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Net Sales and Earnings

The Jaakko Pöyry Group's net sales for the period January - September 1999 amounted to EUR 277.7 million (EUR 182.1 million in the same period 1998). The Group's operating profit was EUR 18.4 (14.4) million and profit after financial items EUR 17.3 (12.9) million. The Group's profit for the period under review was EUR 10.3 (7.4) million and earnings per share EUR 0.76 (0.55).

The Forest Industry business group's net sales remained at last year's level, whereas all other business groups recorded increased net sales. Operating profit increased in the Energy, Infrastructure and Environment and Process Industries business groups. Start-up costs of JP Capital International Ltd decreased the profitability of the Forest Industry Consulting business group, otherwise the profitability improved.

The Group's order stock amounted to EUR 364.2 million at the end of September. The consolidated order stock for the Jaakko Pöyry Group and the Electrowatt Engineering Group amounted to EUR 285.5 million at the end of December 1998. The Forest Industry, Energy, and Infrastructure and Environment business groups recorded increased order stocks.

The figures in the interim report are unaudited.

Financing and Capital Expenditure

The Group's liquidity remained good during the period under review. At the end of September, the Group's cash in hand and at banks totalled EUR 40.8 million and interest-bearing liabilities EUR 54.8 million, so interest-bearing net debts amounted to EUR 14.0 million. At the end of 1998 interest-bearing net debts amounted to EUR 20.4 million. The main reason for the reduction is that the Electrowatt Engineering Group has no interest-bearing loans. The net debt/equity ratio, gearing, decreased from 28.8 per cent at the end of the year 1998 to 17.2 per cent.

The Group's capital expenditure for the report period totalled EUR 6.9 (4.0) million. The capital expenditure consisted mostly of computer software, systems and hardware. In addition, during the period under review, Jaakko Pöyry Group Oyj increased its shareholding in Electrowatt Engineering Ltd, restructured its Brazilian operations and acquired shareholdings in subsidiaries as explained under Group Structure below. These investments in shareholdings totalled about EUR 12 million.

Group Structure

The Jaakko Pöyry Group is actively striving to expand its office network with the aim of serving its clients locally. This effort is supported by the increased outsourcing of clients' engineering and consulting services and their continued globalisation. The Group also intends to expand its technology and know-how base by acquiring technology leaders within its main business sectors. These companies' expertise can be efficiently marketed via the Group's global network of offices. To fulfil these objectives, the Group's corporate structure has been developed and expanded in various ways during the period under review.

Jaakko Pöyry Group exercised on January 11, 1999 its option to increase its 49.0 per cent shareholding in Electrowatt Engineering Ltd, the parent company of Electrowatt Engineering Group, to 70.0 per cent. The remaining 30.0 per cent of the share capital was acquired on April 23, 1999. The acquisition price for the 51.0 per cent interest totalled EUR 9.4 million.

The Electrowatt Engineering Group's net sales for the period under review amounted to EUR 89.9 million and the operating profit to EUR 7.2 million.

Jaakko Pöyry Group has disposed of its 40.0 per cent ownership in the Brazilian consulting engineering company Jaakko Pöyry Engenharia Ltda. Jaakko Pöyry Group and the other owners of Jaakko Pöyry Engenharia Ltda have agreed that the Jaakko Pöyry Group will concentrate on serving the forest industry, whereas the former associated company will continue its business activities in other fields. In connection with the restructuring, the assets, liabilities and personnel of Jaakko Pöyry Engenharia Ltda's forest industry business were taken over by the Jaakko Pöyry Group, including an office property valued at EUR 1.9 million. The Jaakko Pöyry Group's wholly owned subsidiary Jaakko Pöyry Tecnologia Ltda will continue the above-mentioned forest industry business in Brazil with about 50 employees.

