YIT CORPORATION STOCK EXCHANGE RELEASE Feb. 9, 2007 at 8:00
YITs financial statement bulletin for 2006:
REVENUE AND OPERATING PROFIT CONTINUE TO RISE
YITs revenue and operating profit rose to record highs in 2006. The
Groups order backlog is all-time high. The Board of Directors
proposes the raising of YITs dividends for the twelfth year in a
row.
Building Systems forged ahead with improving profitability. The
business segments operating profit rose by 54 per cent. The
operating profit margin grew to 6.2 per cent. Both maintenance and
servicing as well as repair and modernization projects increased.
Earnings in Construction Services were excellent in all areas of
operations. Development was especially vigorous in Russia, where the
company expanded its operations into three new cities. In 2006, YIT
started up the construction of 2,818 market-financed residential
units in Finland, 3,699 in Russia and 887 in the Baltic countries.
The business segments revenue grew by 12 per cent and its operating
profit by 19 per cent. Profitability remained excellent and the
operating profit margin was 11.8.
Industrial and Network Services enjoyed favourable trends in
industrial investments and maintenance. The business segments
operating profit declined by 54 per cent due to the weak market
situation for network services and personnel downscaling measures.
The operating profit margin was 3.8.
The outlook for 2007 is favourable. Construction and demand for
building system services will, on the whole, continue to be brisk in
our entire business territory. Demand for new residences will remain
at a good level. In the view of the Ministry of Finance, the
construction of over 30,000 residential units will be started up in
Finland this year. Housing demand is strong in Russia. We aim to increase
the Groups revenue in Russia by an average of 50 per cent
annually during the 2006-2009 period. Growth in capital invested in
Russian functions outpaces growth in revenue. We will continue to
improve profitability in Building Systems and Industrial and Network
Services. Thanks to our record-high order backlog and the solid
market situation, we are well-poised to keep growing profitably in
line with our plans, says Group CEO Hannu Leinonen.
Revenue growth 9 per cent
The YIT Groups revenue for 2006 rose by 9 per cent exclusive of
significant acquisitions and amounted to EUR 3,284.4 million (2005:
EUR 3,023.8 million). Revenue in Russia grew by 65 per cent to EUR
216.9 million (EUR 131.6 million). Of the revenue, 55 per cent came
from Finland (56%), 32 per cent from the other Nordic countries
(32%), 7 per cent from Russia (4%) and 6 per cent from Lithuania,
Latvia and Estonia (7%).
The revenue generated by the maintenance and servicing business rose
to EUR 1,222.4 million (EUR 1,136.4 million), representing 37 per
cent (38%) of total revenue.
As from the beginning of 2006, YIT has monitored services for
households separately. In the case of services for companies and
institutions, YIT keeps track of trends in the shares of revenue
generated by long-term service agreements, project development and
contracting. In 2006, consumer services accounted for 24 per cent of
revenue, long-term service agreements for 28 per cent, project
development for about 9 per cent and contracting for about 39 per
cent. YITs strategic objective is to increase the relative share of
revenue accounted for by consumer services, long-term service
agreements and project development.
Operating profit growth 14 per cent
Consolidated operating profit grew by 14 per cent to EUR 258.8
million (EUR 227.7 million). The operating profit margin was 7.9
(7.5%). Profit before taxes rose by 11 per cent to EUR 238.2 million
(EUR 214.8 million). Earnings per share were up 8 per cent and
amounted to EUR 1.36 (EUR 1.26). Equity per share increased to EUR
5.29 (EUR 4.49). Return on investment was 24.8 per cent (26.4%).
Financial position remains strong
The need for capital has increased due to growth in Russian business
operations, the acquisition of plots and growth in ongoing
residential development. At years end, 23 per cent (11%), or EUR 279
million (EUR 100 million), of the Groups invested capital was tied
up in Russia. The Groups financial position remained strong. Net
debt was EUR 506.5 million (EUR 254.4 million). The gearing ratio
rose to 75.1 per cent (45.1%). The equity ratio was 34.5 per cent
(36.3%). The balance sheet total at the end of the report period was
EUR 2,117.8 million (EUR 1,688.1 million).
Proposed dividend: EUR 0.65
The Board of Directors will propose to the Annual General Meeting
that a dividend of EUR 0.65 be paid per share (EUR 0.55) for the 2006
financial year, representing 47.8 per cent (43.7%) of earnings per
share. YIT is now increasing the dividend for the twelfth year
running.
Order backlog growth 49 per cent
The Groups uninvoiced backlog of orders rose to a record high. It
was 49 per cent higher at the end of 2006 than a year earlier, having
risen to EUR 2,802.3 million (EUR 1,878.8 million). The margin of the
backlog is good. Due to their nature, part of the Groups maintenance
and servicing operations are not included in the order backlog.
Number of employees 22,300
In 2006, the Group employed 21,846 (21,194) people on average. At the
end of the period, the number of personnel was 22,311 (21,289). Of
YITs employees, 51 per cent work in Finland, 36 per cent in the
other Nordic countries, 6 per cent in Russia and 7 per cent in
Lithuania, Latvia and Estonia.
Northern Europe still booming
YITs territories are still booming, although growth is slightly
slower than in the previous year. Financial research institutions
estimate that the Nordic national economies will see stable
development of 2-3 per cent in 2007 and 2008, outpacing EU growth by
about one percentage point. Russia and Norway still benefit from the
high prices of oil. The rate of growth in the economies of Russia,
Estonia, Latvia and Lithuania is over twice as fast as in the Nordic
countries. Euro interest rates are seeing moderate growth. The
positive earnings trend and the improvement in the employment count
bolster household confidence. The record-high population shift in
Finland is continuing, maintaining stable need for the construction
of new housing. Other construction is growing. Strong
demand for housing in the large cities of Russia enables the expansion of
residential production also over the long term. Growth in
exports and industrial output increases the need for industrial
investments and maintenance in the Nordic countries.
Outlook for 2007
We estimate that revenue and operating profit (EBIT) in 2007 will
increase compared to the previous year.
The outlook for revenue growth is supported by the record-high order
backlog, the continuing boom and YITs major investments in the Russian
market. The healthy margin of the order backlog and the companys own
profitability improvement measures underlie our expectations of
growth in operating profit.
Annual General Meeting
YIT Corporations Annual General Meeting will be held on Friday,
March 16, 2007, from 13:00 (finnish time) onwards at Finlandia Hall,
Mannerheimintie 13 e, 00100 Helsinki, Finland. The full notice of
meeting, including the Board of Directors proposals to the Annual
General Meeting, will be published as a separate stock exchange
release on February 9, 2007.
Annual Report 2006 and Interim Reports in 2007
The Annual Report for 2006 will be published on YITs Internet site
in Finnish and English during week 9/2007. Interim Reports will be
released on April 26, July 27 and October 26, 2007. Financial reports
and other investor information can be read at our site,
www.yitgroup.com.
The Report of the Board of Directors and a summary of the Groups
financial statement information are provided as an annex. Figures in
the financial statement bulletin are unaudited.
YIT CORPORATION
Hannu Leinonen
Group CEO
For additional information, contact:
Sakari Toikkanen, Executive Vice President, tel. +358 20 433 2336,
sakari.toikkanen@yit.fi
Petra Thorén, Vice President, Investor Relations,
tel. +358 40 764 5462, petra.thoren@yit.fi
Distribution: Helsinki Stock Exchange, principal media,
www.yitgroup.com
Information sessions on February 9, 2007
An event for analysts and portfolio managers will be held at YITs
head office at 10:00 (finnish time). The address is Panuntie 11,
00620 Helsinki, Finland. A press conference will be held at the same
venue at 13:00.
A webcast presentation of the 2006 results can be viewed at YITs
site, http://webcast.magneetto.com/yit/indexen.html. The results will
be presented in Finnish and English by Group CEO Hannu Leinonen.
REPORT OF THE BOARD OF DIRECTORS, JANUARY 1 - DECEMBER 31, 2006
REVENUE AND OPERATING PROFIT CONTINUE TO RISE
YITs revenue and operating profit rose to record highs in 2006. The
Groups order backlog is all-time high. The Board of Directors
proposes the raising of YITs dividends for the twelfth year in a
row.
Building Systems forged ahead with improving profitability. The
business segments operating profit rose by 54 per cent. The
operating profit margin grew to 6.2 per cent. Both maintenance and
servicing as well as repair and modernization projects increased.
Earnings in Construction Services were excellent in all areas of
operations. Development was especially vigorous in Russia, where the
company expanded its operations into three new cities. In 2006, YIT
started up the construction of 2,818 market-financed residential
units in Finland, 3,699 in Russia and 887 in the Baltic countries.
The business segments revenue grew by 12 per cent and its operating
profit by 19 per cent. Profitability remained excellent and the
operating profit margin was 11.8.
Industrial and Network Services enjoyed favourable trends in
industrial investments and maintenance. The business segments
operating profit declined by 54 per cent due to the weak market
situation for network services and personnel downscaling measures.
The operating profit margin was 3.8.
THE COMPANYS FINNISH NAME IS CHANGED TO YIT OYJ
At the Annual General Meeting held on March 13, 2006, a decision was
made to amend Article 1 of the Articles of Association such that the
companys Finnish business name became YIT Oyj and its Swedish
parallel business name YIT Abp. The English name YIT Corporation
remained unchanged. The amendment was entered in the Trade Register
on March 24, 2006.
NOMINAL VALUE OF THE SHARE IS HALVED
At the Annual General Meeting held on March 13, 2006, a decision was
made to amend Article 1 of the Articles of Association such that the
nominal value of the share was changed from one euro to EUR 0.50
(split), thereby doubling the number of shares in proportion to the
holding of shareholders and without raising the share capital. The
split was entered in the Trade Register on March 24, 2006, and
trading in the doubled number of shares began on the Helsinki Stock
Exchange on March 27, 2006.
The per-share figures presented in the Boards report have been
adjusted for comparability such that they account for the halving of
the nominal value of the share, which came into effect on March 24,
2006.
YIT REVISES ITS STRATEGIC TARGET LEVELS
On September 19, 2006, YIT Corporations Board of Directors confirmed
the financial target levels for the strategic period from 2007-2009.
A Group-level target for the operating profit margin (EBIT %) was set
for the first time. The operating profit target that was set is 9 per
cent of revenue.
