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STOCK EXCHANGE RELEASE 5 Feb 2014

Pöyry PLC: Pöyry PLC's notice concerning annual accounts for 2013

PÖYRY PLC          Financial Statement Release 5 February 2014 at 8:30 a.m.   

Pöyry PLC's notice concerning annual accounts for 2013

OPERATING PROFIT IMPROVED, NET SALES DECLINED

KEY FIGURES

Pöyry Group 10-12/ 2013 10-12/
2012
Change,
%
1-12/ 2013 1-12/
2012
Change,
%
Order stock at end of period, EUR million 500.0 547.7 -8.7 500.0 547.7 -8.7
Net sales total, EUR million 160.6 190.7 -15.8 650.8 775.0 -16.0
Operating profit,
EUR million
8.3 -15.1 n.a. 13.9 -18.8 n.a.
Operating margin, % 5.2 -7.9 2.1 -2.4
Profit before taxes,
EUR million
7.3 -16.6 n.a. 9.1 -22.0 n.a.
Earnings per share, basic, EUR 0.04 -0.27 n.a. 0.06 -0.43 n.a.
Earnings per share, diluted, EUR 0.04 -0.27 n.a. 0.06 -0.43 n.a.
Gearing, % 26.0 59.9
Return on investment,  % (R12M) 5.8 -5.7
Average number of personnel during period, calculated as full time equivalents (FTE) 5,889 6,695 -12.0

All figures and sums have been rounded off from the exact figures which may lead to minor discrepancies upon addition or subtraction.

JANUARY-DECEMBER 2013 HIGHLIGHTS
Figures in brackets, unless otherwise stated, refer to the same period the previous year.

- The Group's order stock totalled EUR 500.0 million at the end of the reporting period. This is EUR 47.7 million lower than in 2012 (547.7).
- Consolidated net sales amounted to EUR 650.8 million. This is EUR 100.3 million lower than the comparable number in 2012 (751.1). Reported net sales in 2012 were EUR 775.0 million.
- Operating profit improved and amounted to EUR 13.9 million, 2.1 per cent of net sales. The Group's operating profit was burdened in 2013 by project losses of approximately EUR 15 million mainly originated from detailed reviews and adjustments to several projects from the former Urban Business Group. As a consequence organisational measures were implemented, leading to an enhanced control over project management processes across the whole Group.
- During the fourth quarter Pöyry sold its Vantaa office real estate in Finland, which positively impacted operating profit by EUR 13.8 million and cash flow by EUR 58.3 million. As a result the net debt position was reduced to EUR 34.5 million (79.1) and gearing improved to 26.0 per cent (59.9).
- In view of market developments in Northern Europe, Pöyry concluded statutory employee negotiations in Finland and the corresponding restructuring provisions have been included in the accounts.
- Accounts receivable include positions which relate to certain public sector infrastructure projects in Venezuela, currently valued at around EUR 16 million, where the client is a public authority. The receivables have been described in the report of the Board of Directors for 2012 and there have not been any material changes during 2013.
 - During 2013 Pöyry improved its organisation, enhancing its focus on domestic client business, from which a steady flow of small and medium sized orders has been originating. These activities are reported under Pöyry's Regional Operations. Pöyry progressed according to plan with its structural and administrative process improvement program announced at the end of 2012. The program aims at achieving annualised savings of EUR 40-50 million by the end of 2014. In this context Pöyry introduced centrally managed global support functions and outsourced IT and certain financial processes.
- In the beginning of 2013 Pöyry's operations were organised along the following Business Lines: Energy Business Group; Industry Business Group; Regional Operations and Management Consulting Business Group. In line with this evolution Pöyry is integrating its local activities in Latin and North America to the Regional Operations as of January 2014. Corresponding pro forma figures are published as a separate company announcement on 5 February 2014.
- The Statement of Comprehensive Income and Statement of Financial Position 2013 have been restated in line with IAS 19. The corresponding variation analysis is published in the tables of the complete Interim Report.

DIVIDEND
The Group's parent company Pöyry PLC's net profit for 2013 amounted to EUR - 11,884,522.26 and retained earnings were EUR 62,442,575.85. The total distributable earnings were EUR 50,558,053.59.
Considering the challenging market situation the Board of Directors of Pöyry PLC will propose to the Annual General Meeting on 11 March 2014 that no dividend will be paid for the year 2013.

NEW DISCLOSURE PROCEDURE FOR PUBLISHING FINANCIAL FORECASTS
Pöyry has updated its disclosure procedure for publishing financial forecasts. Pöyry will continue to publish a financial forecast for Group operating profit and cease publishing a financial forecast for its net sales.

OUTLOOK FOR 2014
Significant part of Pöyry's businesses is driven by clients' new capital investments, which are mostly late in the economic cycles. Consequently, it is difficult to predict the exact timing of clients' investment decisions and project start-ups. Uncertainty around the general economic outlook prevails, which may impact upon investment activity in business segments that are relevant to Pöyry's operations.

