PÖYRY PLC Interim Report 27 July 2012 at 8:30 a.m.
DISAPPOINTING SECOND QUARTER - 2012 OPERATING PROFIT ESTIMATE REDUCED FURTHER
|Pöyry Group|| 4-6/
|Order stock at end of period, EUR million||644.1||742.1||-13.2||644.1||742.1||-13.2||694.4|
|Net sales total, EUR million||198.8||195.3||1.8||408.3||375.3||8.8||796.1|
| Operating profit excl.
| Operating margin excluding
restructuring costs, %
| Operating profit,
|Operating margin, %||-0.3||3.7||-0.4||3.6||2.5|
| Profit before taxes,
|Earnings per share, basic, EUR||-0.04||0.07||n.a.||-0.11||0.11||n.a.||0.13|
|Earnings per share, diluted, EUR||-0.04||0.07||n.a.||-0.11||0.11||n.a.||0.13|
|Return on investment, % (R12M)||0.0||10.0||7.4|
|Average number of personnel during period, calculated as full time equivalents (FTE)||6,816||6,712||1.5||6,816||6,712||1.5||6,864|
All figures and sums have been rounded off from the exact figures which may lead to minor discrepancies upon addition or subtraction.
JANUARY-JUNE 2012 HIGHLIGHTS
Figures in brackets, unless otherwise stated, refer to the same period the previous year.
- Due to disappointing result in the second quarter Pöyry Group's operating profit for 2012, excluding restructuring costs, is expected to decline compared with 2011. On 29 June 2012, based on preliminary information, the comparable group operating profit estimate was reduced to "stable" from "improves clearly".
- The Group's order stock totalled EUR 644.1 million (742.1) at the end of the first half 2012.
- Consolidated net sales increased by 8.8 per cent compared with the year before to EUR 408.3 million (375.3).
- Operating profit excluding restructuring costs was EUR 7.5 million (15.5) corresponding to 1.8 per cent (4.1) of net sales.
- Operating profit improved significantly in the Industry business group but was lower than the year before in all other business groups.
- In the first half of 2012 restructuring costs totalled EUR 9.1 million of which EUR 7.2 million were recognised in the first quarter of 2012.
- Unallocated costs in the first half of 2012 were EUR 13.1 million which includes EUR 8.5 million restructuring costs.
- The accounts receivable include receivables, which relate to certain public sector infrastructure projects in Venezuela, where the client is a public authority. The receivables have been described in the report of the Board of Directors for 2011 and there have not been material changes during the first half of 2012. The current net value of the receivable is EUR 24.8 million.
- In June 2012 Alexis Fries was appointed President and CEO. He will take up the position during the autumn 2012. At the same time Henrik Ehrnrooth, Chairman of Pöyry PLC's Board of Directors, was appointed interim President and CEO until Alexis Fries takes over the position.
UPDATED OUTLOOK FOR 2012:
The Group's net sales in 2012 are expected to remain stable compared with 2011. The Group's operating profit for 2012, excluding restructuring costs, is expected to decline compared with 2011.
Based on preliminary information on the second quarter result Pöyry reduced its estimate for the full year 2012 operating profit on 29 June 2012 and the Group's operating profit for 2012, excluding restructuring costs, was expected to remain stable compared with 2011. The outlook for the Group's net sales for the full year 2012 remained unchanged.
Updated outlook concerning business groups:
Net sales are expected to remain stable in all business groups. The outlook for the Industry business group was changed from "improves clearly" to "stable". The outlook for other business groups remained unchanged.
Operating profit in the Energy business group is expected to decline and in the Management Consulting business group to decline clearly. The previous outlook for both business groups was "stable". Operating profit in the Industry business group is expected to improve. The previous outlook was "improves clearly". Operating profit in the Urban business group is expected to improve significantly considering the low comparison figure. The outlook remained unchanged.
The operating profit outlook and comparison to 2011 both refer to figures excluding restructuring costs.