The other financial target levels were not amended: average annual
revenue growth of 10 per cent, return on investment of 22 per cent,
an equity ratio of 35 per cent and a dividend payout ratio of 40-60
per cent of earnings after taxes and minority interest.
In addition, YIT set itself the goal of increasing its revenue in
Russia by an average of 50 per cent annually during the 2006-2009
period. Growth in Russia is sought primarily by stepping up
residential development as well as business premise and logistics
projects. Building systems operations in St Petersburg and Moscow
will also be expanded. YIT is seeking to establish a foothold for
industrial services in the St Petersburg area.
The Board of Directors decision to revise the target levels was
announced in a stock exchange release on September 19, 2006, and the
Russian growth target in a release dated October 10, 2006.
REVENUE GROWTH 9 PER CENT
The YIT Groups revenue for 2006 rose by 9 per cent exclusive of
significant acquisitions and amounted to EUR 3,284.4 million (2005:
EUR 3,023.8 million). Revenue in Russia grew by 65 per cent to EUR
216.9 million (EUR 131.6 million).
Revenue by segment (EUR million)
1-12/ 1-12/ Change, % Share of
2006 2005 the
Groups
revenue,
1-12/2006
Building Systems *) 1,415.1 1,398.4 1 43%
Construction Services 1,452.2 1,298.3 12 44%
Industrial and
Network Services *) 476.9 398.8 20 15%
Other items -59.8 -71.7 -17 -2%
YIT Group, total 3,284.4 3,023.8 9 100%
*) At the beginning of 2006, industrial electricity, automation and
HEPAC operations in Finland were transferred to the Industrial and
Network Services business segment from YIT Kiinteistötekniikka Oy.
The business functions that were transferred had revenue of EUR 58.9
million in January-December/2005. Comparable growth in revenue in
2006 was 6 per cent in Building Systems and 4 per cent in Industrial
and Network Services.
YITs service chain spans the entire life cycle of investments. The
life cycle strategy seeks to achieve better service capability,
growth in our business operations and a steadier stream of profits.
Part of the Groups revenue comes from its industrial, property,
telecom network and traditional infrastructure maintenance and
servicing business. In 2006, the revenue generated by the maintenance
and servicing business rose to EUR 1,222.4 million (EUR 1,136.4
million), representing 37 per cent (38%) of total revenue.
As from the beginning of 2006, YIT has monitored services for
households separately. In the case of services for companies and
institutions, YIT keeps track of trends in the shares of revenue
generated by long-term service agreements, project development and
contracting. In 2006, consumer services accounted for 24 per cent of
revenue, long-term service agreements for 28 per cent, project
development for about 9 per cent and contracting for about 39 per
cent. YITs strategic objective is to increase the relative share of
revenue accounted for by consumer services, long-term service
agreements and project development.
Of the revenue, 55 per cent came from Finland (56%), 32 per cent from
the other Nordic countries (32%), 7 per cent from Russia (4%) and
6 per cent from Lithuania, Latvia and Estonia (7%).
The YIT Groups strategic target for revenue growth is 10 per cent
annually on average. In addition, YIT has set itself the goal of
increasing its revenue in Russia by an average of 50 per cent
annually during the 2006-2009 period.
OPERATING PROFIT GROWTH 14 PER CENT
Consolidated operating profit grew by 14 per cent to EUR 258.8
million (EUR 227.7 million). The operating profit margin was 7.9
(7.5%).
Operating profit by segment (EUR million)
1-12/ 1-12/ Change, % Share of
2006 2005 consolida
ted
operating
profit,
1-12/2006
Building Systems *) 87.6 56.8 54 34%
Construction Services 170.8 143.1 19 66%
Industrial and Network
Services **) 18.0 39.1 -54 7%
Other items -17.6 -11.3 56 -7%
YIT Group, total 258.8 227.7 14 100%
*) In the October-December/2006 period,Building Systems released provisions
for certain contractual obligations that had come to an end.
This had a positive impact of EUR 7.2 million on operating profit.
**) The operating profit of the Industrial and Network Services
business segment in July-September/2006 includes EUR 5.1 million in
costs for the downsizing of Network Services.
Profit before taxes rose by 11 per cent on the previous year to EUR
238.2 million (EUR 214.8 million). Profit after taxes was EUR 175.4
million (EUR 156.9 million). Return on investment was 24.8 per cent
(26.4%).
YIT has set itself the target of increasing its operating profit to
9 per cent of revenue in the 2007-2009 strategic period. The strategic
target level for return on investment is 22 per cent.
EARNINGS PER SHARE GROWTH 8 PER CENT
Earnings per share were up 8 per cent and amounted to EUR 1.36
(EUR 1.26). Equity per share increased to EUR 5.29 (EUR 4.49).
PROPOSED DIVIDEND: EUR 0.65
The Board of Directors will propose to the Annual General Meeting
that a dividend of EUR 0.65 be paid per share (EUR 0.55) for the 2006
financial year, representing 47.8 per cent (43.7%) of earnings per
share. YIT is now increasing the dividend for the twelfth year
running.
The strategic target for the dividend payout is 40-60 per cent of the
annual result after taxes and minority interest.
The Board of Directors proposal on the use of the profits is
presented at the end of the Report of the Board of Directors.
ORDER BACKLOG GROWTH 49 PER CENT
The Groups market position is strong. The Groups uninvoiced backlog
of orders rose to a record high. It was 49 per cent higher at the end
of 2006 than a year earlier, having risen to EUR 2,802.3 million (EUR
1,878.8 million). The margin of the backlog is good. Due to their
nature, part of the Groups maintenance and servicing operations are
not included in the order backlog.
Order backlog by segment (EUR million)
12/ 12/ Change, Share of the
2006 2005 % Groups
backlog,
12/2006
Building Systems 601.7 492.0 22 21%
Construction Services 2,053.5 1,242.6 65 73%
Industrial and Network
Services 184.0 173.3 6 7%
Other items -36.9 -29.1 27 1%
YIT Group, total 2,802.3 1,878.8 49 100%
THE GROUPS FINANCIAL POSITION REMAINS STRONG
The need for capital has increased due to growth in Russian business
operations, the acquisition of plots and ongoing production. At
years end, 23 per cent (11%), or EUR 279 million (EUR 100 million),
of the Groups invested capital was tied up in Russia. Interest-
bearing liabilities amounted to EUR 532.4 million (EUR 335.0 million)
at the end of the period and liquid assets to EUR 25.9 million (EUR
80.6 million). Net debt was EUR 506.5 million (EUR 254.4 million).
The Groups financial position remained strong. The gearing ratio at
periods end rose to 75.1 per cent (45.1%). The equity ratio was
34.5 per cent (36.3%). The financial target level for equity ratio is
35 per cent.
Liquidity was boosted in September by increasing the size of the
commercial paper programme from EUR 100 million to EUR 200 million.
In addition, short-term credit was converted into long-term credit by
means of two EUR 50 million private placement bonds in September and
one EUR 75 million private placement bond in December.
Financial income during the period amounted to EUR 2.6 million
(EUR 1.9 million), exchange rate losses to EUR 2.7 million (exchange rate
gains: EUR 2.0 million) and financial expenses to EUR 20.5 million
(EUR 16.8 million). Net financial expenses were EUR 20.6 million
(EUR 12.9 million), or 0.6 per cent (0.4%) of revenue.
The proportion of fixed-interest loans in the Groups entire loan
portfolio was 39 per cent (49%). Loans raised directly on the capital
and money markets amounted to 59 per cent (39%).
The construction-stage contract receivables sold to financing
companies totalled EUR 272.1 million (EUR 268.2 million) at the end
of the period. Of this amount, EUR 120.4 million (EUR 109.4 million)
is included in interest-bearing liabilities in the balance sheet and
the remainder comprises off-balance sheet items as per IAS 39. The
interest on sold receivables paid to financing companies, EUR 9.3
million (EUR 5.3 million), is included in financial expenses in its
entirety.
Participations in the housing corporation loans of unsold completed
residences, EUR 28.6 million (EUR 15.3 million), are also included in
interest-bearing liabilities, but the interest on them is booked in
project expenses, as said interest is included in housing corporation
maintenance charges.
Interest-bearing liabilities included EUR 3.1 million in leasing
commitments (EUR 5.1 million).
The balance sheet total at the end of the report period was EUR
2,117.8 million (EUR 1,688.1 million).
CAPITAL EXPENDITURES AND ACQUISITIONS
Gross capital expenditures on non-current assets included in the
balance sheet totalled EUR 50.4 million (EUR 30.1 million) during the
financial year, representing 1.5 per cent (1.0%) of revenue.
Investments in construction equipment amounted to EUR 17.3 million
(EUR 11.8 million) and investments in information technology to EUR
5.1 million (EUR 2.7 million). Other production investments came in
at EUR 0.9 million (EUR 1.6 million). Other investments including
acquisitions amounted to EUR 27.1 million (EUR 14.0 million).
In 2006, the business functions of Building Systems were rounded out
in Sweden and Norway in line with the strategy. In Sweden, YIT
acquired Fläkt Teknik i Umeå AB, a company specializing in
ventilation technology in Umeå, the piping company AB Smedby Värme &
Sanitet in Kalmari and the electrical company El Persson in Uppsala.
YIT acquired two ventilation companies in Norway, URD Klima Mo AS in
Mo i Rana and Rune Nilsen Ventilasjon AS in Arendal. As a result of
the
transactions, a total of 48 people transferred into YITs employ in
Sweden and 30 in Norway.
YIT Construction Ltd increased its holding in the Moscow-region
housing developer ZAO YIT Moskovia to 82 per cent, and later in the
year to 88 per cent. YITs previous stake in the company was 51 per
cent. YIT Construction Ltd increased its holding in the Lithuanian
AB YIT Kausta Group to 95.1 per cent based on an earlier agreement.
AB YIT Kausta sold its structural steel plant in Kaunas to
the Finnish company Peikko Group.
During the review period, YIT Industrial and Network Services Oy
acquired Alueputkitus Oy and Konepaja Alueputkitus Oy, which offer
maintenance and capital investment services to the petrochemical
industry. The ship electrification operations of the Telesilta
business unit - part of YIT Industrial and Network Services - were
sold to a soon-to-be-formed company named Telesilta Oy.
MAJOR RISKS AND RISK MANAGEMENT
YITs risk management policy aims to identify the major risk factors,
taking the special characteristics of YITs business operations and
environment into consideration, and optimally manage the overall risk
level so that the company achieves its strategic and financial
objectives.
