 71 % (72) worked in Finland, 11% (11) in other Nordic
countries, 11% (11) in the Baltic states and 7% (6) in other countries.
Lemminkäinen has set about adjusting its personnel levels in accordance with the
prevailing market situation. Codetermination negotiations have been initiated
locally and in individual business sectors, and about 1,000 employees fall
within the scope of the negotiations. Adjustment measures also continued after
the accounting period due to a further deterioration in the market situation.
--------------------------------------------------------------------------------
| Personnel (average) | 2008 | 2007 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Hourly paid workers | 6,490 | 6,084 | 5,480 |
--------------------------------------------------------------------------------
| Salaried staff | 3,286 | 3,117 | 2,938 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total personnel, of whom | 9,776 | 9,201 | 8,418 |
--------------------------------------------------------------------------------
| working abroad | 2,836 | 2,565 | 2,235 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel at end of period | 8,910 | 8,718 | 8,087 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total wages, salaries and other | | | |
| remuneration | | | |
--------------------------------------------------------------------------------
| for the accounting period, EUR | 358.1 | 327.2 | 288.0 |
| million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ANNUAL GENERAL MEETING 2008 AND CORPORATE GOVERNANCE
Lemminkäinen Corporation's Annual General Meeting held on 14 March 2008 adopted
the Company's final accounts and consolidated financial statements for 2007 and
granted the Managing Director and the members of the Board of Directors
discharge from liability. The Annual General Meeting decided, in accordance with
the Board of Directors' proposal, to pay a dividend of EUR 1.80 per share, i.e.
a total dividend of EUR 30,638,250.00. The dividend's record date was 19 March
2008 and the payment date was 28 March 2008.
The Annual General Meeting decided, in accordance with the Board of Directors'
proposal, to amend the Company's Articles of Association so that the regulations
concerning the nominal value of the Company's share and the minimum and maximum
amounts of its share capital would be abolished.
Messrs. Berndt Brunow, Heikki Pentti, Teppo Taberman, Sakari Tamminen and Ms.
Kristina Pentti (Mrs. Kristina Pentti-von Walzel) were re-elected to serve as
members of the Board of Directors. Mr. Juhani Mäkinen, Counsellor of Law,
attorney, was newly elected to serve as a Board member. PricewaterhouseCoopers
Oy, a firm of authorised public accountants, was re-elected to serve as the
Company's auditor, with Mr. Jan Holmberg, APA acting as the chief auditor.
Heikki Pentti, long-serving Chairman of Lemminkäinen Corporation's Board of
Directors and the Company's biggest shareholder, passed away on 19 April 2008.
Heikki Pentti was a director of the Company for 39 years. He served as the
Company's Managing Director in the years 1983-1993 and as the Chairman of the
Board of Directors from 1994 onwards.
Lemminkäinen Corporation's Board of Director held an organising meeting after
the death of Heikki Pentti. Mr. Berndt Brunow was elected to serve as the
Chairman of the Board, and Mr. Juhani Mäkinen as the Vice Chairman. The Board of
Directors will work as a five-member body until the next Annual General Meeting
is held in spring 2009.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors chooses 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. All of the Board members can participate in meetings of the Audit
Committee and the Remuneration and Appointments Committee.
In 2008 Mr. Berndt Brunow served as the Chairman of the Nominating Committee,
with Messrs. Teppo Taberman and Sakari Tamminen serving as committee members. On
1 January 2008 the Chairman of the Audit Committee was Mr. Sakari Tamminen, with
Messrs. Berndt Brunow, Teppo Taberman and Heikki Pentti serving as committee
members. From 7 May 2008 onwards, Mr. Sakari Tamminen served as the Chairman,
with Mr. Juhani Mäkinen and Mrs. Kristina Pentti-von Walzel serving as committee
members. On 1 January 2008 the Chairman of the Remuneration and Appointments
Committee was Mr. Heikki Pentti, with Messrs. Berndt Brunow and Teppo Taberman
serving as committee members. From 7 May 2008 onwards, Mr. Teppo Taberman served
as the Chairman, with Messrs. Juhani Mäkinen and Berndt Brunow serving as
committee members.
CHANGES IN THE COMPANY'S MANAGEMENT
On 5 November 2008 the Board of Directors appointed Mr. Timo Kohtamäki, Lic.
Tech. to serve as the Managing Director of Lemminkäinen Corporation with effect
from 1 January 2009. Mr. Juhani Sormaala, M.Sc.(Eng), B.Sc.(Econ.) retired,
having served as the Managing Director of Lemminkäinen Corporation since 1994.
Mr. Henrik Eklund, M.Sc.(Eng.) the Company's present Deputy Managing Director,
was appointed to serve as the head of the infrastructure construction business
sector and Managing Director of Lemminkäinen Infra Oy.
After the end of the accounting period Ms. Tiina Kihlakaski, M.Sc. (Econ.) was
appointed to serve as Lemminkäinen Corporation's Director, Human Resources, and
a member of the Executive Board with effect from 7 January 2009.
LITIGATION
Asphalt industry cartel case
In December 2007 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.
In addition to Lemminkäinen, the Finnish Competition Authority and some asphalt
industry companies have appealed the decision to the Supreme Administrative
Court. Irrespective of these 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.