As a part of the agreement to restructure Jaakko Pöyry Engenharia Ltda, the Jaakko Pöyry Group acquired the complete share capital of Jaakko Pöyry Chilena Ltda, which is active in the forest industry business group. It has some 30 employees in Santiago and Concepcion in Chile. In addition, the Jaakko Pöyry Group increased its shareholding in Jaakko Pöyry Argentina S.A. to 60.0 per cent. This company has some 50 employees and is active mainly in infrastructure-related projects. The agreements came into force at the beginning of September, 1999.

Jaakko Pöyry Oy, which belongs to the Forest Industry business group, in June acquired a 55.0 per cent shareholding in the Polish engineering company Interpap Sp. The company is Poland's leading forest industry engineering firm and will also expand its operations into the country's growing energy market. Interpap Sp has about 50 employees.

JP Projektteknik AB in September acquired a 51.0 per cent shareholding in Rigel Consult i Gävle AB, a forest industry engineering company in Sweden. The company also serves the mining, metal and nuclear industry. The company has about 50 employees.

After the period under review, Jaakko Pöyry Oy has increased its shareholding in JP Engineering AS in Norway by acquiring the remaining 45 per cent interest from the minority shareholder in this company. JP Engineering AS has about 50 employees.

Soil and Water Ltd, which belongs to the Infrastructure and Environment business group, in June acquired the entire share capital of Oy Suoraplan Ltd, a company specialising in the engineering of underground spaces, traffic tunnels, bridges and harbour structures. Oy Suoraplan Ltd has 8 employees.

There are plans to continue developing the group's business activities and the corporate structure during the current year and next year. This will primarily be done through acquisitions related to energy, infrastructure and environment businesses. The office network of the Forest Industry business group will be expanded in Central Europe and North America.

Year 2000

Year 2000 projects are proceeding according to plans. The year 2000 - conformity of the Group's computer infrastructure will be secured.

Share Capital and Shares

Jaakko Pöyry Group Oyj's Annual General Meeting on March 18, 1999 authorised the Board of Directors to raise the share capital by issuing new shares and to issue convertible bonds and/or bonds with warrants. , The purpose of this arrangement is to allow the share capital to be raised by a maximum of FIM 5 000 000 (EUR 0.8 million) based on the new shares and the bonds and bonds with warrants by issuing for subscription a maximum of 1 000 000 new shares. The authorisation still allows an issue of 432 514 new shares. The authorisation is in force until March 18, 2000.

Jaakko Pöyry Group Oyj's Board of Directors decided on April 23, 1999 to raise the company's share capital by FIM 2 837 430 (EUR 0.5 million)from FIM 68 500 000 to FIM 71 337 430 by a targeted share issue to the sellers of the shares in Electrowatt Engineering Ltd, Ernst Göhner Stiftung (378 324 shares) and Nordostschweizerische Kraftwerke AG (189 162 shares). The price paid was FIM 58 per share. The capital gain, a total of FIM 30 076 758 (EUR 5.0 million) is booked into the share premium reserve. The total number of shares increased from 13 700 000 to 14 267 486.

The Annual General Meeting in 1998 authorised the Board of Directors to decide on the acquisition and transfer of the company's own shares. The authorisation covers a maximum of 685 000 shares, equalling 5.0 per cent of the total number of shares, of which the company has acquired 597 200 shares in 1998. The Annual General Meeting in 1999 authorised a continuation to the previously granted authorisation to acquire the company's own shares to a maximum of 685 000 shares. The authorisation still allows acquisition of 87 800 shares. The authorisation is in force until March 18, 2000.

Jaakko Pöyry Group Oyj issued in 1998 a bond loan with warrants to all employees in the Group, with a total value of FIM 13.0 million. The bonds with warrants were wholly subscribed. The warrants carry subscription rights for a maximum of 1.3 million of the company's shares, with the subscription period beginning partly on April 1, 2000 and ending for all warrants on April 30, 2005.