YIT has specified the Groups major risks as well as means of
managing strategic and administrative risks. YITs major strategic
risk factors are related to growing both organically and through
acquisitions, capital management, managing tender-based contracts,
ensuring the availability and competence of employees and general
economic development. In the case of administrative risks, YIT
focuses on the further development of its successful corporate
culture and management system.
YITs risk management is an integral part of the Groups management,
monitoring and reporting systems. Regular reporting and monitoring
are performed both at the Group and business segment levels. The
identification of business risks and preparations for them are
primarily carried out in the units, divisions and business segments.
The Group CEO holds overall responsibility for risk management. The
Board of Directors approves the risk management policy and its
objectives, and both directs and supervises the planning and
implementation of risk management.
The main principles underlying the corporate governance of the YIT
Group and its parent company YIT Corporation are set forth in
legislation and also in YIT Corporations Articles of Association
and the rules of procedure of the Board of Directors, Audit
Committee and the Groups Management Board. An account of YITs
corporate governance principles, risk management policy and the
management of individual risks has been published in the 2003, 2004
and 2005 Annual Reports, and will also appear in the 2006 Annual
Report. Information is also available from www.yitgroup.com.
The YIT Groups business risks are liquidity, interest rate, foreign
exchange and credit risks. The Board of Directors has approved the
Corporate Finance Policy. The Groups Finance Department is
responsible for the practical implementation of the policy in
association with the business units. An account of the financial
risks is presented in the notes to the financial statements.
The key objective of the management of accident risks is to minimize
YITs losses from identified risks and thereby safeguard the
companys financial result and continuity of operations. Project-
specific insurance policies are taken out for YITs projects,
covering sudden and unforeseeable material damage to the project
site, such as due to fire, collapsing structures and theft. Other
assets, such as property, plant and machinery, are covered with
continuous property insurances against material damage. YITs
business operations are diversified in eight countries and about 500
locations. The company rarely carries out projects that are so large
in terms of the total scope of its operations that their insurance
should be examined separately.
THE SUPREME ADMINISTRATIVE COURTS RULING ON YITS RESIDUAL TAXES FOR
1997
On June 21, 2006, the Supreme Administrative Court decided not to
change the ruling of the Helsinki Administrative Court to enforce the
residual taxes levied from YIT for 1997. According to the ruling, YIT
Corporation is not entitled to deduct the confirmed losses of its
merged subsidiary. This ruling of the Supreme Administrative Court
has no impact on YITs financial result for 2006, since the residual
taxes paid were recorded in the financial result for 2002.
YIT has released stock exchange releases on this matter on March 14,
2002, December 31, 2002, March 3, 2003, June 1, 2004 and June 21,
2006.
RULING CONCERNING THE REFURBISHING OF KOY VILHONKATU 7 IN 1999
In its ruling on February 14, 2006, the Helsinki Court of Appeal
ordered Kiinteistö Oy Vilhonkatu 7 to pay compensation to YIT for the
conversion and additional works involved in the refurbishing of SOKs
former head office property, completed in 1999, as well as the costs
caused by the lengthening of the duration of the contract, with
interest, and trial costs. Kiinteistö Oy Vilhonkatu 7 and YIT sought
leave to appeal to the Supreme Court.
In its ruling on November 17, 2006, the Supreme Court granted
Kiinteistö Oy Vilhonkatu 7 limited leave to appeal the ruling of the
Helsinki Court of Appeal on the refurbishing of Vilhonkatu 7 in 1999.
On the basis of the ruling of the Helsinki Court of Appeal, SOK paid
EUR 11.1 million to YIT on February 15, 2006. The amount will not be
recognized in YITs result until the appeal process is resolved.
YIT has released stock exchange releases on this matter on February
24, 2003, February 14, 2006, April 18, 2006 and November 24, 2006.
CHANGES IN THE GROUP MANAGEMENT
A new Group CEO and deputy to the CEO stepped in at YIT Corporation
on January 1, 2006. Hannu Leinonen, M.Sc. (Eng), assumed the position
of Group CEO, and Sakari Toikkanen, Lic. (Tech.), started out as
executive vice president and the deputy to the Group CEO. Leinonen
previously served as the managing director of YIT Primatel Ltd and
Toikkanen as executive vice president of YIT Building Systems Oy.
YITs former Group CEO Reino Hanhinen retired and became the chairman
of YITs Board of Directors at the beginning of 2006. Esko Mäkelä
continued to serve as senior vice president until December 31, 2006,
with responsibility for investor relations.
Petra Thorén, Investor Relations Manager, was appointed YIT
Corporations vice president, Investor Relations as of January 1,
2006, from which date on Thorén has also been a member of YITs
Management Board.
The Board of Directors elects the companys CEO. The period of
notice of the CEO and the deputy to the CEO is six months. If the
company terminates his contract, the CEO or the deputy to the CEO
shall also be paid separate compensation amounting to 12 months
salary.
CHANGES IN THE GROUP STRUCTURE
An independent country group was set up from Building Systems
business functions in the Baltic countries and Russia as from the
beginning of 2006. These business functions were previously part of
the same corporate entity as Finnish functions.
In Construction Services, YIT Tolonen Oy was merged into YIT
Construction Ltd. The residential construction company ZAO YIT
Ramenje, which operates in the cities of the Moscow region, was
renamed ZAO YIT Moskovia. In October, YIT established the joint
venture ZAO YIT Uralstroi in Yekaterinburg with nine private
individuals. YITs holding in this residential construction company
is 71 per cent.
The Industrial and Network Services business segment became a single
legal company in first part of 2006. YIT Primatel Ltd, YIT Service
Ltd and YIT Industria Ltd were merged into their parent company YIT
Industrial and Network Services Ltd. The subsidiary OOO YIT Industria
was established in St Petersburg.
At the beginning of 2006, industrial electricity, automation and
HEPAC operations in Finland were transferred to the Industrial and
Network Services business segment from YIT Kiinteistötekniikka Oy.
The business functions that were transferred had revenue of EUR 58.9
million in January-December/2005.
NUMBER OF EMPLOYEES 22,300
In 2006, the Group employed 21,846 (21,194) people on average. At the
end of the year, the Group had 22,311 employees (21,289). Of YITs
employees, 51 per cent work in Finland, 36 per cent in the other
Nordic countries, 6 per cent in Russia and 7 per cent in Lithuania,
Latvia and Estonia.
Personnel by business segment, December 31, 2006 (December 31, 2005)
No. Share of the
Groups
employees
Building Systems 11,643 (11,731) 52%
Construction Services 5,693 (5,115) 26%
Industrial and Network
Services 4,642 (4,126) 21%
Corporate Services 333 (317) 1%
YIT Group, total 22,311 (21,289) 100%
Personnel by country, December 31, 2006 (December 31, 2005)
No. Share of the
Groups
employees
Finland 11,355 (11,159) 51%
Sweden 4,137 (4,143) 18%
Norway 2,618 (2,485) 12%
Denmark 1,286 (1,103) 6%
Russia 1,293 (907) 6%
Lithuania, Latvia, Estonia 1,622 (1,492) 7%
YIT Group, total 22,311 (21,289) 100%
Network Services concludes codetermination negotiations to boost
operational efficiency and cut personnel
In 2006, YIT Industrial and Network Services Ltds Network Services
business unit carried out codetermination negotiations to boost
operational efficiency and reduce personnel. Personnel cuts were
necessary because the market situation of the Network Services
business unit weakened significantly and permanently during the year
now ended.
The need for personnel cutbacks was confirmed to amount
to 308 persons. Of the reductions, 92 were made through pension
arrangements, layoffs, transfers to new positions and other
solutions. 216 persons were made redundant due to reasons of economy
and production.
The bulk of the cost effects of the personnel cuts - EUR 5.1 million
- was recognized in the Industrial and Network Services business
segments third-quarter result of 2006. The final cost effects depend
on the success of the employment measures initiated after the
conclusion of the codetermination negotiations. Additional costs will
amount to about EUR 3 million at most and will be recognized in the
operating profit for the first half of 2007.
YIT announced that the negotiations would be started in a stock
exchange release on July 28, 2006, and reported on their conclusion
on September 15, 2006.
RESEARCH AND DEVELOPMENT
The development of personnel and operating systems comprises part of
YITs business operations. The Groups financial outlays on research
and development efforts in 2006 amounted to about EUR 21.0 million
(EUR 19.0 million), representing 0.6 per cent (0.6%) of revenue.
RESOLUTIONS PASSED AT THE ANNUAL GENERAL MEETING
YIT Corporations Annual General Meeting was held on March 13, 2006.
The Annual General Meeting adopted the 2005 financial statements and
discharged the members of the Board of Directors and the president
and CEO from liability. It was confirmed that a dividend of EUR 1.10
would be paid per share (EUR 0.70 for 2004), or a total of EUR 68.6
million (EUR 42.9 million). (Dividends per share are presented in
accordance with the number of shares prior to the halving of the
nominal value of the share, that is, the share split.) March 16,
2006, was set as the record date and March 23, 2006, as the payout
date.
During the period from January 1 - March 13, 2006, the Board members
were Reino Hanhinen (chairman), Ilkka Brotherus (vice chairman),
Eino Halonen, Antti Herlin and Teuvo Salminen.
The Annual General Meeting confirmed that the number of Board members
shall be set at five. Eino Halonen, Reino Hanhinen, Antti Herlin and
Teuvo Salminen were re-elected to the Board, and Sari Baldauf was
elected as a new member. At its organization meeting held on March
14, 2006, the Board of Directors elected Reino Hanhinen as its
chairman and Eino Halonen as its vice chairman. Eino Halonen was
elected as the chairman of the Audit Committee and Teuvo Salminen and
Reino Hanhinen as its members.
The Annual General Meeting re-elected PricewaterhouseCoopers Oy,
Authorized Public Accountants, as the companys auditor to audit the
administration and accounts during the present financial period.
PricewaterhouseCoopers Oy appointed Göran Lindell, M.Sc. (Econ.),
Authorized Public Accountant, as chief auditor.
The Annual General Meeting resolved to amend Articles 1, 2, 3, 4 and
9 of the Articles of Association. The amendments to the Articles of
Association were entered in the Trade Register on March 24, 2006.
