AI assistant
YIT Oyj — Earnings Release 2012
Feb 5, 2013
3249_rns_2013-02-05_4fd20688-a338-4066-969a-ac007a9ed2e2.html
Earnings Release
Open in viewerOpens in your device viewer
YIT's Financial Statements Bulletin for 2012: Operating profit increased significantly in International Construction Services – the balance sheet strengthened
YIT's Financial Statements Bulletin for 2012: Operating profit increased significantly in International Construction Services – the balance sheet strengthened
Helsinki, Finland, 2013-02-05 07:00 CET (GLOBE NEWSWIRE) --
YIT CORPORATION FINANCIAL STATEMENTS BULLETIN February 5,
2013 at 8:00 a.m. EET
YIT'S FINANCIAL STATEMENTS BULLETIN FOR 2012:
Operating profit increased significantly in International Construction Services
- the balance sheet strengthened
October 1 - December 31, 2012: All-time high residential sales in Russia during
the fourth quarter
-- The operating profit for the segments decreased by 11 percent in
October-December compared to the previous year, amounting to EUR 67.5
million (10-12/2011: EUR 76.2 million). The operating profit for
International Construction Services increased significantly compared to the
previous year. Operating profit also increased in Construction Services
Finland compared to the previous year and profitability was at a good
level. The profitability of completed projects and projects close to
completion in the project business of Building Services Northern Europe was
lower than forecasted, and project forecast changes had a negative impact
of approximately EUR 20 million on the operating profit for the fourth
quarter.
-- The revenue for the segments for the fourth quarter was on a par with the
previous year, amounting to EUR 1,277.8 million (10-12/2011: EUR 1,264.5
million). Revenue grew clearly in International Construction Services where
the growth of revenue was supported by the high volume of residential
production, record-high residential sales in Russia and clearly improved
revenue in the Baltic countries and in Central Eastern Europe. Revenue
remained on a par with the previous year in Construction Services Finland
and Building Services Central Europe, while revenue decreased in Building
Services Northern Europe.
-- The Group's profit before taxes based on segment reporting decreased by 10
percent in October-December from the year before, amounting to EUR 62.0
million (10-12/2011: EUR 68.6 million).
-- The Group's earnings per share based on segment reporting decreased by 12
percent in October-December from the year before, amounting to EUR 0.36
(10-12/2011: EUR 0.41).
January 1 - December 31, 2012: Good development in Construction Services
-- The operating profit for the segments increased by 3 percent compared to
the previous year, amounting to EUR 248.8 million (1-12/2011: EUR 240.5
million). Operating profit almost doubled in International Construction
Services and increased by 14 percent in Construction Services Finland.
-- The revenue for the segments for January-December was on a par with the
previous year, amounting to EUR 4,675.9 million (1-12/2011: EUR 4,524.7
million). Revenue grew in International Construction Services and
Construction Services Finland.
-- The order backlog of the segments was strong, 4 percent higher than a year
earlier, amounting to EUR 3,901.5 million (12/2011: EUR 3,752.7 million).
-- The Group's profit before taxes based on segment reporting increased by 5
percent from the year before, amounting to EUR 227.6 million (1-12/2011:
EUR 215.8 million).
-- The Group's earnings per share based on segment reporting increased by 10
percent from the year before, amounting to EUR 1.37 (1-12/2011: EUR 1.25).
GUIDANCE: The Group revenue based on segment reporting for 2013 to remain at
last year's level and operating profit to grow in 2013
YIT estimates the Group revenue based on segment reporting for 2013 to remain
at last year's level and operating profit to grow in 2013. The uncertainty
about the general macroeconomic development is still high and impacting YIT's
business operations and customers. The first quarter is typically the weakest
quarter due to the normal seasonal fluctuation of business.
DIVIDEND PROPOSAL: The Board of Directors proposes a dividend increase to EUR
0.75 per share
The Board of Directors proposes to the Annual General Meeting that a dividend
of EUR 0.75 per share be paid, representing 55 percent of the Group's net
profit for the period based on segment reporting.
Juhani Pitkäkoski, President and CEO: All-time high residential sales in Russia
during the fourth quarter
We are satisfied with the continued good development in Construction Services
during the fourth quarter. Our business operations in Russia strengthened
further and our residential sales reached an all-time record during the fourth
quarter: we sold almost 1,300 residential units in Russia. According to our
plan the profitability improved and the operating profit grew clearly in
International Construction Services, which was by far the most profitable
segment of the Group in terms of operating profit margin.
We responded to the continued favourable demand by starting up the construction
of in total almost 2,300 residential units during the fourth quarter. In
addition to low interest rates, the change in asset transfer tax legislation
taking effect at the beginning of March 2013 in Finland will support
residential sales in early 2013.
The personnel cuts of 800 employees in Building Services Northern Europe have
been completed and we anticipate that the profitability will improve during the
current year. Cost adjustments will be continued further during 2013. The
profitability of Building Services Central Europe was at a good level in the
fourth quarter, in Germany and Austria in particular.
Our cash flow was good during the fourth quarter and our balance sheet
strengthened. Our net debt decreased, amounting to EUR 746 million at the end
of December. Our equity ratio exceeded our strategic target of 35 percent.
KEY FIGURES
Development of the Group based on segment reporting (percentage of completion,
POC)
Revenue, EUR million 1-12/12 1-12/11 Change 10-12/1 10-12/1 Change
2 1
Building Services Northern 2,089.2 2,097.6 0% 552.7 600.1 -8%
Europe
Building Services Central 714.2 779.3 -8% 195.8 200.3 -2%
Europe
Construction Services 1,329.0 1,226.9 8% 342.6 335.7 2%
Finland
International Construction 599.6 489.2 23% 205.0 145.9 41%
Services
Other items -56.1 -68.2 -18.3 -17.5
Group, total 4,675.9 4,524.7 3% 1,277.8 1,264.5 1%
Operating profit, EUR 1-12/12 1-12/11 Change 10-12/1 10-12/1 Change
million 2 1
Building Services Northern 41.7 78.8 -47% -3.8 23.0
Europe
Building Services Central 26.9 33.3 -19% 10.4 9.3 11%
Europe
Construction Services 127.0 111.6 14% 38.1 32.1 19%
Finland
International Construction 73.9 37.2 99% 28.7 17.4 65%
Services
Other items -20.7 -20.4 -5.7 -5.6
Group, total 248.8 240.5 3% 67.5 76.2 -11%
Operating profit margin, % 1-12/12 1-12/11 10-12/12 10-12/11
Building Services Northern Europe 2.0 3.8 -0.7 3.8
Building Services Central Europe 3.8 4.3 5.3 4.6
Construction Services Finland 9.6 9.1 11.1 9.6
International Construction Services 12.3 7.6 14.0 11.9
Group, total 5.3 5.3 5.3 6.0
Order backlog, EUR million 12/12 12/11 Change 12/12 9/12 Change
Building Services Northern 819.0 913.1 -10% 819.0 904.9 -9%
Europe
Building Services Central 380.1 449.5 -15% 380.1 435.5 -13%
Europe
Construction Services 1,499.0 1,493.6 0% 1,499.0 1,541.0 -3%
Finland
International Construction 1,266.1 962.5 32% 1,266.1 1,207.4 5%
Services
Other items -62.8 -66.0 -62.8 -70.1
Group, total 3,901.5 3,752.7 4% 3,901.5 4,018.6 -3%
Key ratios of segment reporting (percentage of completion, POC)
1-12/1 1-12/1 Change 10-12/ 10-12/ Change
2 1 12 11
Profit before taxes, EUR million 227.6 215.8 5% 62.0 68.6 -10%
Profit for the review period, 171.2 156.7 9% 45.1 51.8 -12%
EUR million 1)
Earnings/share, EUR 1.37 1.25 10% 0.36 0.41 -12%
Operating cash flow after 90.4 -17.3 87.3 14.1 519%
investments, EUR million
Personnel at the end of period 25,283 25,996 -3% 25,283 25,996 -3%
1) attributable to equity holders of the parent company
Annual General Meeting 2013
YIT Corporation's Annual General Meeting will be held on Friday, March 15,
2013, starting at 10:00 a.m. (Finnish time, EET) in Finlandia Hall, Conference
Wing. Full notice of the meeting, including the Board of Directors' proposals
to the Annual General Meeting, will be published as a separate stock exchange
release on February 5, 2013.
Financial information in 2013
The Annual Report, including the financial statements for 2012, will be
published on YIT's website in Finnish and English at the latest on February 22,
2013. Interim Reports will be published on April 26, July 26 and October 30,
2013.
NEWS CONFERENCE, WEBCAST AND CONFERENCE CALL
YIT will hold a news conference on the financial statements bulletin on
Tuesday, February 5, 2013, at 10:00 a.m. (Finnish Time, EET). The news
conference will be held in English at YIT's head office at Panuntie 11, 00620
Helsinki, Finland. The event is intended for analysts, portfolio managers and
the media.
The news conference and the presentation, given by the company's President and
CEO, Juhani Pitkäkoski, can be viewed live on YIT's website at
www.yitgroup.com/webcast. The live webcast will start at 10:00 a.m. (Finnish
Time, EET). A recording of the webcast will be available at the same address
starting at approximately 12:00 noon (Finnish Time, EET).
It is also possible to participate in the news conference through a conference
call. Participants are requested to call the assigned number +44 (0)20 7162
0077 at least five minutes before the conference call begins, at 9:55 a.m.
(Finnish time, EET) at the latest. The participants will be asked to provide
the following conference ID: 927273. During the webcast and conference call,
all questions should be presented in English. At the end of the event, there
will also be an opportunity for the media to ask questions in Finnish.
Schedule in different time zones:
Financial Statements News conference, Recorded
Bulletin published conference call and live webcast
webcast available
EET 8:00 10:00 12:00
(Helsinki)
CET (Paris, 7:00 9:00 11:00
Stockholm)
GMT (London) 6:00 8:00 10:00
US EST (New 1:00 3:00 5:00
York)
Financial reports and other investor information are available at YIT's
website, www.yitgroup.com/investors. The materials may be ordered via the
website, by sending e-mail to [email protected] or by telephone on +358
20 433 2257.
YIT Corporation
Juhani Pitkäkoski
President and CEO
For further information, please contact:
Timo Lehtinen, Chief Financial Officer, YIT Corporation, tel. +358 45 670 0626,
[email protected]
Hanna-Maria Heikkinen, Vice President, Investor Relations, YIT Corporation,
tel. +358 40 826 2172, [email protected]
Distribution: NASDAQ OMX Helsinki, principal media, www.yitgroup.com
FINANCIAL STATEMENTS BULLETIN JANUARY 1 - DECEMBER 31, 2012
CONTENTS
-- Group financial development based on segment reporting
-- Development by business segment
-- Personnel
-- Strategic objectives
-- Group financial development based on Group reporting (IFRS, IFRIC 15)
-- Resolutions passed at the Annual General Meeting
-- Shares and shareholders
-- Most significant short-term business risks and risk management
-- Personnel development as part of corporate responsibility
-- Outlook for 2013
-- Board of Directors' proposal for the use of distributable equity
-- Tables to the Financial Statements Bulletin
GROUP FINANCIAL DEVELOPMENT BASED ON SEGMENT REPORTING
Accounting principles applied in the financial statements
YIT Corporation's management follows the development of the company's business
according to the percentage of completion-based reporting method for each
segment. Therefore, the descriptive part of the financial statements focuses on
describing the company's performance according to this reporting. YIT also
reports on its operations in accordance with IFRS guidelines, where the company
applies, for example, the IFRIC 15 guidelines. The effects of the differences
of the recognition principles are presented in detail in the tables to the
financial statements.
Revenue of the segments on a par with the previous year
Revenue, EUR million 1-12/12 1-12/11 Change 10-12/1 10-12/1 Change
2 1
Building Services Northern 2,089.2 2,097.6 0% 552.7 600.1 -8%
Europe
Building Services Central 714.2 779.3 -8% 195.8 200.3 -2%
Europe
Construction Services 1,329.0 1,226.9 8% 342.6 335.7 2%
Finland
International Construction 599.6 489.2 23% 205.0 145.9 41%
Services
Other items -56.1 -68.2 -18.3 -17.5
Group, total 4,675.9 4,524.7 3% 1,277.8 1,264.5 1%
The revenue of YIT's segments was on a par with the previous year in
January-December, amounting to EUR 4,675.9 million (1-12/2011: EUR 4,524.7
million). Revenue for the fourth quarter was on a par with the previous year,
amounting to EUR 1,277.8 million (10-12/2011: EUR 1,264.5 million). Revenue
grew in International Construction Services and in Construction Services
Finland in 2012. The growth in revenue was supported by the high volume of
housing production, continued good residential sales, own development project
sales in business premises construction and favourable development of
infrastructure services in Finland. Changes in foreign exchange rates increased
the segments' revenue for January-December by EUR 60.6 million and for the
fourth quarter by EUR 3.5 million compared to the previous year.
In January-December, Finland accounted for 40 percent (1-12/2011: 40%) of the
Group's revenue according to the segment reporting, Sweden for 15 percent
(1-12/2011: 17%), Germany for 12 percent (1-12/2011: 14%), Norway for 12
percent (1-12/2011: 12%), Russia for 10 percent (1-12/2011: 7%), Denmark for 3
percent (1-12/2011: 4%), Austria for 3 percent (1-12/2011: 2%), the Baltic
countries for 3 percent (1-12/2011: 2%) and other countries for 1 percent
(1-12/2011: 1%).
Operating profit of the segments increased compared to the previous year
Operating profit, EUR 1-12/12 1-12/11 Change 10-12/1 10-12/1 Change
million 2 1
Building Services Northern 41.7 78.8 -47% -3.8 23.0
Europe
Building Services Central 26.9 33.3 -19% 10.4 9.3 11%
Europe
Construction Services 127.0 111.6 14% 38.1 32.1 19%
Finland
International Construction 73.9 37.2 99% 28.7 17.4 65%
Services
Other items -20.7 -20.4 -5.7 -5.6
Group, total 248.8 240.5 3% 67.5 76.2 -11%
Operating profit margin, % 1-12/12 1-12/11 10-12/12 10-12/11
Building Services Northern Europe 2.0 3.8 -0.7 3.8
Building Services Central Europe 3.8 4.3 5.3 4.6
Construction Services Finland 9.6 9.1 11.1 9.6
International Construction Services 12.3 7.6 14.0 11.9
Group, total 5.3 5.3 5.3 6.0
YIT's operating profit based on segment reporting increased by 3 percent
compared to the previous year, amounting to EUR 248.8 million in
January-December (1-12/2011: EUR 240.5 million). The operating profit margin
based on segment reporting was 5.3 percent (1-12/2011: 5.3%). The operating
profit for the review period includes EUR -13.6 million of borrowing costs
according to IAS 23 (1-12/2011: EUR -9.4 million). The IAS 23 standard defines
the recording method of borrowing costs in long-term construction projects.
The operating profit for the fourth quarter decreased by 11 percent from the
previous year to EUR 67.5 million (10-12/2011: EUR 76.2 million). The operating
profit margin based on segment reporting was 5.3 percent (10-12/2011: 6.0%).