On 18 June 2008 Lemminkäinen was informed of an application for a summons in
which the Finnish Road Administration is demanding compensatory damages from
different asphalt companies before the Helsinki District Court. Lemminkäinen's
share of the claimed compensation is at most EUR 10.5 million. The Finnish Road
Administration is also seeking damages of at most EUR 5.6 million from
Lemminkäinen, under joint and several liability with other defendant companies.
The Finnish Road Administration has asked the Helsinki District Court to
postpone the hearing of the case until the competition restriction case has been
resolved in the Supreme Administrative Court.
IKEA
IKEA and Lemcon, a Lemminkäinen Group company, have reached an agreement on the
payment to be paid by IKEA to Lemcon due to the termination of a construction
contract. The contract in question concerned the St. Petersburg MEGA shopping
centre and was worth EUR 92 million. The parties have agreed not to disclose the
amount of the payment. As a result of the settlement, the parties will withdraw
all claims made at the arbitral tribunal regarding the termination of the
construction contract. Arbitration proceedings regarding the dispute have been
on-going in Stockholm since 2006 in accordance with the rules of the Stockholm
Chamber of Commerce's Arbitration Institute.
RISKS AND UNCERTAINTIES
Lemminkäinen's business risks are divided into six categories: market risks,
project risks, financing risks, credit loss risks, environmental risks, and
accidents and damage. The measures necessary to manage the most significant
identified risks have been specified.
Market risk poses the most significant threat to Lemminkäinen in the near
future. The international financial crisis and economic downturn are creating
uncertainty in key sectors of Lemminkäinen's operating environment and making
its more difficult to foresee future changes. As a consequence of this,
Lemminkäinen has set about making the necessary adjustments to its business
operations.
The sharp fall-off in demand for housing production has increased Lemminkäinen's
exposure to market risk. The Company has significantly reduced the volume of its
housing production from the level of the previous year. In 2009 new housing
starts will be made only if a sufficiently high percentage of the units are
reserved by buyers in advance. In Russia, Lemminkäinen has halted construction
work on almost 300 housing units.
The financing difficulties experienced by Lemminkäinen's customers may have a
weakening effect on demand for the Company's goods and services. Particular
attention is being paid to credit loss risks, and trade receivables are being
actively monitored.
Operating in a number of business sectors with differing cyclical behaviours is
a cornerstone of Lemminkäinen's strategy. Fluctuating demand for new
construction in Finland is counterbalanced by infrastructure construction.
Building repair and maintenance account for more than a third of the Group's
business.
The Company's Annual Report and website provide more information on
Lemminkäinen's risk management.
RESEARCH AND DEVELOPMENT
Lemminkäinen's research and development work focuses on the development of
operational prerequisites and the quality assurance of products and services.
Careful consideration of safety issues and environmental effects is an important
principle 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 2008 the Group's research and development expenditure
accounted for 0.7 % of net sales.
THE ENVIRONMENT
Environmentally responsible construction is one of Lemminkäinen's values.
Lemminkäinen Group takes life-cycle and environmental perspectives into account
when developing its operations, products and services. The management of
environmental affairs and the effects of the Group's operations on the
environment are continuously monitored by means of internal monitoring and
control programmes.
The Company's Annual Report and website provide more information on
Lemminkäinen's environmental issues.
OUTLOOK FOR 2009
The volume of new building construction in Finland will contract in 2009. No
significant pick-up in the housing market is expected, and there will be a
marked reduction in commercial and office construction activity, especially
towards the end of the year. Refurbishment contracting will continue to grow
steadily. In Russia the uncertain economic situation will probably keep the
volume of construction at a low level.
The Finnish government has decided on a stimulus package that will boost
infrastructure appropriations for 2009. Major infrastructure projects now
starting up will keep the market situation favourable for the next few years. In
other Nordic countries the situation will be similar to Finland, but the markets
of the Baltic states will remain weak.
Forecasting economic development over the second half of the year is
exceptionally challenging. Based on the existing order book and the uncertain
market situation, Lemminkäinen expects its full-year net sales and profit before
taxes to fall well short of the 2008 level.
BOARD OF DIRECTORS' PROPOSAL FOR THE DISTRIBUTION OF PROFITS
The distributable shareholders' equity shown on the consolidated balance sheet
as of 31 December 2008 amounts to EUR 261,326,385.32. The distributable
shareholders' equity shown on the balance sheet of the parent company,
Lemminkäinen Corporation, amounts to EUR 87,955,318.59, consisting of EUR
718,416.16 in retained earnings from previous years and EUR 87,236,902.43 in
profit 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 0.90 (1.80) per share for
the 2008 accounting period, i.e. a total of EUR 15,319,125.00 (30,638,250.00)
Helsinki, 11 February 2009
LEMMINKÄINEN CORPORATION
Board of Directors
TABULATED SECTION OF THE FINANCIAL STATEMENTS BULLETIN
ACCOUNTING PRINCIPLES
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards, observing the IAS and IFRS
standards and SIC and IFRIC interpretations in force on 31 December 2008. The
IFRS recognition and measurement principles applied in the preparation of the
financial statements are the same as those used in the financial statements for
2007 except for the changes that are stated below.
The share of the results of affiliated companies that was earlier recognised as
a financial item is now included in operating profit because shares in the
results of affiliated companies belong to the operations of reporting business
segments.