A decision was made to amend Article 1 of the Articles of Association
such that the companys Finnish business name was changed to YIT Oyj
and the Swedish parallel business name to YIT Abp.
A decision was made to amend Article 2 of the Articles of Association
such that network services was added to the companys field of
activity.
A decision was made to amend Article 3 of the Articles of Association
such that the nominal value of the share was changed from one euro to
EUR 0.50 (split), thereby doubling the number of shares in proportion
to the holding of shareholders and without raising the share capital.
A decision was made to amend Article 4 of the Articles of Association
such that the Annual General Meeting shall elect the chairman and
vice chairman of the Board of Directors and a minimum of three (3)
and a maximum of five (5) Board members. A person who has reached the
age of 68 years shall not be elected as a member of the Board of
Directors.
The term of office of a Board member begins at the General Meeting
where he was elected and ends at the conclusion of the subsequent
Annual General Meeting.
A decision was made to amend Article 9 of the Articles of Association
such that the chairman, vice chairman and members of the Board of
Directors shall be elected at the Annual General Meeting.
Due to the halving of the nominal value of the share, the Annual
General Meeting decided to amend the terms of the share options from
2002 and 2004. A decision was made to change the terms of the Series
C and D share options from 2002 such that each Series C and D share
option entitles its bearer to subscribe for four YIT Corporation
shares having a nominal value of EUR 0.50 each. On the basis of the
share subscriptions, the companys share capital may be raised by a
maximum amount of EUR 2,800,000. A decision was made to amend the
terms of the Series E and F share options from 2004 such that each
Series E and F share option entitles its bearer to subscribe for two
shares having a nominal value of EUR 0.50 each. A maximum total of
1,200,000 shares can be subscribed for and the companys share
capital may be raised by a maximum amount of EUR 600,000. A decision
was made to change the subscription price of the shares subscribed
with the Series C options to EUR 3.2725 per share and in the case of
the Series D options to EUR 2.9225 per share. The meeting decided to
change the terms of the Series E options such that the share
subscription price is EUR 6.80. The place of share subscription on
the basis of the options was changed to Nordea Bank Finland Plcs
investment advisory branches.
In addition, the Annual General Meeting decided that a maximum of
300,000 Series K, 900,000 Series L, 900,000 Series M and 900,000
Series N share options be granted for subscription without
consideration. The share options will be distributed in 2006 (K),
2007 (L), 2008 (M) and 2009 (N), on the basis of the decision by the
Board of Directors of YIT Corporation, to those who are either in the
employ of or will be hired into the employ of the YIT Group
companies, the president and CEO of YIT Corporation, the deputy to
the CEO, and other members of the Groups management and its key
employees.
SHARES AND SHARE CAPITAL
The company has one series of shares. Each share carries one vote and
confers an equal right to a dividend.
YIT Corporations number of shares outstanding was EUR 62,397,352 at
the beginning of 2006 and the share capital was 62,397,352.
Following a decision by the Annual General Meeting, the nominal value
of the share was changed from one euro to EUR 0.50 (split) on March
24, 2006, thereby doubling the number of shares.
On the basis of shares subscribed for with the Series C and D share
options from 2002 and the Series E share options from 2004, the
number of shares rose by a total of 1,982,368 during the report year.
At years end, the number of shares was 126,777,072 and the share
capital amounted to EUR 63,388,536.
According to the Companies Act, the General Meeting shall decide on
the buyback and conveyance of shares as well as any decisions leading
to changes in the share capital.
As set forth in the Securities Markets Act, a shareholder is
obligated to make a public purchase offer for the companys shares
when his stake exceeds three-tenths or half of the companys shares.
This provision supplants the purchase obligation clause in YITs
Articles of Association.
Authorizations to increase the share capital
In 2006, no share issues were organized and convertible bonds or
bonds with warrants were not floated. At the end of the year, the
Board of Directors did not have valid share issue authorizations or
authorizations to issue convertible bonds or bonds with warrants.
Market capitalization up 18 per cent
On the last day of trading in 2006, the closing rate of YITs share
was EUR 20.95 (2005: EUR 18.07), up 16 per cent during the report
year.
The highest share price in 2006 was EUR 23.88 (EUR 18.25) and the
lowest was EUR 15.20 (EUR 8.95). The average price was EUR 19.24 (EUR
13.99). At years end, market capitalization was EUR 2,656.0 million
(EUR 2,254.4 million), up 18 per cent on the previous year.
Share turnover grew significantly compared with 2005, with
184,576,963 (120,368,616) shares being traded on the Helsinki Stock
Exchange in 2006. The value of share turnover was EUR 3,563.1 million
(EUR 1,697.3 million). Average daily turnover amounted to 657,460
(475,766) shares.
Own shares
At the end of 2006, YIT Corporation held 400 of its own shares,
representing 0.0 per cent of the companys shares. In December 2005,
YIT Corporation purchased 200 of the companys own shares at an
average price of EUR 35.25 per share. Due to the halving of the
nominal value of the share, the number of shares doubled and the
share price was halved on March 24, 2006. The buyback of shares was
decided on by the Annual General Meeting held in spring 2005, which
decided on the buyback of a minimum of 200 and a maximum of 2,000,000
of the companys own shares. These shares do not confer the right to
a dividend or voting rights at General Meetings.
At the end of the year the Board of Directors did not have
authorizations to purchase or dispose of YITs own shares.
YITs subsidiaries did not own shares in the parent company.
Substantial growth in the number of shareholders
In 2006, the number of registered shareholders grew from 9,368 to
14,364, up 53 per cent. The number of private investors grew by over
4,600.
A total of 39.9 per cent of the shares (27.9%) were owned by nominee-
registered or non-Finnish investors at the beginning of the year and
45.9 per cent (39.9%) at the end.
During 2006, there were no changes in YIT share ownership that would
have required a flagging notification.
SHARE OPTION PROGRAMMES
YIT had three share option programmes in 2006, of which the programme
from 2002 ended on November 30, 2006.
Decisions on granting share options and the terms and conditions of
option programmes are made by the General Meeting. On the basis of
the terms and conditions of YITs share options, the Board of
Directors decides on the distribution of options annually. The number
and subscription prices of shares subscribed for with share options
have changed due to the halving of the nominal value of shares in
2004 and 2006.
The full terms and conditions of the share options are available on
the companys Internet site at www.yitgroup.com.
2002 share option programme
The 2002 Annual General Meeting decided to grant a maximum total of
450,000 Series C share options and a maximum total of 950,000 Series
D share options for subscription to the Groups management and key
employees. Each Series C and D share option from 2002 entitled its
holder to subscribe for four YIT Corporation shares having a nominal
value of EUR 0.50. As a result of the subscriptions, the share
capital could be increased by a maximum of EUR 2,800,000.
In 2002, about 110 members of the Groups management and key
employees named by the Board of Directors subscribed for Series C
share options. The subsidiary YIT Construction Ltd subscribed for all
the Series D share options for distribution to members of the Groups
management and key employees on a staggered basis from 2003-2005 if
the profitability and growth targets set in the share option
programme were achieved.
In accordance with the terms and conditions of the share options, the
share subscription price was based on the average price of the YIT
Corporation share on the Helsinki Stock Exchange in December 2001 and
January 2002 plus 15%. The share subscription price was lowered by
the amount of dividends per share, as specified in the terms and
conditions. The subscription price of a share subscribed for with the
Series C share options was EUR 3.2725 per share and with the Series D
share options EUR 2.9225 per share.
The share subscription period with the Series C share options was
from April 1 to November 30 in 2004 - 2006 and with the Series D
share options from April 1 to November 30 in 2005 - 2006. At the
beginning of the subscription periods, a total of 427,740 Series C
share options and 698,520 Series D share options had been distributed
to the Groups management and key employees.
In 2006, 373,000 shares were subscribed for with the Series C share
options and 1,430,488 with the Series D share options. The
subscription period with the Series C and D share options ended on
November 30, 2006. A total of 1,710,960 shares were subscribed for
with the Series C and 2,793,732 with the Series D share options.
During the report year, 59,850 Series C share options were traded at
an average price of EUR 66.95 and 310,950 Series D share options at
an average price of EUR 69.15.
2004 share option programme
The 2004 Annual General Meeting decided to grant a maximum of 180,000
Series E share options and a maximum of 420,000 Series F share
options for subscription to the management and key employees of the
new Building Systems business segment. The share option programme
covers about 65 people who were not part of the 2002 share option
programme. Each share option entitles its holder to subscribe for two
YIT Corporation shares having a nominal value of EUR 0.50 each. As a
result of the subscriptions, the share capital can be increased by a
maximum of EUR 600,000.
The Series E share options were issued in summer 2004. YIT
Construction Ltd subscribed for the Series F share options and will
distribute them on a staggered basis to the management and key
employees of the Building Systems business segment in 2005-2007 if
the objectives set for the business segments result (EBITA-%) are
achieved. Shares can be subscribed for with the Series E share
options from April 1 - November 30, 2006 and April 1 - November 30,
2007, and with the Series F share options from April 1 - November 30,
2007.
The share subscription price is based on the average price of the YIT
Corporation share on the Helsinki Stock Exchange in November and
December 2003 and January 2004 plus 10% and divided by two. The share
subscription price will be lowered by the amount of dividends per
share, as specified in the terms and conditions. The subscription
price of a share subscribed for with the Series E share options is
EUR 6.80 per share. The subscription price of shares with the Series
F share options will be confirmed prior to the commencement of the
subscription period.
At the beginning of the subscription period, a total of 167,400
Series E share options had been distributed to the Groups management
and key employees. A total of 50,960 Series F share options had been
distributed to the Groups management and key employees by December
31, 2006.
In 2006, 178,880 shares were subscribed for with the Series E share
options from 2006. A maximum of 155,920 shares can be subscribed for
with the remaining Series E share options.
During the report year, 138,150 Series E share options were traded at
an average price of EUR 28.42.
2006 share option programme
The Annual General Meeting in 2006 decided to grant a maximum of
300,000 Series K, 900,000 Series L, 900,000 Series M and 900,000
Series N share options for subscription without consideration. Each
Series K, L, M and N share option entitles its holder to subscribe
for one YIT Corporation share having a nominal value of EUR 0.50. As
a result of the subscriptions, the share capital can increase by a
maximum of EUR 1,500,000.