The operating profit for the fourth quarter includes EUR -4.5 million of
borrowing costs according to IAS 23 (10-12/2011: EUR -3.1 million).
In Building Services Northern Europe the profitability of completed projects
and projects close to completion in the project business (especially in Sweden,
Denmark and Norway) was lower than forecasted, and project forecast changes had
a negative impact on results of approximately EUR 20 million during the fourth
quarter. The operating profit for Building Services Central Europe,
Construction Services Finland and International Construction Services increased
from the previous year.
The depreciations booked by YIT amounted to EUR 44.9 million euros during the
review period (1-12/2011: EUR 39.6 million). The change in depreciation was
particularly due to the increased depreciation related to allocations from
business combinations, amounting to EUR 14.5 million euros (1-12/2011: EUR 10.1
million). YIT started reorganisation of operations in Poland during the second
quarter, as a result of which a write-down of EUR 0.9 million was made to the
goodwill during the third quarter in 2012.
Order backlog remained strong
Order backlog, EUR million 12/12 12/11 Change 12/12 9/12 Change
Building Services Northern 819.0 913.1 -10% 819.0 904.9 -9%
Europe
Building Services Central 380.1 449.5 -15% 380.1 435.5 -13%
Europe
Construction Services 1,499.0 1,493.6 0% 1,499.0 1,541.0 -3%
Finland
International Construction 1,266.1 962.5 32% 1,266.1 1,207.4 5%
Services
Other items -62.8 -66.0 -62.8 -70.1
Group, total 3,901.5 3,752.7 4% 3,901.5 4,018.6 -3%
The order backlog of YIT's segments was EUR 3,901.5 million at the end of
December (12/2011: EUR 3,752.7 million); approximately 4 percent more than at
the end of December the previous year. The order backlog decreased by 3 percent
from the end of September 2012, at which time it stood at EUR 4,018.6 million.
The order backlog of Building Services Northern Europe decreased on the
previous year as the result of a weaker market situation. In addition, the
order backlog of Building Services Central Europe decreased compared to the
previous year, which was particularly due to a weakened activity in large
projects in Germany. The order backlog of International Construction Services
grew clearly as a result of residential start-ups.
Capital expenditure and acquisitions
Gross capital expenditure on non-current assets included on the balance sheet
totalled EUR 44.6 million (1-12/2011: EUR 48.7 million) during
January-December, representing 0.9 percent (1-12/2011: 1.1%) of revenue.
Investments in construction equipment amounted to EUR 16.2 million (1-12/2011:
EUR 15.5 million) and investments in information technology to EUR 9.2 million
(1-12/2011: EUR 9.5 million). Other investments, including acquisitions,
amounted to EUR 19.2 million (1-12/2011: EUR 23.7 million).
During 2012, YIT made a total of eight acquisitions. A more detailed
description of the acquisitions made during the review period can be found in
the tables to the financial statements bulletin. When assessing acquisitions,
YIT's goal is to acquire companies that support YIT's strategy of becoming the
leading building system service provider in the Nordic countries and Central
Europe. The acquired company's business culture, areas of competence and
payback time of the purchase price of the acquired company are key criteria.
During the first half of the year 2012, YIT made five acquisitions in the
Building Services Northern Europe segment. In Sweden, YIT acquired the share
capital of Elektriska Installationer i Finspång AB, a company specialising in
electricity, telecommunications, data, alarm and low voltage installations, and
its subsidiary Kraftmontage i Finspång AB, specialising in electrical
installations in February. In Norway, YIT acquired the share capital of
electrical installations specialist Madla Elektro AS in March. The company has
around 30 employees. In Sweden, YIT acquired the security business operations
of Level5 security in April and the share capital of electrical installations
company Dala Elmontage Lindkvist & Bodin AB in May. The company has about 30
employees.
During the first half of the year 2012, YIT made two acquisitions in the
Building Services Central Europe segment. In Austria, YIT acquired the share
capital of P&P Kältenangebau GmbH, a cooling solutions and services provider,
and the share capital of WM Haustechnik GmbH, an HVAC solution provider, in
January 2012.
In December 2012 International Construction Services acquired 100% holding in
OOO Vesta, a company specialising in contracting and services within technical
building systems in Russia. International Construction Services also sold the
shares held in a Russian company called UJUT Service. The sale had no
significant impact to the results of the YIT Group.
The combined total acquisition price of the above acquisitions amounted to EUR
9.5 million. No goodwill is expected to be recognised as a result of the
acquisitions.
Strong cash flow during the fourth quarter
The Group's operating cash flow after investments for 2012 amounted to EUR 90.4
million (1-12/2011: EUR -17.3 million). Operating cash flow for 2012 was
affected particularly by growth in the sales inventory of own development
project production, plot investments in Russia and, on the other hand, a strong
cash flow in Building Services Northern Europe and in Construction Services
Finland.
The operating cash flow after investments for the fourth quarter amounted to
EUR 87.3 million (10-12/2011: EUR 14.1 million). Operating cash flow for the
fourth quarter 2012 was affected particularly by a strong cash flow in Building
Services.
The return on investment based on segment reporting amounted to 14.2 percent
for the last 12 months (10/2011-9/2012: 14.6%). At the end of December, the
Group's invested capital based on segment reporting amounted to EUR 1,943.0
million (9/2012: EUR 1,959.0 million). Invested capital is calculated by
deducting non-interest bearing liabilities from the balance sheet total.
Profit before taxes grew
Profit before taxes based on segment reporting increased by 5 percent compared
to the previous year, amounting to EUR 227.6 million in January-December
(1-12/2011: EUR 215.8 million). The profit before taxes for the fourth quarter
decreased by 10 percent from the previous year to EUR 62.0 million (10-12/2011:
EUR 68.6 million).
Earnings per share based on segment reporting increased by 10 percent from the
year before in 2012, amounting to EUR 1.37 (1-12/2011: EUR 1.25). Earnings per
share based on segment reporting for the fourth quarter decreased by 12 percent
from the year before, amounting to EUR 0.36 (10-12/2011: EUR 0.41).
In 2012 the effective tax rate of the Group based on segment reporting was 24.3
percent (1-12/2011: 26.9%). The reasons for the decrease in the tax rate were,
among others, a lower corporate tax rate in Finland and the deduction of
earlier losses in Russia. Furthermore, a larger portion of profit than before
was generated in countries with a lower tax rate.
Dividend proposal
YIT's target for dividend payout is 40-60 percent of net profit for the period.
The Board of Directors proposes to the Annual General Meeting that a dividend
of EUR 0.75 per share be paid, representing 55 percent of the Group's net
profit for the period based on segment reporting.
DEVELOPMENT BY BUSINESS SEGMENT
Development by business segment is presented using figures compliant with
segment reporting.
BUILDING SERVICES NORTHERN EUROPE
1-12/12 1-12/11 Change 10-12/ 10-12/ Change
12 11
Revenue, EUR million 2,089.2 2,097.6 0% 552.7 600.1 -8%
Operating profit, EUR million 41.7 78.8 -47% -3.8 23.0 -
Operating profit margin, % 2.0 3.8 -0.7 3.8 -
Return on operative invested 12.2 23.8 - - -
capital (last 12 months), %
12/12 12/11 Change 12/12 9/12 Change
Operative invested capital, EUR 320.6 372.9 -14% 320.6 394.8 -19%
million
Order backlog, EUR million 819.0 913.1 -10% 819.0 904.9 -9%
Revenue, EUR million 1-12/12 1-12/11 Change 10-12/12 10-12/11 Change
Sweden 704.3 706.5 -0% 188.5 213.9 -12%
Finland 600.5 637.2 -6% 150.9 173.1 -13%
Norway 580.4 528.6 10% 155.6 150.7 3%
Denmark 145.6 170.6 -15% 37.8 47.7 -21%
Russia and the Baltic 58.5 54.7 7% 20.0 14.7 36%
countries
Total 2,089.2 2,097.6 -0% 552.7 600.1 -8%
The revenue for Building Services Northern Europe remained at the level of the
previous year in January-December, amounting to EUR 2,089.2 million (1-12/2011:
EUR 2,097.6 million). Changes in foreign exchange rates increased the revenue
for the review period by EUR 49.8 million compared to the previous year. The
revenue for the fourth quarter decreased by 8 percent from the previous year to
EUR 552.7 million (10-12/2011: EUR 600.1 million). Changes in foreign exchange
rates increased the revenue for the fourth quarter by EUR 16.8 million compared
to the previous year.
The segment's operating profit decreased by 47 percent from the previous year
to EUR 41.7 million (1-12/2011: EUR 78.8 million). In Building Services
Northern Europe the operating loss in the fourth quarter amounted to EUR 3.8
million (operating profit 10-12/2011: EUR 23.0 million). The profitability of
completed projects and projects close to completion in the project business
(especially in Sweden, Denmark and Norway) was lower than forecasted, and
project forecast changes had a negative impact on results of approximately EUR
20 million during the fourth quarter. In addition, costs related to the
reorganisation of operations amounted to approximately EUR 3 million during the
fourth quarter. The profitability of service and maintenance operations was at
a satisfactory level. Contrary to normal seasonality the volume of service and
maintenance business remained however lower than expected towards the end of
the year as the customers postponed and decreased additional service and
maintenance work.
Project operations targeting improvement in profitability
New investments in building systems remained at a relatively low level. The
high uncertainty over the general macroeconomic development has had a negative
effect on decision-making by YIT's customers and thereby the order backlog of
the segment. YIT has accelerated the adjustment of its capacity due to the
decreased project demand. In the future, YIT will aim to increase the share of
service and maintenance business as well as strengthen its position,
particularly in large Design & Build projects.
YIT will continue to focus on improving the profitability of Building Services
Northern Europe. The restructuring of operations proceeded during the review
period in all countries where Building Services Northern Europe operates. The
earlier announced actions to reach cost savings of EUR 40 million have been
completed and personnel cuts amounting to 800 employees were finalised. As a
result of the actions carried out the company anticipates that the
profitability will improve during the current year. The efficiency of the
segment's regional organisations has been enhanced during the review period,
and organisation structures have been streamlined in order to improve the
control and profitability of operations. YIT has increased the level of
international procurement in its project business.
Cost adjustments will be continued particularly in project operations and
negotiations are underway for further personnel cuts amounting to approximately
600 employees during 2013. The aim is to improve the profitability of project
operations through more careful project selection, increasingly systematic risk
management and making procurement more efficient. In addition to these
efficiency improvement measures already under way, improvement in profitability
is targeted by making the tendering process more efficient and centralising the
project business and sufficient competence in centres of excellence. The
criteria for the tendering process have been tightened clearly, and the number
of offers prepared will be reduced. The systems and software used in offer
calculations will be harmonised, and authorisations for approving projects have
been made more stringent.
During the fourth quarter, YIT agreed on a total technical supplier project in
Tromsø, Norway. The value of the agreement was approximately EUR 6.7 million,
and YIT will deliver all technical installations related to electricity,
sanitation, heating, ventilation and building automation to a
14,000-square-metre police station. In Eskilstuna, Sweden, YIT has launched a
project to supply all installations related to electricity, heating, plumbing,
ventilation and sprinklers in the new Brunnsbacken nursing home.
The share of service and maintenance operations on a par with the previous year
YIT's aims to be the leading provider of energy-efficient technical systems,
solutions and life-cycle services in the Nordic countries and in Central
Europe. The target is to increase service and maintenance operations at a
faster rate than other operations.
Service and maintenance operations generated EUR 1,322.6 million (1-12/2011:
EUR 1,319.3 million), or 63 percent of the segment's total revenue in
January-December (1-12/2011: 63%). During the fourth quarter, service and
maintenance operations generated EUR 345.5 million (10-12/2011: EUR 396.5
million), or 63 percent of the segment's total revenue (10-12/2011: 66%).
Several new service and maintenance agreements were reached during the fourth
quarter. YIT is responsible for property maintenance at Outokumpu's Tornio
mills, for example. The cooperation covers an area of more than 500,000 square
metres, and it includes all technical building installation services, 24-hour
on-call duty and property control room services.
Number of energy efficiency projects is increasing
Marketing efforts within energy savings projects resulted in a new major energy
efficiency project at the office building Klockan 10 in the centre of
Stockholm, Sweden. The major project will be implemented during 2013, and it
includes all technical installations related to electricity, piping,
ventilation and sprinklers.
In Salo, Finland, YIT will improve energy efficiency in retail chain
Suur-Seudun Osuuskauppa's approximately 100 properties by performing an energy
assessment followed by required actions. The target set for energy savings is
15 percent by the year 2016.
BUILDING SERVICES CENTRAL EUROPE
1-12/1 1-12/1 Change 10-12/ 10-12/ Change
2 1 12 11
Revenue, EUR million 714.2 779.3 -8% 195.8 200.3 -2%
Operating profit, EUR million 26.9 33.3 -19% 10.4 9.3 11%
Operating profit margin, % 3.8 4.3 5.3 4.6
Return on operative invested 31.5 53.8 - -
capital (last 12 months), %
12/12 12/11 Change 12/12 9/12 Change
Operative invested capital, EUR 98.9 72.0 37% 98.9 113.7 -13%
million
Order backlog, EUR million 380.1 449.5 -15% 380.1 435.5 -15%
Revenue, EUR million 1-12/1 1-12/1 Change 10-12/ 10-12/ Change
2 1 12 11
Germany 542.2 633.2 -14% 147.8 162.8 -9%
Austria 156.6 107.0 44% 44.4 31.4 41%
Poland, the Czech Republic and 15.3 39.1 -54% 3.6 6.1 -41%
other countries
Total 714.2 779.3 -8% 195.8 200.3 -2%
The revenue of Building Services Central Europe decreased by 8 percent in
January-December compared to the previous year, amounting to EUR 714.2 million
(1-12/2011: EUR 779.3 million). Revenue for the fourth quarter was on a par
with the previous year, amounting to EUR 195.8 million (10-12/2011: EUR 200.3
million). The decrease in revenue during the year was due to weakening demand,
especially in the market for large projects in Germany, reorganisation of
operations in Germany and Poland and the low level of activity in Central
Eastern Europe. Revenue continued to increase clearly in Austria during the
financial period and amounted to EUR 156.6 million (1-12/2011: EUR 107.0
million).
The operating profit for January-December decreased by 19 percent from the
previous year to EUR 26.9 million (1-12/2011: EUR 33.3 million). The operating
profit for the comparison period was improved by a sales gain of EUR 5 million
from the divestment of Hungarian operations. The operating profit for the
fourth quarter increased by 11 percent from the previous year to EUR 10.4
million (10-12/2011: EUR 9.3 million). In particular, favourable development in
the German and Austrian business improved the profitability in the fourth
quarter. During the second quarter of 2012, YIT initiated the restructuring of
operations in Poland, aiming to decrease the share of project business and
increase the share of profitable service and maintenance operations.
