STOCK EXCHANGE RELEASE 31 Jul 2014
Pöyry Oyj : Interim report 1 January - 30 June 2014
PÖYRY PLC Interim Report 31 July 2014 at 10:45 a.m.
CORRECTION TO THE INTERIM REPORT: NET SALES AND COMPARABLE OPERATING PROFIT DECLINED
There is an error on pages 4 and 5 of the interim report published today at 8:30 a.m. as an attachment to the interim report release.
The error occurs in the following sentence under Regional Operations:
Operating profit includes a one-time gain of EUR 19 million from the divestment in Finland as well as EUR -14 million loss resulting from the write-off of the receivables from Venezuela.
The correct sentence:
Operating profit includes EUR -14 million loss resulting from the write-off of the receivables from Venezuela.
The error has been corrected in the attached interim report.
|Pöyry Group||4-6/ 2014||4-6/ 2013||Change, %||1-6/ 2014||1-6/ 2013||Change, %||1-12/ 2013|
|Order stock at end of period, EUR million||482.4||555.7||-13.2||482.4||555.7||-13.2||500.0|
|Net sales total, EUR million||152.2||170.2||-10.6||303.5||336.5||-9.8||650.8|
|Operating profit, EUR million||-2.9||1.9||n.a.||-4.7||5.0||n.a.||13.9|
|Operating margin, %||-1.9||1.1||-1.6||1.5||2.1|
|Profit before taxes, EUR million||-3.0||0.5||n.a.||-6.0||2.7||n.a.||9.1|
|Earnings per share, basic, EUR||-0.06||-0.01||n.a.||-0.12||0.00||n.a.||0.06|
|Earnings per share, diluted, EUR||-0.06||-0.01||n.a.||-0.12||0.00||n.a.||0.06|
|Return on investment, % (R12M)||-3.3||4.1||5.8|
|Average number of personnel during period, calculated as full time equivalents (FTE)||5,659||6,235||-9.2||6,128|
All figures and sums have been rounded off from the exact figures, which may lead to minor discrepancies upon addition or subtraction.
JANUARY - JUNE 2014 HIGHLIGHTS
Figures in brackets, unless otherwise stated, refer to the same period of the previous year.
- On 2 June 2014, Pöyry closed the divestment in Finland that included significant parts of Pöyry's real estate design and consulting business as well as construction management business for real estate and infrastructure.
- The Group's order stock totalled EUR 482.4 (555.7) million. It increased in the Industry Business Group but contracted in all other Business Lines. Excluding the divestment in Finland in June, comparable order stock increased from EUR 461.4 at the end of the previous year. Comparable order stock on 30 June 2013 was EUR 512.5 million.
- Net sales declined to EUR 303.5 (336.5) million mostly due to the performance in the Regional Operations.
- Operating profit decreased to EUR -4.7 (5.0) million. Operating profit was burdened by lower than expected net sales as well as EUR -5.4 million of project losses and other one-time items recognised mainly in the Regional Operations. Operating profit includes a one-time gain of EUR 19 million from the divestment in Finland as well as EUR -14 million loss resulting from the write-off of the receivables from Venezuela. Operating profit increased in the Management Consulting Business Group, however it declined in all other Business Lines and mostly in the Regional Operations except for the Northern European region.
- In line with its strategic evolution introduced in February 2013, Pöyry integrated its local activities in Latin and North America as well as in Asia Pacific to Regional Operations in January 2014.
- Pöyry continues to implement its structural and administrative process improvement program announced at the end of 2012. As these measures are progressing, Pöyry will introduce further improvements in terms of sales focus, project management and capacity management.
OUTLOOK FOR 2014
Due to the write-off of the receivables in Venezuela, Pöyry has on 31 July 2014 lowered its guidance for the operating profit for 2014. According to the guidance announced on 5 February 2014, the Group operating profit in 2014 was expected to increase. According to the new guidance, the Group's operating profit in 2014 is expected to decline compared to the operating profit for 2013.
ALEXIS FRIES, PRESIDENT AND CEO:
"Pöyry's net sales declined in the first half of the year to EUR 303.5 (336.5) million. Sales weakened mostly in the Regional Operations which were impacted by clients' lower investment activity and project delays in Europe and Latin America. Operating profit declined to EUR -4.7 (5.0) million. The figure includes EUR -5.4 million of project losses and other one-time items as well as profit of EUR 19 million originating from the divestment in Finland. Operating profit was additionally impacted by the write-off of overdue receivables related to projects from the former Urban Business Group in Venezuela, amounting to EUR 14 million. Pöyry continues to pursue the collection process. Operating profit improved in the Management Consulting Business Group. While Northern Europe developed satisfactorily, the overall performance of the Regional Operations was disappointing and had a negative impact on the figure.
The Group's order prospects were solid, however the progression of larger project opportunities was taking clearly longer. The Group's overall order intake decreased in the Energy Business Group, Central Europe and Latin America. Nevertheless, orders increased in all other Business Lines. The Group's order stock improved in most Business Lines, amounting to EUR 482.4 million and improving from EUR 461.4 million at the end of 2013. However, the year-on-year figure decreased from EUR 555.7 million (or EUR 512.5 million excluding the divestment in Finland). The decrease affected all Business Lines with the exception of the Industry Business Group.
The Group's unallocated costs increased in line with expectations due to advancing centralisation of the global support functions, a process where considerable cost savings have been achieved.
As communicated earlier, Pöyry strengthened its regional focus in January 2014 by integrating its local activities in Latin and North America, as well as in Asia Pacific, into the Regional Operations. This is in line with Pöyry's strategy to grow its services in key domestic markets.
After a difficult start in a weakening market at the beginning of this year, the Regional Operations in Northern Europe recovered well and showed positive development. In other regions, however, where lower sales resulted in unsold engineering hours and losses were recorded in projects originating from the former Urban Business Group, performance was not satisfactory. Latin America was impacted by litigation costs related to an arbitration process and a delayed start-up of a major client project.
Improvements in terms of sales focus, project management and capacity management have been initiated across all units and are closely monitored as part of our regular management process.
We continue to progress with Pöyry's organisational evolution, introduced in February 2013. It is based on Management Consulting, Global Business Lines focusing on Energy and Industry as well as development of strong Regional Operations around key countries where we offer engineering services to industry and infrastructure clients locally through our office network. The related organisational adjustments have proceeded according to plan.
The divestment in Finland was closed on 2 June 2014, allowing us now to sharpen our focus on the industry and local infrastructure markets in Northern Europe."
This is a summary of the January-June 2014 Interim report. The complete report is published as an enclosure to 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.
Jukka Pahta, CFO
tel. +358 10 33 22629
INVITATION TO CONFERENCES TODAY 31 JULY 2014
Pöyry's January-June 2014 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 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 (EEST). The event will be hosted by Jukka Pahta, CFO.
10:00 a.m. US EDT (New York)
3:00 p.m. BST (London)
4:00 p.m. CEST (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 0465
SE: +46 (0)8 5199 9355
UK: +44 (0)20 3194 0550
US: +1 855 269 2605
Other countries: +44 (0)20 3194 0550
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 and water. Pöyry has an extensive local office network employing about 6,000 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).
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