YIT Construction Ltd subscribed for the 2006 share options for
distribution in 2006 (K), 2007 (L), 2008 (M) and 2009 (N), on the
basis of the decision by the Board of Directors of YIT Corporation,
to those who are either in the employ of or will be hired into the
employ of the YIT Group companies, the president and CEO of YIT
Corporation, the deputy to the CEO, and other members of the Groups
management and its key employees. The criteria for the distribution
of Series L, M and N share options are return on investment and
revenue growth.
The share subscription price with the 2006 K, 2006 L, 2006 M and 2006
N share options will be based on the average price of the YIT
Corporation share on the Helsinki Stock Exchange in December 2005 and
January and February 2006 plus 10% and divided by two. The share
subscription price will be lowered by the amount of dividends per
share, as specified in the terms and conditions. YIT Corporations
Board of Directors will confirm the subscription prices of shares
prior to the commencement of the subscription periods.
Shares can be subscribed for annually in the period from April 1 to
November 30. Shares can be subscribed for with the Series K share
options in 2007-2008, the Series L share options in 2007-2008, the
Series M share options in 2008-2009 and the Series N share options in
2009-2010.
By December 31, 2006, a total of 244,000 Series K share options had
been distributed to the Groups management and key employees.
NORTHERN EUROPE STILL BOOMING
The boom in the Nordic countries has peaked. In January, Nordea
estimated that the GDP of the Nordic countries will grow by 2.9 per
cent this year, significantly outpacing euro zone growth. Growth will
slacken to 2.4 per cent in 2008. Russia and Norway still benefit from
the high prices of oil. The rate of growth in the Russian economy is
twice as fast as in the Nordic countries, while economic growth in
Estonia, Latvia and Lithuania is almost three times as fast. Euro
interest rates are seeing moderate growth. The positive earnings
trend and the improvement in the employment count bolster household
confidence. The record-high population shift in Finland is
continuing, maintaining stable need for the construction of new
housing and increasing repairs of old housing. Non-residential
construction continues brisk. Strong demand for housing in the large
cities of Russia enables the company to expand residential production
over the long term, too. Growth in exports and industrial output
increases the need for industrial investments and maintenance in the
Nordic countries.
Finland
In January, Nordea estimated that Finlands GDP will rise by 3.2 per
cent this year and further by 3.6 per cent in 2008. In other words,
growth will continue to outpace the long-term average. The
improvement in the employment situation, the favourable trend in
incomes and the moderately growing interest rate level support
household consumption and demand for housing. The rise in income
levels will slacken from last years rate of 3 per cent to 2.6 per
cent, and then pick up the pace to 3.5 per cent next year. This
change will be reflected in household consumption. Growth in
investments in machinery and equipment will rise to 4.5. per cent this
year. The business cycle report published by the Confederation of
Finnish Construction Industries RT in October states that the volume
of construction will grow by 2.5 per cent this year. Residential
construction will remain at a good level. Repair works will remain
brisk. According to RT, 33,500 residential units will be started up
this year, slightly less than in the previous year. The Ministry of
Finance estimates that start-ups will number over 30,000 residential
units. Office construction will be on the up, especially in the
Greater Helsinki Area. Construction of commercial premises will also
remain brisk. Annual growth in renovation works will be 2-3.5 per
cent during the present decade. Growth in new construction and
renovation maintains demand in the construction and building system
markets (heating, plumbing, air-conditioning, electrical and
automation contracting, and maintenance). The market for industrial,
property and infrastructure maintenance will expand as the
outsourcing trend progresses. Growth in the number of broadband
connections has slackened and investments to expand the fixed and
mobile phone networks will remain slight.
Sweden
In December, the Swedish National Institute of Economic Research KI
estimated that Swedens GDP will grow by 3.6 per cent this year and
3.2 per cent in 2008. The factors underlying this positive trend are
the high capacity utilization ratio in industry, solid earnings, the
positive incomes trend enjoyed by households and the low interest
rates. Growth is on a broad footing. In 2007, exports will increase
by 6.9 per cent due to international demand and the effect of the
relatively weak Swedish kronor. Fixed investments will increase by
6.3 per cent this year, but will slacken to 4.5 per cent the next.
Fixed investments by industry will increase by 3.6 per cent during
the present year, and next year by 2.2 per cent. Investments by the
service sector are higher and growing faster than those of industry,
rising by 6.4 per cent both this year and the next. KI states that
growth in housing investments will continue at a rate of 5.1 per cent
this year and by 3.7 per cent the next. According to the business
cycle barometer KI released in January, the order backlogs of
construction companies have increased, employment has improved, and
companies expect to see further production growth. 60 per cent of
construction companies report that the shortage of skilled labour
slows down growth. In December, Euroconstruct predicted that the
construction of 35,000 new residential units will be started up this
year and 34,500 the next. The Swedish Construction Federation BI
predicted in December that the production of other types of buildings
will see growth of 10 per cent this year and decline by 2 per cent in
2008.
Norway
Norways boom has gained momentum. According to the forecast released
by Statistics Norway in December, GDP will grow by 3.1 per cent both
this year and the next. Household consumption will grow by 3.6 per
cent this year and continue at almost the same rate in 2008-2009. The
vigorous growth in fixed investments that got under way in 2004 will
slacken to 4.2 per cent this year because growth in housing
investments has come to a halt. Investments by business and industry
will rise by 7.6 per cent this year and by about 5 per cent during
each of the next two years. In a year and a half, Norges Banks key
interest rate (sight deposit rate) has risen by 1.75 percentage
points. Statistics Norway expects the key interest rate to rise
further this year, by 0.5 percentage point to 4.25 per cent. The
slowdown in international economic growth will weaken the trend in
the exports of continental Norway during the next two years. The
construction of 29,100 residential units got under way from January
to November last year, 2.3 per cent more than in the corresponding
period of the previous year. Start-ups of other types of buildings
during the same period amounted to 3.2 million square metres,
outnumbering the year-ago figure by 11.2 per cent. Demand for
business and industrial buildings is expected to keep growing in 2007-
2009. Euroconstruct estimated in December that housing renovation
will grow by 3 per cent annually on average from 2007-2009.
Renovation of non-residential buildings will remain at the present
level.
Denmark
The outlook for the Danish economy is still good. In December, Nordea
anticipated that GDP growth will amount to 2.1 per cent this year.
Growth will slacken to 1.5 per cent in 2008. Export growth gathered
steam last year, and will continue at a rate of 6 per cent this year
and 5.6 per cent the next. Growth in private consumption is estimated
to slacken to 2.6 per cent this year. Investments will increase by
5.8 per cent this year. Housing prices rose by 23.9 per cent last
year, but growth will slow down to about 2.8 per cent this year and
further the next. Growth in housing investments will slacken to 4.5
and 1.0 per cent this year and the next, respectively. In December,
Euroconstruct estimated that the number of new residential start-ups
will be 29,000 this year and in the subsequent two years. Housing
renovation will not see growth in these years. The construction of
other types of new buildings will increase by 3.7 per cent this year,
and by 3.8 and 3.9 per cent in 2008 and 2009. The value of the
production of industrial buildings will rise by 10 per cent this
year. Production of business buildings will grow by about 4 per cent
annually in 2008 and 2009. Annual growth in repairs of business
buildings is about one per cent.
Baltic countries
GDP and investments grow at a significantly faster rate in Latvia,
Lithuania and Estonia than in the Nordic countries. According to
VTTs estimate, the value of construction was EUR 5.8 billion in
2005. In its forecast in December, Nordea estimated that the GDP of
these countries will continue to grow by 7.4-11.9 per cent in 2007
and 2008. The growth of these economies is supported by the high
educational level in the area and the EU membership of Estonia,
Latvia and Lithuania. Growth in investments this year will be 14 per
cent in Estonia, 18 per cent in Latvia and 15 per cent in Lithuania.
In 2008, investments will continue to grow at a rate of over 10 per
cent in these countries. Inflation in Estonia and Lithuania is double
the EMU average, and it is triple in Latvia. Rapid inflation will
delay the EMU entry of these countries. The interest rate spread with
the euro will narrow as the countries seek EMU membership. Affordable
borrowing, economic growth and the greater affluence of the
population have increased demand for new residences and renovation.
VTT estimates that a total of about 21,000 residential units will be
completed in the Baltic countries this year. Building permits have
been granted for over twice as many residences as have been
completed.
Russia
The high price of oil supports Russian economic growth. In December,
Nordea estimated that Russias GDP will grow by 6.5 per cent this
year and by 6.0 per cent in 2008. In December, the Russian Ministry
of Economic Development and Trade (MERT) estimated that GDP had grown
by 6.9 per cent in 2006, and nudged its growth estimates for 2007 and
2008 up to 6.2 and 5.9 per cent, respectively. The Central Bank of
the Russian Federation forecast in August that growth in GDP will
amount to 6 per cent in 2007 provided that the average price per
barrel of Ural blend oil is USD 61. If the per-barrel price were to
be USD 45, growth would remain at 5 per cent, while in the case of a
higher per-barrel price of USD 75, the growth rate would rise to 6.4
per cent. Russia has recently tapped its oil funds to accelerate the
repayment of the government debt. Considering its currency reserves,
Russia is now in practice a debt-free country. Last year, inflation
was 9.7 per cent; according to Nordeas estimate, it will slow down
to 8.7 per cent this year. MERT predicts that inflation will decline
to 6.5 per cent by 2010. The rate of growth in investments will rise
to 18 per cent this year and continue at a rate of 12 per cent the
next, remaining significantly faster than the EU and Nordic average
over the next few years. A significant share of investments are
earmarked for residential construction. Thanks to the good incomes
trend, household consumption has become the primary engine of growth.
Private consumption will rise by 15 per cent this year, comprising
half of GDP. The greater affluence of the middle class has
strengthened demand for market-financed residences in large cities
such as Moscow and St Petersburg.
EARNINGS TRENDS OF THE BUSINESS SEGMENTS
BUILDING SYSTEMS
In 2006, Building Systems revenue was up one per cent compared to
2005 and amounted to EUR 1,415.1 million (EUR 1,398.4 million).
Comparable growth in revenue*) in 2006 was 6 per cent. The share of
the business segments revenue accounted for by the maintenance and
servicing business rose to 64 per cent (60%), or EUR 907.5 million
(EUR 840.7 million).
The business segment continued to improve its profitability.