The business areas of Lemminkäinen Group's affiliated companies are road
maintenance and upkeep, property development, road markings, asphalt production
and paving, and mineral aggregates production, so the change in presentation
format is in better keeping with the nature of these operations. The change
increases the operating profit by EUR 1.2 million in the accounting period and
by EUR 0.9 million in the comparative period. The change does not have any
effect on the result before taxes. The comparative figures have been adjusted.
New and revised standards and interpretations which came into force in 2008 but
do not have any essential bearing on the consolidated financial statements:
- IFRIC 11 concerning the application of IFRS 2 to share-based payments
- IFRIC 12 Service Concession Arrangements
- IFRIC 14, IAS 19 The Limit and Defined Benefit Assets, Minimum Funding
Requirements and their Interaction
- IAS 39 (amendment) and IFRS 7 (amendment) Reclassification of Financial
Assets.
The amendment permits certain financial assets to be reclassified out of the
held-for-trading-purposes or available-for-sale categories provided that certain
conditions are met. The amendment has been applicable since 1 July 2008. The
Group did not apply the amendment during the accounting period.
The standards and interpretations published by IASB and listed below will come
into force in 2009 or thereafter. The Group has decided against their early
adoption and will apply them in future accounting periods.
- IAS 1 (revised) Presentation of Financial Statements. The revision is aimed at
improving users' ability to analyse and compare the information given in
financial statements, for example, by showing changes in a company's equity
resulting from transactions with owners separately from other changes in equity.
Changes not connected with the owners will be presented in a comprehensive
statement of income. The Group is studying the effect of the revised standard on
the presentation format of the financial statements.
- IAS 23 (revised) Borrowing costs. The revision requires borrowing costs
directly attributable to the acquisition, construction or production of a
qualifying asset to be capitalised as part of the cost of that asset. The direct
recognition of these costs as expenses is not permitted. The Group will start
capitalising these costs in projects commencing in 2009 and in
percentage-of-completion projects. The revision of the standard is not expected
to have any essential bearing on the Group's projects.
- IAS 32 (amendment) Financial Instruments: Presentation; and IAS 1 (revised)
Presentation of Financial Statements - Financial Instruments Puttable at Fair
Value and Obligations Arising on Liquidation. The revisions of the standards
require certain puttable financial instruments, as well as certain instruments
that impose on the entity an obligation to deliver to another party a pro-rata
share of the net assets of the entity only on liquidation, to be classified as
equity. The Group is clarifying the effect of the change on the consolidated
financial statements.
- IFRS 2 Share-based Payment - the amendment to the standard clarifies that
vesting conditions are service conditions and performance conditions only. All
other features of a share-based payment are non-vesting conditions. It also
specifies that all cancellations should receive the same accounting treatment.
At present the Group does not have any share-based payments, so the amendment to
the standard will not have any effect on the financial statements at this time.
- IFRS 8 Operating Segments - the standard came into force on 1 January 2009.
Adoption of the standard in the 2009 accounting period will affect neither the
number of the Company's operating segments nor the cash-generating units. In
future the Group will report management's segment information in conformity with
IFRS figures.
Future effects of new interpretations of IFRS standards
In summer 2008 the International Financial Reporting Interpretations Committee
(IFRIC) issued interpretation IFRIC 15 - Agreements for the Construction of Real
Estate. The interpretation will be applied for the first time retrospectively in
the accounting period beginning 1 January 2009 or thereafter. The interpretation
has not yet been approved in the European Union. In Lemminkäinen Group the
interpretation is expected to affect mainly the income recognition practice for
own building production. The effect of the new interpretation on the Company's
financial reporting is currently being clarified.
The information contained in the financial statements bulletin has not been
audited.
