STOCK EXCHANGE RELEASE 27 Oct 2011
Pöyry Oyj : Interim report 1 January- 30 September 2011
PÖYRY PLC Interim Report 27 October 2011 at 8:30 a.m.
INDUSTRY BUSINESS GROUP'S PROFITABILITY DEVELOPING WELL - BUSINESS ENVIRONMENT IN THE PUBLIC SECTOR CHALLENGING
|Order stock at end of period, EUR million||724.4||543.7||33.2||724.4||543.7||33.2||526.2|
|Net sales total, EUR million||193.9||161.2||20.3||569.2||495.6||14.9||681.6|
|Operating profit excluding
restructuring costs, EUR million
|Operating margin excluding
restructuring costs, %
|Operating profit, EUR million||6.9||0.1||-||20.5||-0.3||-||5.8|
|Operating margin, %||3.6||0.1||3.6||-0.1||0.9|
|Profit before taxes, EUR million||6.1||-0.8||-||17.9||-2.1||-||4.3|
|Earnings per share, basic, EUR||0.05||-0.04||-||0.16||-0.08||-||0.00|
|Earnings per share, diluted, EUR||0.05||-0.04||-||0.16||-0.08||-||0.00|
|Return on investment, % (R12M)||9.8||0.5||2.6|
|Average number of personnel during
period, calculated as full time
All figures and sums have been rounded off from the exact figures which may lead to minor discrepancies upon addition or subtraction.
JANUARY-SEPTEMBER 2011 HIGHLIGHTS
Figures in brackets, unless otherwise stated, refer to the same period the previous year.
- The Group's order stock totalled EUR 724.4 million (543.7) at the end of September 2011. The order stock includes a major EPC contract announced in the first quarter of 2011.
- Consolidated net sales in January-September 2011 increased by 14.9 per cent compared with the year before to EUR 569.2 million (495.6).
- Operating profit excluding restructuring costs was EUR 24.0 million (3.8) corresponding to 4.2 per cent (0.8) of sales.
- Compared with the year before, operating profit improved significantly in the Energy, Industry and Management Consulting business groups as a result of improving activity and successful restructuring measures.
- The Group's operational excellence program launched in 2010 continues in Germany. Negotiations with the labour representatives are on-going.
- Balance sheet remains strong. The inclusion of the Vantaa Head Office building in the balance sheet in the second quarter of 2011 increased gearing which now stands at 37.8 per cent (20.6).
- The accounts receivable includes EUR 26.6 million, which relates to certain public sector infrastructure projects in Venezuela. Pöyry has has continued intensive collection activities of these receivables.
- Transaction whereby Pöyry PLC acquired parts of the engineering consulting business of Vattenfall Power Consultant AB was completed on 15 July and the newly established company SwedPower AB was consolidated in Pöyry's reporting as from 1 July 2011.
- Oil and gas business was divested in June 2011.
- After the end of the report period, on 12 October 2011, Pöyry announced that it will increase focus on emerging markets and realign structure by establishing a dedicated Asian operations unit and combining Water & Environment and Urban & mobility business groups into new Urban business group.
OUTLOOK FOR 2011
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. During the autumn the uncertainty around the general economic outlook has further increased, which may also impact investment activity in business segments that are relevant to Pöyry's operations.
The current strong order stock and outlook for new orders support the net sales development. However, the outlook for the Group's net sales growth in 2011 has been revised downwards from improves clearly to improves. Outlook for the operating profit development remains unchanged and the comparable operating profit for 2011 is expected to improve significantly from the operating profit, excluding restructuring costs, in 2010, taking into consideration the small numbers in the reference period.
Outlook concerning business groups:
The preconditions for net sales growth in 2011 remain good in the Industry business group but have slightly slowed in the Energy and Management Consulting business groups. In the Water & Environment business group the outlook has deteriorated and there as well as in the Urban & Mobility business group net sales are expected to remain stable or decline compared with 2010. In the Industry and Management Consulting business groups the operating profit outlook is unchanged and their comparable operating profit in 2011 is expected to improve significantly. Comparable operating profit outlook in the Energy business group has been revised from improves significantly to improves clearly, in the Urban & Mobility business group from declines clearly to declines significantly and in the Water & Environment business group from improves significantly to stable or improves.
COMMENTS FROM HEIKKI MALINEN, PRESIDENT AND CEO:
"The good order intake especially in the Industry and Energy business groups during 2011 has resulted in high order stock. The major EPC contract which was received from MWV Rigesa, Brazil, in the first quarter of 2011 is now in the implementation phase. In September the Industry business group received yet another pulp mill project from Latin America which supported the order stock level. In the Energy business group the order stock increased about 12 per cent from the year before which also includes the acquired business in Pöyry SwedPower.
In the public sector the business environment has been more challenging. We have a strong focus on developing new solutions to improve our competitiveness, and following the on-going strategic review the decision was made to merge Water & Environment business group and Urban & Mobility business groups. We believe that by combining these businesses into the new Urban business group we are able to improve competitiveness and better capture synergies across engineering units serving mainly the public sector. This change will be effective as of 1 January 2012.
Accelerating profitable growth is one of our strategic targets and in this respect the emerging markets are fundamentally important for the company. We have a long and successful history in Latin America, especially in Brazil, and now we increase our focus on Asia. We are already established in this region, but Asia's share of Pöyry's total business needs to be further increased. In order to increase sales of owners' and contractors' engineering, EPCM and EPC projects in the region we have decided to establish a dedicated Asian operations unit that will start from in beginning of 2012.
Our operating profit during 2011 has recovered from the low levels of 2010. Towards the end of the reporting period the increasing macroeconomic uncertainty began to be visible as somewhat softer market environment for management consulting. Challenges in the public sector are also continuing. The current strong order stock and outlook for new orders support the net sales development. However, the outlook for the Group's net sales growth in 2011 has been revised downwards from improves clearly to improves. Outlook for the operating profit development remains unchanged and the comparable operating profit for 2011 is expected to improve significantly from the operating profit, excluding restructuring costs, in 2010, taking into consideration the small numbers in the reference period."
This is a summary of the January-September 2011 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 interim report 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 27 OCTOBER 2011
The January-September 2011 result will be presented by CEO Heikki Malinen and 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 3:00 p.m. Finnish time (EEST). Please note the time.
8:00 a.m. US EDT (New York)
1:00 p.m. BST (London)
2:00 p.m. CEST (Paris)
3:00 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
US: +1 334 323 6201
Other countries: +44 20 7162 0025
Conference id: 905331
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, urban & mobility and water & environment. Pöyry has 7,000 experts and the local office network in about 50 countries. Pöyry's net sales in 2010 were EUR 682 million and the company's shares are quoted on NASDAQ OMX Helsinki. (Pöyry PLC: POY1V).