Demand in the Central European building systems market weakened slightly during
the fourth quarter. The order backlog amounted to EUR 380.1 million at the end
of December (12/2011: EUR 449.5 million). The order backlog at the end of
December decreased by 15 percent from the previous year and by 13 percent from
the end of September 2012 (9/2012: EUR 435.5 million).
Service and maintenance revenue is growing
Service and maintenance operations generated EUR 219.8 million (1-12/2011: EUR
191.7 million), or 31 percent of the segment's total revenue in
January-December (1-12/2011: 25%). The share of service and maintenance was
significantly lower in Building Services Central Europe (10-12/2012: 33%) than
in Building Services Northern Europe (10-12/2012: 63%), and therefore the
opportunities for increasing it in Building Services Central Europe are good.
The volume of service and maintenance was already increasing, generating EUR
64.0 million of revenue for the fourth quarter, or 23 percent more than the
previous year.
During the fourth quarter, YIT reached new, minor service and maintenance
agreements and several long-term agreements were renewed and extended, such as
the facility management contract for technical services to Germany's national
research centre for aeronautics and space.
Lower demand in the German project market
The demand for new building system investments was lower than the previous
year. In particular, the level of activity in major projects slowed down in
Germany. In spite of the slowing down of the market, YIT secured several
significant projects during the fourth quarter. YIT is responsible for the
renovation of the famous 29-storey Dreischeibenhaus office building in
Düsseldorf. YIT will also deliver sprinkler and ventilation solutions to the
new ”Satellite” terminal at Munich Airport, a technically demanding ventilation
system to the Goodyear Dunlop production facilities in Fürstenwalde, Germany,
and all new all mechanical systems to a new 54,000 square-metre hospital in
Mistelbach-Gänserndorf, Austria.
CONSTRUCTION SERVICES FINLAND
1-12/12 1-12/11 Change 10-12/ 10-12/ Change
12 11
Revenue, EUR million 1,329.0 1,226.9 8% 342.6 335.7 2%
Operating profit, EUR million 127.0 111.6 14% 38.1 32.1 19%
Operating profit excluding IAS 134.1 117.3 14% 40.2 33.8 19%
23 adjustment, EUR million
Operating profit margin, % 9.6 9.1 11.1 9.6
Operating profit margin 10.1 9.6 11.7 10.1
excluding IAS 23 adjustment,
%
12/12 12/11 Change 12/12 9/12 Change
Operative invested capital, 581.7 558.4 4% 581.7 546.8 6%
EUR million
- of which plot reserves, 284.2 294.6
MEUR
Order backlog, EUR million 1,499.0 1,493.6 0% 1,499.0 1,541.0 -3%
1-12/12 1-12/11
Return on operative invested capital (last 12 months), % 23.5 24.0
The revenue of Construction Services Finland amounted to EUR 1,329.0 million in
January-December and it increased by 8 percent from the previous year
(1-12/2011: EUR 1,226.9 million). Revenue for the fourth quarter was on a par
with the previous year, amounting to EUR 342.6 million (10-12/2011: EUR 335.7
million). The growth in revenue for the fourth quarter was supported by the
high volume of housing production, continued good residential sales, own
development project sales in business premises construction and increase in the
volume of infrastructure services.
The segment's operating profit increased by 14 percent in January-December
compared to the previous year, amounting to EUR 127.0 million (1-12/2011: EUR
111.6 million). The operating profit for the review period includes EUR -7.1
million of borrowing costs according to IAS 23 (1-12/2011: EUR -5.7 million).
The operating profit for the fourth quarter increased by 19 percent from the
previous year to EUR 38.1 million (10-12/2011: EUR 32.1 million). The operating
profit for the fourth quarter includes EUR -2.2 million of borrowing costs
according to IAS 23 (10-12/2011: EUR -1.7 million).
YIT has revised its estimate related to the definition of the 10-year liability
for construction. The amendment had a positive impact of approximately EUR 6.1
million on the operating profit for the fourth quarter, the provision was EUR
42.5 million at the end of 2012 (12/2011: EUR 44.2 million).
The order backlog at the end of December remained on a par with the previous
year, amounting to EUR 1,499.0 million (12/2011 EUR 1,493.6 million). The order
backlog remained unchanged from the end of September 2012, at which time it
stood at EUR 1,541.0 million.
The segment's capital tied into plot reserves totalled EUR 284.2 million at the
end of December (9/2012: EUR 287.8 million). The reserves included 1,796,000
square metres of residential plots (9/2012: 1,824,000) and 877,000 square
metres of business premises (9/2012: 598,000).
Good residential sales to consumers continued
Residential sales continued at a good level in the fourth quarter. The demand
focused particularly on residential units in the final stages of construction
and completed residential units. Housing prices remained stable during the
review period. Interest rates remained low during the fourth quarter, but
customers' access to financing became slightly more difficult with banks
tightening their credit terms. Development of consumer confidence and loan
terms are key factors for the development of residential sales in 2013. In
January the company sold approximately 110 residential units to consumers.
Residential construction in Finland, number of residential units
1-12/1 1-12/1 Change 10-12/1 7-9/12 4-6/12 1-3/12
2 1 2
Sold 2,757 2,765 0% 597 668 717 775
- of which directly to 1,869 1,893 -1% 505 414 497 453
consumers
Start-ups 2,856 3,221 -11% 531 770 996 559
- of which directly to 1,968 2,349 -16% 439 516 776 237
consumers
Completed 2,722 3,674 -26% 579 591 936 616
- of which directly to 2,364 2,477 -5% 427 591 847 499
consumers
Under construction* 4,240 4,105 3% 4,240 4,288 4,109 4,049
- of which sold* 2,409 2,208 9% 2,409 2,409 2,293 2,398
For sale* 2,282 2,180 5% 2,282 2,348 2,245 1,966
- of which completed 451 283 59% 451 469 429 315
* At the end of the period.
Changes in the number of residential units may take place after the start of
construction due to the division or combination of residences.
The focus for YIT's housing construction is on residential development projects
aimed directly at consumers in accordance with market demand. During the fourth
quarter, YIT started the construction of 439 residential units as own
development projects. In addition, YIT started up the construction of a total
of 92 residential units as free funded and subsidised projects as well as
tender-based projects in the fourth quarter.
YIT has actively replenished its plot reserves by acquiring plots and making
preliminary agreements on plots in order to also ensure good opportunities for
residential start-ups in the future.
Of the residential units under construction, 57 percent have been sold
(12/2011: 54%), which reduces YIT's sales risk. The sales inventory is focused
on medium-priced residential production: over 70 percent of the residential
units for sale are priced at less than EUR 300,000.
YIT is well prepared to adjust its residential production according to the
market situation. The costs of completing the current residential and business
premises development projects for sale amounted to EUR 274.0 million at the end
of December 2012 (12/2011: EUR 346.4 million).
Stable development in the business and office premises market continued
The development of the business and office premises market continued to be
stable in the fourth quarter, and the order backlog of YIT's business and
office premises operations remained at a favourable level. Competition for
business premises contracting became tougher during the second half of the
year. The leasing of business and office premises under construction proceeded
well in October-December: lease agreements were signed on approximately 8,800
square metres of premises. Rents for business premises and investors' yield
requirements remained stable in the fourth quarter.
YIT and HGR Property Partners sold a historic premium property at
Ruoholahdenkatu 23 to Cordea Savills during the fourth quarter. The property
has a total floor area of about 7,000 square metres, and the value of the
transaction was approximately EUR 27 million. Ruoholahdenkatu 23 was awarded
Gold level Certification based on the LEED Core & Shell standards in December.
In addition, the Triotto office building in Käpylä, Helsinki, was acquired by
HANSAINVEST, a German-based real estate investor. The newly built building has
a total floor area of about 15,500 square metres, and it has head office
premises for two tenants. The contract price includes the building plot
purchased from the City of Helsinki and totals about EUR 56.5 million. An
international Gold level LEED certification has been sought for Triotto.
Road projects proceeded as planned in infrastructure services
The order backlog of infra services at the end of December 2012 decreased from
the previous year. Significant on-going road projects proceeded according to
plans during the fourth quarter.
INTERNATIONAL CONSTRUCTION SERVICES
1-12/1 1-12/1 Change 10-12/ 10-12/ Change
2 1 12 11
Revenue, EUR million 599.6 489.2 23% 205.0 145.9 41%
Operating profit, EUR million 73.9 37.2 99% 28.7 17.4 65%
Operating profit excluding IAS 80.4 40.9 97% 31.0 18.9 64%
23 adjustment, EUR million
Operating profit margin, % 12.3 7.6 14.0 11.9
Operating profit margin 13.4 8.4 15.1 12.9
excluding IAS 23 adjustment, %
12/12 12/11 Change 12/12 9/12 Change
Operative invested capital, 708.3 602.2 18% 708.2 703.8 1%
EUR million
- of which plot reserves, MEUR 389.3 349.2 11% 389.3 406.6 -4%
Order backlog, EUR million 1,266.1 962.5 32% 1,266.1 1,207.4 5%
1-12/12 1-12/11
Return on operative invested capital (last 12 months), % 12.3 6.5
The revenue of International Construction Services for January-December
increased by 23 percent from the previous year to EUR 599.6 million (1-12/2011:
EUR 489.2 million). The revenue for the fourth quarter increased by 41 percent
from the previous year to EUR 205 million (10-12/2011: EUR 145.9 million).
The operating profit for January-December almost doubled from the previous year
to EUR 73.9 million (1-12/2011: EUR 37.2 million). The segment's operating
profit for January-December includes EUR -6.5 million of borrowing costs
according to IAS 23 (1-12/2011: EUR -3.7 million). The operating profit for the
fourth quarter amounted to EUR 28.7 million (10-12/2011: EUR 17.4 million). The
operating profit for the fourth quarter includes EUR -2.3 million of borrowing
costs according to IAS 23 (10-12/2011: EUR -1.5 million).
Excessive levels of ammonia were found in residential units built by the
company in St. Petersburg in September 2011, caused by an additive used by the
concrete supplier. YIT made a provision of EUR 10.0 million during the third
quarter of 2011 to cover the costs of rectifying the problem. The incurred
costs have been lower than expected, due to which the company has cancelled EUR
7.0 million of the said provision in the third quarter of 2012. The costs
materialised by the end of 2012 amounted to EUR 2.6 million. The company has
received indemnities from its insurance company, covering the costs of research
and renovation of the apartments. YIT has adopted increasingly strict
procurement guidelines based on which the concrete suppliers are now required
to have stricter control measures and delivery responsibilities.
Due to the high number of residential start-ups, the order backlog at the end
of December increased by 32 percent on the previous year, amounting to EUR
1,266.1 million (12/2011: EUR 962.5 million). The order backlog increased
slightly from the end of September 2012, at which time it stood at EUR 1,207.4
million. The segment's order backlog was partially improved by the
strengthening of the ruble, which had an impact of EUR 5.2 million in
October-December.
The costs of completing the current residential and business premises
development projects for sale amounted to EUR 554 million at the end of
December 2012 in International Construction Services (12/2011: EUR 350.0
million).
The segment's capital tied into plot reserves totalled EUR 389.3 million at the
end of December (9/2012: EUR 406.6 million). The reserves included 2,590,000
square metres of residential plots (9/2012: 2,622,000) and 574,000 square
metres of business premises in Russia, the Baltic countries, the Czech Republic
and Slovakia (9/2012: 686,000).
The segment's return on operative invested capital for the last 12 months
improved to 12.3 percent, but was still below the Group's strategic target
(20%). YIT aims to increase the segment's return on invested capital primarily
by increasing the volume of operations, improving profitability and increasing
further capital efficiency.
Russian residential sales continued well
Russia generated 77 percent of the revenue of International Construction
Services for January-December (1-12 /2011: 80%). Revenue in Russia increased
from the previous year to EUR 463.1 million (1-12/2011: EUR 393.2 million).
The capital tied into plot reserves in Russia totalled EUR 302.0 million at the
end of December (9/2012: EUR 323.2 million). The reserves included 2,179,000
square metres of residential plots (9/2012: 2,255,000) and 446,000 square
metres of business premises (9/2012: 546,000).
Residential construction in Russia, number of residential units
1-12/12 1-12/11 Change 10-12/12 7-9/12 4-6/12 1-3/12
Sold 4,209 3,561 18% 1,288 1,032 934 955
Start-ups 5,487 4,492 22% 1,818 1,006 1,123 1,540
Completed 1) 4,197 1,576 166% 2,217 622 765 593
Under construction* 8,662 7,365 18% 8,662 8,995 8,670 8,313
- of which sold* 3,020 2,632 15% 3,020 3,576 3,159 2,881
For sale* 6,530 5,142 27% 6,530 5,961 5,987 5,799
- of which completed 888 409 117% 888 542 476 367
* At the end of the period.
Under construction at 1-12/1 1-12/1 Change 10-12/ 7-9/12 4-6/12 1-3/12
the end of the period 2 1 12
St. Petersburg 2,686 2,396 12% 2,686 2,323 2,290 2,102
Moscow region 3,796 3,142 21% 3,796 4,259 4,016 3,882
Yekaterinburg, Kazan, 2,180 1,827 19% 2,180 2,413 2,364 2,329
Don Rostov and Moscow
1) Completion of the projects requires commissioning by the authorities.
In Russia, the focus of operations is on residential development projects in
St. Petersburg, Moscow and cities in the Moscow region, Yekaterinburg,
Rostov-on-Don and Kazan. YIT actively continued plot investments in the Moscow
region, Yekaterinburg, Rostov-on-Don, Kazan and Tyumen during the fourth
quarter.
Residential sales have been supported by YIT's established position as a
reliable construction company in Russia, YIT's diverse housing offering, YIT's
own marketing and promotion measures and extensive housing loan cooperation
with banks. The significance of loan financing has increased in Russia, and, in
the fourth quarter, customers have taken out housing loans in 44 percent of
YIT's residential sales. Residential sales were also supported by the limited
supply of new housing, continued favourable consumer confidence and oil prices.
Interest rates for mortgages increased further in Russia during the fourth
quarter, but remained at a locally moderate level.
In January 2013 the company sold approximately 240 residential units in Russia.
The first quarter of the year is always the weakest in Russia in terms of sales
due to the holiday season.
Housing prices continued to increase at a moderate rate during 2012 in Russia,
and YIT slightly increased the prices of its residential units in all of its
operating cities in Russia.
Based on the favourable demand, YIT has actively started up new residential
projects in Russia, and in the fourth quarter start-ups began in St.
Petersburg, the Moscow region, Kazan and Yekaterinburg. In 2012, YIT expanded
its operations to eight cities in the Moscow region, and during the fourth
quarter to Tyumen. Tyumen, a city with almost 700,000 residents famous for its
natural gas and oil reserves, is one of the wealthiest cities in Russia,
located in Western Siberia approximately 300 kilometres from Yekaterinburg.
Several Western companies operate in the city. The construction of a
residential block is being planned on the plot acquired by YIT. A total of six
18-storey buildings will be built on the plot, with a total of 890 planned
residential units.