The sector-specific comparative figures presented in the financial statements
bulletin with regard to the building construction and infrastructure
construction business sectors are pro forma figures
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
13) Litigation
--------------------------------------------------------------------------------
| 1) CONSOLIDATED INCOME STATEMENT | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | 12/20 | 12/20 | Change | Change | | |
| | 08 | 07 | | , | | |
--------------------------------------------------------------------------------
| | | | | | % | | |
--------------------------------------------------------------------------------
| Net sales | 2,481 | 2,174 | 307.7 | 14.2 | | |
| | .8 | .1 | | | | |
--------------------------------------------------------------------------------
| Other operating income | | | | | | |
--------------------------------------------------------------------------------
| and expenses | -2,32 | -2,01 | -311.4 | 15.5 | | |
| | 5.0 | 3.6 | | | | |
--------------------------------------------------------------------------------
| Depreciation | 34.9 | 34.2 | 0.7 | 2.0 | | |
--------------------------------------------------------------------------------
| Share of the results of | | | | | | |
--------------------------------------------------------------------------------
| affiliated companies | 1.2 | 0.9 | 0.3 | 33.3 | | |
--------------------------------------------------------------------------------
| Operating profit | 123.2 | 127.2 | -4.0 | -3.1 | | |
--------------------------------------------------------------------------------
| Financial expenses | 50.7 | 22.2 | 28.5 | Over | | |
| | | | | 100 | | |
--------------------------------------------------------------------------------
| Financial income | 18.5 | 6.2 | 12.3 | Over | | |
| | | | | 100 | | |
--------------------------------------------------------------------------------
| Result before taxes | 91.0 | 111.2 | -20.2 | -18.2 | | |
--------------------------------------------------------------------------------
| Income taxes | -27.5 | -30.6 | 3.1 | 10.1 | | |
--------------------------------------------------------------------------------
| Result for the | | | | | | |
--------------------------------------------------------------------------------
| accounting period | 63.5 | 80.6 | -17.1 | -21.2 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution of the | | | | | | |
| result | | | | | | |
--------------------------------------------------------------------------------
| for the accounting period | | | | | | |
--------------------------------------------------------------------------------
| To shareholders of | | | | | | |
--------------------------------------------------------------------------------
| the parent company | 55.9 | 72.9 | -17.0 | -23.3 | | |
--------------------------------------------------------------------------------
| To minority interests | 7.6 | 7.6 | 0.0 | 0.0 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EPS calculated from result attributable to parent company | |
| shareholders | |
--------------------------------------------------------------------------------
| Earnings per share, | | | | | | |
| diluted and | | | | | | |
--------------------------------------------------------------------------------
| undiluted, EUR | 3.28 | 4.29 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2) CONSOLIDATED BALANCE SHEET | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | | | | 12/20 | 12/200 | | | |
| | | | | 08 | 7 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | | | |
--------------------------------------------------------------------------------
| Tangible assets | 187.0 | 176.1 | | | |
--------------------------------------------------------------------------------
| Goodwill | 74.9 | 75.1 | | | |
--------------------------------------------------------------------------------
| Other intangible assets | 2.5 | 2.6 | | | |
--------------------------------------------------------------------------------
| Investments | 10.7 | 9.7 | | | |
--------------------------------------------------------------------------------
| Deferred tax asset | 7.2 | 4.9 | | | |
--------------------------------------------------------------------------------
| Other non-current receivables | 6.3 | 3.7 | | | |
--------------------------------------------------------------------------------
| Total | 288.7 | 272.1 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | | |
--------------------------------------------------------------------------------
| Inventories | 398.2 | 330.9 | | | |
--------------------------------------------------------------------------------
| Trade and other receivables | 476.3 | 387.4 | | | |
--------------------------------------------------------------------------------
| Cash funds | 250.1 | 78.5 | | | |
--------------------------------------------------------------------------------
| Total | 1,124 | 796.9 | | | |
| | .7 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets, total | 1,413 | 1,069. | | | |
| | .3 | 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 | -1.7 | 0.2 | | | |
--------------------------------------------------------------------------------
| Translation differences | -4.7 | 0.1 | | | |
--------------------------------------------------------------------------------
| Retained earnings | 224.8 | 182.5 | | | |
--------------------------------------------------------------------------------
| Result for the period | 55.9 | 72.9 | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | | | | | |
--------------------------------------------------------------------------------
| before minority interest | 314.0 | 295.5 | | | |
--------------------------------------------------------------------------------
| Minority interest | 27.8 | 23.7 | | | |
--------------------------------------------------------------------------------
| Shareholders' equity, total | 341.8 | 319.2 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 18.7 | 12.9 | | | |
--------------------------------------------------------------------------------
| Pension liabilities | 0.2 | 0.6 | | | |
--------------------------------------------------------------------------------
| Provisions | 2.2 | 1.7 | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 118.8 | 139.5 | | | |
--------------------------------------------------------------------------------
| Other liabilities | 1.3 | 1.9 | | | |
--------------------------------------------------------------------------------
| Total | 141.2 | 156.6 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | | | |
--------------------------------------------------------------------------------
| Accounts payable and other | 455.6 | 369.2 | | | |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Provisions | 7.1 | 6.4 | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 467.7 | 217.6 | | | |