Group outlook from the January-March Interim Report on 25 April 2012:
The Group's net sales in 2012 are expected to remain stable compared with 2011. The comparable operating profit for 2012 is expected to improve clearly from the operating profit, excluding restructuring costs, in 2011.
Outlook concerning business groups as on 25 April 2012:
The net sales in the Energy, Urban, and Management Consulting business groups are expected to remain stable compared with 2011. Net sales in the Industry business group are expected to improve clearly
The operating profit in the Urban business group is expected to improve significantly and in the Industry business group to improve clearly. The operating profit in the Management Consulting and Energy business groups is expected to remain stable.
COMMENTS FROM HENRIK EHRNROOTH, CHAIRMAN OF THE BOARD OF DIRECTORS AND PRESIDENT AND CEO:
"Group's second quarter operating profit of EUR 7.5 million or 1.8 per cent of net sales before restructuring costs did not meet our expectations. Group's order stock has reduced but remained on a satisfactory level of EUR 644 million and the prospect pipeline is stable. Net sales for the first half increased by approximately 9 per cent from the previous year and totalled EUR 408 million.
We have continued the strategic review of our business portfolio which has led to closures and divestments of some low performing and non-core offices and business units. These actions burden the comparable operating profit in the short term. Especially in the Urban business group we have also recognised one time project and credit losses mainly outside of our core markets. Lower than anticipated activity levels in certain markets, especially in the Energy business group, and weaker than expected top line development, especially in the Management Consulting business group, have negative impact on the business groups' profitability. Restructuring costs in the first half remained high at EUR 9.1 million.
During the summer we revisited our strategy. In the strategy period 2013-2015 we will continue implementing our key strategic priorities. In the short term the emphasis will be on improving our profitability by further increasing the focus both in the business portfolio and geographically. Group's financial targets remain unchanged. The operating model and internal processes for business operations and support functions will be radically improved and simplified. These plans are expected to result in significant improvements. More detailed information on estimated financial impacts will be available later this year."
This is a summary of the January-June 2012 interim report. The complete report is published as an enclosure to this company announcement and is available in full on the company's web site at www.poyry.com. Investors are advised to review the complete financial statement release with tables.
Additional information from:
Jukka Pahta, CFO
tel. +358 10 33 26088
Sanna Päiväniemi, Director, Investor Relations
tel. +358 10 33 23002
INVITATION TO CONFERENCES TODAY 27 JULY 2012
The January-June 2012 result will be presented by CFO Jukka Pahta at the news conferences today as follows:
- A conference for analysts, investors and press in Finnish will be arranged at 12 p.m. Finnish time at Restaurant Savoy, Eteläesplanadi 14, Helsinki, Finland.
- An international conference call and webcast in English will begin at 5:00 p.m. Finnish time (EEST).
10:00 a.m. US EDT (New York)
3:00 p.m. BST (London)
4:00 p.m. CEST (Paris)
5:00 p.m. EEST (Helsinki)
The webcast may be followed online on the company's website www.poyry.com. A replay can be viewed on the same site the next working day.
To attend the conference call, please dial
Finland: 0800 914672
UK: 0808 109 0700
USA: 1 866 966 5335
Other countries: +44 (0)20 3003 2666
Conference id: Pöyry
Due to the live webcast, we kindly ask those attending the international conference call and webcast to dial in 5 minutes prior to the start of the event.
Pöyry is a global consulting and engineering company dedicated to balanced sustainability and responsible business. With quality and integrity at our core, we deliver best-in-class management consulting, total solutions, and design and supervision. Our in-depth expertise extends to the fields of energy, industry, transportation, water, environment and real estate. Pöyry has about 7,000 experts and a local office network in about 50 countries. Pöyry's net sales in 2011 were EUR 796 million and the company's shares are quoted on NASDAQ OMX Helsinki (Pöyry PLC: POY1V).
NASDAQ OMX Helsinki