In December 2012, YIT and the real estate investor SATO signed an agreement
whereby SATO will buy 80 residential units and 25 parking spaces in YIT's new
Novomoskovski residential project located in St. Petersburg. The total value of
the contract was approximately EUR 13 million.
The number of residential units for sale has been increased in a controlled
manner, and the sales inventory at the end of December was geographically
balanced. The number of completed but unsold residential units has increased
slightly at the end of the year due to several finished projects. Of the
residential units under construction, 35 percent had been sold (12/2011: 36%).
After the delivery of residential projects, YIT offers its customers service
and maintenance in St. Petersburg, the Moscow region, Yekaterinburg and
Rostov-on-Don. At the end of December 2012, YIT was responsible for the service
and maintenance of approximately 14,000 residential units.
Customer interest in energy efficiency is increasing in Russia. A pilot project
focusing on energy efficiency has been continued and solar panels deployed in
the first residential project in Yekaterinburg.
YIT's volume in the Russian business premises market remained low during the
fourth quarter of the year. YIT signed an agreement on the sale of a
four-hectare plot to Siemens in the Gorelovo industrial park in St. Petersburg
in the fourth quarter.
Revival of the residential market is slow in the Baltic countries and Central
Eastern Europe
Estonia, Latvia, Lithuania, the Czech Republic and Slovakia accounted for 23
percent of the revenue of International Construction Services for
January-December (1-12/2011: 20%). Revenue generated in these countries
increased by 42 percent compared to the year before to EUR 136.5 million
(1-12/2011: EUR 96.0 million). The capital tied into plot reserves in the
Baltic countries, the Czech Republic and Slovakia totalled EUR 87.3 million at
the end of December (9/2012: EUR 83.4 million). The reserves included 411,000
square metres of residential plots (9/2012: 367,000) and 128,000 square metres
of business premises (9/2012: 140,000).
Profitability improved in the Baltic countries and Central Eastern Europe in
the fourth quarter, but was still below the segment average YIT aims to shift
the focus of operations from tender-based production to own residential
development projects in order to improve profitability as residential demand
revives.
Residential construction in the Baltic countries and Central Eastern Europe,
number of residential units
1-12/12 1-12/11 Change 10-12/12 7-9/12 4-6/12 1-3/12
Sold 384 364 5% 118 99 92 75
Start-ups 530 526 1% 0 246 284 0
Completed 421 288 46% 107 35 47 232
Under construction* 715 614 16% 715 822 615 378
- of which sold* 108 171 -37% 108 131 110 104
For sale* 743 611 22% 743 861 718 526
- of which completed 136 168 -19% 136 170 213 252
* At the end of the period.
The construction of 530 residential units was started in Estonia, Latvia,
Lithuania, the Czech Republic and Slovakia during 2012 (1-12/2011: 526). At the
end of December, there were 715 residential units under construction (12/2011:
614). During the review period, housing prices increased slightly in the Baltic
countries and remained stable in the Czech Republic and Slovakia.
YIT's residential sales inventory has grown in the Baltic countries, the Czech
Republic and Slovakia, and YIT aims to increase the number of residential units
for sale in accordance with demand. In January-December, a total of 384
residential units were sold in these countries (1-12/2011: 364), of which 118
were sold in October-December (10-12 /2011: 97). At the end of December, there
were 743 residential units for sale (12/2011: 611), of these 136 were completed
(12/2011: 168). The number of residential units completed during 2012 was 421
(1-12/2011: 288). YIT's Hajek residential construction project was nominated
the best residential construction project of the year in Prague, the Czech
Republic.
Construction of business premises in the Baltic countries and Central Eastern
Europe
During the fourth quarter, YIT started up the construction of a new office
building in Vilnius, Lithuania. Several tender-based projects have also been
delivered to customers in the Baltic countries (University of Tartu in Estonia
and the library of the Vilnius University in Lithuania).
PERSONNEL
Personnel by business segment 12/12 12/11 Change 12/12 9/12 Change
Building Services Northern 15,159 15,900 -5% 15,159 15,538 -2%
Europe
Building Services Central Europe 3,380 3,506 -4% 3,380 3,441 -2%
Construction Services Finland 3,540 3,429 3% 3,540 3,635 -3%
International Construction 2,808 2,753 2% 2,808 2,782 1%
Services
Corporate Services 396 408 -3% 396 392 1%
Group, total 25,283 25,996 -3% 25,283 25,788 -2%
Personnel by country/region 12/12 12/11 Change 12/12 9/12 Change
Finland 8,868 9,165 -3% 8,868 9,160 -3%
Sweden 4,492 4,770 -6% 4,492 4,542 -1%
Norway 3,642 3,602 1% 3,642 3,708 -2%
Germany 2,450 2,627 -7% 2,450 2,502 -2%
Russia 2,650 2,498 6% 2,650 2,647 0%
Denmark 1,104 1,218 -9% 1,104 1,158 -5%
Baltic countries 991 1,067 -7% 991 972 2%
Other countries (Central Europe 1,086 1,049 4% 1,086 1,099 -1%
excluding Germany)
Group, total 25,283 25,996 -3% 25,283 25,788 -2%
In 2012, the Group employed 25,833 people on average (1-12/2011: 26,254). At
the end of the year, the Group employed 25,283 people (12/2011: 25,996). At the
end of 2012, 87 percent of the Group's personnel were male (2011: 88%) and 13
percent female (2011: 12%). The personnel expenses for 2012 amounted to a total
of EUR 1,410.6 million (1-12/2011: EUR 1,357.2 million).
YIT employed over 2,000 trainees during 2012. The trainees worked in a variety
of production-related and administrative tasks at YIT in construction, building
services, industrial and corporate services functions.
The cost effect of YIT's share-based incentive scheme was about EUR 5.1 million
in January-December 2012 (1-12/2011: EUR 3.4 million).
STRATEGIC OBJECTIVES
YIT Corporation's Board of Directors confirmed the Group's strategy for
2013-2014 on September 20, 2012. The key strategic objective is increasingly
focused, balanced and profitable growth. It was decided that the Group's
strategic long-term targets are kept unchanged: average annual revenue growth
of more than 10 percent, return on investment of 20 percent, operating cash
flow after investments sufficient for dividend payout and reduction of debt,
equity ratio of 35 percent and dividend payout of 40-60 percent of net profit
for the period. The target levels are based on figures reported by the company
on the basis of the percentage of completion in accordance with the current
emphasis. When determining the target levels, the assumption was made that
economic growth in YIT's market areas will continue.
Achievement of strategic targets
YIT's financial targets Target level Performance in
2012*
Revenue growth More than 10 percent annually on 3%
average
Return on investment 20 percent 14.2%
Operating cash flow after Sufficient for dividend payout and EUR 90.4
investments reduction of debt million
Equity ratio 35 percent 35.4%
Dividend payout 40-60 percent of net profit for the 54.9%**)
period
*) Based on segment reporting
**) Board of Director's proposal to the Annual General Meeting to be held on
March 15, 2013.
In terms of business operations, the focus areas of YIT's growth continue to be
building systems service and maintenance operations and residential
construction. Growth is being sought organically and through acquisitions.
Particular focus areas for growth include residential construction in Russia
and building services in Germany.
To support its strategic goals, YIT has launched three development programmes
which focus on energy-efficient solutions, best quality living experience and
efficient building services. Building Services Northern Europe will focus on
improving profitability and strengthening cash flow. In addition to increasing
the share of service and maintenance business, Building Services Central Europe
will seek to strengthen its position during the strategy period, particularly
in large Design & Build projects. In residential construction, YIT is investing
in innovative solutions and strengthening its forerunner status. In
Construction Services Finland, YIT is responding to customer demand by
particularly increasing the production of moderately priced housing during the
strategy period. YIT aims to expand in building system services in the
German-speaking region further. In International Construction Services, the
company is focussing on expanding in Russia. The focus of operations in all
construction business areas is on increasing the share of own development
production.
YIT published a stock exchange release on the confirmation of the strategy on
September 21, 2012, and materials for the Capital Market Day focusing on the
strategic focus areas on September 25, 2012.
GROUP FINANCIAL DEVELOPMENT BASED ON GROUP REPORTING (IFRS, IFRIC 15)
1-12/12 1-12/11 Change 10-12/1 10-12/1 Change
2 1
Revenue, EUR million 4,705.9 4,382.1 7% 1,284.9 1,190.4 8%
Operating profit, EUR 259.2 200.0 30% 72.8 57.5 27%
million
Operating profit margin, % 5.5 4.6 5.7 4.8
Profit before taxes, EUR 238.0 175.2 36% 67.3 49.9 35%
million
Profit for the review 178.7 124.4 44% 49.1 34.9 41%
period, EUR million 1)
Earnings/share, EUR 1.43 0.99 44% 0.39 0.27 44%
Operating cash flow after 90.4 -17.3 87.3 14.1 519%
investments, EUR million
1) attributable to equity holders of the parent company
12/12 12/11 Change 12/12 9/12 Change
Order backlog, EUR million 4,245.1 4,148.6 2% 4,245.1 4,462.0 -5%
Return on investment (last 14.6 12.0 14.6 13.7
12 months) %
Equity ratio, % 33.2 30.2 33.2 31.6
Gearing ratio, % 72.1 80.4 72.1 83.7
Revenue based on Group reporting increased by 7 percent compared to the
previous year, amounting to EUR 4,705.9 million in January-December (1-12/2011:
EUR 4,382.1 million). The revenue for the fourth quarter increased by 8 percent
compared to the previous year, amounting to EUR 1,284.9 million (10-12/2011 EUR
1,190.4 million). In Group-level reporting, own residential development
projects are only recognised as income upon project delivery. The completion
schedules for own development projects affect the Group's revenue recognition,
and therefore Group-level figures may fluctuate greatly between different
quarters. The number of residential units completed during the fourth quarter
was higher than the previous year. The number of residential units completed in
Russia and Finland was clearly higher than the year before, while in the Baltic
countries and Central Eastern Europe the number of residential units completed
was lower than the year before.
Following the IFRIC 15 adjustment, the Group's operating profit for
January-December increased by 30 percent compared to the previous year,
amounting to EUR 259.2 million (1-12/2011: EUR 200.0 million). Following the
IFRIC 15 adjustment, the Group's operating profit margin for January-December
was 5.5 percent (1-12/2011: 4.6%). The operating profit for the fourth quarter
increased by 27 percent from the previous year to EUR 72.8 million (10-12/2011:
EUR 57.5 million). The operating profit margin for the fourth quarter was 5.7
percent (10-12/2011: 4.8%).
Profit before taxes based on Group reporting increased by 36 percent compared
to the previous year, amounting to EUR 238.0 million in January-December
(1-12/2011: EUR 175.2 million). Profit before taxes for the fourth quarter grew
clearly and amounted to EUR 67.3 million (10-12/2011: EUR 49.9 million).
Earnings per share based on Group reporting increased by 44 percent from the
year before in January-December, amounting to EUR 1.43 (1-12/2011: EUR 0.99).
Earnings per share for the fourth quarter grew clearly and amounted to EUR 0.39
(10-12/2011: EUR 0.27).
In 2012 the effective tax rate of the Group was 24.4 percent (1-12/2011:
28.7%). The reasons for the decrease in the tax rate were, among others, a
lower corporate tax rate in Finland and the deduction of earlier losses in
Russia. Furthermore, a larger portion of profit than before was generated in
countries with a lower tax rate.
The order backlog based on Group reporting amounted to EUR 4,245.1 million at
the end of December (12/2011: EUR 4,148.6 million).
Return on investment amounted to 14.6 percent for the last 12 months
(10/2011-9/2012: 13.7%). At the end of December, the Group's invested capital
amounted to EUR 1,941.0 million (12/2011: EUR 1,855.8 million). Invested
capital is calculated by deducting non-interest bearing liabilities from the
balance sheet total. The balance sheet total at the end of December was EUR
3,682.0 million (9/2012: EUR 3,722.3 million).
Of the Group's invested capital, 30 percent (9/2012: 28%), or EUR 585.2 million
(9/2012: EUR 550.7 million) was invested in Russia. The amount of capital
invested in Russia increased slightly compared to the end of September, and the
exchange rate changes of the ruble decreased the capital invested by EUR 2.8
million in October-December. Smaller project sizes, gradual building in
projects, sales of residential units at an earlier construction phase, improved
terms of payment and an increased share of mortgage deals all increase capital
efficiency.
The equity ratio increased compared to the end of September 2012, amounting to
33.2 percent (9/2012: 31.6%).
Diverse capital structure and good liquidity position
YIT's financing consists of diverse sources of financing and its liquidity
position remained good at the end of December 2012. Cash and cash equivalents
amounted to EUR 175.7 million at the end of December (9/2012: EUR 150.0
million). In addition, undrawn overdraft facilities and committed credit
facilities amounted to a total of EUR 358.7 million. YIT had a total of EUR 280
million in committed credit facilities, of which EUR 30 million falls due in
December 2014 and EUR 250 million in December 2015. These committed credit
facilities do not include an obligation to maintain financial key ratios, i.e.
covenants.
The gearing ratio decreased clearly compared with the end of September 2012 as
the result of the good cash flow, amounting to 72.1 percent at the end of
December (9/2012: 83.7%). Net interest-bearing debt decreased and amounted to
EUR 746.2 million at the end of December (9/2012: EUR 827.3 million).
Net financial expenses decreased in January-December compared to the previous
year and amounted to EUR 21.2 million (1-12/2011: EUR 24.8 million), or 0.5
percent of the Group's revenue (1-12/2011: 0.6%). The net financial expenses
include EUR 17.4 million of capitalisations of interest expenses in compliance
with IAS 23 (1-12/2011: EUR 12.2 million). The exchange rate differences
included in the net financial expenses, totalling EUR -5.8 million (1-12/2011:
EUR -4.1 million), were comprised almost entirely of costs of hedging debt
investments in Russia.
Net financial expenses decreased in the fourth quarter compared to the previous
year and amounted to EUR 5.5 million (10-12/2011: EUR 7.6 million), or 0.4
percent (10-12/2011: 0.6%) of the Group's revenue. The net financial expenses
include EUR 4.9 million of capitalisations of interest expenses in compliance
with IAS 23 (10-12/2011: EUR 2.9 million). The exchange rate differences
included in the net financial expenses totalled EUR -1.3 million (10-12/2011:
EUR -2.1 million).
The hedged ruble exposure increased from the end of September 2012. At the end
of December 2012, EUR 125.2 million of the capital invested in Russia were
comprised of debt investments (9/2012: EUR 118.2 million) and EUR 460.0 million
were equity investments or similar fixed net investments (9/2012: EUR 432.5
million). In accordance with YIT's hedging policy, the debt investments are
hedged against exchange rate risk, while equity investments are not hedged due
to their permanent nature.
Borrowings decreased and amounted to EUR 921.9 million at the end of December
(9/2012: EUR 977.3 million), and the average interest rate was 3.1 percent
(9/2012: 3.0%). Fixed-rate loans accounted for approximately 75 percent of the
Group's borrowings (9/2012: 64%). Of the loans, approximately 40 percent had
been raised directly from the capital and money markets (9/2012: 50%),
approximately 45 percent from banks and other financial institutions (9/2012:
39%) and approximately 15 percent from insurance companies (9/2012: 11%).