--------------------------------------------------------------------------------
| Total | 930.4 | 593.2 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity and | | | | | |
--------------------------------------------------------------------------------
| liabilities, total | 1,413 | 1,069. | | | |
| | .3 | 0 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 3) STATEMENT OF SOURCE AND APPLICATION OF FUNDS | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | | | | 12/20 | 12/200 | | | |
| | | | | 08 | 7 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result before extraordinary items | 91.0 | 111.2 | | | |
--------------------------------------------------------------------------------
| Depreciation according to plan | 34.9 | 34.2 | | | |
--------------------------------------------------------------------------------
| Other adjustments | 26.7 | 7.7 | | | |
--------------------------------------------------------------------------------
| Cash flow before change | | | | | |
--------------------------------------------------------------------------------
| in working capital | 152.6 | 153.1 | | | |
--------------------------------------------------------------------------------
| Change in working capital | -45.3 | -32.9 | | | |
--------------------------------------------------------------------------------
| Financial items | -31.4 | -17.9 | | | |
--------------------------------------------------------------------------------
| Direct taxes paid | -51.2 | -22.6 | | | |
--------------------------------------------------------------------------------
| Cash flow from operating | 24.6 | 79.6 | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
| Cash flow provided by investing | 15.2 | 24.3 | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
| Cash flow used in investing | -43.2 | -53.8 | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
| Change in non-current receivables | -1.6 | -1.4 | | | |
--------------------------------------------------------------------------------
| Drawings of loans | 1,740 | 329.3 | | | |
| | .4 | | | | |
--------------------------------------------------------------------------------
| Repayments of loans | -1,52 | -332.5 | | | |
| | 8.9 | | | | |
--------------------------------------------------------------------------------
| Dividends paid | -32.6 | -27.4 | | | |
--------------------------------------------------------------------------------
| Cash flow from financing | 177.3 | -32.0 | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
| Change in cash funds | 174.0 | 18.1 | | | |
--------------------------------------------------------------------------------
| Cash funds at beginning of period | 78.5 | 60.6 | | | |
--------------------------------------------------------------------------------
| Translation difference of cash | -2.4 | -0.2 | | | |
| funds | | | | | |
--------------------------------------------------------------------------------
| Cash funds at end of period | 250.1 | 78.5 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 4) STATEMENT OF CHANGES IN EQUITY | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
| | | | | | | | | |
--------------------------------------------------------------------------------
| | | Share | Trans | Reval | | |Share- |
| | | | - | u- | | |holders' |
--------------------------------------------------------------------------------
| EUR mill. | Share | premi | latio | ation | Retain | Minori | equit | |
| | | um | n | | ed | ty | y | |
--------------------------------------------------------------------------------
| capital | accou | diffe | reser | earnin | intere | total | |
| | nt | rence | ve | gs | st | | |
--------------------------------------------------------------------------------
| Shareholders' | | | | | | | |
--------------------------------------------------------------------------------
| equity, | | | | | | | |
--------------------------------------------------------------------------------
| 1.1.2007 | 34.0 | 5.8 | 0.1 | 0.1 | 208.1 | 19.7 | 267.7 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Translation | | | | | | | |
--------------------------------------------------------------------------------
| difference | | 0.4 | | | | 0.4 | |
--------------------------------------------------------------------------------
| Hedging of net | | | | | | | |
--------------------------------------------------------------------------------
| investment in | | | | | | | |
--------------------------------------------------------------------------------
| foreign | | | | | | | |
--------------------------------------------------------------------------------
| subsidiary | | -0.4 | | | | -04 | |
--------------------------------------------------------------------------------
| 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 | -1.9 | -27.4 | |
--------------------------------------------------------------------------------
| Result for the | | | | | | | |
--------------------------------------------------------------------------------
| accounting | | | | | | | |
--------------------------------------------------------------------------------
| period | | | | 72.9 | 7.6 | 80.6 | |
--------------------------------------------------------------------------------
| Change in | | | | | | | |
--------------------------------------------------------------------------------
| minority | | | | | | | |
--------------------------------------------------------------------------------
| interest | | | | | -1.7 | -1.7 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' | | | | | | | |
--------------------------------------------------------------------------------
| equity, | | | | | | | | |
--------------------------------------------------------------------------------
| 31.12.200 | 34.0 | 5.8 | 0.1 | 0.2 | 255.4 | 23.7 | 319.2 | |
| 7 | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | | | | | Share | |
| | | | | | | | - | |
--------------------------------------------------------------------------------
| | | Share | Trans | Reval | | |holders' |
| | | | - | u- | | | |
--------------------------------------------------------------------------------
| EUR mill. | Share | premi | latio | ation | Retain | Minori | equit | |
| | | um | n | | ed | ty | y | |
--------------------------------------------------------------------------------
| capital | accou | diffe | reser | earnin | intere | total | |
| | nt | rence | ve | gs | st | | |
--------------------------------------------------------------------------------
| Shareholders' | | | | | | | |
--------------------------------------------------------------------------------
| equity, | | | | | | | |
--------------------------------------------------------------------------------
| 1.1.2008 | 34.0 | 5.8 | 0.1 | 0.2 | 255.4 | 23.7 | 319.2 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Translation | | | | | | | |