Through its enhanced regional focus, Pöyry is establishing a solid foundation in key domestic markets from which it expects to generate a steady flow of projects and growth in line with prevailing market developments. In parallel, Pöyry is accessing global growth potentials in conjunction with its global competences and special opportunities with selected large projects.

The Group's operating profit in 2014 is expected to increase.

CORPORATE GOVERNANCE STATEMENT
Pöyry will publish its Corporate Governance Statement 2013 and its Financial Statements 2013 including the Board of Directors' report on Tuesday 18 February 2014 at the latest. The Corporate Governance Statement will be published separately from the Board of Directors' report and financial statements, and will be published on the company's website at www.poyry.com.

MATERIALS TO THE AGM
The financial statements, the Board of Directors' report, the Corporate Governance Statement as well as other documents presented to the Annual General Meeting will be published on the company's website at www.poyry.com on 18 February 2014 at the latest.

COMMENTS BYALEXIS FRIES, PRESIDENT AND CEO:
"The operating profit improved. Project losses originating from detailed reviews and adjustments to several projects from the former Urban Business Group were compensated by the positive contribution gained from the divestment of office real estate in Vantaa during the fourth quarter.

The net sales declined, amid uncertain economic environments in Pöyry's industrial and energy sectors and in Northern Europe as a whole. In spite of promising order prospects, client investments have generally taken longer to materialise. Thus, net sales declined relative to comparable levels in 2012 in the Industry Business Group and the Energy Business Group. However, as announced earlier, order prospects remain attractive and important orders were recorded in both business groups, indicating that Pöyry has successfully defended its market position in its relevant areas of competence.

Enhanced organisational focus on key domestic markets have sustained a steady inflow of small and medium sized orders, albeit increasing competitive pressures were noticed during the last quarter in particular. These have negatively impacted sales performance in Northern Europe. In view of these developments, in December 2013 Pöyry concluded statutory employee negotiations in Finland.

New project investments progressed at a slower pace and hence the Group's order stock declined and totalled EUR 500.0 million at the end of the year.

Net sales amounted to EUR 650.8 million (775.0). Operating profit was EUR 13.9 million (-18.8), which is 2.1 per cent of net sales (-2.4). In 2012 the operating profit excluding restructuring expenses was EUR 6.2 million. The Group's operating profit was burdened in 2013 by project losses of approximately EUR 15 million mainly originated from detailed reviews and adjustments to several projects from the former Urban Business Group. As a consequence organisational measures were implemented, leading to an enhanced control over project management processes across the whole Group.

Pöyry progressed according to plan with its structural and administrative process improvement programme as announced at the end of 2012. The programme aims at achieving annualised cost savings of EUR 40-50 million by the end of 2014. In this context Pöyry introduced centrally managed global support functions and outsourced certain IT and financial processes in several of Pöyry's main locations.

Through its enhanced regional focus Pöyry is establishing a solid foundation in key domestic markets. In parallel, it is accessing growth potentials in conjunction with its global competences and special opportunities with selected large projects.

Although current revenue development has fallen short of expectations, the order prospects pipeline continues to be solid and healthy. We remain committed to our strategic evolution. The Group's operating profit in 2014 is expected to increase."

This is a summary of the January-December 2013 Interim report. The complete report is enclosed with this company announcement and is available in full on the company's website at www.poyry.com. Investors are advised to review the complete financial statement release with tables.

PÖYRY PLC

Additional information:
Jukka Pahta, CFO
tel. +358 10 33 22629

INVITATION TO CONFERENCES, 5 FEBRUARY 2014
Pöyry's January-December 2013 result will be presented at the following news conferences:

- A conference for analysts, investors and press will be arranged at 12:00 p.m. Finnish time (EET) at Restaurant Savoy, Eteläesplanadi 14, Helsinki, Finland. The event will be hosted by Alexis Fries, President and CEO and Jukka Pahta, CFO.

- An international conference call and webcast in English will begin at 5:00 p.m. Finnish time (EET). The event will be hosted by Jukka Pahta, CFO.

10:00 a.m. US EST (New York)
3:00 p.m. GMT (London)
4:00 p.m. CET (Paris)

The webcast may be followed online on the company's website www.poyry.com. A recording will be made available on the next working day on the same website.

To attend the conference call, please dial:

FI: +358 (0)9 8171 0467
UK: +44 (0)20 3194 0544
US: +1 855 716 1592
Other countries: +44 (0)20 3194 0544
Due to the nature of 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 an international consulting and engineering company. We serve clients globally across the energy and industrial sectors and locally in our core markets. We deliver strategic advisory and engineering services, underpinned by strong project implementation capability and expertise. Our focus sectors are power generation, transmission & distribution, forest industry, chemicals & biorefining, mining & metals, transportation, water and real estate sectors. Pöyry has an extensive local office network employing about 6,500 experts. Pöyry's net sales in 2013 were EUR 650 million and the company's shares are quoted on NASDAQ OMX Helsinki (Pöyry PLC: POY1V).

DISTRIBUTION:
NASDAQ OMX Helsinki
Major media
www.poyry.com 

 

Financial Statement Release January-December 2013