Operating profit increased by 54 per cent to EUR 87.6 million
(EUR 56.8 million). The operating profit margin rose to 6.2 per cent
(4.1%). In the last quarter, it was 8.6 per cent (5.2%). In the October-
December/2006 period, Building Systems released provisions for certain
contractual obligations that had come to an end. This had a positive
impact of EUR 7.2 million on operating profit. Return on investment
rose to 34.4 percent (22.0%).
The order backlog at the end of the year was 22 per cent higher than
in the previous year, having risen to EUR 601.7 million
(EUR 492.0 million).
The business segment had 11,643 employees (11,731) at the end of the
year.
In 2006, business functions were rounded out in Sweden and Norway
with numerous small acquisitions, in line with the strategy. As a
result of the transactions, a total of 48 people transferred into
YITs employ in Sweden and 30 in Norway.
Revenue of the Building Systems business segment by country
1-12/2006 (1-12/2005) Share of the
business
segments
revenue, 1-
12/2006
Sweden EUR 541.0 million (EUR 537.6 million) 38%
Finland EUR 327.4 million *)(EUR 394.3 million) 23%
Norway EUR 345.9 million (EUR 305.4 million) 25%
Denmark EUR 146.4 million (EUR 123.9 million) 10%
Estonia,
Latvia,Lithuania
and Russia EUR 54.4 million (EUR 37.0 million) 4%
Total EUR 1,415.1 million (EUR 1,398.4 million) 100%
*) At the beginning of 2006, industrial electricity, automation and
HEPAC operations in Finland were transferred to the Industrial and
Network Services business segment from YIT Kiinteistötekniikka Oy.
The transferred business functions had revenue of EUR 58.9 million in
January-December/2005.
An independent country group was set up from Building Systems
business functions in the Baltic countries and Russia as from the
beginning of 2006. These business functions were previously part of
the same corporate entity as Finnish functions.
Demand for building equipment systems remained good in all the
business countries. Demand for technical solutions and services
surged in Russia and the Baltic countries on the heels of strong
economic growth and a rise in foreign investments.
Both maintenance and servicing as well as repair and modernization
projects were on the up. Interest in the outsourcing of technical
services was increased by public sector restructuring.
The market for industrial services grew in Sweden, Norway and
Denmark.
CONSTRUCTION SERVICES
In 2006, the revenue of Construction Services grew by 12 per cent on
the previous year and amounted to EUR 1,452.2 million (EUR 1,298.3
million). The share of revenue accounted for by the maintenance
business grew to EUR 51.3 million (EUR 42.3 million), representing
4 per cent (3%) of the business segments revenue. Of the revenue,
75 per cent came from Finland, 13 per cent from Russia, 12 per cent from
Lithuania, Latvia and Estonia and less than one per cent from other
countries.
Construction Services posted excellent results in all its business
areas. Operating profit grew by 19 per cent to EUR 170.8 million (EUR
143.1 million). The operating profit margin remained excellent,
11.8 per cent (11.0%). Return on investment remained good and was
24.1 per cent (25.8%).
The uninvoiced backlog of orders was at a record high. The order
backlog grew by 65 per cent to EUR 2,053.5 million
(EUR 1,242.6 million). The margin of the backlog is good.
The business segment had 5,693 employees (5,115) at the end of the
year.
Demand for housing remained good in Finland. The construction of
leisure-time residences progressed in line with plans. In business
premise construction, retail investments gained added momentum from
consumer demand, and the market situation for logistics facilities
remained solid. Demand for new office buildings improved during the
report year and renovation saw steady growth. Construction
investments by industry remained slight. The market for
infrastructure construction held firm. New public road maintenance
contracts were landed in Finland, consolidating YITs position as the
countrys largest private road maintenance company.
Housing demand was robust in Russia, where YIT expanded its
operations into three new cities. The first housing plots were
acquired in Kazan and Yaroslavl. A joint venture focusing on
residential construction was established in Yekaterinburg.
Construction was also started up in the city of Moscow during the
report year. Economic growth and an increase in foreign investments
stepped up demand for business and logistics premises in Russia and
the Baltic countries. YIT kicked off its own business premise
projects in the St Petersburg area as well in 2006, such as by
agreeing on the construction of a logistics centre that will be owned
by the EPI Russia fund and Atrias production plant on a plot YIT
acquired in Gorelovo.
The prices of residences saw moderate growth in Finland. Prices have
increased strongly in the Baltic countries and especially in Russia.
In October - December 2006, the average selling price of the
residences built by YIT in Russia was about 43 per cent of the
average selling price of market-financed residences sold in Finland,
and in the Baltic countries about 53 per cent.
Residential construction in 2006 (2005), number of residences
Finland Russia Estonia,
Latvia,
Lithuania
Market- State- Total
financed financed,
(incl. rental
leisure- housing
time and
residences) tender-
based
Sold 2,478 - (-) 2,478 1,950 697
(3,094) (3,094) (1,535) (848)
Start-ups 2,818 186 3,004 3,699 887
(2,993) (328) (3,321) (2,263) (1,111)
Under
construction
at years end 3,210 186 3,396 8,381 1,858
(3,417) (153) (3,570) (5,350) (1,530)
Completed 3,025 153 3,178 563 (466) 559 (237)
(2,577) (158) (2,735)
Completed
and unsold
at years
end 235 (110) - (-) 235 (110) 6 (1) - (-)
Developer-contracted housing construction and project development
require good plot reserves. In Finland, YIT focuses on acquiring
plots in the growth centres and their surrounding municipalities.
Plot reserves are being bolstered in the Baltic countries and
especially in Russia to enable vigorous growth in the entire business
area. The most significant plot acquisition was made in northern St
Petersburg, on the north side of the Novo-Orlovsky forest park. The
plot measures about 46 hectares and over 15,500 residential units can
be built on it from 2008 onwards.
Plot reserves, December 31, 2006 (December 31, 2005)
Building rights and zoning potential, 1,000 m2 of floor area
Finland Russia Estonia,
Latvia,
Lithuania
Residential plots 1,723 (1,733) 1,761 (587) 367 (215)
Business premise plots 927 (676) 400 (26) 35 (33)
Total 2,650 (2,409) 2,161 (613) 402 (248)
Capital tied into
plot reserves, EUR
million 325.1 (268.9) 129.2 (32.5) 51.0 (24.7)
Plot reserves include plots that have been zoned and an estimate of
the potential building rights on areas that are under zoning. As
construction progresses, YIT gradually assumes ownership of the
building rights provided by regional development agreements made with
landowners.
INDUSTRIAL AND NETWORK SERVICES
The revenue of Industrial and Network Services grew by 20 per cent in
2006 and amounted to EUR 476.9 million (EUR 398.8 million).
Comparable growth in revenue was 4 per cent in 2006. At the beginning
of 2006, industrial electricity, automation and HEPAC operations in
Finland were transferred to the Industrial and Network Services
business segment from YIT Kiinteistötekniikka Oy. The transferred
business functions had revenue of EUR 58.9 million in January-
December/2005.
The share of revenue accounted for by the maintenance business was
EUR 288.2 million (EUR 305.4 million), representing 60 per cent (77%)
of the business segments revenue. Of the revenue, 94 per cent came
from Finland and 6 per cent from other countries.
Trends in industrial investments and maintenance were favourable.
Operating profit weakened by 54 per cent due to the weak market for
network services and personnel downscaling measures. Operating profit
was EUR 18.0 million (EUR 39.1 million) and the operating profit
margin was 3.8 (9.8%). Return on investment was 28.8 per cent
(63.3%).
The bulk of the cost effects of the personnel cuts - EUR 5.1 million
- was recognized in the Industrial and Network Services business
segments third-quarter result of 2006. The final cost effects depend
on the success of the employment measures initiated after the
conclusion of the codetermination negotiations. Additional costs will
amount to about EUR 3 million at most and will be recognized in the
result for the first half of 2007.
The order backlog at the end of the period amounted to EUR 184.0
million (EUR 173.3 million). The order backlog in Network Services is
based on forecasts from customers.
At the end of the period, the business segment had 4,642 employees
(4,126).
Demand for industrial maintenance services was brisk. In addition to
the maintenance outsourcing and service agreements that were forged,
major maintenance shutdown works were carried out for the forestry,
energy, process and building materials industries.
The market situation for capital investment projects for industry
remained favourable. Both international and Finnish demand held firm
in the process and energy industry. The market situation in the
marine industry continued to be excellent.
The market situation for network services weakened significantly.
Investments by teleoperators, maintenance works and fault repairs
have decreased and the demand for broadband connections waned. As in
previous years, the number of landline phones and related works
declined.
EVENTS AFTER THE END OF THE REVIEW PERIOD
On January 16, 2007, YIT and Vattenfall signed a partnership
agreement under which the electricity network maintenance and
construction works that had until then been handled by Vattenfall
were handed over to YIT as from January 22, 2007. About one hundred
persons transferred into YITs employ. By means of this agreement,
YIT ventured into energy network maintenance in line with its
strategy.
OUTLOOK FOR 2007
We estimate that revenue and operating profit (EBIT) in 2007 will
increase compared to the previous year.
The outlook for revenue growth is supported by the record-high order
backlog, the continuing boom and YITs major investments in the Russian
market. The healthy margin of the order backlog and the companys own
profitability improvement measures underlie our expectations of
growth in operating profit.
BOARD OF DIRECTORS PROPOSAL FOR THE DISTRIBUTION OF PROFIT
The distributable equity of YIT Corporation on December 31, 2006 is:
· Retained earnings 162,161,357.01
· Profit for the financial period 84,420,484.12
246,581,841.13
==============
The Board of directors proposes that the profit be disposed of as
follows:
· Payment of a dividend EUR 0.65
per share to shareholders 82,404,836.80
· Transfer to retained earnings 164,177,004.33
246,581,841.13
==============
No significant changes have taken place in the companys financial
position after the end of the financial year. The companys liquidity
is good and in the view of the Board of Directors the proposed
dividend payout does not jeopardize the companys solvency.
Helsinki, February 8, 2007
Reino Hanhinen Eino Halonen
Chairman Vice chairman
Sari Baldauf Antti Herlin
Teuvo Salminen Hannu Leinonen
President and CEO
SUMMARY OF THE GROUPS FINANCIAL STATEMENT INFORMATION DEC 31,2006
(Figures in the financial statement bulletin are unaudited.)