--------------------------------------------------------------------------------
| difference | | -6.4 | | | | -6.4 | |
--------------------------------------------------------------------------------
| Hedging of net | | | | | | | |
--------------------------------------------------------------------------------
| investment in | | | | | | | |
--------------------------------------------------------------------------------
| foreign | | | | | | | |
--------------------------------------------------------------------------------
| subsidiary | | 1.6 | | | | 1.6 | |
--------------------------------------------------------------------------------
| Cash flow | | | | | | | |
--------------------------------------------------------------------------------
| hedges | | | -1.9 | | | -1.9 | |
--------------------------------------------------------------------------------
| Effect of | | | | | | | |
--------------------------------------------------------------------------------
| sold shares | | | 0.0 | | | 0.0 | |
--------------------------------------------------------------------------------
| Reversal of | | | | | | | |
--------------------------------------------------------------------------------
| dividend | | | | | | | |
--------------------------------------------------------------------------------
| liability | | | | 0.0 | | 0.0 | |
--------------------------------------------------------------------------------
| Dividend | | | | | | | |
--------------------------------------------------------------------------------
| distribution | | | | -30.6 | -2.9 | -33.6 | |
--------------------------------------------------------------------------------
| Result for the | | | | | | | |
--------------------------------------------------------------------------------
| accounting | | | | | | | |
--------------------------------------------------------------------------------
| period | | | | 55.99 | 7.6 | 63.5 | |
--------------------------------------------------------------------------------
| Change in | | | | | | | |
--------------------------------------------------------------------------------
| minority | | | | | | | |
--------------------------------------------------------------------------------
| interest | | | | | -0.6 | -0.6 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' | | | | | | | |
--------------------------------------------------------------------------------
| equity, | | | | | | | |
--------------------------------------------------------------------------------
| 31.12.200 | 34.0 | 5.8 | -4.7 | -1.7 | 280.7 | 27.8 | 341.8 | |
| 8 | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 5) CONSOLIDATED INCOME STATEMENT, QUARTERLY | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 4-6/ | 7-9/ | 10-12 | 1-3/ | 4-6/ | 7-9/ | 10-12 | |
| | | | / | | | | / | |
--------------------------------------------------------------------------------
| EUR mill. | 2007 | 2007 | 2007 | 2008 | 2008 | 2008 | 2008 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 551.9 | 655.7 | 638.5 | 444.9 | 645.9 | 648.5 | 742.5 | |
--------------------------------------------------------------------------------
| Other | | | | | | | | |
| operating | | | | | | | | |
--------------------------------------------------------------------------------
| income | | | | | | | | |
| and | | | | | | | | |
--------------------------------------------------------------------------------
| expenses | -498. | -585. | -607. | -445. | -599.4 | -582.5 | -697. | |
| | 0 | 8 | 0 | 3 | | | 7 | |
--------------------------------------------------------------------------------
| Depreciat | 9.0 | 12.3 | 8.1 | 4.9 | 9.3 | 13.5 | -7.2 | |
| ion | | | | | | | | |
--------------------------------------------------------------------------------
| Share of the | | | | | | | |
| results | | | | | | | |
--------------------------------------------------------------------------------
| of | | | | | | | | |
| affiliate | | | | | | | | |
| d | | | | | | | | |
--------------------------------------------------------------------------------
| companies | 0.1 | 0.7 | 0.3 | -0.2 | 0.4 | 1.1 | -0.1 | |
--------------------------------------------------------------------------------
| Operating | 45.1 | 58.3 | 23.6 | -5.5 | 37.6 | 53.6 | 37.5 | |
| profit | | | | | | | | |
--------------------------------------------------------------------------------
| Financial | | | | | | | | |
--------------------------------------------------------------------------------
| expenses | 5.1 | 6.3 | 6.7 | 7.8 | 9.8 | 5.2 | 27.9 | |
--------------------------------------------------------------------------------
| Financial | 1.9 | 0.6 | 2.7 | 1.7 | 3.3 | 0.2 | 13.4 | |
| income | | | | | | | | |
--------------------------------------------------------------------------------
| Result | | | | | | | | |
--------------------------------------------------------------------------------
| before | 41.9 | 52.6 | 19.6 | -11.6 | 31.0 | 48.6 | 23.0 | |
| taxes | | | | | | | | |
--------------------------------------------------------------------------------
| Income | -10.2 | -12.3 | -9.2 | 2.2 | -7.6 | -11.8 | -10.3 | |
| taxes | | | | | | | | |
--------------------------------------------------------------------------------
| Result | | | | | | | | |
| for the | | | | | | | | |
--------------------------------------------------------------------------------
| accountin | | | | | | | | |
| g | | | | | | | | |
--------------------------------------------------------------------------------
| period | 31.7 | 40.3 | 10.4 | -9.4 | 23.4 | 36.8 | 12.7 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution of the result for the accounting period | |
--------------------------------------------------------------------------------
| To shareholders | | | | | | | |
--------------------------------------------------------------------------------
| of the parent | | | | | | | |
--------------------------------------------------------------------------------
| company | 30.2 | 38.7 | 7.8 | -10.0 | 22.1 | 34.5 | 9.3 | |
--------------------------------------------------------------------------------
| To | | | | | | | | |
| minority | | | | | | | | |
--------------------------------------------------------------------------------
| interests | 1.5 | 1.6 | 2.6 | 0.6 | 1.4 | 2.3 | 3.4 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EPS calculated from result attributable to parent company | |
| shareholders | |
--------------------------------------------------------------------------------
| Earnings per share, diluted and undiluted | |
--------------------------------------------------------------------------------
| EUR | 1.77 | 2.27 | 0.46 | -0.59 | 1.30 | 2.03 | 0.55 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 6) NET SALES BY BUSINESS SECTOR | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | | | 12/20 | 12/20 | Change | Change | | |
| | | | 08 | 07 | | , | | |