The maturity distribution of long-term loans was balanced. A total of EUR 106.0
million of long-term loans will mature during 2013. Long-term fixed-rate TyEL
loans and new interest hedges increased the proportion of fixed interest rates
in YIT's loan portfolio during the fourth quarter.
The total amount of construction-stage contract receivables sold to financial
institutions decreased slightly from the end of September 2012, amounting to
EUR 265.5 million at the end of December (9/2012: EUR 269.5 million). Of this
amount, EUR 175.4 million was included in current borrowings on the balance
sheet (9/2012: EUR 152.9 million) and the remainder comprises off-balance sheet
items in accordance with IAS 39. Interest expenses on receivables sold to
financial institutions amounted to EUR 4.0 million during the review period
(1-12/2011: EUR 5.1 million), of which EUR 0.5 million in the fourth quarter
(10-12/2011: EUR 1.3 million) and these are fully included in the financial
expenses.
Participations in the housing corporation loans of unsold completed residential
units amounted to EUR 77.5 million at the end of December (9/2012: EUR 75.1
million), and they are included in current borrowings. The interest on the
participations was included in housing corporation charges and was thus booked
in project expenses. Interest on the participations amounted to EUR 2.2 million
in the review period (1-12/2011: EUR 1.4 million) and EUR 0.7 million during
the fourth quarter (10-12/2011: EUR 0.4 million).
During the second quarter, YIT Corporation paid out dividends of EUR 87.7
million for 2011 in compliance with the resolution of the Annual General
Meeting.
The Group's solid financial position enables the implementation of YIT's growth
strategy and the acquisitions and plot investments required by it. On the other
hand, the Group has also prepared for macroeconomic uncertainty by diversifying
the sources of financing and maintaining a strong liquidity position.
RESOLUTIONS PASSED AT THE ANNUAL GENERAL MEETING
YIT Corporation's Annual General Meeting was held on March 13, 2012. The Annual
General Meeting adopted the 2011 financial statements, discharged the members
of the Board of Directors and the President and CEO from liability, confirmed
the dividend as proposed by the Board of Directors, decided on the Board of
Directors' fees and elected the auditor. The Annual General Meeting confirmed
the composition of the Board of Directors: Henrik Ehrnrooth (Chairman), Reino
Hanhinen (Vice Chairman), Kim Gran, Antti Herlin, Satu Huber and Michael
Rosenlew were re-elected as Board members.
At its organisational meeting on March 13, 2012, the Board elected the chairmen
and members of the Audit Committee, Personnel Committee as well as the Working
Committee from among its number.
YIT Corporation published stock exchange releases on the resolutions passed at
the Annual General Meeting and the organisation of the Board of Directors on
March 13, 2012. The stock exchange releases and a presentation of the members
of the Board of Directors are available at YIT's website: www.yitgroup.com.
SHARES AND SHAREHOLDERS
The company has one series of shares. Each share carries one vote and confers
an equal right to a dividend.
Share capital and number of shares
YIT Corporation's share capital and the number of shares outstanding did not
change during the review period. YIT Corporation's share capital was EUR
149,216,748.22 at the beginning of 2012 (2011: EUR 149,216,748.22), and the
number of shares outstanding was 127,223,422 (2011: 127,223,422).
Treasury shares and authorisations of the Board of Directors
In accordance with the Limited Liability Companies Act, the General Meeting
decides on the buyback and conveyance of shares, as well as any decisions
leading to changes in the share capital. The Annual General Meeting of YIT
Corporation resolved on March 13, 2012, to authorise the Board of Directors to
purchase the company's shares as proposed by the Board of Directors. In
addition to this, the Board of Directors has a valid share issue authorisation
issued by YIT's Annual General Meeting on March 10, 2010. The authorisation is
valid for five years after its granting. The share issue authorisation also
includes an authorisation to decide on the conveyance of treasury shares.
YIT Corporation held 1,952,414 treasury shares at the beginning of the review
period purchased on the basis of the authorisation given by the General Meeting
of October 6, 2008.
YIT Corporation's Board of Directors confirmed the rewards for the 2011 earning
period under the share-based incentive scheme for YIT's management on April 26,
2012, which were conveyed as a directed share issue without consideration. In
the share issue, 130,976 YIT Corporation shares were issued and conveyed
without consideration to the key persons participating in the Share Ownership
Plan according to the terms and conditions of the plan.
During 2012, 18,139 shares were returned to the company in accordance with the
terms and conditions of the share-based incentive scheme, after which the
company held 1,839,577 treasury shares at the end of December 2012.
Trading in shares
The price of YIT's share was EUR 12.38 at the beginning of the year (January 1,
2011: EUR 18.65). The closing rate of the share on the last trading day of the
year on December 28, 2012, was EUR 14.78 (December 30, 2011: EUR 12.38). The
share price increased by approximately 19 percent during January-December. The
highest price of the share in 2012 was EUR 17.25 (1-12/2011: EUR 21.92), the
lowest was EUR 11.87 (1-12/2011: EUR 10.04) and the average price was EUR 14.90
(1-12/2011: EUR 15.28). Share turnover on Nasdaq OMX in January-December
amounted to 96,887 thousand shares (1-12/2011: 151,023 thousand). The value of
turnover was EUR 1,443.9 million (1-12:2011: EUR 2,314.0 million), source:
Nasdaq OMX.
In addition to the Helsinki Stock Exchange, YIT shares are also traded in other
market places, such as Chi-X, BATS and Turquoise. The share of trade volume on
alternative market places increased slightly compared to the previous year
during the review period. During January-December, 31,183 thousand YIT
Corporation shares changed hands in alternative market places (1-12/2011:
36,621 thousand), corresponding to approximately 25 percent of the total share
trade (1-12/2011: 21%). Of the alternative market places, YIT shares changed
hands particularly in Chi-X, source: Fidessa Fragmentation Index.
YIT Corporation's market capitalisation at the end of the review period was EUR
1,853.2 million (12/2011: EUR 1,550.9 million). The market capitalisation has
been calculated excluding the shares held by the company.
Number of shareholders and flagging notifications
At the end of December 2012, the number of registered shareholders was 35,258
(12/2011: 36,547). At the end of December, a total of 34.8 percent of the
shares were owned by nominee-registered and non-Finnish investors (12/2011:
32.2%).
During the review period, the company received no "flagging notifications" of
changes in ownership in YIT Corporation in accordance with Chapter 2, section 9
of the Securities Market Act.
MOST SIGNIFICANT SHORT-TERM BUSINESS RISKS AND RISK MANAGEMENT
YIT classifies as risks those factors that might endanger the achievement of
the Group's strategic and financial goals if they should materialise. Risks are
divided into strategic, operational, financial and event risks. The
identification and management of risk factors take into account the special
features of the business and operating environment. Risk management is an
integral part of the Group's management, monitoring and reporting systems. The
nature and probability of strategic risks is continuously monitored and
reported on. A strategic risk assessment is carried out at Group level once a
year in connection with the review of the strategy.
YIT has developed the Group's business structure to be balanced and more
tolerant of economic fluctuations. The share of steadily developing service and
maintenance operations has been increased. The business model has also been
developed so that the construction services can operate independently.
Continuous monitoring and analysis make it possible to react quickly to changes
in the operating environment and to utilise the new business opportunities
provided by them.
The Group's aim is to grow profitably, both organically and through
acquisitions. Risks associated with acquisitions and outsourcing are managed by
selecting projects according to strict criteria and effective integration
processes that familiarise new employees with YIT's values, operating methods
and strategy. The Group has a uniform process and guideline for the
implementation of acquisitions.
YIT's typical operational risks include risks related to plot investments,
sales risk of residential and commercial development projects and risks related
to contract tenders, service agreements, project management and personnel. YIT
manages sales risk by matching the number of housing start-ups with the
estimated residential demand and the number of unsold residential units (the
figures for residential production are presented under Development by business
segment) and by normally securing key tenants and/or the investor prior to
starting a commercial development project. Changes in the availability of
housing loans and real estate financing are key risks related to the demand for
residential units.
No write-offs were made to plots in 2012. YIT tests the value of its plots as
required by IFRS accounting principles. Plot reserves are measured at
acquisition cost and the plot value is impaired when it is estimated that the
building being constructed on the plot will be sold at a price lower than the
sum of the price of the plot and the construction costs.
Financial risks include risks related to the sufficiency of financing, currency
and interest rates, credit and counterparty risks and risks related to the
reporting process. Financial risks are managed through accounting and financing
policies as well as internal and external auditing.
Approximately 60 percent of the revenue of YIT during the review period was
derived from euro countries. The other key currencies are the Swedish krona and
the Norwegian krone as well as the Russian ruble. The Group's most significant
currency risk is related to investments denominated in rubles. Capital invested
in Russia totalled EUR 585.2 million at the end of the period (9/2012: EUR
550.7 million). The amount of equity or equivalent net investments at the end
of the period was EUR 460.0 million (9/2012: EUR 432.5 million). The equity
investments in the Russian subsidiaries are unhedged in accordance with the
treasury policy, and a potential devaluation of the ruble would have an equal
negative impact on the Group's shareholders' equity. Debt investments amounted
to EUR 125.2 million at the end of the period (9/2012: EUR 118.2 million), and
this exposure was hedged in full. The differences in the interest rates between
the euro and ruble have an effect on hedging costs and therefore net financial
expenses.
Possible event risks include accidents related to personal or information
security and sudden and unforeseen material damage to premises, project sites
and other property resulting, for example, from fire, collapse or theft. YIT
complies with a group-wide security policy covering the different areas of
security.
A more detailed account of YIT's risk management policy and the most
significant risks will be published in the Annual Report 2012. Financing risks
are described in more detail in the notes to the Financial Statements for 2012.
PERSONNEL DEVELOPMENT AS PART OF CORPORATE RESPONSIBILITY
Personnel development has been a key focus for YIT in 2012. YIT commits,
motivates and develops its personnel in several ways in different countries.
Opportunities for professional development and extending competence are
provided through the company's internal and external training, reflective
methods (such as mentoring, 360 degrees), vocational degree training,
on-the-job learning and career development by means of active job rotation. The
aim is to be a desired employer also in the future. The key areas of
development in 2012 were the development of operations and supervisory work in
accordance with YIT's values, responsible and long-term orientation of new
recruits, systematic cooperation with educational institutions, identification
and development of critical talent and potential successors as well as
promoting productive, safe and healthy work in our company. YIT has also
focused on managerial training, and 70% of managers in critical positions
attended management training in 2012. During 2012, the foundation was laid for
more uniform talent management and a joint personnel survey, YIT Voice, with
both supervisor and commitment indices, was launched. YIT Kausta was certified
as a successfully working company in Lithuania in 2012. YIT has also been
rewarded as the most responsible employer of summer trainees in Finland in 2011
and 2012.
The occupational safety and well-being at work of employees has been promoted
by supporting supervisors' managerial skills, harmonising guidelines, piloting
new or developing existing systems, investing in predictive and early
intervention and emphasising the importance of the example of the management
and attitude in general. Monitoring of the development of occupational safety
and accident rates is an integral part of the work of YIT's Managerial Board.
Occupational safety is measured using a common indicator (number of accidents
per one million hours worked). In 2012, the accident frequency was 11
(1-12/2011: 14).
The organisation of well-being at work and occupational health care varies by
country, but this theme has become part of Managerial Board discussions and
closer follow-up during 2012. In Finland, the country with the highest number
of employees, the early intervention model has been implemented in the line
organisation and a disability risk monitoring system is being piloted.
Performance and development discussions are a channel of influence included in
YIT's corporate culture, contributing to well-being at work. The new personnel
survey makes it possible to monitor the usefulness of these discussions.
Awareness of corporate culture, values and leadership has been increased, and a
related workshop has been arranged in five countries during 2012.
OUTLOOK FOR 2013
YIT estimates the Group revenue based on segment reporting for 2013 to remain
at last year's level and operating profit to grow in 2013. The uncertainty
about the general macroeconomic development is still high and impacting YIT's
business operations and customers. The first quarter is typically the weakest
quarter due to the normal seasonal fluctuation of business.
Building Services Northern Europe
The market situation in building services varies by country in the Nordic
countries in 2013.
The service and maintenance market is estimated to remain stable or even grow
slightly in all countries in 2013. The increase in technology in buildings
increases the need for new services, and the demand for energy efficiency
services is expected to remain stable. The service and maintenance market is
expected to grow particularly in Norway by 3-4 percent.
Demand in the project market is expected to weaken further in 2013 in Finland,
Sweden and Denmark. The size of the Swedish project market as a whole is
expected to decrease by approximately 5 percent during 2013, mainly due to
weakening demand. In Norway, the project market is estimated to remain stable
and the demand for infrastructure projects to grow during 2013.
In the Baltic countries and Russia, both the project and service market demand
is estimated to remain low.
Building Services Central Europe
In Building Services Central Europe, the service and maintenance market is
expected to grow at a moderate rate. The opportunities for growth in service
and maintenance are still quite favourable, particularly in Germany and
Austria. In Poland, the building system services market will continue to grow
but suffer from oversupply, which will have a negative impact on prices. The
building system services market in the rest of Central Eastern Europe (the
Czech Republic and Romania) is developing slowly with a low level of activity.
Uncertainty in the project market has increased in the Central European
countries in which YIT operates. Decision-making on new investments has been
slowed down and the start-ups of certain projects have been postponed,
partially due to the lack of funding. New building system investments are
estimated to remain at the current level in Germany and Austria, whereas in
Central Eastern Europe they are estimated to decrease slightly.
Growth in the demand for energy-efficient services is possible over the next
few years with high energy prices and tightening environmental legislation,
particularly in Germany and Austria. Services related to the maintenance of
traffic infrastructure are also estimated to develop favourably.
Construction Services Finland
With regard to Construction Services Finland, housing demand is expected to
continue to be good, with the need for new housing remaining high. Residential
demand continues to be supported by continued low interest rates, relatively
stable employment rates and migration to growth centres. Furthermore, the
population and the number of household-dwelling units will increase with
continued migration and the increasing number of one-person households.
Residential sales during the first quarter may also be partly supported by the
change in asset transfer tax legislation taking force in March 2013, increasing
the asset transfer tax from the current 1.6% level to 2.0%. The tax will be
calculated from the debt-free price in the future.
According to Euroconstruct's December 2012 estimate, the construction of 25,000
residential units will start in Finland during 2013. According to a report
published by VTT in January 2012, the annual need for the production of new
residential units amounts to 24,000-29,000 residential units over the long
term. YIT's goal is to strengthen its position as the leading housing developer
in Finland.
YIT estimates that housing prices will remain stable in 2013. Construction
costs are estimated to increase, mainly due to new energy regulations, but the
increase is expected to be moderate in 2013.