1. Consolidated financial statements, Jan 1 - Dec 31, 2006
Consolidated income statement
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Commitments and contingent liabilities and assets
Acquired and divested businesses
Revenue, operating profit and order backlog by segment
2. Other YIT Groups key figures
Key figures
Quarterly figures
Revenue, operating profit and order backlog by segment by quarter
1. CONSOLIDATED FINANCIAL STATEMENTS, JAN 1 - DEC 31, 2006
IFRS standards
YIT changed over to IFRS (International Financial Reporting
Standards) on January 1, 2005. Prior to the adoption of IFRS, YITs
financial reporting was based on Finnish Accounting Standards (FAS).
The financial statements for 2006 are drafted in accordance with IFRS
recognition and measurement policies.
Business segment structure
YITs business segment structure was firmed up on June 1, 2005, by
merging Services for Industry and Data Network Services to form a
single business segment: Industrial and Network Services. YITs
business operations are now divided into three business segments:
Building Systems, Construction Services and Industrial and Network
Services. The Industrial and Network Services business segments
comparative figures for 2005 have been calculated by combining the
financial figures of the Services for Industry and Data Network
Services business segments.
At the beginning of 2006, industrial electricity, automation and
HEPAC operations in Finland were transferred to the Industrial and
Network Services business segment from YIT Kiinteistötekniikka Oy.
The business functions that were transferred had revenue of
EUR 58.9 million in Jan-Dec/2005.
CONSOLIDATED INCOME STATEMENT (EUR million)
IFRS IFRS Change, %
Jan-Dec/ Jan-Dec/
2006 2005
Revenue 3,284.4 3,023.8 9
- of which activities
outside Finland 1,477.4 1,326.6 11
Operating income and
expenses -3,002.8 -2,772.9 8
Share of results of
affiliates 1.3 0.7 86
Depreciation and write-downs -24.1 -23.9 1
Operating profit 258.8 227.7 14
% of revenue 7.9 7.5 -
Financial income 2.6 1.9 37
Exchange rate differences -2.7 2.0 *)
Financial expenses -20.5 -16.8 22
Profit before taxes 238.2 214.8 11
% of revenue 7.3 7.1 -
Income taxes 1) -62.8 -57.9 8
Profit for the report period 175.4 156.9 12
% of revenue 5.3 5.2 -
Attributable to
Equity holders of the
parent company 171.0 155.5 10
Minority interests 4.4 1.4 *)
Earnings per share
attributable to the equity
holders of the parent company
Earnings per share, EUR **) 1.36 1.26 8
Diluted earnings per share,
EUR **) 1.35 1.23 10
*) Change over 100%
**) The per-share key figures presented in the tables have been
adjusted for comparability such that they account for the halving of
the nominal value of the share, which came into effect on March 24,
2006 (split). The percentage changes have been calculated from the
pre-split values.
1) Income taxes have been accounted for as the estimated taxes for the
entire financial year.
CONSOLIDATED INCOME STATEMENT FROM LAST QUARTER (EUR million)
IFRS IFRS Change, %
Oct-Dec/ Oct-Dec/
2006 2005
Revenue 908.1 860.0 6
- of which activities
outside Finland 429.7 405.6 6
Operating income and
expenses -815.7 -787.8 4
Share of results of
affiliates 0.5 0.2 *)
Depreciation and write-downs -6.5 -7.2 -10
Operating profit 86.4 65.2 32
% of revenue 9.5 7.6 -
Financial income 0.3 0.6 -50
Exchange rate differences -0.9 -0.6 50
Financial expenses -5.7 -4.0 43
Profit before taxes 80.1 61.2 31
% of revenue 8.8 7.1 -
Income taxes 1) -19.2 -17.7 9
Profit for the report period 60.8 43.5 40
% of revenue 6.7 5.1 -
Attributable to
Equity holders of the
parent company 60.3 42.8 41
Minority interests 0.5 0.7 -29
Earnings per share
attributable to the equity
holders of the parent company
Earnings per share, EUR **) 0.48 0.35 35
Diluted earnings per share,
EUR **) 0.48 0.34 41
*) Change over 100%
**) The per-share key figures presented in the tables have been
adjusted for comparability such that they account for the halving of
the nominal value of the share, which came into effect on March 24,
2006 (split). The percentage changes have been calculated from the
pre-split values.
1) Income taxes have been accounted for as a share of the estimated
taxes for the entire financial year, calculated in proportion to the
result for the review period.
CONSOLIDATED BALANCE SHEET (EUR million)
IFRS IFRS Change, %
Dec 31, Dec 31,
2006 2005
ASSETS
Non-current assets
Property, plant and equipment 91.8 77.1 19
Goodwill 248.8 248.8 -
Other intangible assets 15.6 13.4 16
Shares in associated companies 2.9 1.8 61
Investments 3.0 3.0 -
Receivables 13.4 9.4 43
Deferred tax assets 21.1 23.6 -11
Current assets
Inventories 1,006.4 685.2 47
Trade and other receivables 688.9 545.2 26
Cash and cash equivalents 25.9 80.6 -68
Total assets 2,117.8 1,688.1 25
EQUITY AND LIABILITIES
Equity attributable to equity
holders of the parent company
Share capital 63.4 62.4 2
Other equity 607.1 497.4 22
Minority interests 3.9 3.7 5
Total equity 674.4 563.5 20
Non-current liabilities
Deferred tax liabilities 52.5 36.5 44
Pension liabilities 11.6 11.6 -
Provisions 32.2 30.1 7
Interest-bearing liabilities 275.8 172.4 60
Other liabilities 8.4 4.4 91
Current liabilities
Trade and other payables 788.0 691.2 14
Provisions 18.3 15.8 16
Interest-bearing current
liabilities 256.6 162.6 58
Total equity and 2,117.8 1,688.1 25
liabilities
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR million)
Share Share Legal Other Cumu- Fair Retai- Mino- Total
capi- pre- re- re- lative value ned rity equity
tal mium serve serve trans- re- ear- inte-
re- lation serve nings rest
serve diffe-
rences
Equity on
Jan 1,2006 62.4 77.2 0.7 2.5 -3.0 -0.1 420.0 3.7 563.5
Shares
subscribed
with options 1.0 5.6 - - - - - - -
Change in the
fair value of
interest
derivatives - - - - - 0.9 - - -
Change in
the fair value - - - - - 0.2 - - -
Change in
translation
differences - - - - -1.5 - -0.3 - -
Employee share
option scheme - 1.0 - 11.2 - - -9.6 - -
Net profit for
the period - - - - - - 171.0 - -
Dividend paid - - - - - - -68.9 - -
Other change - - 0.1 - - - 0.1 - -
Equity on
Dec 31,2006 63.4 83.8 0.8 13.7 -4.5 1.0 512.3 3.9 674.4
Share Share Legal Other Cumu- Fair Retai- Mino- Total
capi- pre- re- re- lative value ned rity equity
tal mium serve serve trans- re- ear- inte-
re- lation serve nings rest
serve diffe-
rences
Equity on
Dec 31,2004 61.3 71.5 0.7 1.6 -1.4 - 307.4 4.1 445.4
Transition
effect of IAS
32 and 39 - - - - - -0.4 -0.3 - -0.7
Equity on
Jan 1,2005 61.3 71.5 0.7 1.6 -1.4 -0.4 307.2 4.1 444.7
Shares
subscribed
with options 1.1 5.7 - - - - - - -
Change in the
fair value of
interest
derivatives - - - - - 0.3 - - -
Change in
translation
differences - - - - -1.6 - - - -
Employee share
option scheme - - - 0.9 - - 0.1 - -
Net profit for
the period - - - - - - 155.5 - -
Dividend paid - - - - - - -42.9 - -
Other change - - - - - - 0.1 - -
Equity on
Dec 31,2005 62.4 77.2 0.7 2.5 -3.0 -0.1 420.0 3.7 563.4
CONSOLIDATED CASH FLOW STATEMENT (EUR million)
IFRS IFRS Change, %
Jan-Dec/ Jan-Dec/
2006 2005
Cash flows from operating
activities
Net profit for the period 175.4 156.9 12
Reversal of accrual-based
items 106.8 94.4 13
Change in working capital
- Change in trade and
other receivables -140.0 -74.3 88
- Change in inventories -319.5 -54.6 *)
- Change in trade and
other payables 105.6 102.1 3
Total change in working
capital -353.9 -26.8 *)
Interest paid -24.9 -20.8 20
Interest received 2.4 1.3 85
Taxes paid -54.1 -37.0 46
Net cash generated from
operating activities -148.3 168.0 -
Cash flows from investing
activities
Acquisition of
subsidiaries, net of cash -11.1 -4.7 *)
Purchase of property,
plant and equipment -33.8 -23.1 46
Purchase of intangible assets -3.1 -1.8 72
Increases in other investments - -0.5 -
Disposals of subsidiaries
and businesses 2.5 - -
Proceeds from sale of property,
plant and equipment 3.0 5.1 -41
Proceeds from sale of
intangible assets - 0.1 *)
Proceeds from sale of
other investments 0.5 0.4 25
Net cash used in investing
activities -42.0 -24.5 71
Cash flow from financing activities
Proceeds from share issues 6.6 6.7 -1
Decrease in loan receivables 0.1 - -
Change in current liabilities 61.9 -21.5 -
Proceeds from borrowings 175.0 - -
Repayments of borrowings -37.4 -36.4 3
Payments of financial
leasing debts -1.9 -5.1 -63
Dividends paid -68.9 -42.9 61
Net cash used in financing
activities 135.4 -99.2 *)
Net change in cash and
cash equivalents -54.8 44.3 -
Cash and cash equivalents
at the beginning of the period 80.6 36.1 *)
Change in the fair value
of the cash equivalents 0.1 0.2 -50
Cash and cash equivalents
at the end of the period 25.9 80.6 -68
*) Change over 100%
COMMITMENTS AND CONTINGENT LIABILITIES (EUR million)
IFRS IFRS Change, %
Dec 31, Dec 31,
2006 2005
Collateral given for own
commitments
- Corporate mortgages 29.3 29.3 -
- Pledged shares 1.5 1.6 -6
Other commitments
- Repurchase commitments 252.5 266.8 -5
- Operating leases 202.1 189.2 7
- Rental guarantees for
clients 6.5 3.8 71
- Other contingent
liabilities 0.8 0.4 *)
Liability under derivative
contracts **)
Value of underlying instruments
-- Interest rate options,
purchased 28.4 28.4 -
-- Interest rate swaps 145.0 60.0 *)
-- Foreign currency
forward contracts 202.7 70.5 *)
Market value
-- Interest rate options,
purchased 0.8 0.6 33
-- Interest rate swaps 1.2 -0.2 *)
-- Foreign currency
forward contracts 1.7 -0.8 *)
Contingent assets
- Legal processes 11.1 - -
*) Change over 100%
**) YIT has changed over to the presentation of the fair values of
derivative contracts in net terms. The figures for the comparison
periods have been adjusted accordingly.