--------------------------------------------------------------------------------
| | | | | | | % | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Building construction | 1,205 | 1,042 | 162.8 | 15.6 | | |
| | .7 | .9 | | | | |
--------------------------------------------------------------------------------
| Infrastructure | 902.8 | 820.3 | 82.5 | 10.1 | | |
| construction | | | | | | |
--------------------------------------------------------------------------------
| Technical building | 269.5 | 230.2 | 39.3 | 17.1 | | |
| services | | | | | | |
--------------------------------------------------------------------------------
| Building products | 156.0 | 133.8 | 22.2 | 16.6 | | |
--------------------------------------------------------------------------------
| Other operations | -52.2 | -53.0 | 0.8 | 1.5 | | |
--------------------------------------------------------------------------------
| Group total | 2,481 | 2,174 | 307.7 | 14.2 | | |
| | .8 | .1 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 7) NET SALES BY BUSINESS SECTOR, QUARTERLY | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 4-6/ | 7-9/ | 10-12 | 1-3/ | 4-6/ | 7-9/ | 10-12 | |
| | | | / | | | | / | |
--------------------------------------------------------------------------------
| EUR mill. | 2007 | 2007 | 2007 | 2008 | 2008 | 2008 | 2008 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Building | 250.3 | 268.0 | 332.6 | 276.6 | 295.3 | 207.3 | 426.5 | |
| construct | | | | | | | | |
| ion | | | | | | | | |
--------------------------------------------------------------------------------
| Infrastru | | | | | | | | |
| cture | | | | | | | | |
--------------------------------------------------------------------------------
| construct | 220.0 | 301.7 | 217.2 | 95.5 | 250.5 | 337.8 | 219.0 | |
| ion | | | | | | | | |
--------------------------------------------------------------------------------
| Technical | | | | | | | | |
| building | | | | | | | | |
--------------------------------------------------------------------------------
| services | 57.2 | 58.5 | 68.3 | 56.5 | 68.0 | 68.7 | 76.3 | |
--------------------------------------------------------------------------------
| Building | 39.5 | 41.2 | 34.5 | 25.0 | 45.8 | 51.0 | 34.2 | |
| products | | | | | | | | |
--------------------------------------------------------------------------------
| Other | -15.2 | -13.6 | -14.1 | -8.6 | -13.7 | -16.3 | -13.5 | |
| operation | | | | | | | | |
| s | | | | | | | | |
--------------------------------------------------------------------------------
| Group | 551.9 | 655.7 | 638.5 | 444.9 | 645.9 | 648.5 | 742.5 | |
| total | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 8) OPERATING PROFIT BY BUSINESS SECTOR | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | | | 12/20 | 12/20 | Change | Change | | |
| | | | 08 | 07 | | , | | |
--------------------------------------------------------------------------------
| | | | | % | | |
--------------------------------------------------------------------------------
| Building construction | 71.8 | 71.7 | 0.1 | 0.1 | | |
--------------------------------------------------------------------------------
| Infrastructure | | | | | | |
--------------------------------------------------------------------------------
| construction | 30.7 | 39.3 | -8.6 | -21.9 | | |
--------------------------------------------------------------------------------
| Technical | | | | | | | |
| building | | | | | | | |
--------------------------------------------------------------------------------
| services | 17.0 | 11.9 | 5.1 | 42.9 | | |
--------------------------------------------------------------------------------
| Building products | 10.5 | 11.1 | -0.6 | -5.4 | | |
--------------------------------------------------------------------------------
| Other operations | -6.8 | -6.7 | -0.1 | 1.5 | | |
--------------------------------------------------------------------------------
| Group total | 123.2 | 127.2 | -4.0 | -3.1 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 9) OPERATING PROFIT BY BUSINESS SECTOR, QUARTERLY | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 4-6/ | 7-9/ | 10-12 | 1-3/ | 4-6/ | 7-9/ | 10-12 | |
| | | | / | | | | / | |
--------------------------------------------------------------------------------
| EUR mill. | 2007 | 2007 | 2007 | 2008 | 2008 | 2008 | 2008 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Building | 17.0 | 14.3 | 25.8 | 10.1 | 11.3 | 14.4 | 36.0 | |
| construct | | | | | | | | |
| ion | | | | | | | | |
--------------------------------------------------------------------------------
| Infrastru | | | | | | | | |
| cture | | | | | | | | |
--------------------------------------------------------------------------------
| construct | 20.8 | 36.7 | -5.5 | -14.9 | 19.2 | 27.2 | -0.8 | |
| ion | | | | | | | | |
--------------------------------------------------------------------------------
| Technical | | | | | | | | |
| building | | | | | | | | |
--------------------------------------------------------------------------------
| services | 3.3 | 3.5 | 3.8 | 2.2 | 5.9 | 5.9 | 3.0 | |
--------------------------------------------------------------------------------
| Building | 4.7 | 5.6 | 2.0 | -1.5 | 4.9 | 6.2 | 0.9 | |
| products | | | | | | | | |
--------------------------------------------------------------------------------
| Other | -0.8 | -1.7 | -2.4 | -1.3 | -3.7 | -0.2 | -1.5 | |
| operation | | | | | | | | |
| s | | | | | | | | |
--------------------------------------------------------------------------------
| Group | 45.1 | 58.3 | 23.6 | -5.5 | 37.6 | 53.6 | 37.5 | |
| total | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 10) ECONOMIC TRENDS AND FINANCIAL INDICATORS | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 12/20 | 12/200 | | | |
| | 08 | 7 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity, % | 19.2 | 27.5 | | | |
--------------------------------------------------------------------------------
| Return on investment, % | 17.7 | 20.7 | | | |
--------------------------------------------------------------------------------
| Operating margin, % of net sales | 5.0 | 5.8 | | | |
--------------------------------------------------------------------------------
| Equity ratio, % | 26.2 | 32.7 | | | |
--------------------------------------------------------------------------------
| Gearing, % | 98.4 | 87.2 | | | |
--------------------------------------------------------------------------------
| Interest-bearing net debt, EUR | 336.4 | 278.5 | | | |
| million | | | | | |
--------------------------------------------------------------------------------
| Gross investments, EUR million | | | | | |
--------------------------------------------------------------------------------
| (incl. leasing purchases) | 60.2 | 61.4 | | | |
--------------------------------------------------------------------------------