With regard to the construction of business premises, real estate investors are
still cautious due to the general economic situation, and in order to control
risks the Helsinki metropolitan area and good tenants are appreciated. The very
low level of long-term interest rates increases investors' interest in
high-yield properties. According to Euroconstruct's December 2012 estimate,
construction of business premises will decrease by approximately 19 percent in
Finland during 2013. Vacancy rates for offices are still rather high, with the
vacant building stock also including relatively old office premises in poor
condition. YIT estimates that the demand will focus on modern and
energy-efficient offices. YIT estimates that renovation of business premises
will grow in 2013.
According to Euroconstruct's December 2012 estimate, commercial construction
will decrease by approximately 12 percent in Finland during 2013. The shift of
the retail trade towards ever larger business properties and the expansion of
foreign retail chains in Finland will support construction activity. Vacancy
rates for commercial premises are rather low.
The infrastructure construction market is expected to remain stable and at the
same level as in 2012 (Euroconstruct, December 2012). Rail and metro
construction will continue to increase in 2013, and several major road projects
will be underway in 2013-2014. The market situation of rock construction is
expected to remain favourable. There will be a shift from rock excavation to
trim and structural engineering work. The road maintenance market is expected
to remain stable, and new tenders will create opportunities for YIT.
International Construction Services
The volume of residential construction is estimated to increase in Russia in
2013. However, the growth is expected to slow down slightly compared to the
previous year.
Moscow, the Moscow region and St. Petersburg make up the largest residential
markets in Russia: these areas account for approximately one-fifth of all
residential construction. Residential demand has been supported by the good
economic development in Russia, good consumer confidence and favourable
development in the housing loan market, even though housing loan interest rates
began to increase at the end of 2011. The increase in interest rates continued
further during 2012 and the increase is expected to continue also in 2013.
The future outlook for Russian residential construction is good. Living space
per person is still clearly lower than in Western Europe and housing is in poor
condition, which creates the need for new, high-quality housing. Furthermore,
the middle class is expected to grow in proportion to the population and the
number of household-dwelling units is expected to increase. The development of
the housing loan market in Russia has also contributed to the expansion of the
potential buyer base. YIT has promoted the availability of loans to consumers
through extensive cooperation with banks. YIT expects housing prices to
increase in Russia in 2013, but at a slower rate than in 2012.
The volume of business premises construction is expected to grow moderately in
2013 according to VTT's statistics. YIT's largest individual market is St.
Petersburg, where YIT will continue the marketing and sales of the Gorelovo
industrial park.
In the Baltic countries, residential demand has been supported by improved
consumer confidence and the employment situation. Residential construction is
expected to remain at the level of the previous year in the Czech Republic and
Slovakia in 2013. Economic growth has come to a standstill and the country has
increased the value added tax on housing sales as of the beginning of 2013. In
Slovakia the housing market is supported by the stable price level of housing,
moderate economic growth and interest rates remaining low, the growing
unemployment is seen as a risk.
BOARD OF DIRECTORS' PROPOSAL FOR THE DISTRIBUTION OF DISTRIBUTABLE EQUITY
The distributable equity of YIT Corporation on December 31, 2012 is:
Retained earnings 219,690,906.87
Profit for the period 269,650,764.99
Retained earnings, total 489,341,671.86
Non-restricted equity reserve 3,823,677.13
Distributable equity, total 493,165,348.99
The Board of Directors proposes to the Annual General Meeting that the
distributable equity be disposed of as follows:
Payment of a dividend from retained earnings EUR 0,75 per share 94,037,883.75
to shareholders
Remains in distributable equity 399,127,465.24
No significant changes have taken place in the company's financial position
after the end of the financial year. The company's liquidity is good and, in
the view of the Board of Directors, the proposed dividend payout does not
jeopardise the company's solvency.
Signature of the Report of the Board of Directors and financial statements
Helsinki, February 4, 2013
Henrik Ehrnrooth Reino Hanhinen
Chairman Vice Chairman
Kim Gran Antti Herlin
Satu Huber Michael Rosenlew
Juhani Pitkäkoski
President and CEO
FINANCIAL STATEMENTS BULLETIN JAN 1 - DEC 31, 2012: TABLES
The financial statements bulletin is based on the audited financial statements
for 2012.
- SEGMENT REPORTING
1.1 Segment reporting accounting principles
1.2 Key figures, segment reporting
1.3 Revenue, segment reporting
1.4 Operating profit and Profit for the review period, segment reporting
1.5 Order backlog, segment reporting
1.6 YIT Group figures by quarter, segment reporting
1.7 Segment information by quarter, segment reporting
1.8 Reconciliation of the segment reporting and the group reporting
- GROUP REPORTING, IFRS
2.1 Key figures, IFRS
2.2 YIT Group figures by quarter, IFRS
2.3 Consolidated income statement Jan 1 - Dec 31, 2012, IFRS
2.4 Statement of comprehensive income Jan 1 - Dec 31, 2012, IFRS
2.5 Consolidated income statement Oct 1 - Dec 31, 2012, IFRS
2.6 Consolidated balance sheet, IFRS
2.7 Consolidated statement of changes in equity
2.8 Consolidated cash flow statement
2.9 Accounting principles of the Financial Statements Bulletin
2.10 Definitions of key financial figures
2.11 Financial risk management
2.12 Unusual items affecting operating profit
2.13 Business combinations and disposals
2.14 Changes in property, plant and equipment
2.15 Inventories
2.16 Notes on equity
2.17 Borrowings
2.18 Change in contingent liabilities and assets and commitments
2.19 Transactions with associated companies
- SEGMENT REPORTING
1.1 Accounting principles of segment reporting
Building Services Northern Europe and Building Services Central Europe
segments' reporting to YIT Group's management board is based on YIT Group's
accounting principles. In the reporting of Construction Services Finland
segment and International Construction Services segment, the revenue from own
residential and commercial development projects is recognised on the basis of
the percentage of degree of completion and the degree of sale, using percentage
of completion method, which does not fully comply with Group's IFRS accounting
principles. According to Group's IFRS accounting principles revenue from own
residential and commercial development projects is recognised at the
completion. In the case of YIT's commercial real estate development projects,
the recognition practice will be evaluated on a case-by-case basis and in
accordance with the terms and conditions of each contract. Sold projects are
recognised either when the construction work has started or when the project is
complete. The share of income and expenses to be recognised is calculated by
multiplying the percentage of completion by the percentage of sale multiplied
by the occupancy rate. YIT usually sells commercial real estate development
projects to investors either prior to construction or during an early phase.
The impact on revenue and operating profit of two revenue recognition
principles is shown in the line IFRIC 15 adjustment. As a result of the
accounting policy, Group figures can fluctuate greatly between quarters. The
chief operating decision-maker has been identified as the YIT Group's
Management Board, which review the Group's internal reporting in order to
assess performance and allocate resources to the segments.
1.2 Key figures, segment reporting
1-12/12 1-12/11 Change
Revenue, EUR million 4,675.9 4,524.7 3%
Operating profit, EUR million 248.8 240.5 3%
% of revenue 5.3 5.3
Profit before taxes, EUR million 227.6 215.8 5%
Profit for the report period, EUR million 1) 171.2 156.7 9%
Earnings per share, EUR 1.37 1.25 10%
Diluted earnings per share, EUR 1.37 1.25 10%
Equity per share, EUR 8,78 7,93 11%
Return on investment, from the last 12 months, % 14.2 14.8 -4%
Equity ratio, % 35.4 32.9 8%
Order backlog at the end of the period, EUR million 3,901.5 3,752.7 4%
Average number of personnel 25,833 26,254 -2%
1) Attributable to equity holders of the parent company
1.3 Revenue, segment reporting
EUR million 1-12/12 1-12/11 Change
Building Services Northern Europe 2,089.2 2,097.6 0%
- Group internal -55.1 -63.2
- external 2,034.2 2,034.4 0%
Building Services Central Europe 714.2 779.3 -8%
- Group internal -0.8 -0.3
- external 713.4 779.0 -8%
Construction Services Finland 1,329.0 1,226.9 8%
- Group internal -1.8 -1.9
- external 1,327.2 1,225.0 8%
International Construction Services 599.6 489.2 23%
- Group internal -0.3 -4.2 -------------------------------------------------------------
- external 599.3 485.0 24%
Other items 1.8 1.5
Revenue in total, segment reporting 4,675.9 4,524.7 3%
IFRIC 15 adjustments 29.9 -142.6
Revenue in total, IFRS 4,705.9 4,382.1 7%
1.4 Operating profit and Profit for the review period, segment reporting
EUR million 1-12/12 1-12/11 Change
Building Services Northern Europe 41.7 78.8 -47%
Building Services Central Europe 26.9 33.3 -19%
Construction Services Finland 127.0 111.6 14%
International Construction Services 73.9 37.2 99%
Other items -20.7 -20.4 2%
Operating profit total, segment reporting 248.8 240.5 3%
Financial income and expenses -21.2 -24.8 -14%
Profit before taxes, segment reporting 227.6 215.8 5%
Taxes -55.3 -58.0 -5%
Attributable to non-controlling interests -1.0 -1.0 4%
Profit for the review period, segment reporting 171.2 156.7 9%
IFRIC 15 adjustments 7.5 -32.3
Profit for the review period, IFRS 178.7 124.4 44%
Operating profit margin, segment reporting
% 1-12/12 1-12/11
Building Services Northern Europe 2.0 3.8
Building Services Central Europe 3.8 4.3
Construction Services Finland 9.6 9.1
International Construction Services 12.3 7.6
Operating profit, segment reporting 5.3 5.3
1.5 Order backlog, segment reporting
EUR million 12/12 12/11 Change
Building Services Northern Europe 819.0 913.1 -10%
Building Services Central Europe 380.1 449.5 -15%
Construction Services Finland 1,499.0 1,493.6 0%
International Construction Services 1,266.1 962.5 32%
Other items -62.8 -66.0
Order backlog total, segment reporting 3,901.5 3,752.7 4%
IFRIC 15 adjustments 343.5 395.9
Order backlog, IFRS 4,245.1 4,148.6 2%
1.6 YIT Group figures by quarter, segment reporting
10-12/1 7-9/12 4-6/12 1-3/12 10-12/1 7-9/11 4-6/11 1-3/11
2 1
Revenue, 1,277.8 1,115.3 1,184.5 1,098.3 1,264.5 1,096.5 1,136.9 1,026.9
EUR
million
Operatin 67.5 68.4 60.5 52.3 76.2 43.6 70.3 50.4
g
profit,
EUR
million
% of 5.3 6.1 5.1 4.8 6.0 4.0 6.2 4.9
revenue
Profit 62.0 64.0 54.5 47.1 68.6 35.8 65.5 45.9
before
taxes,
EUR
million
Profit 45.6 49.8 41.7 34.6 51.8 24.5 47.6 32.7
for the
review
period,
EUR
million
1)
Earnings 0.36 0.40 0.33 0.28 0.41 0.20 0.38 0.26
/share,
EUR
Diluted 0.36 0.40 0.33 0.28 0.41 0.20 0.38 0.26
earning
s/share,
EUR
Equity/s 8.78 8.44 7.91 7.74 7.93 7.38 7.42 7.05
hare,
EUR
Return 14.2 14.6 13.7 14.8 14.8 14.4 15.4 15.1
on
investm
ent,
from
the
last 12
months,
%
Equity 35.4 33.8 32.2 31.5 32.9 31.4 31.8 31.0
ratio,
%
Order 3,901.5 4,018.6 4,045.4 3,965.5 3,752.7 3,489.0 3,509.4 3,355.6
backlog
at the
end of
the
period,
EUR
million
Average 25,478 26,002 25,998 25,821 26,245 23,796 26,021 25,754
number
of
personn
el
Personne 25,283 25,788 26,255 25,703 25,996 26,502 26,807 25,748
l at the
end of
the
period
1) Attributable to equity holders of the parent company
1.7. Segment information by quarter, segment reporting
Revenue by business segment
EUR 10-12/1 7-9/12 4-6/12 1-3/12 10-12/1 7-9/11 4-6/11 1-3/11
million 2 1
Building 552.7 485.3 538.1 513.1 600.1 511.9 509.4 476.2
Service
s
Northern
Europe
Building 195.8 179.5 179.5 159.4 200.3 210.8 191.1 177.1
Service
s
Central
Europe
Construc 342.6 308.9 347.9 329.5 335.7 269.4 332.3 289.5
tion
Service
s
Finland
Internat 205.0 153.3 133.4 107.9 145.9 122.5 120.5 100.3
ional
Constru
ction
Service
s
Other -18.3 -11.7 -14.4 -11.6 -17.5 -18.1 -16.4 -16.2
items
Revenue 1,277.8 1,115.3 1,184.5 1,098.3 1,264.5 1,096.5 1,136.9 1,026.9
in
total,
segment
reporti
ng
Operating profit by business segment
EUR million 10-12/ 7-9/12 4-6/12 1-3/12 10-12/ 7-9/11 4-6/11 1-3/11
12 11
Building -3.8 15.6 15.3 14.6 23.0 19.9 18.8 17.1
Services
Northern Europe
Building 10.4 4.8 6.6 5.2 9.3 7.9 12.1 4.0
Services
Central Europe
Construction 38.1 27.2 32.0 29.7 32.1 21.1 32.8 25.6
Services
Finland
International 28.7 24.0 12.7 8.5 17.4 -0.9 12.3 8.4
Construction
Services
Other items -5.7 -3.2 -6.1 -5.7 -5.6 -4.4 -5.7 -4.7
Operating profit 67.5 68.4 60.5 52.3 76.2 43.6 70.3 50.4
in total,
segment
reporting
Operating profit margin by business segment
% 10-12/ 7-9/12 4-6/12 1-3/12 10-12/ 7-9/11 4-6/11 1-3/11
12 11
Building -0.7 3.2 2.8 2.9 3.8 3.9 3.7 3.6
Services
Northern Europe
Building 5.3 2.6 3.7 3.3 4.6 3.7 6.3 2.3
Services
Central Europe
Construction 11.1 8.8 9.2 9.0 9.6 7.8 9.9 8.8
Services
Finland
International 14.0 15.7 9.5 7.9 11.9 -0.7 10.2 8.4
Construction
Services
Order backlog by business segment
EUR 12/12 9/12 6/12 3/12 12/11 9/11 6/11 3/11
million
Building 819.0 904.9 955.1 969.4 913.1 886.1 879.5 804.9
Service
s
Northern
Europe
Building 380.1 435.5 473.4 500.5 449.5 523.9 554.1 573.2
Service
s
Central
Europe
Construc 1,499.0 1,541.0 1,499.9 1,428.0 1,493.6 1,289.3 1,239.5 1,176.0
tion
Service
s
Finland
Internat 1,266.1 1,207.4 1,186.7 1,142.9 962.5 850.1 896.4 862.7
ional
Constru
ction
Service
s
Other -62.8 -70.1 -69.7 -75.3 -66.0 -60.3 -60.2 -61.2
items
Order 3,901.5 4,018.6 4,045.4 3,965.5 3,752.7 3,489.0 3,509.4 3,355.6
backlog
,
segment
reporti
ng
Operative invested capital*)
EUR million 12/12 9/12 6/12 3/12 12/11 9/11 6/11 3/11
Building Services 320.6 394.8 357.8 339.4 372.9 375.6 323.5 282.8
Northern Europe
Building Services 98.9 113.7 106.5 96.5 72.0 56.0 40.8 18.9
Central Europe
Construction Services 581.7 546.8 515.3 552.1 558.4 503.0 451.7 436.1
Finland
International 708.3 703.8 655.7 651.8 602.2 601.5 668.3 720.0
Construction Services
Return on operative invested capital*)
Last 12 months, % 12/12 9/12 6/12 3/12 12/11 9/11 6/11 3/11
Building Services 12.2 17.8 21.4 24.5 23.8 23.5 28.6 34.8
Northern Europe
Building Services 31.5 30.4 39.4 59.7 53.8 58.5 91.7 83.1
Central Europe
Construction Services Finland 23.5 24.3 25.0 24.6 24.0 26.3 30.9 28.3
International Construction 12.3 10.5 6.5 6.1 6.5 5.8 6.7 5.8
Services
*) Only operational items are taken into account in calculating the segments'
invested capital.
