STOCK EXCHANGE RELEASE 29 Oct 2014
Pöyry PLC: Interim Report 1 January - 30 September 2014
PÖYRY PLC Interim Report 29 October 2014 at 8:30 a.m.
NET SALES AND OPERATING PROFIT DECLINED
|Order stock at end of period, EUR million||
|Net sales total, EUR million||
| Operating profit,
|Operating margin, %||-4.7||0.4||-2.5||1.1||2.1|
| Profit before taxes,
|Earnings per share, basic, EUR||-0.08||0.02||n.a.||-0.20||0.02||n.a.||0.06|
|Earnings per share, diluted, EUR||-0.08||
|Return on investment, % (R12M)||-5.6||3.3||5.8|
|Average number of personnel during period, calculated as full time equivalents (FTE)||5,517||6,183||-10.8||6,139|
All figures and sums have been rounded off from the exact figures, which may lead to minor discrepancies upon addition or subtraction.
JANUARY - SEPTEMBER 2014 HIGHLIGHTS
Figures in brackets, unless otherwise stated, refer to the same period of the previous year.
- The Group's order stock totalled EUR 475.3 (557.4) million. The year-on-year figure declined in all Business Lines except for the Industry Business Group where the figure remained stable. Excluding the divestment in Finland in June, comparable order stock increased from EUR 461.9 at the end of the previous year. Comparable order stock on 30 September 2013 was EUR 515.6 million.
- Net sales declined to EUR 434.8 (490.2) million, which was mainly attributable to the development in the Regional Operations. Net sales increased slightly in the Management Consulting Business Group.
- Operating profit decreased to EUR -10.9 (5.6) million. The figure was burdened by lower than expected net sales as well as one-time items of EUR -10 (-7) million recorded mostly in the Regional Operations, consisting mainly of project losses originating from the former Urban Business Group, as well as the EUR -14 million write-off of the receivables from Venezuela recognised in June. Operating profit includes a one-time gain of EUR 19 million from the divestment in Finland in June. Operating profit increased in the Management Consulting Business Group, however it declined in all other Business Lines.
- In line with its strategic evolution introduced in February 2013, Pöyry further streamlined its operations in global sales and project management, the Regional Operations and the Industry and Energy Business Groups on 19 August 2014. In addition, the Group Executive Committee structure was adjusted with a view to improving efficiency.
- 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.
ALEXIS FRIES, PRESIDENT AND CEO:
"Pöyry's net sales declined during the reporting period to EUR 434.8 (490.2) million. Sales weakened mostly in the Regional Operations. It decreased particularly in Finland due to the divestment in June, in Brazil amidst the economic slowdown and in Central Europe mostly caused by project revenue adjustments. Net sales increased slightly in the Management Consulting Business Group.
Operating profit declined to EUR -10.9 (5.6) million. Operating profit was burdened by lower than expected net sales as well as one-time items of EUR -10 (-7) million recorded mostly in the Regional Operations, consisting mainly of project losses originating from the former Urban Business Group, as well as the EUR -14 million write-off of the receivables from Venezuela recognised in June. Operating profit includes a one-time gain of EUR 19 million from the divestment in Finland in June. Operating profit increased in the Management Consulting Business Group, however it declined in all other Business Lines.
The Group's order prospects were solid. However, the number of identified larger project opportunities was stagnating. The Group's overall order intake decreased due to lower volumes in the Energy Business Group and Regional Operations Latin America, where exceptionally large orders were recorded in 2013. Nevertheless, several mid-sized projects were secured and the other Business Lines maintained a stable order intake. The Group's comparable order stock, excluding the divestment in Finland, increased from EUR 461.9 million at the end of 2013 to EUR 475.3 million on 30 September 2014. At the end of September 2013, comparable order stock was EUR 515.6 million and reported order stock was EUR 557.4 million. Reported order stock declined in all Business Lines except for the Industry Business Group where it remained stable.
The Group's unallocated costs increased in line with expectations due to the progressing centralisation of the global support functions, related outsourcing costs, restructuring of the Group Executive Committee in August as well as office rents following the sale of the head office building in Finland in 2013.
After a difficult start in a weakening market at the beginning of this year, the recovery of Regional Operations Northern Europe progressed satisfactorily. In other regions, however, sales were lower and losses were recorded in projects originating from the former Urban Business Group. Operations in Latin America were impacted by litigation costs related to an arbitration process and a delayed start-up of a major client project.
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 adjustments have proceeded according to plan, from re-shaping administrative processes and outsourcing elements of the support functions to streamlining the organisation and business.
Accordingly, Pöyry established a Global Sales and Project Management function and streamlined the Regional Operations as well as the Industry and Energy Business Groups with a view to improving efficiency, as announced in August. The Group Executive Committee structure was adjusted accordingly.
Improvements in terms of sales focus, project management and capacity management are being implemented across all units and are closely monitored as part of our regular management process."
This is a summary of the January-September 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 29 OCTOBER 2014
Pöyry's January-September 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 (EET). The event will be hosted by Jukka Pahta, CFO.
10:00 a.m. US EDT (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 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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