The company's shares are quoted on the Helsinki and Stockholm Stock Exchanges. The average trading price during the period was EUR 9.79, with a high of EUR 13.00 and a low of EUR 7.70. A total of 10.1 million of the company's shares (equalling 70.8 per cent of the total number of shares) were traded, corresponding to a turnover of EUR 98.9 million. On the Stockholm Stock Exchange, a total of 59 050 shares were traded with an average trading price of SEK 90.99.

In April 1999 Finvest Oyj, the former biggest owner of Jaakko Pöyry Group Oyj sold all its shares in Jaakko Pöyry Group Oyj, a total of 5.8 million shares equalling 42.4 per cent of the shares. The sale of the shares was targeted at Finvest Oyj's shareholders.


Investment activity in the forest products industry is primarily related to paper machine rebuilds. The increase in the number of rebuilds has increased the Forest Industry business group's order stock during the period under review. Greenfield investments have also recovered in the third quarter. The expected margins of these greenfield projects are somewhat below the business group's long-term average. The Forest Industry business group's earnings for the review period are lower than last year and annual earnings will fall short of last year's, as expected. The market situation has improved in the forest products industry, which will have a favourable impact on the prospects for forest industry consulting services. The annual earnings of the Forest Industry Consulting business group are estimated to remain at last year's level. The earnings and order stock of the Energy business group have improved during the period under review and for this reason its annual earnings will clearly improve compared with last year. Business activity has remained stable in the Infrastructure and Environment business group and its earnings will improve compared with last year. The earnings and order stock of the Process Industry business group have developed satisfactorily and its earnings will improve compared with last year.

The operating profit has increased during the period under review by EUR 4.0 million (28 per cent). The Group's order stock has grown by EUR 78.7 million (28 per cent). Consolidated earnings will improve compared with last year in line with set targets.

Vantaa, November 3, 1999

Jaakko Pöyry Group Oyj

Board of Directors

Jaakko Pöyry Group Oyj

Erkki Pehu-Lehtonen

Teuvo Salminen

For additional information, please contact:

Mr. Erkki Pehu-Lehtonen, President and CEO,

tel. +358 9 8947 2999, +358 400 468 084

Mr. Teuvo Salminen, Executive Vice President,

tel. +358 9 8947 2872, +358 400 420 285

Mr. Edvard Krogius, Investor Relations,

tel. +358 9 8947 3002, +358 40 551 3388


Helsinki Stock Exchange

Stockholm Stock Exchange

Major Media


Consolidated Statement of Income

(EUR million)1-9/19991-9/19981-12/1998
NET SALES277.7182.1259.7
Other operating income3.20.82.0
Share of associated companies' results0.51.11.5
Operating expenses-254.9-162.4-231.5
Depreciation and value decrease-8.1-7.2-9.6
Proportion of net sales, %
Financial income and expenses-1.1-1.5-1.5
Proportion of net sales, %
Extraordinary items0.00.00.0
Income taxes -5.8-5.0-8.0
Minority interest-1.2-0.5-0.5

Consolidated Balance Sheet

(EUR million)September 30, 1999September 30, 1998December 31, 1998
Consolidation goodwill39.633.332.6
Intangible and tangible assets37.027.727.5
Non-current investments21.232.429.1
Own shares5.50.05.5
Investments, cash in hand and at banks40.826.429.4
Non-current liabilities43.462.247.9
Current liabilities171.971.582.5
*) Interest bearing liabilities54.861.449.8
Non-interest bearing liabilities160.572.380.6

Contingent Liabilities

(EUR million)September 30, 1999September 30, 1998December 31, 1998
Pledged assets and mortgages for own debt   
   Pledged assets2.32.42.3
   Mortgages, real estate1.11.11.1
   Mortgages on company assets6.16.26.1
Other obligations   
   Pledged assets2.73.83.8
   Mortgages, real estate2.22.12.0
   Rent and leasing obligations62.234.939.4
   Pension obligations0.40.40.4
   Other obligations 35.315.814.3
For others   
   Pledged assets
   Mortgages, real estate3.83.73.7
Derivative Instruments, notional values   
Foreign exchange forward contracts20.1249.8223.6
Currency options, bought10.4  
Currency options, sold10.0  

The notional amounts outstanding include positions, which have been closed off.