ACQUIRED BUSINESSES
In 2006, the YIT Group made small acquisitions of companies and
business functions in Finland, Sweden and Norway. The
acquisitions were made for the Building Systems, Construction
Services and Industrial and Network Services business segments. They
served to bolster YITs current local operations.
The major acquisitions were a 100 per cent holding in the Konepaja
Alueputkitus Group and 100 per cent stakes in Fläktteknik i Umeå AB
(Sweden) and URD Klima Mo AS (Norway). Their total purchase price was
EUR 6.0 million. The acquisitions did not generate unallocated goodwill.
Goodwill was primarily allocated to intangible rights and inventories.
The major acquirees were merged into existing operations, and thus it
is not possible to assess the separate effect of the acquisitions on
the 2006 result. The acquirees are small in relation to the Groups
size.
During the financial year, YIT increased its holding in ZAO YIT
Moskovia by 36.8 per cent to 87.8 per cent and in the AB YIT Kausta
Group by 9.4 per cent to 95.1 per cent.
DIVESTED BUSINESSES
In 2006, the Lithuanian subsidiary AB YIT Kausta sold a structural
steel plant and YIT Industrial and Network Services sold the ship
electrification operations of the Telesilta business unit.
REVENUE BY BUSINESS SEGMENT (EUR million)
IFRS IFRS Change, %
Jan-Dec/ Jan-Dec/
2006 2005
Building Systems *) 1,415.1 1,398.4 1
Construction Services 1,452.2 1,298.3 12
Industrial and Network
Services *) 476.9 398.8 20
Other items -59.8 -71.7 -17
YIT Group, total 3,284.4 3,023.8 9
*) At the beginning of 2006, industrial electricity, automation and
HEPAC operations in Finland were transferred to the Industrial and
Network Services business segment from YIT Kiinteistötekniikka Oy.
The business functions that were transferred had revenue of
EUR 58.9 million in January-December/2005. Comparable growth in revenue in
2006 was 6 per cent in Building Systems and 4 per cent in Industrial
and Network Services.
OPERATING PROFIT BY BUSINESS SEGMENT (EUR million)
IFRS IFRS Change, %
Jan-Dec/ Jan-Dec/
2006 2005
Building Systems *) 87.6 56.8 54
Construction Services 170.8 143.1 19
Industrial and Network 18.0 39.1 -54
Services **)
Other items -17.6 -11.3 56
YIT Group, total 258.8 227.7 14
*) In the October-December/2006 period, Building Systems released
provisions for certain contractual obligations that had come to an end.
**)The operating profit of the Industrial and Network Services
business segment in July-September/2006 includes EUR 5.1 million in
costs for the downsizing of Network Services.
ORDER BACKLOG BY BUSINESS SEGMENT AT END OF PERIOD (EUR million)
IFRS IFRS Change, %
Dec/2006 Dec/2005
Building Systems 601.7 492.0 22
Construction Services 2,053.5 1,242.6 65
Industrial and Network
Services 184.0 173.3 6
Other items -36.9 -29.1 27
YIT Group, total 2,802.3 1,878.8 49
2. OTHER YIT GROUPS KEY FIGURES
KEY FIGURES
IFRS IFRS Change, %
Dec/2006 Dec/2005
Earnings per share, EUR **) 1.36 1.26 8
Diluted earnings per share,
EUR **) 1.35 1.23 10
Equity per share, EUR **) 5.29 4.49 18
Average share price during
the period, EUR **) 19.24 13.99 38
Share price at end of
period, EUR **) 20.95 18.07 16
Market capitalization at
end of period, MEUR 2,656.0 2,254.4 18
Weighted average share-
issue adjusted number of
shares outstanding,
thousands **) 125,357 123,544 1
Weighted average share-
issue adjusted number of
shares outstanding,
thousands, diluted **) 126,772 126,522 -
Share-issue adjusted number
of shares outstanding at
end of period, thousands
**) 126,777 124,794 2
Net interest-bearing debt
at end of period, MEUR 506.5 254.4 99
Return on investment, from
the last 12 months, % 2) 24.8 26.4 -
Return on equity, % 28.3 31.1 -
Equity ratio, % 34.5 36.3 -
Gearing ratio, % 75.1 45.1 -
Gross capital expenditures,
MEUR 50.4 30.1 67
-% of revenue 1.5 1.0 -
Order backlog at end of
period, MEUR 3) 2,802.3 1,878.8 49
- of which order backlog
outside Finland 1,490.0 752.4 98
Average number of personnel 21,846 21,194 3
**) The per-share key figures presented in the tables have been
adjusted for comparability such that they account for the halving of
the nominal value of the share, which came into effect on March 24,
2006 (split). The percentage changes have been calculated from the
pre-split values.
2) Calculated for the period from January 1, 2006 - December 31,
2006, using the balance sheet figures at December 31, 2005 and
December 31, 2006.
3) Portion of binding orders not recognized as income.
QUARTERLY FIGURES, Q1/2005-Q4/2006
IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS
I/ II/ III/ IV/ I/ II/ III/ IV/
2005 2005 2005 2005 2006 2006 2006 2006
Revenue, MEUR 663.9 745.1 754.8 860.0 768.8 818.0 789.5 908.1
Operating profit,MEUR 40.1 55.7 66.7 65.2 53.7 60.1 58.6 86.4
- % of revenue 6.0 7.4 8.8 7.6 7.0 7.3 7.4 9.5
Financial income,MEUR 0.3 0.4 0.6 0.6 1.3 0.4 0.6 0.3
Exchange rate
differences, MEUR 1.2 0.9 0.5 -0.6 -0.6 -0.6 -0.6 -0.9
Financial expenses,
MEUR -4.1 -4.5 -4.2 -4.0 -4.3 -4.6 -5.9 -5.7
Profit before taxes,
MEUR 37.5 52.5 63.6 61.2 50.1 55.3 52.7 80.1
- % of revenue 5.6 7.1 8.4 7.1 6.5 6.8 6.7 8.8
Balance sheet total,1,508.2 1,621.4 1,722.0 1,925.5
MEUR 1,612.2 1,688.1 1,847.2 2,117.8
Earnings per share,
EUR **) 0.23 0.32 0.36 0.35 0.29 0.31 0.28 0.48
Equity per share, EUR
**) 3.48 3.77 4.14 4.49 4.23 4.54 4.83 5.29
Share price at end of
period, EUR **) 10.92 13.80 17.65 18.07 22.38 19.17 18.27 20.95
Market capitalization
at end of period, 1,338.6 2,193.2 2,792.9 2,294.4
MEUR 1,711.2 2,254.4 2,406.7 2,656.0
Return on investment,
from the last 12
months, % 19.7 21.8 23.7 26.4 28.1 28.2 25.2 24.8
Equity ratio, % 30.1 31.8 34.6 36.3 33.5 34.5 34.6 34.5
Net interest-bearing
debt at end of
period, MEUR 368.1 313.6 271.8 254.4 334.2 342.5 416.8 506.5
Gearing ratio, % 85.6 66.6 52.3 45.1 62.7 59.5 68.1 75.1
Gross capital
expenditures, MEUR 7.0 14.1 22.3 30.1 9.1 18.7 29.9 50.4
Order backlog at end 1,909.4 1,881.4 2,007.2 2,246.2
of period, MEUR 1,999.2 1,878.8 2,151.3 2,802.3
Personnel at end of 21,096 21,468 21,140 22,188
period 21,297 21,289 21,873 22,311
**) The per-share key figures presented in the tables have been
adjusted for comparability such that they account for the halving of
the nominal value of the share, which came into effect on March 24,
2006 (split).
REVENUE BY BUSINESS SEGMENT (EUR million)
IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS
I/ II/ III/ IV/ I/ II/ III/ IV/
2005 2005 2005 2005 2006 2006 2006 2006
Building Systems 319.5 348.0 327.2 403.7 325.6 348.4 335.2 405.9
Construction Services 272.0 313.8 339.5 373.0 350.8 368.1 337.0 396.3
Industrial and
Network Services 85.6 100.7 105.0 107.5 107.7 116.9 128.3 124.0
Other items -13.2 -17.4 -16.9 -24.2 -15.3 -15.4 -11.0 -18.1
YIT Group, total 663.9 745.1 754.8 860.0 768.8 818.0 789.5 908.1
OPERATING PROFIT BY BUSINESS SEGMENT (EUR million)
IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS
I/ II/ III/ IV/ I/ II/ III/ IV/
2005 2005 2005 2005 2006 2006 2006 2006
Building Systems 8.2 14.3 13.3 21.0 11.7 19.8 21.1 35.0
Construction Services 29.4 34.2 44.1 35.4 40.7 40.5 39.6 50.0
Industrial and
Network Services 6.3 9.3 12.3 11.2 5.3 5.0 2.5 5.2
Other items -3.8 -2.1 -3.0 -2.4 -4.0 -5.2 -4.6 -3.8
YIT Group, total 40.1 55.7 66.7 65.2 53.7 60.1 58.6 86.4
ORDER BACKLOG BY BUSINESS SEGMENT AT END OF PERIOD (EUR million)
IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS
I/ II/ III/ IV/ I/ II/ III/ IV/
2005 2005 2005 2005 2006 2006 2006 2006
Building Systems 574.0 602.6 575.7 492.0 517.6 584.1 582.7 601.7
Construction 1,131.0 1,193.8 1,296.5 1,524.4
Services 1,263.3 1,242.6 1,391.8 2,053.5
Industrial and 234.4 187.3 158.3 173.3 219.5 208.4 180.3 184.0
Network Services
Other items -30.0 -54.0 -46.4 -29.1 -26.4 -33.0 -41.2 -36.9
YIT Group, total 1,909.4 1,881.4 2,007.2 2,246.2
1,999.2 1,878.8 2,151.3 2,802.3
YITs financial statement bulletin for 2006: REVENUE AND OPERATING PROFIT CONTINUE TO RISE
| Source: YIT