Lemminkäinen financial statements bulletin 2013

LEMMINKÄINEN CORPORATION    FINANCIAL STATEMENTS BULLETIN    7 FEBRUARY 2014
AT 8:00 A.M.

LEMMINKÄINEN FINANCIAL STATEMENTS BULLETIN 2013: Full year losses derived from non-recurring items and challenges in International operations

October–December 2013 (10-12/2012)

• Net sales in October–December totalled EUR 639.5 million (668.6).
• The value of new orders received was EUR 390.7 million (528.5).
• The operating profit, excluding non-recurring items, stood at EUR -16.3 million (24.0).
  The operating margin was -2.5% (3.6).
• Non-recurring items were expenses from the District Court's decision on damages related to the asphalt cartel, EUR 65.6 million, and write-downs mainly related to commercial properties, EUR 20.1 million.
• Earnings per share were EUR -4.45 (0.28).
• Earnings per share, excluding non-recurring items mentioned above, were EUR -0.07 (0.28).
• Cash flow from operations totalled EUR -22.0 million (19.0).

January–December 2013 (1-12/2012)

• Net sales in January–December were EUR 2,218.2 million (2,267.6).
• At the end of the review period, the order book was EUR 1,821.3 million (1,443.9).
• Operating profit, excluding non-recurring items, was EUR -5.2 million (50.4)
• The operating margin was -0.2% (2.2).
• Non-recurring items were expenses from the District Court's decision on damages related to the asphalt cartel, EUR 65.6 million, and write-downs mainly related to commercial properties, EUR 20.1 million.
• Earnings per share were EUR -5.06 (2.04).
• Earnings per share, excluding non-recurring items mentioned above, were EUR -0.68 (2.04).
• Cash flow from operations totalled EUR 8.3 million (57.8).
• The equity ratio stood at 27.3% (37.2) and gearing at 100.8% (62.8).
• Interest-bearing net debt totalled EUR 326.5 million (277.3).
• The Board of Directors will propose to the AGM that no dividend will be paid for the financial year of 2013.
   

Profit guidance for 2013

In 2013, Lemminkäinen changed its profit guidance three times. Due to the weak first half of the year, the profit guidance was updated in April and July. In November, the company gave a profit warning after the District Court's decision on damages related to the asphalt cartel. The new guidance was: "Net sales in 2013 are expected to be on par with 2012. Result will be clearly negative." In 2013, the net sales were EUR 2 218 million (2 268) and the operating profit (IFRS) was EUR -91 million (50).
 

Profit guidance for 2014

Lemminkäinen estimates that its 2014 net sales will be slightly lower than in 2013 but its operating profit will improve clearly on 2013 (excluding non-recurring items). In 2013 the net sales were EUR 2,218 million and operating profit excluding non-recurring items was EUR -5 million. 

 

Key figures

*) Includes discontinued operations.

**) Includes expenses from the District Court's decision on damages related to the asphalt cartel (EUR 65.6 million) and write-downs mainly related to commercial properties (EUR 20.1 million).

***) Includes expenses from the District Court's decision on damages related to the asphalt cartel (EUR -3.35/share) and write-downs mainly related to commercial properties (EUR -1.03 / share).

President & CEO Timo Kohtamäki:

"2013 was a difficult year for us," says President and CEO Timo Kohtamäki. "In the beginning of the year the paving season was delayed due to the prolonged winter, and in the end of the year we recorded margin decreases from major projects in Norway, Sweden and Russia. In Norway, several efficiency improvement measures were carried out during the year, but the operations in Norway remained unprofitable. The result was further weakened by large non-recurring items related to the District Court's decisions on damages in the asphalt cartel case, write-downs from old commercial property projects as well as expenses from the divestment of parts of the telecommunications network business and the efficiency improvement program. Consequently, our operating profit was negative."

"Our efficiency improvement program launched in August has proceeded as planned: our cost structure is lighter and better adjusted to seasonal variations. In procurement, the gains were not fully realized in our result due to intensified competition. In Scandinavia and Russia, the efficiency improvement measures continue also in 2014. In addition to optimizing the cost structure, we are focusing on project management and governance in all our operating countries."

"In 2014, our primary focus is to continue to develop operational efficiency, improve profitability and strengthen our equity ratio. We are, nevertheless, currently strengthening our resources in demanding infrastructure projects in Scandinavia. In Russia, we have some 900 apartments under construction. Current order book in Finland creates a solid platform to develop our business further in 2014."

Market outlook

In Finland, the overall market situation in construction is estimated to remain quiet in 2014. The volume of infrastructure construction is expected to decrease due to the weak economic situation of municipalities and the state. Demand for new apartments focuses on small apartments in urban growth centres. Commercial projects are being planned but their launch is uncertain. In Russia, the demand for apartments is dependent on the exchange rate of the rouble, the oil price and the general economic situation in Russia. In Sweden, Norway and Denmark, long-term investment plans targeted at infrastructure construction will keep the market situation strong in the near future. On the other hand, the growing infrastructure market attracts Central European construction companies, which intensifies price competition in the industry.  

Briefing

A Finnish-language briefing for analysts and the media will be held at 10:00 a.m. on Friday, 7 February at Lemminkäinen's head office. The street address is Salmisaarenaukio 2, Helsinki, Finland. Due to CEO Timo Kohtamäki's sick leave, CFO Robert Öhman will present the Financial statements bulletin. Presentation materials can be found in Finnish and English at the company's website, www.lemminkainen.com.

LEMMINKÄINEN CORPORATION
Corporate Communications

ADDITIONAL INFORMATION:
Robert Öhman, CFO
Tel. +358 2071 53515
robert.ohman@lemminkainen.com  

Katri Sundström, Vice President, Investor Relations
Tel. +358 2071 54813
katri.sundstrom@lemminkainen.com

APPENDICES:
Financial statement bulletin and tabulated sections of the financial statement bulletin 2013

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

Together with our customers we create conditions that make living, working and travelling functional, safe and healthy. We operate in northern Europe and employ about 7,800 experts. In 2013, our net sales were about EUR 2.2 billion. Lemminkäinen Corporation's share is quoted on NASDAQ OMX Nordic Exchange Helsinki. www.lemminkainen.com