The notional amounts are not a measure of the foreign rate risk of the exposure outstanding.

Key Figures 1-9/19991-9/19981-12/1998
Earnings / share, EUR0.760.550.89
Shareholders' equity / share, EUR5.674.675.03
Return on investment, % p.a.19.915.217.6
Return on equity, % p.a.19.915.518.0
Equity ratio, %34.737.739.5
Equity / Asset ratio, %27.533.435.3
Net debt / Equity ratio (gearing), %17.252.428.8
Order stock, EUR million364.2182.9167.1
Capital expenditure,operating, EUR million6.93.34.8
Capital expenditure in shares, EUR million12.00.72.2
Personnel in group companies in average4 1272 9012 919
Personnel in group companies at the end of the period4 1802 9832 977
Personnel in associated companies at the end of the period2802 7792 577

For purposes of calculating key figures, own shares have been eliminated

from shareholders' equity and the number of shares

Key Figures for the Business Groups

(EUR million)1-9/19991-9/19981-12/1998
Forest Industry85.585.8118.9
Forest Industry Consulting28.926.636.6
Infrastructure and Environment68.831.443.9
Process Industries30.624.341.4
Other 0.2-0.7-1.3
Forest Industry9.611.816.4
Forest Industry Consulting0.50.60.9
Infrastructure and Environment5.82.83.8
Process Industries0.90.21.1
Associated companies0.00.81.1
Forest Industry76.452.041.3
Forest Industry Consulting19.827.225.8
Infrastructure and Environment91.925.826.3
Process Industries63.071.265.8
The Nordic countries64.464.991.2
Other Europe 134.364.595.5
North America15.419.227.4

Key Figures for the Business Groups

(EUR million)10-12/971-3/984-6/987-9/987-9/98
ET SALES      
Forest Industry30.231.129.425.3   25,3
Forest Industry Consulting10.   7,9
Energy5.   5,0
Infrastructure and Environment11.010.011.410.0   10,0
Process Industries7.   8,5
Other -1.60.0-0.70.0   0,0
Total62.661.763.756.7   56,7
Forest Industry4.   4,5
Forest Industry Consulting0.   0,2
Energy0.   0,3
Infrastructure and Environment1.   0,8
Process Industries0.70.1-0.10.2   0,2
Associated companies0.20.60.4-0.2   -0,2
Other-1.6-0.8-1.5-0.3   -0,3
Total7.   5,5
Forest Industry45.562.662.552.0   52,0
Forest Industry Consulting21.221.622.027.2   27,2
Energy11.   6,7
Infrastructure and Environment18.520.524.825.8   25,8
Process Industries44.544.038.671.2   71,2
Total140.7159.1157.5182.9   182,9

Key Figures for the Business Groups

(EUR million)10-12/981-3/994-6/997-9/99   7-9/99
Forest Industry33.130.630.024.9   24,9
Forest Industry Consulting10.09.610.09.3   9,3
Energy5.520.422.920.4   20,4
Infrastructure and Environment12.522.823.622.4   22,4
Process Industries17.110.510.89.3   9,3
Other -0.60.4-0.1-0.1   -0,1
Total77.694.397.286.2   86,2
Forest Industry4.   2,9
Forest Industry Consulting0.   0,3
Energy0.   1,2
Infrastructure and Environment1.   2,1
Process Industries0.   0,3
Associated companies0.   0,0
Other-0.2-1.0-0.8-0.6   -0,7
Total7.   6,1
Forest Industry41.355.354.276.4   76,4
Forest Industry Consulting25.823.122.419.8   19,8
Energy7.9114.0113.8113.1   113,1
Infrastructure and Environment26.394.295.191.9   91,9
Process Industries65.859.564.863.0   63,0
Total167.1346.1350.3364.2   364,2