| Order book, EUR mill. | 1 | 1 | | | |
| | 064.5 | 414.1 | | | |
--------------------------------------------------------------------------------
| - of which foreign orders, EUR | 263.1 | 284.0 | | | |
| mill. | | | | | |
--------------------------------------------------------------------------------
| Average number of employees | 9 776 | 9 201 | | | |
--------------------------------------------------------------------------------
| Employees at end of period | 8 910 | 8 718 | | | |
--------------------------------------------------------------------------------
| Net sales, EUR mill. | 2 | 2 | | | |
| | 481.8 | 174.1 | | | |
--------------------------------------------------------------------------------
| - of which operations abroad, EUR | 676.7 | 581.6 | | | |
| mill. | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 27.3 | 26.8 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 11) SHARE-SPECIFIC INDICATORS | 12/20 | 12/200 | | | |
| | 08 | 7 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, EUR | 3.28 | 4.29 | | | |
--------------------------------------------------------------------------------
| Equity per share, EUR | 18.45 | 17.36 | | | |
--------------------------------------------------------------------------------
| Dividend per share, EUR 1) | 0.90 | 1.80 | | | |
--------------------------------------------------------------------------------
| Dividend to earnings ratio, % | 27.4 | 42.0 | | | |
--------------------------------------------------------------------------------
| Market capitalisation, EUR mill. | 222.1 | 536.2 | | | |
--------------------------------------------------------------------------------
| Share price at end of period, EUR | 13.05 | 31.50 | | | |
--------------------------------------------------------------------------------
| Trading volume during period, | | | | | |
--------------------------------------------------------------------------------
| 1,000 shares | 3,185 | 5,204 | | | |
--------------------------------------------------------------------------------
| Number of issued shares, 1,000 | 17,02 | 17,021 | | | |
| shares | 1 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Board of Directors' proposal | | | | | |
| to the AGM | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 12) GUARANTEES AND CONTINGENT LIABILITIES | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR mill. | | | | 2008 | 2007 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Securities for own commitments | | | | |
--------------------------------------------------------------------------------
| Property mortgages | 1.5 | 3.1 | | | |
--------------------------------------------------------------------------------
| Business mortgages | 40.6 | 95.3 | | | |
--------------------------------------------------------------------------------
| Bonds pledged as security | 0.3 | 0.8 | | | |
--------------------------------------------------------------------------------
| Deposits | 0.2 | 0.0 | | | |
--------------------------------------------------------------------------------
| Total | 42.7 | 99.2 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Guarantees | | | | | |
--------------------------------------------------------------------------------
| On behalf of affiliated companies | 49.1 | | | | |
--------------------------------------------------------------------------------
| On behalf of others | 19.9 | 9.9 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Minimum lease payments of | | | | | |
| irrevocable lease agreements | | | | | |
--------------------------------------------------------------------------------
| One year or less | 9.9 | 5.7 | | | |
--------------------------------------------------------------------------------
| Over one year but no | | | | | |
--------------------------------------------------------------------------------
| more than five years | 26.6 | 20.8 | | | |
--------------------------------------------------------------------------------
| Over five years | 18.9 | 20.2 | | | |
--------------------------------------------------------------------------------
| Total | 55.4 | 46.7 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Purchase commitments of | 13.2 | 11.3 | | | |
| investments | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Derivative contracts | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Forward foreign exchange contracts | | | | |
--------------------------------------------------------------------------------
| Nominal value | 81.2 | 54.6 | | | |
--------------------------------------------------------------------------------
| Fair value | 5.1 | -0.2 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest rate options, calls purchased | | | | |
--------------------------------------------------------------------------------
| Nominal value | 1.4 | 3.5 | | | |
--------------------------------------------------------------------------------
| Fair value | 0.0 | 0.0 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest rate options, puts written | | | | |
--------------------------------------------------------------------------------
| Nominal value | 1.4 | 3.5 | | | |
--------------------------------------------------------------------------------
| Fair value | 0.0 | -0.1 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest rate swap contracts | | | | |
--------------------------------------------------------------------------------
| Nominal value | 71.9 | 95.6 | | | |
--------------------------------------------------------------------------------
| Fair value | -2.7 | -0.5 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 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. | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
13) LITIGATION
The arbitral tribunal decided that IKEA's termination in spring 2006 of the
construction contract for the MEGA shopping centre in St. Petersburg was not
justified. Lemminkäinen has received the payment form IKEA due to the
termination of a construction contract. The parties have agreed not to disclose
the amount of the payment.
The Market Court ordered Lemminkäinen to pay an infringement fine of EUR 14
million for contravening competition law in connection with its asphalt paving
operations in Finland. The infringement fine was recognised as an expense in the
fourth quarter of 2007. The decision has been appealed to the Supreme
Administrative Court, so the total amount of the fine may change.
Lemminkäinen has been informed of an application for a summons in which the
Finnish Road Administration is demanding compensatory damages from different
asphalt companies before the Helsinki District Court. Lemminkäinen's share of
the claimed compensation is at most EUR 10.5 million. The Finnish Road
Administration is also seeking damages of at most EUR 5.6 million from
Lemminkäinen, under joint and several liabilities with other defendant
companies.