1.8 Reconciliation of the segment reporting and the group reporting
Reporting period 1-12/12 1-12/11
Income Segment IFRIC 15 IFRS Segment IFRIC 15 IFRS
statement, reporting adjustmen reporting adjustmen
EUR million ts ts
Revenue 4,675.9 29.9 4,705.9 4,524.7 -142.6 4,382.1
Other operating -4,382.3 -19.5 -4,401.8 -4,244.6 102.1 -4,142.5
income and
expenses
Depreciation -44.9 -44.9 -39.6 -39.6
Operating profit 248.8 10.5 259.2 240.5 -40.5 200.0
Financial income -21.2 -21.2 -24.8 -24.8
and expenses
Profit before 227.6 10.5 238.0 215.8 -40.5 175.2
taxes
Income taxes -55.3 -2.8 -58.1 -58.0 -7.8 -50.2
Profit for the 172.2 7.7 179.9 157.7 -32.7 125.0
review period
Attributable to:
Equity holders 171.2 7.5 178.7 156.7 -32.3 124.4
of the parent
company
Non-controlling 1.0 0.2 1.2 1.0 -0.4 0.6
interests
Earnings/share, 1.37 1.43 1.25 0.99
EUR
Diluted 1.37 1.43 1.25 0.99
earnings/share,
EUR
Quarter 10-12/12 10-12/11
Income Segment IFRIC 15 IFRS Segment IFRIC 15 IFRS
statement, reporting adjustmen reporting adjustmen
EUR million ts ts
Revenue 1,277.8 7.1 1,284.9 1,264.4 -74.1 1,190.3
Other operating -1,199.6 -1.9 -1,201.5 -1,178.2 55.4 -1,122.8
income and
expenses
Depreciation -10.7 -10.7 -10.0 -10.0
Operating profit 67.5 5.3 72.8 76.2 -18.7 57.5
Financial income -5.5 -5.5 -7.6 -7.6
and expenses
Profit before 62.0 5.3 67.3 68.6 -18.7 49.9
taxes
Income taxes -16.4 -1.0 -17.4 -16.5 1.6 -14.9
Profit for the 45.6 4.2 49.8 52.1 -17.0 35.1
review period
Attributable to:
Equity holders 45.1 4.0 49.1 51.8 -16.9 34.9
of the parent
company
Non-controlling 0.5 0.3 0.8 0.3 -0.1 0.2
interests
Earnings/share, 0.36 0.39 0.41 0.27
EUR
Diluted 0.36 0.39 0.41 0.27
earnings/share,
EUR
12/12 12/11
Balance sheet, Segment IFRIC 15 IFRS Segment IFRIC 15 IFRS
EUR million reporting adjustments reporting adjustments
Non-current
assets
Other 539.5 539.5 538.1 538.1
non-current
assets
Deferred tax 40.7 9.1 49.8 47.2 13.1 60.3
assets
Current assets
Inventories 1,590.9 310.6 1,901.5 1,348.2 324.4 1,672.6
Trade and 1,082.3 -66.8 1,015.5 1,122.0 -94.7 1,027.3
other
receivables
Cash and cash 175.7 175.7 206.1 206.1
equivalents
Total assets 3,429.0 252.9 3,682.0 3,261.6 242.9 3,504.5
Equity 1,104.6 -69.3 1,035.4 996.7 -75.6 921.1
Non-current
liabilities
Financial 517.1 517.1 522.9 522.9
liabilities
Other 108.0 108.0 128.5 128.5
non-current
liabilities
Deferred tax 108.6 -9.9 98.7 96.6 -8.3 88.3
liabilities
Current
liabilities
Financial 332.9 72.0 404.9 325.2 98.4 423.6
liabilities
Advances 305.5 261.1 566.6 231.3 227.0 458.3
received
Other current 952.4 -1.1 951.3 960.4 1.2 961.6
liabilities
Total equity 3,429.0 252.9 3,682.0 3,261.6 242.9 3,504.5
and
liabilities
- GROUP REPORTING, IFRS
2.1 Key figures, IFRS
12/12 12/11 Change
Earnings/share, EUR 1.43 0.99 44%
Diluted earnings/share, EUR 1.43 0.99 44%
Equity/share, EUR 8.23 7.33 12%
Average share price during the period, EUR 14.90 15.28 -2%
Share price at the end of the period, EUR 14.78 12.38 19%
Market capitalization at the end of the period, EUR 1,853.2 1,550.9 19%
million
Weighted average share-issue adjusted number of shares 125,352 125,210 0%
outstanding, thousands
Weighted average share-issue adjusted number of shares 125,352 125,210 0%
outstanding, thousands, diluted
Share-issue adjusted number of shares outstanding at 125,384 125,271 0%
the end of the period, thousands
Net interest-bearing debt at the end of the period, 746.2 740.4 1%
EUR million
Return on investment, from the last 12 months, % 14.6 12.0
Equity ratio, % 33.2 30.2
Gearing ratio, % 72.1 80.4
Gross capital expenditures, EUR million 44.6 48.7 -8%
% of revenue 0.9 1.1
Unrecognised order backlog at the end of the period, 4,245.1 4,148.6 2%
EUR million
of which order backlog outside Finland 2,273.3 2,066.9 10%
Average number of personnel 25,833 26,254 -2%
2.2 YIT Group figures by quarter, IFRS
EUR 10-12/1 7-9/12 4-6/12 1-3/12 10-12/1 7-9/11 4-6/11 1-3/11
million 2 1
Revenue, 1,284.9 1,103.6 1,218.9 1,098.4 1,190.4 1,084.8 1,137.2 969.7
EUR
million
Operatin 72.8 63.6 67.7 55.2 57.5 35.4 67.9 39.2
g
profit,
EUR
million
% of 5.7 5.8 5.6 5.0 4.8 3.3 6.0 4.0
revenue
Financia 1.2 0.1 2.8 1.4 1.4 0.0 0.3 2.4
l
income,
EUR
million
Exchange -1.3 -1.8 -1.6 -1.0 -2.1 0.0 -0.8 -1.3
rate
differe
nces,
EUR
million
Financia -5.5 -2.6 -7.3 -5.7 -6.9 -7.8 -4.4 -5.6
l
expense
s, EUR
million
Profit 67.3 59.2 61.6 49.9 49.9 27.6 63.0 34.7
before
taxes,
EUR
million
% of 5.2 5.4 5.1 4.5 4.2 2.5 5.5 3.6
revenue
Balance 3,682.0 3,722.3 3,646.9 3,631.9 3,504.5 3,418.6 3,387.4 3,274.8
sheet
total,
EUR
million
Earnings 0.39 0.37 0.37 0.29 0.27 0.15 0.37 0.20
/share,
EUR
Equity/s 8.23 7.86 7.37 7.14 7.33 6.93 7.00 6.64
hare,
EUR
Share 14.78 14.93 13.38 16.12 12.38 11.33 17.24 20.92
price
at the
end of
the
period,
EUR
Market 1,853.2 1,872.0 1,677.7 2,019.3 1,550.9 1,419.3 2,159.7 2,616.6
capital
ization,
EUR
million
Return 14.6 13.7 12.5 12.8 12.0 15.6 15.7 14.0
on
investm
ent,
from
the
last 12
months,
%
Equity 33.2 31.6 30.0 28.8 30.2 29.2 29.7 28.5
ratio,
%
Net 746.2 827.3 803.1 755.9 740.4 755.0 702.7 632.6
interes
t-bearin
g debt
at the
end of
the
period,
MEUR
Gearing 72.1 83.7 86.7 84.2 80.4 86.8 79.9 75.2
ratio,
%
Gross 10.3 10.1 10.6 13.6 7.1 18.3 14.6 8.7
capital
expendi
tures,
EUR
million
% of 0.8 0.9 0.9 1.2 0.6 1.7 1.3 0.9
revenue
Unrecogn 4,245.1 4,462.0 4,409.3 4,385.3 4,148.6 3,738.3 3,796.9 3,699.0
ised
order
backlog
at the
end of
the
period,
EUR
million
Personne 25,283 25,788 26,255 25,703 25,996 26,502 26,807 25,748
l at the
end of
the
period
2.3 Consolidated income statement Jan 1 - Dec 31, 2012, IFRS
EUR million 1-12/12 1-12/11 Change
Revenue 4,705.9 4,382.1 7%
of which activities outside Finland 2,777.3 2,607.7 7%
Other operating income and expenses -4,402.0 -4,142.9 6%
Share of results of associated companies 0.2 0.4 -39%
Depreciation and impairments -44.9 -39.6 13%
Operating profit 259.2 200.0 30%
% of revenue 5.5 4.6
Financial income 5.5 4.3 29%
Exchange rate differences -5.8 -4.1 42%
Financial expenses -21.0 -24.8 -16%
Profit before taxes 238.0 175.2 36%
% of revenue 5.1 4.0
Income taxes -58.1 -50.2 16%
Profit for the review period 179.9 125.0 44%
% of revenue 3.8 2.9
Attributable to
Equity holders of the parent company 178.7 124.4 44%
Non-controlling interests 1.2 0.6 100%
Earnings per share attributable to the equity
holders of the parent company
Earnings/share, EUR 1.43 0.99 44%
Diluted earnings/share, EUR 1.43 0.99 44%
2.4 Statement of comprehensive income Jan 1 - Dec 31, 2012, IFRS
EUR million 1-12/12 1-12/11 Change
Profit for the review period 179.9 125.0 44%
Other comprehensive income
- Cash flow hedges 0.6 -2.0
-- Deferrred tax -0.1 0.4
- Change in fair value for available for sale -0.4 0.5
investments
-- Deferrred tax 0.1 -0.1
- Change in translation differences 17.4 -8.5
- Other change -0.1
Other comprehensive income, total 17.6 -9.7
Total comprehensive result 197.5 115.3 71%
Attributable to
Equity holders of the parent company 196.3 114.5 71%
Non-controlling interest 1.2 0.8 50%
2.5 Consolidated income statement Oct 1 - Dec 31, 2012, IFRS
EUR million 10-12/12 10-12/11 Change
Revenue 1,284.9 1,190.3 8%
of which activities outside Finland 828.0 734.5 13%
Other operating income and expenses -1,201.6 -1,123.3 7%
Share of results of associated companies 0.2 0.5 -69%
Depreciation and impairments -10.7 -10.0 7%
Operating profit 72.8 57.5 27%
% of revenue 5.7 4.8
Financial income 1.2 1.4 -14%
Exchange rate differences -1.3 -2.1 -39%
Financial expenses -5.5 -6.9 -21%
Profit before taxes 67.3 49.9 35%
% of revenue 5.2 4.2
Income taxes -17.4 -14.9 17%
Profit for the review period 49.8 35.1 42%
% of revenue 3.9 2.9
Attributable to
Equity holders of the parent company 49.1 34.9 41%
Non-controlling interests 1.2 0.2 500%
Earnings per share attributable to the equity
holders of the parent company
Earnings/share, EUR 0.39 0.27 44%
Diluted earnings/share, EUR 0.39 0.27 44%
2.6 Consolidated balance sheet, IFRS
EUR million 12/12 12/11 Change
Assets
Non-current assets
Property, plant and equipment 110.6 110.8 0%
Goodwill 346.6 347.5 0%
Other intangible assets 61.8 54.1 14%
Shares in associated companies 0.6 3.1 -82%
Other investments 3.4 3.8 -11%
Other receivables 16.6 18.8 -11%
Deferred tax assets 49.8 60.3 -17%
Current assets
Inventories 1,901.5 1,672.6 14%
Trade and other receivables 1,015.5 1,027.3 -1%
Cash and cash equivalents 175.7 206.1 -15%
Total assets 3,682.0 3,504.5 5%
Equity and liabilities
Equity attributable to equity holders of the parent
company
Share capital 149.2 149.2 0%
Other equity 882.8 769.5 15%
Non-controlling interest 3.3 2.5 33%
Total equity 1,035.4 921.1 12%
Non-current liabilities
Deferred tax liabilities 98.7 88.3 12%
Pension liabilities 27.0 26.5 2%
Provisions 48.5 54.1 -10%
Borrowings 517.1 522.9 -1%
Other liabilities 32.6 47.9 -32%
Current liabilities
Advances received 566.6 458.3 24%
Trade and other payables 896.1 909.3 -1%
Provisions 55.3 52.3 6%
Current borrowings 404.9 423.6 -4%
Total equity and liabilities 3,682.0 3,504.5 5 %
2.7 Consolidated statement of changes in equity
Attributable to equity holders of the parent company
--------------------------------------------------------------------------------
EUR Share Legal Other Cumula Fair Treasu Retain Total Non-co
Total
milli capita reserv reserv tive value ry ed ntroll
equity
on l e e transl reserv shares earnin ing
ation e gs intere
differ st
ences
Equity 149.2 1.9 2.8 -23.4 -3.6 -9.7 801.5 918.7 2.5
921.1
on
Januar
y 1,
2012
Compre
hensiv
e
incom
e
Profit 178.7 178.7 1.2
179.9
for
the
perio
d
Other
compr
ehensi
ve
incom
e:
Cash 0.6 0.6
0.6
flow
hedge
s
- -0.1 -0.1
-0.1
Defer
red
tax
Change -0.4 -0.4
-0.4
in
fair
value
of
availa
ble-fo
r-sale
asset
s
- 0.1 0.1
0.1
Defer
red
tax
Change 17.4 17.4
17.4
in
trans
lation
diffe
rences
Compre 17.4 0.2 0.0 178.7 196.3 1.2
197.5
hensiv
e
incom
e,
total
Transa
ctions
with
owners
Divide -87.7 -87.7 -0.4
-88.1
nd
paid
Share- 1.0 0.5 3.3 4.8
4.8
based
incen
tive
schem
es
Transa 1.0 0.0 0.0 0.5 -84.4 -82.9 -0.4
-83.3
ctions
with
owners
,
total
Equity 149.2 1.9 3.8 -6.2 -3.4 -9.2 895.9 1,032.1 3.3
1,035.4
on
Decemb
er 31,
2012
Attributable to equity holders of the parent company
--------------------------------------------------------------------------------
EUR Share Legal Other Cumula Fair Treasu Retain Total Non-co
Total
milli capita reserv reserv tive value ry ed ntroll
equity
on l e e transl reserv shares earnin ing
ation e gs intere
differ st
ences
Equity 149.2 2.0 0.0 -14.2 -2.4 -10.6 756.1 880.1 2.8
882.9
on
Januar
y 1,
2011
Compre
hensiv
e
income
Profit 124.4 124.4 0.6
125.1
for
the
perio
d
Other
compr
ehensi
ve
incom
e:
Cash -2.0 -2.0
-2.0
flow
hedge
s
- 0.4 0.4
0.4
Defer
red
tax
Change 0.5 0.5
0.5
in
fair
value
of
availa
ble-fo
r-sale
asset
s
- -0.1 -0.1
-0.1
Defer
red
tax
Change -9.1 0.4 -8.7 0.2
-8.4
in
trans
lation
differ
ences
Other -0.1 -0.1
-0.1
chang
e
Compre -0.1 -9.1 -1.2 124.9 114.5 0.8
115.4
hensiv
e
incom
e,
total
Transa
ctions
with
owners
Divide -81.3 -81.3 -0.2
-81.5
nd
paid
Share- 2.8 0.9 0.7 4.4
4.4
based
incen
tive
schem
e
Transa 2.8 0.9 -80.6 -76.9 -0.2
-77.1
ctions
with
owner
s,
total
Change
s in
owner
ship
share
s
in
subsi
diarie
s
Change 1.0 1.0 -1.0
0.0
s in
group
owner
ship
shares
in
subsi
diarie
s - no
loss
of
contro
l
Non-co 0.0
0.0
ntroll
ing
inter
ests
from
busine
ss
combi
nation
s
Change 1.0 1.0 -1.0
0.0
s in
owner
ship
share
s
in
subsi
diarie
s,
total
Equity 149.2 1.9 2.8 -23.4 -3.6 -9.7 801.5 918.7 2.5
921.1
on
Decemb
er 31,
2011
2.8 Consolidated cash flow statement
EUR million 10-12/ 10-12/ Change 1-12/1 1-12/1 Change
12 11 2 1
Cash flow from
operating activities
Net profit for the period 49.8 35.1 42% 179.9 125.0 44%
Reversal of accrual-based 29.6 51.9 -43% 127.5 143.5 -11%
items
Change in working capital
Change in trade and 79.7 -289.3 50.5 -159.2
other receivables
Change in inventories -46.6 -79.0 -41% -197.6 -196.3 1%
Change in current -15.2 55.6 43.9 189.4 -77%
liabilities
Change in working 18.0 -52.5 -103.2 -166.1 -38%
capital, total
Interest paid -8.0 -7.6 5% -35.4 -34.3 3%
Other financial items, net 0.5 -5.7 -9.9 -5.3 86%
