Pöyry Oyj : Interim Report 1 January - 31 March 2012
PÖYRY PLC Interim Report 25 April 2012 at 8:30 a.m.
SLOW START FOR 2012 - OUTLOOK UNCHANGED
|Pöyry Group|| 1-3/
|Order stock at end of period, EUR million||696.9||716.7||-2.8||694.4|
|Net sales total, EUR million||209.5||180.0||16.4||796.1|
| Operating profit excl.
| Operating margin excluding
restructuring costs, %
| Operating profit,
|Operating margin, %||-0.6||3.5||2.5|
| Profit before taxes,
|Earnings per share, basic, EUR||-0.07||0.04||n.a.||0.13|
|Earnings per share, diluted, EUR||-0.07||0.04||n.a.||0.13|
|Return on investment, % (R12M)||0.1||9.2||n.a.||7.4|
|Average number of personnel during period, calculated as full time equivalents (FTE)||6,827||6,659||2.5||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-MARCH 2012 HIGHLIGHTS
Figures in brackets, unless otherwise stated, refer to the same period the previous year.
- The Group's order stock totalled EUR 696.9 million (716.7) at the end of the first quarter 2012. The end of the quarter EPC-order stock has been corrected downwards by EUR 15.7 million. The correction relates to an agreement made with MWV Rigesa where the client is purchasing part of the equipment directly by itself according to plan made by Pöyry. Only the service fee related to these deliveries will be recognised as income.
- Consolidated net sales increased by 16.4 per cent compared with the year before to EUR 209.5 million (180.0).
- Operating profit excluding restructuring costs was EUR 6.2 million (6.5) corresponding to 3.0 per cent (3.6) of sales.
- Compared with the year before, the operating profit improved significantly in the Industry business group and was also higher in the Urban business group. Operating profit declined in the Energy and Management Consulting business groups.
- Unallocated costs in the first quarter of 2012 were EUR 9.1 million. This includes EUR 6.6 million restructuring costs of which majority relates to the divestment of parts of the international water and environment operations. Of the remaining EUR 2.5 million EUR 1.1 million relates to unrealised exchange rate losses of the receivable in Venezuela.
- 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 quarter of 2012. The current net value of the receivable is EUR 23.3 million.
- Parts of the international water & environment businesses were divested in March 2012.
- The new business group structure became effective as of 1 Jan 2012.
OUTLOOK FOR 2012
The Group outlook remains unchanged.
Pöyry's businesses are predominantly driven by clients' new capital investments and most of the businesses are also inherently late in the cycle. It is difficult to predict the timing of clients' new investment decisions and project start-ups. The uncertainty around the general economic outlook is high, which may also impact investment activity in business segments that are relevant to Pöyry's operations.
Based on the current strong order stock and outlook for new orders, 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.
Updated outlook concerning business groups:
The net sales outlook in the Energy and Urban business groups remains unchanged. Net sales in the Industry business group is expected to improve clearly and in the Management Consulting business group to remain stable compared with 2011.
The operating profit outlook in the Urban and Management Consulting business groups remains unchanged. Comparable operating profit in the Energy business group is expected to remain stable and in the Industry business group to improve clearly compared with 2011.
Outlook concerning business groups from the Financial Statement Release on 9 February 2012:
The net sales in the Industry and Management Consulting business groups are expected to improve and in the Energy and Urban business groups to remain stable compared with 2011. Comparable operating profit in the Energy business group is expected to improve clearly, in the Industry business group to improve, in the Urban business group to improve significantly and in the Management Consulting business group to remain stable compared with 2011.
COMMENTS FROM HEIKKI MALINEN, PRESIDENT AND CEO:
"The Group order stock remained at a good level of EUR 696.9 million. Order stock value declined clearly in the Industry business group where the large projects received in 2011 are now in the implementation phase. On the other hand, order stock value increased in the Energy business group where order intake was good especially in Central Europe, Middle-East and North America. Net sales increased by 16.4 per cent to EUR 209.5 million. Operating profit before restructuring costs was EUR 6.2 million (6.5) or 3.0 per cent (3.6) of net sales.
Compared with the year before, operating profit improved significantly in the Industry business group reflecting the progress of the large project in Latin America. The implementation of the projects is moving ahead as planned and due to the nature of some of the contracts the main profit recognition is expected to occur towards the latter part of the year. I am also pleased to report that Pöyry was recently awarded basic engineering and detail engineering contracts for site infrastructure for Klabin's new pulp mill in Brazil. The capacity of the new state-of-the-art pulp mill is 1.5 million tonnes per annum and the start-up of the mill is planned for the third quarter of 2014. The final investment decision is expected later this year. Overall, the Industry business group has achieved a good turnaround after a tough 2009-2010. Operating profit also improved slightly in the new Urban business group where restructuring of the business and development of the portfolio remained a priority.
Operating profit in the Energy business group was a disappointment reflecting the on-going transition, lower than expected activity due to demand driven issues in certain weak markets and some challenging projects. Actions continue to be taken to adapt capacity to the work-load as necessary. The high order stock at the end of the quarter is a solid foundation when looking forward to the latter part of the year. After a good turn-around in the Management Consulting business group in 2011 the first quarter of 2012 was disappointingly weak. Positively, performance in the European main markets was quite stable compared to the year before despite the increased economic uncertainty which typically impacts management consulting business quickly. To react to changes in client needs, investments are made to broaden the scope of our consulting offering.
At the Group level we continue with operational excellence programme and our group wide growth enabling initiatives - Large Projects, Sales & Marketing, Way of Working and Thought Leadership - with the aim to streamline our operations and office network, improve core processes as well as invest in competence development."
This is a summary of the January-March 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:
Heikki Malinen, President and CEO
tel. +358 10 33 21307
Jukka Pahta, CFO
tel. +358 10 33 26088
Sanna Päiväniemi, Director, Investor Relations
tel. +358 10 33 23002
INVITATION TO CONFERENCES TODAY 25 APRIL 2012
The January-March 2012 result will be presented 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 following 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 the 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