Interest received 1.7 1.3 32% 4.5 4.1 10%
Taxes paid 2.1 0.1 over -42.0 -49.7 -16%
thousand
Net cash generated 93.7 22.4 318% 121.5 17.4 598%
from operating activities
Cash flow from investing
activities
Acquisition of subsidiaries, 0.0 0.1 -119% -7.3 -8.9 -18%
net of cash
Purchase of property, -7.6 -4.7 61% -26.7 -30.0 -11%
plant and equipment
Purchase of intangible -2.2 -2.9 -24% -8.4 -9.0 -7%
assets
Increases in other 0.0 -0.1 0.0 -0.1
investments
Disposal of subsidiaries, 0.0 0.0 5.9
net of cash
Disposal of affiliated 2.9
companies
Proceeds from sale of 3.4 -1.0 7.7 4.5 70%
fixed assets
Proceeds from sale of 0.0 0.1 -112% 0.7 2.7 -74%
other investments
Net cash used in -6.4 -8.5 -25% -31.2 -34.7 -10%
investing activities
Operating cash flow 87.3 14.1 519% 90.4 -17.3
after investments
Cash flow from
financing activities
Change in loan receivables -7.6 -13.9
Change in current -99.6 -19.6 408% -34.9 139.4
liabilities
Proceeds from 50.0 0.0 150.0 175.0 -14%
borrowings
Repayments of -4.5 -15.5 -71% -136.6 -157.4 -13%
borrowings
Payments of financial -0.2 0.5 -0.7 -0.9 -20%
leasing debts
Dividends paid and other -88.1 -81.5 8%
distribution of assets
Net cash used in -61.9 -34.6 79% -124.2 74.6
financing activities
Net change in cash and 25.4 -20.5 -33.9 57.4
cash equivalents
Cash and cash equivalents 149.3 224.1 -33% 204.8 147.6 39%
at the beginning of the
period
Change in the fair value -0.1 1.1 3.8 -0.2
of the cash equivalents
Cash and cash equivalents 174.6 204.7 -15% 174.6 204.8 -15%
at the end of the period
2.9 Accounting principles of the Financial Statements Bulletin
YIT Corporation's financial statements bulletin for January 1 - December 31,
2012 has been drawn up in line with IAS 34: Interim Financial Reporting. The
consolidated financial statement have been prepared in compliance with the
International Financial Reporting standards, and IAS/IFRS standards approved
the EU Commission by December 31, 2012 and SIC and IFRIC interpretations have
been complied with in the drafting of the financial statements for 2012.
The standards and interpretations that have been applied as of January 1, 2012
have minor effects on YIT during the report period. The effects are described
in the accounting principles of financial statements for the year 2012.
In the Financial Statements Bulletin the figures are presented in million euros
doing the rounding on each line, which may cause some rounding inaccuracies in
column and total sums.
Currency exchange rates used in the Financial Statements Bulletin
Average rate Average rate Balance sheet Balance sheet
Jan-Dec, 2012 Jan-Dec, 2011 rate rate
Dec 31, 2012 Dec 31, 2011
1 EUR = CZK 25.1460 24.5910 25.1510 25.7870
DKK 7.4438 7.4506 7.4610 7.4342
HUF 289.3200 279.7800 292.3000 314.5800
MYR 3.9687 4.2555 4.0347 4.1055
NOK 7.4752 7.7929 7.3483 7.7540
PLN 4.1843 4.1196 4.0740 4.4580
RUB 39.9239 40.8816 40.3295 41.7650
SEK 8.7061 9.0289 8.5820 8.9120
SGD 1.6059 1.7490 1.6111 1.6819
USD 1.2854 1.3918 1.3194 1.2939
LTL 3.4528 3.4528 3.4528 3.4528
LVL 0.6973 0.7028 0.6977 0.7028
2.10 Definitions of key financial figures
Return on Group's profit before taxes + interest expenses + other financial
investment expenses +/- exchange rate differences x 100
(ROI %) = Balance sheet total - capitalised interest - non-interest bearing
liabilities (average)
Segment's Tangible and intangible assets + goodwill + shares in associated
operative companies + investments + inventories + trade receivables + other
invested non-interest bearing operational receivables *) - provisions -
capital = trade payables - advances received - non-interest bearing
liabilities *)
*) excl. items associated with taxes, distribution of profit and
financial items
Return on Segment's operating profit + interest included in operating profit
operative Segment's operative invested capital (average)
invested
capital (%)
=
Equity ratio Equity + non-controlling interest x 100
(%) = Balance sheet total - advances received
Gearing Interest-bearing liabilities - cash and cash equivalents x 100
ratio (%) = Shareholder's equity + non-controlling interest
Segment Net profit for the period (attributable for equity holders),
reporting, segment reporting
earnings / Share issue-adjusted average number of outstanding shares during
share (EUR) the period
=
Group IFRS Net profit for the period (attributable for equity holders), group
reporting, reporting
earnings/ Share issue-adjusted average number of outstanding shares during
share (EUR) the period
=
Equity/share Shareholders' equity
(EUR) = Share issue-adjusted average number of outstanding shares at the
end of period
Market (Number of shares - treasury shares) x share price on the closing
capitalizat date by share series
ion =
2.11 Financial risk management
Financial risks include liquidity, interest rate, currency and credit risk, and
their management is a part of the Group's treasury policy. The Board of
Directors has approved this policy. The Group Treasury is responsible for the
practical implementation of the policy in association with the business
segments and units.
The Group's strategic financial targets guide the use and management of the
Group's capital. Achieving the strategic targets is supported by maintaining an
optimum Group capital structure. Capital structure is mainly influenced by
controlling investments and the amount of working capital tied to business
operations.
A more detailed account of financial risks has been published in the notes to
the financial statements for 2012.
2.12 Unusual items affecting operating profit
EUR million 1-12/12 1-12/11 Change
Building Services Northern Europe -5,8 -3.0 93%
Building Services Central Europe -0,9 5.0
International Construction Services 7,0 -10.0
YIT Group, total 3,3 -8.0
Building Services Northern Europe entered costs related to the reorganisation
of operations amounted to approximately EUR 3.0 million during the fourth
quarter.
The operating profit for International Construction Services for the third
quarter of 2012 was improved by the cancellation of a EUR 7.0 million cost
provision due to the ammonia issue in St. Petersburg. YIT made a provision of
EUR 10.0 during the third quarter of 2011 to cover the costs of rectifying the
problem.
YIT started the restructuring of operations in Poland during the second quarter
of 2012 and made a write-down of EUR 0.9 million in goodwill in the third
quarter of 2012 as the result.
During the second quarter of 2012, the operating profit for Building Services
Northern Europe was burdened by a non-recurring expense of EUR 2.8 million
associated with the final financial report of a customer project completed in
2011. Building Services Northern Europe booked a provision of EUR 3.0 million
associated with the same project in the second quarter of 2011.
The operating profit for Building Services Central Europe for the second
quarter of 2011 was improved by a sales gain of EUR 5.0 million from the
divestment of Hungarian operations.
2.13 Business combinations and disposals
In Sweden, YIT acquired the share capital of Elektriska Installationer i
Finspång AB, a company specialising in electricity, telecommunications, data,
alarm and low voltage installations, and its sister company Kraftmontage i
Finspång AB, specialising in electrical installations in February. In Norway,
YIT acquired the share capital of electrical installations specialist Madla
Elektro AS in March. In Sweden, YIT acquired the security business operations
of Level5 security in April and the share capital of electrical installations
company Dala Elmontage Lindkvist & Bodin AB in May.
During the first half of the year 2012, YIT made two acquisitions in the
Building Services Central Europe segment. In Austria, YIT acquired the share
capital of P&P Kältenangebau GmbH, a cooling solutions and services provider,
and the share capital of WM Haustechnik GmbH, an HVAC solution provider, in
January 2012.
In December 2012 International Construction Services acquired 100% holding in
OOO Vesta, a company specialising in contracting and services within technical
building systems in Russia.
The total acquisition price amounted to EUR 9.5 million. The acquisition is not
expected to result in goodwill.
Composition of acquired net assets and goodwill
EUR million 12/12
Consideration
Cash 8.5
Contingent consideration 1.1
Total consideration 9.5
Acquisition -related costs, 0.2
(recognised as other operating expenses)
Recognised amounts of identifiable assets acquired and liabilities
assumed
Cash and cash equivalents 1.1
Tangible assets 0.5
Intangible rights:
Customer base 1.6
Order backlog 4.5
Other intangible rights 12.9
Inventories 0.9
Trade and other receivables 6.6
Deferred tax liabilities, net -2.0
Trade and other payables -16.6
Total identifiable net assets 9.5
Non-controlling interest (minority share)
Goodwill
Total entity value 9.5
International Construction Services also sold the shares held in a Russian
company called UJUT Service. The sale had no significant relevance to the YIT
Group.
2.14 Changes in property, plant and equipment
EUR million 1-12/12 1-12/11 Change
Carrying value at the beginning of the period 110.8 106.7 4%
Increase 27.7 30.4 -9%
Increase through acquisitions 0.5 0.9 -40%
Decrease -4.2 -3.7 14%
Decrease through disposals 0.0 -0.1
Depreciation and value adjustments -23.8 -23.9 0%
Reclassifications -1.6 0.6
Carrying value at the end of the period 110.6 110.8 0%
2.15 Inventories
EUR million 12/12 12/11 Change
-------------------------------------------------------------------------------Raw materials and consumables 36.2 27.6 31%
Work in progress 894.8 792.8 13%
Land areas and plot owning companies 673.5 643.8 5%
Shares in completed housing and real estate companies 232.0 158.2 47%
Advance payments 64.1 49.5 30%
Other inventories 0.9 0.7 30%
Total inventories 1,901.5 1,672.6 14%
2.16 Notes on equity
Share capital and share Number Share capital (EUR Treasury
premium account of outstanding million) shares
shares (EUR
million)
January 1, 2012 125,271,008 149.2 -9.7
Return of treasury shares, -4,131
1.1.- 31.3.2012
Return of treasury shares, -8,541
1.4.- 30.6.2012
Return of treasury shares, -3,204
1.7.- 30.9.2012
Return of treasury shares, -2,263
1.10.- 31.12.2012
Transfer of treasury shares 130,976 0.6
December 31, 2012 125,383,845 149.2 -9.2
2.17 Borrowings
EUR million Fair Carrying Nominal
value value value
Bonds in financial statements December 330.8 335.1 335.7
31, 2011
Valuation of the above bonds on December 287.2 278.1 278.6
31, 2012
Bonds raised during the review period:
Floating-rate bonds
1/2012-2014, Euribor 3 month +1,75% 1) 50.0 49.9 50.0
Total bonds on December 31, 2012 337.2 328.0 328.6
Terms of the bonds raised during the review period in brief:
1) Loan period February 17, 2012 - August 18, 2014, interest payments annually
February 17, May 17, August 17 and November 17 in arrear. The bond is unsecured
and its ISIN code is FI4000037874.
2.18 Change in contingent liabilities and assets and commitments
EUR million 12/12 12/11 Change
Collateral given for own commitments
- Corporate mortgages 29.3 31.2 -6%
- Other pledged assets 0.9
Other commitments to associated companies 7.0 7.0 0%
Other commitments
- Repurchase commitments 349.3 293.1 19%
- Operating leases 355,0 330.7 7%
- Rental guarantees for clients 2.1 4.1 -49%
- Other contingent liabilities 1.3 1.5 -13%
- Guarantees given 0.0 0.0
Liability under derivative contracts
- Value of underlying instruments
-- Interest rate derivatives 579.6 329.4 76%
-- Foreign exchange derivatives 220.4 194.1 14%
-- Commodity derivatives 1.9
- Market values
-- Interest rate derivatives -13.6 -11.9 14%
-- Foreign exchange derivatives -1.6 1.1
-- Commodity derivatives -0.9
YIT Corporation's guarantees on behalf of its 1,537.3 1,515.4 1%
subsidiaries
2.19 Transactions with associated companies
EUR million 1-12/12 1-12/11 Change
Sales to associated companies 1.5 1.5 2%
Purchases from associated companies 0.1 0.1 47%
Trade and other receivables 0.1 0.0
Trade and other liabilities 0.0 0.0
Attachments: