SRV GROUP PLC STOCK EXCHANGE RELEASE August 8th, 2007, 9.00 a.m. EET
SRV GROUP INTERIM REPORT 1 January - 30 June 2007:
SIGNIFICANT GROWTH IN REVENUE AND ORDER BACKLOG
- SRV's revenue in January-June 2007 grew by 14.4 per cent to EUR 261,3
million (228.5 million in January-June 2006)
- Operating profit was EUR 10.3 million (11.9 million)
- Net profit for the review period was EUR 6.6 million (7.0 million)
- Order backlog grew by 68.4 per cent to EUR 517.4 million (307.3 million)
- Return on investment was 11.6 per cent (16.8 %) and return on equity 11.0
per cent (27.0 %)
- Equity ratio was 59.4 per cent (32.5 %)
- Earnings per share amounted to EUR 0.25 (EUR 0.25)
The interim condensed consolidated financial statement information has been
prepared in accordance with the accounting policies set out in the IAS 34
standard, and the information disclosed is unaudited.
“SRV's activities have been successful in the first half of the year, and our
order backlog has reached a record high level. Company's strong position as a
builder of business premises has further strengthened. Business operations in
our strategic fields of growth in housing construction and in Russia had an
average growth of 40 per cent from the reference period in 2006. The successful
initial public offering supports the development of our business operations in
the long term. SRV Group's revenue and operating profit in 2007 are expected to
surpass the previous year's level”, says Eero Heliövaara, President and CEO of
SRV.
SRV Group's revenue and order backlog continued to grow in the first half of
2007. Revenue grew in the review period by 14.4 per cent amounting to EUR 261.3
million (228.5 million in January-June 2006). 90 per cent (92 %) of SRV's
revenue came from Finland and 10 per cent (8%) from Russia and the Baltic
states.
Revenue grew in the Housing business area, in particular. Revenue in the
Business Premises business area remained close to the previous year's level,
even though revenue in the reference period included the sale of the Kamppi
offices and shopping centre, which accounted for ca. 60% of revenues of Business
Premises. Revenue in the International business area grew by 40 per cent.
The order backlog grew by 68.4 per cent and amounted to EUR 517.4 million (307.3
million on 30 June 2006). At the end of 2006 the order backlog amounted to EUR
453.7 million. Growth in the order backlogs of both Business Premises and
International business areas contributed to the 68.4 per cent growth in the
order backlog.
SRV's operating profit was EUR 10.3 million (11.9 million) and net profit for
the review period EUR 6.6 million (7.0 million). The operating profit margin
was 4.0 per cent (5.2%). Operating profit grew in the Housing business area, in
particular. The operating profit in Business Premises for the reference period
included the sales of Kamppi offices and shopping centre, which accounted for
ca. 70 % of the operating margin of projects of the business area.
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| Key figures of SRV | IFRS | IFRS | change, | change, | IFRS |
| Group | | | | | |
--------------------------------------------------------------------------------
| EUR million | 1-6/2007 | 1-6/2006 | MEUR | % | 2006 |
--------------------------------------------------------------------------------
| Revenue | 261.3 | 228.5 | 32.9 | 14.4 | 479.5 |
--------------------------------------------------------------------------------
| Operating profit | 10.3 | 11.9 | -1.5 | -12.8 | 24.6 |
--------------------------------------------------------------------------------
| Profit before taxes | 9.0 | 9.4 | -0.5 | -5.0 | 20.7 |
--------------------------------------------------------------------------------
| Net profit for the | 6.6 | 7.0 | -0.4 | -5.4 | 15.3 |
| period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | 517.4 | 307.3 | 210.1 | 68.4 | 453.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit, % | 4.0 | 5.2 | | | 5.1 |
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| Profit before taxes, % | 3.4 | 4.1 | | | 4.3 |
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| Net profit, % | 2.5 | 3.1 | | | 3.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio, % | 59.4 | 32.5 | | | 31.7 |
--------------------------------------------------------------------------------
| Return on investment, % | 11.6 | 16.8 | | | 15.9 |
| 1) | | | | | |
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| Return on equity, % 1) | 11.0 | 27.0 | | | 27.3 |
--------------------------------------------------------------------------------
| Earnings per share, eur | 0.25 | 0.25 | | -3.7 | 0.56 |
| 2) | | | | | |
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| 1) In calculating the key ratio only the profit for the period has been |
| annualised |
| 2) Key figures per share have been adjusted to reflect the increase in the |
| number of shares, which came into effect on April 11th, 2007 (split) and new |
| issue of shares on June 11th, 2007 |
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OUTLOOK FOR CONSTRUCTION
According to the studies by the International Chamber of Commerce and CES-Ifo
the outlook for world economy remains good and the global economic growth is
expected to reach almost five per cent this year. The favourable development in
the euro area continued during the first quarter and according to the Ministry
of Finance production in the area increased by 3 per cent on the previous year's
figure.
The European Central Bank raised the reference rate to four per cent in June.
The interest level is expected to rise also in the future.
The economic growth in Finland still surpasses the accelerated growth in Europe.
The Ministry of Finance estimates the upward cycle in Finland to continue to be
stronger and lasting longer than was anticipated earlier, the growth in the GDP
is estimated to be 4.4 per cent in 2007 and 3.2 per cent in 2008. The growth in
total output has continued at the annual rate of 5 per cent in the early part of
this year.
The outlook for construction in Finland is still positive. The housing
production is estimated to go only slightly down from the present level. This
year 33 000 residential units are estimated to be started up. The demand of new
production remains on 30 000 residential units until the year 2020.
The real estate and construction markets, except for residential construction,
show a growing trend, and the total construction markets are clearly on the up.
Construction of office and commercial premises is expected to remain brisk in
the latter part of this year. Favourable economic situation and the completion
of Vuosaari harbour keep also the construction of industrial and warehouse
premises brisk in the greater Helsinki area.
The growth centres in southern Finland, in particular, suffer from shortages in
skilled labour. Strong demand brings shortage in supply of certain materials.
The Bank of Finland reports strong economic growth in Russia and in the new EU
member states. The more than 11 per cent growth in the GDP in Estonia and Latvia
was the fastest in the EU. Russian construction market is estimated to grow
around 10 per cent annually.
KEY FIGURES OF OPERATING SEGMENTS
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| Revenue | IFRS | IFRS | change, | change, | IFRS |
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| EUR million | 1-6/2007 | 1-6/2006 | MEUR | % | 2006 |
--------------------------------------------------------------------------------
| Business Premises | 151.6 | 157.0 | -5.4 | -3.5 | 297.0 |
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| Housing | 84.0 | 59.2 | 24.8 | 42.0 | 138.1 |
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| International | 25.9 | 18.5 | 7.4 | 40.0 | 44.6 |
| Operations | | | | | |
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| Other | 6.0 | 3.3 | 2.6 | 78.9 | 6.0 |
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| Eliminations | -6.1 | -9.6 | 3.5 | | -6.2 |
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| Group total | 261.3 | 228.5 | 32.9 | 14.4 | 479.5 |
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| Operating profit | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| EUR million | 1-6/2007 | 1-6/2006 | MEUR | % | 2006 |
--------------------------------------------------------------------------------
| Business Premises | 6.5 | 13.7 | -7.2 | -52.5 | 25.0 |
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| Housing | 4.8 | 0.1 | 4.7 | | 5.1 |
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| International | 0.9 | -2.2 | 3.1 | | -3.6 |
| Operations | | | | | |
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| Other Operations | -1.5 | -1.9 | 0.4 | | -4.4 |
--------------------------------------------------------------------------------
| Eliminations | -0.4 | 2.2 | -2.5 | -117.5 | 2.5 |
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| Group total | 10.3 | 11.9 | -1.5 | -12.8 | 24.6 |
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| Order backlog | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| EUR million | 1-6/2007 | 1-6/2006 | MEUR | % | 2006 |
--------------------------------------------------------------------------------
| Business Premises | 323.4 | 135.9 | 187.5 | 137.9 | 287.7 |
--------------------------------------------------------------------------------
| Housing | 129.7 | 147.9 | -18.2 | -12.3 | 154.4 |
--------------------------------------------------------------------------------
| International | 64.4 | 23.5 | 40.8 | 173.3 | 11.6 |
| Operations | | | | | |
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| Group total | 517.4 | 307.3 | 210.1 | 68.4 | 453.7 |
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EARNINGS TRENDS OF OPERATING SEGMENTS
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| Business Premises | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| EUR million | 1-6/2007 | 1-6/2006 | MEUR | % | 2006 |
--------------------------------------------------------------------------------
| Revenue | 151.6 | 157.0 | -5.4 | -3.5 | 297.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 6.5 | 13.7 | -7.2 | -52.5 | 25.0 |
--------------------------------------------------------------------------------
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| Order backlog | 323.4 | 135.9 | 187.5 | 137.9 | 287.7 |
--------------------------------------------------------------------------------
The Business Premises segment comprises SRV Viitoset Oy's commercial, business,
logistics and infrastructure construction operations and property development.
Revenue in the Business Premises business area remained close to the previous
year's level, even though the revenue in the reference period included the sale
of the Kamppi offices and shopping centre, which accounted for ca. 60 % of
revenues. Operating profit was EUR 6.5 million (13.7 million). The operating
profit of the reference period was positively contributed by the sale of Kamppi
offices and shopping centre, which accounted for ca. 70 % of the operating
margin of projects of the business area. The order backlog grew by 137.9 per
cent to EUR 323.4 million (135.9 million).
In early 2007 the logistics centre for Kaukohuolinta in Tuusula, Nokia's
KaraPhone East business premises project in the Karamalmi district of Espoo, new
business premises for PartnerTech Oy in Vantaa as well as Autotalo Laakkonen and
the IBI Porvoo retail building in Kuninkaanportti were completed.
A contract was concluded with Neste Oil Pension Fund for the construction and
sale of a third office block in the Keilaniemi, Espoo. Other projects that were
started comprise the Logistics Centre in Tuupakka, Vantaa, the renovation of the
TRIO Shopping Centre in Lahti, Etra in Kuninkaanportti, Porvoo, business
premises for SGN in Vantaa and Plantagen in the Suomenoja, Espoo as well as the
renovation of the Pasila postal centre.
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| Housing | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| EUR million | 1-6/2007 | 1-6/2006 | MEUR | % | 2006 |
--------------------------------------------------------------------------------
| Revenue | 84.0 | 59.2 | 24.8 | 42.0 | 138.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 4.8 | 0.1 | 4.7 | | 5.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | 129.7 | 147.9 | -18.2 | -12.3 | 154.4 |
--------------------------------------------------------------------------------
The Housing segment comprises SRV Westerlund Oy's housing construction
operations within the Greater Helsinki area as well as the operations of the
regional subsidiaries. The regional subsidiaries engage in housing, commercial
business and logistics construction projects.
Revenue in the Housing business area grew by 42 % as the developer contracting
projects proceeded as planned. Operating profit improved clearly and amounted to
EUR 4.8 million (0.1 million). The order backlog amounted to EUR 129.7 million
(147.9 million).
The review period saw the launch of the construction of 177 new dwellings,
applying the developer contracting method, of which 67 were in the greater
Helsinki area, 42 in Tampere region, 18 in Turku region and 50 in Jyväskylä
region. In addition, new contracts amounting to EUR 15.9 million were concluded
during the review period with external contractors. A total of 186 (209)
development contracted housing units were sold in the review period. At the end
of the review period SRV had 282 unsold residential units, of these 30 units in
completed projects.
In early July SRV concluded a contract for Ulrikanhuippu in Vantaa (46
apartments) and a target price contract for Näyttelijöiden Vanhuudenkotisäätiö
(Actors' old-age home foundation) in Helsinki (24 apartments). These projects
are not yet included in the order backlog information in the interim report.
Several new development contracting projects are scheduled for the latter part
of the year. The most important are the apartment blocks to be built in the
Leppävaara district of Espoo (67 apartments) and the Töölö district of Helsinki
(66 apartments).
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| International | IFRS | IFRS | change, | change, | IFRS |
| Operations | | | | | |
--------------------------------------------------------------------------------
| EUR million | 1-6/2007 | 1-6/2006 | MEUR | % | 2006 |
--------------------------------------------------------------------------------
| Revenue | 25.9 | 18.5 | 7.4 | 40.0 | 44.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 0.9 | -2.2 | 3.1 | | -3.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | 64.4 | 23.5 | 40.8 | 173.3 | 11.6 |
--------------------------------------------------------------------------------
International Operations comprise the business activities of SRV International
Group in Russia and the Baltic States.
Both revenue and profitability improved in International business area as the
operation volume increased. Business area's revenue amounted to EUR 25.9 million
(18.5 million) and operating profit was EUR 0.9 million (a loss of 2.2 million).
The order backlog amounted to EUR 64.4 million (23.5 million).
RUSSIA
The Russian operations were focused on project development.
SRV signed contracts for renovation of the Pulkovskaya and Pribaltiskaya hotels
operated by Rezidor Group in St. Petersburg early this year. New contracts
include the extension of a fair centre for Lenexpo in St. Petersburg, which was
implemented during the first half of 2007 and handed over to the client in early
June. Construction of the Etmia II office and parking facility in the heart of
Moscow started early this year. In the project, SRV acts as co-owner and project
management contractor. The design and planning of the Papula residential area in
the city of Vyborg continued during the review period and the construction works
started in June. Phase I includes 38 residential units in the area.
A major shopping centre project in the Moscow area with real estate investment
company Vicus Oy was published in March. The planning of the shopping centre is
ongoing, and construction is estimated to start at the turn of the year. The
complex will be built in two phases. The total floor area is 80,000 square
metres. SRV's role in the project is that of co-owner with a 25% share, and
contractor. The planning of the shopping centre project is included in the order
backlog.
BALTIC STATES
Business premises for Veikko Laine Oy were completed in Estonia, as were the 54
apartments in the third and last phase of the Juri low-rise apartment area. 51
of these apartments have been sold. A new contract was concluded with Oriola KD
to build a logistics centre. A contract was concluded with Inchcape Motors to
build an auto house in Tallinn.
In Latvia project management contracts were concluded with HRX and Beweship to
build logistics premises. In addition, SRV concluded a supplementary contract
with Latvijas Finieris for the extension of their factory. Kesko Agro store was
handed over to the client in Riga.
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| Other Operations | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| EUR million | 1-6/2007 | 1-6/2006 | MEUR | % | 2006 |
--------------------------------------------------------------------------------
| Revenue | 6.0 | 3.3 | 2.6 | 78.9 | 6.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | -1.5 | -1.9 | 0.4 | | -4.4 |
--------------------------------------------------------------------------------
Other Operations comprises mainly the operations of SRV Group Plc and SRV
Kalusto Oy.
FINANCING AND FINANCIAL POSITION
The Group's interest-bearing liabilities totalled EUR 59.9 million on 30 June
2007 (EUR 58.1 million). Net financial expenses were EUR 1.4 million (EUR 2.4
million). At the end of the reporting period, the Group's liquid assets amounted
to EUR 70.3 million (EUR 26.5 million). The increase in liquid assets and the
decrease of liabilities was due to the Initial Public Offering.
The return on investment was 11.6 per cent (16.8 %) and the return on equity
11.0 percent (27.0 %). The equity ratio was 59.4 percent (32.5 %).
INVESTMENTS
The Group's investments amounted to EUR 2.1 million (EUR 0.6 million) and were
mainly related to machinery and equipment.
PLOT RESERVES AND DEVELOPMENT AGREEMENTS
--------------------------------------------------------------------------------
| Plot reserves | Business | Housing | International | Total |
| 30.6.2007 | Operations | | Operations | |
--------------------------------------------------------------------------------
| Plot reserves and land acquisition commitments |
--------------------------------------------------------------------------------
| Building rights*, | 121 | 201 | 336 | 658 |
| 1000 m2 | | | | |
--------------------------------------------------------------------------------
| Capital tied, | 27 | 47 | 22 | 97 |
| including | | | | |
| commitments, EUR | | | | |
| million | | | | |
--------------------------------------------------------------------------------
| Land development | | | | |
| agreements | | | | |
--------------------------------------------------------------------------------
| Building rights*, | 348 | 115 | 100 | 563 |
| 1000 m2 | | | | |
--------------------------------------------------------------------------------
| * building rights include estimated zoning potential |
--------------------------------------------------------------------------------
During the review period SRV purchased a 6.3 hectare land area in Vantaa in the
proximity of Hämeenlinna highway and Kehä III (Ring Road). The acquired land
area enables the construction of versatile business premises in the developing
Vantaankoski area.
CHANGES IN GROUP MANAGEMENT
Juha-Veikko Nikulainen started as Executive Vice President in charge of Housing
business area on 26 January 2007 and Jussi Ollila as Senior Vice President in
charge of communications and marketing on 1 February 2007.
PERSONNEL
SRV Group employed on average 744 (624) employees, of whom 518 (438) were
white-collar. The parent company employed on average 61 (55) white-collars. At
the end of the reporting period the Group's payroll was 844 (707) employees, of
whom 64 (62) were employed by the parent company. 8.3 per cent (8.5 %) of the
personnel are employed abroad.
SRV develops co-operation with universities and colleges as a part of Group
recruitment plan and as a resource pool for holiday seasons. At the end of the
reporting period 115 summer trainees were employed in SRV Group's operations in
Finland. The total number of trainees including international operations was
119.
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Personnel by operating segment30.6.200731.12.2006Share of Group personnel
30.6.2007, %Business Premises32323638Housing32629339International
Operations1038712Other929111Group total844707100
RISKS, RISK MANAGEMENT AND CORPORATE GOVERNANCE
General economic trends and changes in customers' operating environments have an
immediate effect on the construction and property markets. A change in the
general interest level has a direct impact on both SRV's actual cash flow from
operating activities and financing costs.
SRV's revenue is generated by construction projects, and the company's result
depends on the profitability of individual projects as well as their progress.
The recognition date of the developer contracting projects depends also on the
percentage of sold premises in projects. Construction is subject to significant
risks relating to subcontracting and deliveries, their control underlines the
need for long-span planning. Project management contracting model requires
skilled and competent personnel. Warranty and liability obligations related to
construction can span up to ten years.
The financial risks related to the SRV Group's business are liquidity, interest
rate, foreign exchange, credit and counterparty risks, which have been presented
in the notes to the 2006 financial statements.
Group's risk management is carried out in line with the Group's operations
system and control is exercised in accordance with the Group strategy approved
by the Board of Directors of the Group's parent company. The Group's President
and CEO has overall responsibility for the risk management. SRV also makes every
effort to cover operational risks by means of insurance and contractual terms. A
more detailed account of SRV's risks, risk management and corporate governance
policies has been disclosed in the 2006 Annual Report and financial statements.
CORPORATE GOVERNANCE AND THE SHAREHOLDERS' GENERAL MEETINGS
The Extraordinary General Meeting decided on 2 April 2007 to increase the number
of shares of the Company twenty fold (split) and transfer the share premium
reserve to share capital. The Extraordinary General Meeting decided also on
amendments to the Articles of Association. The decisions were entered in the
Trade Register 11 April 2007.
The Annual General Meeting was held on 28 April, 2007 and confirmed the
financial statements for 2006 and discharged the members of the Board of
Directors and the President and CEO from liability. The dividend was confirmed
at EUR 0.12 per share.
The Annual General Meeting decided to set the monthly remuneration to the
chairman of the Board of Directors at EUR 5,000, to vice chairman of the Board
at EUR 4,000 and to members of the Board of Directors at EUR 3,000. In addition,
a fee of EUR 500 per meeting is paid to all members for meetings of the Board
and its Committees they attend.
Ilpo Kokkila was re-elected as Chairman of the Board of Directors and Eero
Heliövaara, Matti Mustaniemi, Markku Sarkamies, Jukka Hienonen and Lasse
Kurkilahti as members. The term of Jukka Hienonen and Lasse Kurkilahti began and
the term of Eero Heliövaara ended on 13 June 2007, when the Company's shares had
been admitted to the public trading at the Helsinki Stock Exchange. The Board of
Directors elected on 13 June 2007 Lasse Kurkilahti as deputy Chairman of the
Board, Matti Mustaniemi as chairman of the Audit Committee and Ilpo Kokkila as
chairman of the Nominations and Remuneration Committee.
Jarmo Lohi, Authorised Public Accountant was re-elected as Company's auditor and
as deputy auditor, Ernst & Young Oy with Mikko Rytilahti, Authorised Public
Accountant as chief auditor. The Annual General Meeting decided also on
amendments to the Articles of Association.
The Annual General Meeting authorised on 23 April 2007 the Board of Directors to
issue a maximum of 11,500,000 new shares, to decide on the issue of up to
1,500,000 new directed shares to SEB Enskilda to cover possible
oversubscriptions and to acquire a maximum of 1,500,000 shares from SEB
Enskilda.
The Boards of Directors of SRV and SRV Henkilöstö Oy signed on 27 April 2007 a
plan to merge SRV Henkilöstö into SRV. The Extraordinary General Meeting of SRV
Group Plc approved on 24 May 2007 the merger plan.
INITIAL PUBLIC OFFERING
Board of Directors decided on 25 May 2007 to offer ca. 11,500,000 new shares for
subscription for Finnish and International institutional investors, for retail
investors in Finland and for the Board of Directors, management and employees of
SRV in Finland. SRV submitted to the Helsinki Stock Exchange an application for
listing of its shares on 25 May 2007.
The institutional offering commenced on 28 May 2007 and expired on 11 June 2007.
The retail offering commenced on 29 May 2007 and was interrupted due to
oversubscription on 5 June 2007. The employee offering commenced on 29 May 2007
and expired on 7 June 2007. The offer price range was EUR 8.00 to 9.75. The
Board of Directors determined to set the offer price at EUR 9.00 based for
institutional and retail offerings and EUR 8.10 for employee offering.
The Board of Directors decided on 11 June 2007 to issue 11,500,000 new shares,
of which 9,907,300 shares was allocated to domestic and institutional investors,
1,150,000 shares to retail investors in Finland and 442,700 to the employees. In
addition, the Company issues 1,500,000 shares to SEB Enskilda to cover
over-allotments. Based on the share allocation the institutional offering was
approximately 8.1 times subscribed and the retail offering was approximately 4.6
times subscribed. In total 6,400 investors participated in the offering.
Approximately 54 per cent of the demand in the institutional offering came from
Finnish investors and approximately 46 per cent from international investors.
The size of the offering was confirmed at 13,000,000 shares. The shares issued
represent approximately 33.3 per cent of the total number of shares in SRV after
the offering.
The gross proceeds to SRV from the offering were approximately EUR 117 million
and the net proceeds after deduction of commissions and fees related to the
transaction were approximately EUR 112 million.
SRV intends to use the proceeds to further develop its operations primarily
through increasing the share of developer contracting and development projects
both in residential and non-residential construction, and accelerating the
expansion of its international business particularly in Russia.
SHARES AND SHAREHOLDERS
SRV Group Plc's share capital is EUR 3,062,520. The share has no nominal value
and the total number of shares is 39,064,000. The company has one series of
shares. Key figures per share in the interim report have been adjusted to
reflect the increase in the number of shares, which came into effect on 11 April
2007 (split) and new issue of shares on 11 June 2007.
Trading with SRV's share commenced on the Pre-list of the Helsinki Stock
Exchange on 12 June 2007 and on the Main list on 15 June 2007. SRV has on 30
June 2007 in total 7,771 shareholders.
MERGER OF SRV HENKILÖSTÖ OY
The Boards of Directors of SRV and SRV Henkilöstö Oy signed on 27 April 2007 a
plan to merge SRV Henkilöstö into SRV. The Extraordinary General Meeting of SRV
Henkilöstö Oy approved the merger plan on 6 June 2007.
SRV will give as merger consideration up to 10,200,889 shares for shareholders
of SRV Henkilöstö Oy, who will receive as merger consideration ca. 16.3 SRV
Group Plc's shares for each SRV Henkilöstö Oy's share. The 12,512,000 SRV shares
held currently by SRV Henkilöstö Oy will be cancelled in connection with the
merger without reducing the share capital. The merger will be completed on or
about 30 September 2007. The merger is estimated to decrease SRV's unrestricted
equity by EUR 20,800,000.
FINANCIAL TARGETS
The Board of Directors has set financial targets for the company in the spring
of 2007. In the medium term SRV aims to achieve an annual average growth of
approximately 15 per cent in Group revenue and annual average growth of 30
percent in revenue in the International Operations. SRV aims to increase the
level of operating profit and in the medium to long term to achieve an operating
margin of 8 per cent. Also the company aims to maintain an equity ratio of 30
per cent.
GROUP OUTLOOK
Outlook for construction and real estate market is expected to remain good.
Capacity has brought shortcomings for the availability and cost level of
construction subcontracting or materials. The market for construction of
business and commercial premises is expected to remain strong. Selling times
for dwellings have lengthened and the rise in housing prices has steadied
especially outside the growth centres.
Construction volume is expected to increase in Russia, but challenges will be
faced as cost levels rise and the shortage in skilled personnel continues.
However, SRV's order backlog growth makes a good basis for the development of
revenue and profit for 2007. The operating profits in Business Premises and
Housing business areas are expected to surpass the results for the first half of
the year. The selling date of developer contracting projects contributes to the
operating profit in International business area.
SRV Group's revenue and operating profit are expected to surpass the previous
year's level.
Espoo, 8 August 2007
Board of Directors
All forward-looking statements in this review are based on the management's
current expectations and beliefs about future events, and actual results may
differ materially from the expectations and beliefs such statements contain.
For further information please contact:
Eero Heliövaara, CEO, tel. +358 (0)20 1455 202
Hannu Linnoinen, CFO, +358 (201) 455 990, +358 (50) 523 5850
Jussi Ollila, SVP, Communications, +358 (201) 455 275, +358 (50) 372 5229
Distribution:
Helsinki Stock Exchange
Media
SRV Group Plc 1 January - 30 June 2007: TABLES
Appendixes
1) Condensed consolidated financial statements: income statement, balance sheet,
statement of changes in equity, cash flow statement, commitments and contingent
liabilities, derivative contracts liabilities
2) Segment information
3) other SRV Group key figures
1. GROUP FINANCIALS 1 JANUARY - 30 JUNE 2007
IFRS-STANDARDS AND OPERATING SEGMENTS
SRV Group (SRV) adopted International Financial Reporting Standards (IFRS) on 1
January 2006. In preparing interim condensed consolidated financial statement
information, SRV has applied the same accounting principles as in its year-end
financial statements for 2006. The interim condensed consolidated financial
statement information has been prepared in accordance with the accounting
policies set out in the IAS 34 standard and the information disclosed is
unaudited.
SRV's reporting segments comprise Business Premises, Housing, International
Operations and Other operations. The operating segment figures are disclosed in
accordance the IFRS 8 following accounting principles applied to the
consolidated financial statements.
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| Consolidate | IFRS | IFRS | change | chang | IFRS | IFRS | IFRS |
| income | | | , | e, | | | |
| statement | | | | | | | |
--------------------------------------------------------------------------------
| EUR million | 1-6/20 | 1-6/2 | MEUR | % | 4-6/20 | 4-6/20 | 2006 |
| | 07 | 006 | | | 07 | 06 | |
--------------------------------------------------------------------------------
| Revenue | 261.3 | 228.5 | 32.9 | 14.4 | 140.0 | 165.0 | 479.5 |
--------------------------------------------------------------------------------
| Other operating | 0.6 | 1.5 | -1.0 | -61.8 | 0.3 | 0.6 | 3.7 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Change in | 10.8 | 11.8 | -1.0 | | 3.8 | 4.7 | 27.2 |
| inventories of | | | | | | | |
| finished goods | | | | | | | |
| and work in | | | | | | | |
| progress | | | | | | | |
--------------------------------------------------------------------------------
| Use of | -233.1 | -204. | -28.7 | 14.1 | -121.1 | -132.3 | -434.0 |
| materials and | | 3 | | | | | |
| services | | | | | | | |
--------------------------------------------------------------------------------
| Employee | -21.7 | -18.8 | -3.0 | 15.8 | -12.2 | -10.9 | -36.8 |
| benefit | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | -0.9 | -0.9 | 0.0 | -1.1 | -0.4 | -0.4 | -2.0 |
| and impairments | | | | | | | |
--------------------------------------------------------------------------------
| Other operating | -6.8 | -6.0 | -0.8 | 12.9 | -3.6 | -3.5 | -12.8 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 10.3 | 11.9 | -1.5 | -12.8 | 6.8 | 23.1 | 24.6 |
| profit | | | | | | | |
--------------------------------------------------------------------------------
| Financial | 0.8 | 1.5 | -0.8 | -51.1 | 0.2 | 0.8 | 2.6 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Financial | -2.1 | -4.0 | 1.8 | -46.3 | -1.0 | -2.7 | -6.6 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Financial | -1.4 | -2.4 | 1.1 | -43.3 | -0.8 | -2.0 | -4.0 |
| income and | | | | | | | |
| expenses, total | | | | | | | |
--------------------------------------------------------------------------------
| Profit before | 9.0 | 9.4 | -0.5 | -5.0 | 6.0 | 21.1 | 20.7 |
| taxes | | | | | | | |
--------------------------------------------------------------------------------
| Income taxes | -2.4 | -2.5 | 0.1 | -4.0 | -0.6 | -4.4 | -5.4 |
--------------------------------------------------------------------------------
| Net profit for | 6.6 | 7.0 | -0.4 | -5.4 | 5.3 | 16.7 | 15.3 |
| the period | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to | | | | | | | |
--------------------------------------------------------------------------------
| Equity holders | 6.7 | 6.6 | | | 4.8 | 16.5 | 14.5 |
| of the parent | | | | | | | |
| company | | | | | | | |
--------------------------------------------------------------------------------
| Minority | -0.1 | 0.4 | | | 0.5 | 0.2 | 0.8 |
| interest | | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.25 | 0.25 | | -3.7 | 0.17 | 0.63 | 0.56 |
| share | | | | | | | |
| calculated on | | | | | | | |
| the profit | | | | | | | |
| attributable to | | | | | | | |
| equity holders | | | | | | | |
| of the parent | | | | | | | |
| company | | | | | | | |
| (undiluted and | | | | | | | |
| diluted) 1) | | | | | | | |
--------------------------------------------------------------------------------
| 1) Key figures per share have been adjusted to reflect the increase in the |
| number of shares, which came into effect on 11 April 2007 (split) and new |
| issue of shares on 11 June 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated balance sheet | IFRS | IFRS | change, | IFRS |
--------------------------------------------------------------------------------
| EUR million | 6/2007 | 6/2006 | % | 2006 |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 6.2 | 7.0 | -11.2 | 5.5 |
--------------------------------------------------------------------------------
| Goodwill | 0.7 | 0.8 | -9.7 | 0.7 |
--------------------------------------------------------------------------------
| Other intangible assets | 0.8 | 0.7 | 3.9 | 0.9 |
--------------------------------------------------------------------------------
| Other financial assets | 2.9 | 1.6 | 76.1 | 2.3 |
--------------------------------------------------------------------------------
| Receivables | 6.0 | 5.9 | 1.0 | 5.6 |
--------------------------------------------------------------------------------
| Deferred tax assets | 2.2 | 0.7 | 216.3 | 0.2 |
--------------------------------------------------------------------------------
| Non-current assets, total | 18.7 | 16.8 | 11.6 | 15.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | 180.6 | 81.0 | 123.0 | 134.5 |
--------------------------------------------------------------------------------
| Trade and other receivables | 77.1 | 66.7 | 15.6 | 65.4 |
--------------------------------------------------------------------------------
| Current tax | 3.3 | 7.1 | -53.0 | 1.4 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 70.3 | 26.5 | 165.4 | 14.9 |
--------------------------------------------------------------------------------
| Current assets, total | 331.3 | 181.2 | 82.8 | 216.3 |
--------------------------------------------------------------------------------
| ASSETS, TOTAL | 350.1 | 198.0 | 76.8 | 231.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated balance sheet | IFRS | IFRS | change, | IFRS |
--------------------------------------------------------------------------------
| EUR million | 6/2007 | 6/2006 | % | 2006 |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity attributable to equity | | | | |
| holders of the parent company | | | | |
--------------------------------------------------------------------------------
| Share capital | 3.1 | 1.3 | 135.0 | 1.3 |
--------------------------------------------------------------------------------
| Share premium reserve | 0.0 | 1.8 | | 1.8 |
--------------------------------------------------------------------------------
| Invested free equity account | 112.6 | 0.0 | | 0.0 |
--------------------------------------------------------------------------------
| Translation differences | 0.0 | 0.0 | | 0.0 |
--------------------------------------------------------------------------------
| Fair value reserve | 0.0 | 0.1 | | 0.0 |
--------------------------------------------------------------------------------
| Retained earnings | 58.7 | 46.8 | 25.3 | 54.8 |
--------------------------------------------------------------------------------
| Equity attributable to equity | 174.4 | 50.0 | 249.0 | 57.9 |
| holders of the parent company, total | | | | |
--------------------------------------------------------------------------------
| Minority interest | 4.0 | 3.8 | 5.4 | 4.2 |
--------------------------------------------------------------------------------
| Equity, total | 178.4 | 53.7 | 231.9 | 62.2 |
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 1.1 | 1.1 | 3.3 | 1.0 |
--------------------------------------------------------------------------------
| Provisions | 4.7 | 3.7 | 28.7 | 4.8 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 36.0 | 39.0 | -7.7 | 48.3 |
--------------------------------------------------------------------------------
| Other liabilities | 0.0 | 0.0 | | 0.0 |
--------------------------------------------------------------------------------
| Non-current liabilities, total | 41.8 | 43.7 | -4.4 | 54.2 |
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Trade and other liabilities | 98.5 | 72.0 | 36.8 | 80.1 |
--------------------------------------------------------------------------------
| Current tax | 3.4 | 6.6 | -48.1 | 0.2 |
--------------------------------------------------------------------------------
| Provisions | 4.0 | 2.8 | 43.3 | 3.6 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 24.0 | 19.1 | 25.3 | 31.2 |
--------------------------------------------------------------------------------
| Current liabilities, total | 129.9 | 100.5 | 29.2 | 115.1 |
--------------------------------------------------------------------------------
| Liabilities, total | 171.7 | 144.3 | 19.0 | 169.3 |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | 350.1 | 198.0 | 76.8 | 231.4 |
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN GROUP EQUITY 1 JAN - 30 JUN. 2007
--------------------------------------------------------------------------------
| | Equity attributable to the equity holders of the | |
| | parent company | |
--------------------------------------------------------------------------------
| IFRS | Sha | Sha | Non- | Oth | Tra | Fair | Reta | Tota | Mino | Tota |
| EUR | re | re | rest | er | ns- | valu | i-ne | l | -rit | l |
| million | cap | pre | rict | res | lat | e | d | | y | equi |
| | ita | miu | ed | erv | ion | rese | earn | | inte | ty |
| | l | m | equi | e | dif | rve | -ing | | rest | |
| | | res | ty | | fer | | s | | | |
| | | erv | rese | | -en | | | | | |
| | | e | rve | | ces | | | | | |
--------------------------------------------------------------------------------
| Equity on | 1.3 | 1.8 | 0.0 | 0.0 | 0.0 | 0.4 | 42.5 | 45.9 | 3.9 | 49.8 |
| 1 Jan.2007 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Translatio | | | | | 0.0 | | | 0.0 | | |
| n | | | | | | | | | | |
| difference | | | | | | | | | | |
| s | | | | | | | | | | |
--------------------------------------------------------------------------------
| Amount of | | | | | | | | 0.0 | | |
| available- | | | | | | | | | | |
| for-sale | | | | | | | | | | |
| financial | | | | | | | | | | |
| assets | | | | | | | | | | |
| removed | | | | | | | | | | |
| from | | | | | | | | | | |
| equity and | | | | | | | | | | |
| recognised | | | | | | | | | | |
| in the | | | | | | | | | | |
| income | | | | | | | | | | |
| statement | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net gains | | | | | | -0.3 | | -0.3 | | |
| on | | | | | | | | | | |
| available- | | | | | | | | | | |
| for-sale | | | | | | | | | | |
| financial | | | | | | | | | | |
| assets | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | 0.0 | 0.0 | | |
| changes | | | | | | | | | | |
--------------------------------------------------------------------------------
| Share | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -0.3 | 0.0 | -0.3 | | |
| issue and | | | | | | | | | | |
| employee | | | | | | | | | | |
| offering | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net income | | | | | | | 6.6 | 6.6 | | |
| recorded | | | | | | | | | | |
| directly | | | | | | | | | | |
| in equity | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 6.6 | 6.6 | | |
| for the | | | | | | | | | | |
| period | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | | | -2.2 | -2.2 | | |
| recognized | | | | | | | | | | |
| income and | | | | | | | | | | |
| expenses | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | 1.3 | 1.8 | 0.0 | 0.0 | 0.0 | 0.1 | 46.8 | 50.0 | 3.8 | 53.7 |
| paid | | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity on | 1.3 | 1.8 | 0.0 | 0.0 | 0.0 | 0.4 | 42.5 | 45.9 | 3.9 | 49.8 |
| 30 Jun. | | | | | | | | | | |
| 2007 | | | | | | | | | | |
--------------------------------------------------------------------------------
Statement of changes in Group equity 1 Jan - 30 Jun. 2007
--------------------------------------------------------------------------------
| | Equity attributable to the equity holders of the | |
| | parent company | |
--------------------------------------------------------------------------------
| IFRS | Sha | Sha | Non- | Oth | Tra | Fair | Reta | Tota | Mino | Tota |
| EUR | re | re | rest | er | ns- | valu | i-ne | l | -rit | l |
| million | cap | pre | rict | res | lat | e | d | | y | equi |
| | ita | miu | ed | erv | ion | rese | earn | | inte | ty |
| | l | m | equi | e | dif | rve | -ing | | rest | |
| | | res | ty | | fer | | s | | | |
| | | erv | rese | | -en | | | | | |
| | | e | rve | | ces | | | | | |
--------------------------------------------------------------------------------
| Equity on | 1.3 | 1.8 | 0.0 | 0.0 | 0.0 | 0.1 | 54.7 | 57.9 | 4.2 | 62.2 |
| 1 Jan.2007 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Translatio | | | | | 0.0 | | | 0.0 | | |
| n | | | | | | | | | | |
| difference | | | | | | | | | | |
| s | | | | | | | | | | |
--------------------------------------------------------------------------------
| Amount of | | | | | | | | 0.0 | | |
| available- | | | | | | | | | | |
| for-sale | | | | | | | | | | |
| financial | | | | | | | | | | |
| assets | | | | | | | | | | |
| removed | | | | | | | | | | |
| from | | | | | | | | | | |
| equity and | | | | | | | | | | |
| recognised | | | | | | | | | | |
| in the | | | | | | | | | | |
| income | | | | | | | | | | |
| statement | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net gains | | | | | | -0.1 | | -0.1 | | |
| on | | | | | | | | | | |
| available- | | | | | | | | | | |
| for-sale | | | | | | | | | | |
| financial | | | | | | | | | | |
| assets | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | 1.8 | -1. | | | | | 0.0 | 0.0 | | |
| changes | | 8 | | | | | | | | |
--------------------------------------------------------------------------------
| Share | | | 112. | | | | 0.4 | 113. | | |
| issue and | | | 6 | | | | | 0 | | |
| employee | | | | | | | | | | |
| offering | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net income | 1.8 | -1. | 112. | 0.0 | 0.0 | -0.1 | 0.4 | 112. | | |
| recorded | | 8 | 6 | | | | | 9 | | |
| directly | | | | | | | | | | |
| in equity | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | | 6.7 | 6.7 | | |
| for the | | | | | | | | | | |
| period | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 6.7 | 6.7 | | |
| recognized | | | | | | | | | | |
| income and | | | | | | | | | | |
| expenses | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | | | | -3.1 | -3.1 | | |
| paid | | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity on | 3.1 | 0.0 | 112. | 0.0 | 0.0 | 0.0 | 58.7 | 174. | 4.0 | 178. |
| 30 Jun. | | | 6 | | | | | 4 | | 4 |
| 2007 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated cash flow statement | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| EUR million | 1-6/2007 | 1-6/2006 | 2006 |
--------------------------------------------------------------------------------
| Cash flows from operating activities | | | |
--------------------------------------------------------------------------------
| Net profit for the financial year | 6.6 | 7.0 | 14.5 |
--------------------------------------------------------------------------------
| Adjustments: | | | |
--------------------------------------------------------------------------------
| Depreciation | 0.9 | 0.9 | 2.0 |
--------------------------------------------------------------------------------
| Non-cash transactions | 0.3 | -0.2 | 0.7 |
--------------------------------------------------------------------------------
| Financial income and expenses | 1.4 | 2.4 | 4.0 |
--------------------------------------------------------------------------------
| Capital gains on sales of tangible and | -0.1 | -0.2 | -0.4 |
| intangible assets | | | |
--------------------------------------------------------------------------------
| Income taxes | 2.4 | 2.5 | 5.4 |
--------------------------------------------------------------------------------
| | 4.7 | 5.3 | 11.7 |
--------------------------------------------------------------------------------
| Changes in working capital: | | | |
--------------------------------------------------------------------------------
| Change in loan receivables | -1.3 | 15.7 | 21.6 |
--------------------------------------------------------------------------------
| Change in trade and other receivables | -11.4 | 33.0 | 30.3 |
--------------------------------------------------------------------------------
| Change in inventories | -46.1 | 19.7 | -33.9 |
--------------------------------------------------------------------------------
| Change in trade and other liabilities | 18.2 | 2.2 | 11.0 |
--------------------------------------------------------------------------------
| Change in provisions | 0.3 | 1.0 | 3.0 |
--------------------------------------------------------------------------------
| | -40.3 | 71.5 | 32.0 |
--------------------------------------------------------------------------------
| Interest paid | -2.3 | -5.1 | -8.1 |
--------------------------------------------------------------------------------
| Interest received | 0.9 | 7.1 | 8.1 |
--------------------------------------------------------------------------------
| Taxes paid | -2.9 | -5.8 | -9.6 |
--------------------------------------------------------------------------------
| Net cash flow from operating | -33.3 | 80.0 | 48.5 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing activities | | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | -1.9 | -0.5 | -1.6 |
--------------------------------------------------------------------------------
| Intangible assets | -0.1 | -0.1 | -0.6 |
--------------------------------------------------------------------------------
| Other financial assets | -0.1 | 0.0 | -1.0 |
--------------------------------------------------------------------------------
| Sale of property, plant and equipment | 0.7 | 0.2 | 2.3 |
| and intangible assets | | | |
--------------------------------------------------------------------------------
| Sale of investments | 0.3 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Net cash used in investing activities | -1.2 | -0.3 | -0.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from financing activities | | | |
--------------------------------------------------------------------------------
| Proceeds from share issue | 112.6 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Proceeds from long-term loans | 2.8 | 4.8 | 6.3 |
--------------------------------------------------------------------------------
| Repayments of long-term loans | -2.5 | -62.8 | -62.8 |
--------------------------------------------------------------------------------
| Change in housing corporation loans | 5.6 | 13.7 | -0.5 |
--------------------------------------------------------------------------------
| Change in short-term loans | -25.5 | -30.2 | 3.1 |
--------------------------------------------------------------------------------
| Dividends paid | -3.1 | -2.2 | -2.2 |
--------------------------------------------------------------------------------
| Net cash from financing activities | 89.9 | -76.7 | -56.2 |
--------------------------------------------------------------------------------
| Net change in cash and cash | 55.5 | 3.0 | -8.6 |
| equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the | 14.9 | 23.5 | 23.5 |
| beginning of period | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end | 70.3 | 26.5 | 14.9 |
| of period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inventories | IFRS | IFRS | change, | IFRS |
--------------------------------------------------------------------------------
| EUR million | 6/2007 | 6/2006 | % | 2006 |
--------------------------------------------------------------------------------
| Raw materials and consumables | 0.0 | 0.0 | | 0.3 |
--------------------------------------------------------------------------------
| Work in progress | 70.2 | 37.7 | 86.1 | 51.8 |
--------------------------------------------------------------------------------
| Land areas and plot-owning | 68.7 | 25.2 | 172.8 | 46.8 |
| companies | | | | |
--------------------------------------------------------------------------------
| Shares in completed housing | 21.6 | 5.1 | 321.5 | 14.8 |
| corporations and real estate | | | | |
| companies | | | | |
--------------------------------------------------------------------------------
| Advance payments | 12.3 | 5.3 | 133.0 | 13.5 |
--------------------------------------------------------------------------------
| Other inventories | 7.7 | 7.7 | 0.8 | 7.4 |
--------------------------------------------------------------------------------
| Inventories, total | 180.6 | 81.0 | 123.0 | 134.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commitments and Contingent | IFRS | IFRS | change, | IFRS |
| Liabilities | | | | |
--------------------------------------------------------------------------------
| EUR million | 6/2007 | 6/2006 | % | 2006 |
--------------------------------------------------------------------------------
| Collateral given for own | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Corporate mortgages given | 0.0 | 0.0 | | 0.0 |
--------------------------------------------------------------------------------
| Real estate mortgages given | 61.3 | 61.4 | -0.2 | 87.4 |
--------------------------------------------------------------------------------
| Pledges given | 11.0 | 5.9 | 86.7 | 10.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other commitments | | | | |
--------------------------------------------------------------------------------
| Guarantees given on liabilities | 71.0 | 0.0 | | 48.0 |
| on uncompleted projects | | | | |
--------------------------------------------------------------------------------
| Investment commitments given | 6.4 | 3.8 | 67.3 | 3.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fair and nominal value | IFRS | IFRS | IFRS |
| of | 6/2007 | 6./006 | 2006 |
| derivative | | | |
| instruments | | | |
--------------------------------------------------------------------------------
| EUR million | Fair Values | Fair Values | Fair Values |
--------------------------------------------------------------------------------
| | Posit | Negati | Posit | Negativ | Positi | Negativ |
| | ive | ve | ive | e | ve | e |
--------------------------------------------------------------------------------
| Hedge accounting not | | | | | | |
| applied | | | | | | |
--------------------------------------------------------------------------------
| Foreign exchange | 0,0 | 0,0 | 0,0 | 0,0 | - | 0,0 |
| forward contracts | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | IFRS | | IFRS | | IFRS |
--------------------------------------------------------------------------------
| | | 6/2007 | | 6/2006 | | 2006 |
--------------------------------------------------------------------------------
| Nominal values of | | 9.3 | | 0.0 | - | 7.6 |
| derivative instruments | | | | | | |
--------------------------------------------------------------------------------
| Foreign exchange | | | | | | |
| forward contracts | | | | | | |
--------------------------------------------------------------------------------
| The fair values of foreign exchange contracts are based on market prices at |
| the end of the reporting period. |
| Open foreign exchange forward contracts |
| are hedging the financing cash flow. |
--------------------------------------------------------------------------------
2. SEGMENT INFORMATION
--------------------------------------------------------------------------------
| Revenue | IFRS | IFRS | change | chang | IFRS | IFRS | IFRS |
| | | | , | e, | | | |
--------------------------------------------------------------------------------
| EUR million | 1-6/20 | 1-6/2 | MEUR | % | 4-6/20 | 4-6/20 | 2006 |
| | 07 | 006 | | | 07 | 06 | |
--------------------------------------------------------------------------------
| Business | 151.6 | 157.0 | -5.4 | -3.5 | 82.2 | 119.2 | 297.0 |
| Premises | | | | | | | |
--------------------------------------------------------------------------------
| Housing | 84.0 | 59.2 | 24.8 | 42.0 | 43.9 | 35.9 | 138.1 |
--------------------------------------------------------------------------------
| International | 25.9 | 18.5 | 7.4 | 40.0 | 14.0 | 12.7 | 44.6 |
| Operations | | | | | | | |
--------------------------------------------------------------------------------
| Other | 6.0 | 3.3 | 2.6 | 78.9 | 4.0 | 1.8 | 6.0 |
| Operations | | | | | | | |
--------------------------------------------------------------------------------
| Eliminations | -6.1 | -9.6 | 3.5 | | -4.2 | -4.6 | -6.2 |
--------------------------------------------------------------------------------
| Group total | 261.3 | 228.5 | 32.9 | 14.4 | 140.0 | 165.0 | 479.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | IFRS | IFRS | change | chang | IFRS | IFRS | IFRS |
| profit | | | , | e, | | | |
--------------------------------------------------------------------------------
| EUR million | 1-6/20 | 1-6/2 | MEUR | % | 4-6/20 | 4-6/20 | 2006 |
| | 07 | 006 | | | 07 | 06 | |
--------------------------------------------------------------------------------
| Business | 6.5 | 13.7 | -7.2 | -52.5 | 3.6 | 21.9 | 25.0 |
| Premises | | | | | | | |
--------------------------------------------------------------------------------
| Housing | 4.8 | 0.1 | 4.7 | | 2.9 | 0.9 | 5.1 |
--------------------------------------------------------------------------------
| International | 0.9 | -2.2 | 3.1 | | 1.8 | -1.6 | -3.6 |
| Operations | | | | | | | |
--------------------------------------------------------------------------------
| Other | -1.5 | -1.9 | 0.4 | | -1.1 | -1.1 | -4.4 |
| Operations | | | | | | | |
--------------------------------------------------------------------------------
| Eliminations | -0.4 | 2.2 | -2.5 | -117. | -0.4 | 2.9 | 2.5 |
| | | | | 5 | | | |
--------------------------------------------------------------------------------
| Group total | 10.3 | 11.9 | -1.5 | -12.8 | 6.8 | 23.1 | 24.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | IFRS | IFRS | IFRS | IFRS | IFRS | |
| profit | | | | | | |
--------------------------------------------------------------------------------
| % | 1-6/2007 | 1-6/2006 | 4-6/2007 | 4-6/2006 | 2006 | |
--------------------------------------------------------------------------------
| Business | 4.3 | 8.7 | 4.4 | 18.4 | 8.4 | |
| Premises | | | | | | |
--------------------------------------------------------------------------------
| Housing | 5.7 | 0.2 | 6.5 | 2.6 | 3.7 | |
--------------------------------------------------------------------------------
| International | 3.3 | -12.0 | 12.7 | -12.3 | -8.0 | |
| Operations | | | | | | |
--------------------------------------------------------------------------------
| Group total | 4.0 | 5.2 | 4.8 | 14.0 | 5.1 | |
--------------------------------------------------------------------------------
| Assets | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| EUR million | 6/2007 | 6/2006 | MEUR | % | 2006 |
--------------------------------------------------------------------------------
| Business Premises | 125.1 | 84.7 | 40.5 | 47.8 | 111.9 |
--------------------------------------------------------------------------------
| Housing | 88.2 | 59.5 | 28.7 | 48.2 | 74.2 |
--------------------------------------------------------------------------------
| International | 74.0 | 61.6 | 12.5 | 20.2 | 65.6 |
| Operations | | | | | |
--------------------------------------------------------------------------------
| Other Operations | 154.3 | 48.3 | 106.1 | 219.8 | 71.7 |
--------------------------------------------------------------------------------
| Eliminations and | -91.6 | -55.9 | -35.6 | | -92.0 |
| other adjustments | | | | | |
--------------------------------------------------------------------------------
| Group total | 350.1 | 198.0 | 152.1 | 76.8 | 231.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | IFRS | IFRS | change | change, | IFRS |
| | | | , | | |
--------------------------------------------------------------------------------
| EUR million | 6/2007 | 6/2006 | MEUR | % | 2006 |
--------------------------------------------------------------------------------
| Business Premises | 104.9 | 45.8 | 59.1 | 129.0 | 72.2 |
--------------------------------------------------------------------------------
| Housing | 72.9 | 43.8 | 29.1 | 66.5 | 61.0 |
--------------------------------------------------------------------------------
| International Operations | 62.5 | 50.1 | 12.4 | 24.7 | 54.3 |
--------------------------------------------------------------------------------
| Other Operations | 23.8 | 39.5 | -15.7 | -39.6 | 45.1 |
--------------------------------------------------------------------------------
| Eliminations and other | -92.5 | -34.9 | -57.5 | | -63.3 |
| adjustments | | | | | |
--------------------------------------------------------------------------------
| Group total | 171.7 | 144.3 | 27.4 | 19.0 | 169.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Invested capital | IFRS | IFRS | change | change, | IFRS |
| | | | , | | |
--------------------------------------------------------------------------------
| EUR million | 6/2007 | 6/2006 | MEUR | % | 2006 |
--------------------------------------------------------------------------------
| Business Premises | 60.7 | 35.6 | 25.1 | 70.6 | 37.9 |
--------------------------------------------------------------------------------
| Housing | 60.6 | 27.3 | 33.3 | 122.1 | 35.6 |
--------------------------------------------------------------------------------
| International Operations | 58.6 | 46.4 | 12.2 | 26.2 | 33.0 |
--------------------------------------------------------------------------------
| Other Operations and | 58.5 | 2.6 | 55.9 | | 35.1 |
| eliminations | | | | | |
--------------------------------------------------------------------------------
| Group total | 238.3 | 111.9 | 126.5 | 113.1 | 141.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on investment | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (%) | 1-6/2007 | 1-6/2006 | 2006 |
--------------------------------------------------------------------------------
| Business Premises | 29.2 | 44.2 | 60.3 |
--------------------------------------------------------------------------------
| Housing | 18.0 | 1.4 | 16.5 |
--------------------------------------------------------------------------------
| International Operations | 4.0 | -7.1 | -7.8 |
--------------------------------------------------------------------------------
| Group total | 11.6 | 16.8 | 15.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | IFRS | IFRS | change | change, | IFRS |
| | | | , | | |
--------------------------------------------------------------------------------
| EUR million | 6/2007 | 6/2006 | MEUR | % | 2006 |
--------------------------------------------------------------------------------
| Business Premises | 323.4 | 135.9 | 187.5 | 137.9 | 287.7 |
--------------------------------------------------------------------------------
| Housing | 129.7 | 147.9 | -18.2 | -12.3 | 154.4 |
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| International Operations | 64.4 | 23.5 | 40.8 | 173.3 | 11.6 |
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| Group total | 517.4 | 307.3 | 210.1 | 68.4 | 453.7 |
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| Business Premises | IFRS | IFRS | change | change, | IFRS |
| | | | , | | |
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| EUR million | 1-6/2007 | 1-6/200 | MEUR | % | 2006 |
| | | 6 | | | |
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| Revenue | 151.6 | 157.0 | -5.4 | -3.5 | 297.0 |
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| Operating profit | 6.5 | 13.7 | -7.2 | -52.5 | 25.0 |
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| Segment's assets | | | | | |
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| Non-current assets | 0.8 | 1.5 | -0.8 | -50.3 | 0.7 |
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| Current assets | 124.4 | 83.1 | 41.3 | 49.6 | 111.2 |
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| Total assets | 125.1 | 84.7 | 40.5 | 47.8 | 111.9 |
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| Segment's liabilities | | | | | |
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| Non-current liabilities | 12.7 | 11.7 | 1.0 | 8.5 | 14.0 |
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| Current liabilities | 92.2 | 34.1 | 58.1 | 170.5 | 58.1 |
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| Total liabilities | 104.9 | 45.8 | 59.1 | 129.0 | 72.2 |
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| Invested capital at end | 60.7 | 35.6 | 25.1 | 70.6 | 37.9 |
| of period | | | | | |
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| Return on investment, % | 29.2 | 44.2 | | | 60.3 |
| 1) | | | | | |
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| Order backlog at end of | 323.4 | 135.9 | 187.5 | 137.9 | 287.7 |
| period | | | | | |
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| Housing | IFRS | IFRS | change | change, | IFRS |
| | | | , | | |
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| EUR million | 1-6/2007 | 1-6/200 | MEUR | % | 2006 |
| | | 6 | | | |
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| Revenue | 84.0 | 59.2 | 24.8 | 42.0 | 138.1 |
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| Operating profit | 4.8 | 0.1 | 4.7 | | 5.1 |
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| Segment's assets | | | | | |
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| Non-current assets | 1.0 | 0.8 | 0.2 | 25.5 | 1.1 |
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| Current assets | 87.1 | 58.7 | 28.5 | 48.5 | 73.1 |
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| Total assets | 88.2 | 59.5 | 28.7 | 48.2 | 74.2 |
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| Segment's liabilities | | | | | |
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| Non-current liabilities | 25.6 | 17.1 | 8.5 | 50.0 | 25.5 |
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| Current liabilities | 47.3 | 26.7 | 20.6 | 77.1 | 35.5 |
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| Total liabilities | 72.9 | 43.8 | 29.1 | 66.5 | 61.0 |
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| Invested capital at end | 60.6 | 27.3 | 33.3 | 122.1 | 35.6 |
| of period | | | | | |
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| Return on investment, % | 18.0 | 1.4 | | | 16.5 |
| 1) | | | | | |
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| Order backlog at end of | 129.7 | 147.9 | -18.2 | -12.3 | 154.4 |
| period | | | | | |
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| International Operations | IFRS | IFRS | change | change, | IFRS |
| | | | , | | |
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| EUR million | 1-6/2007 | 1-6/200 | MEUR | % | 2006 |
| | | 6 | | | |
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| Revenue | 25.9 | 18.5 | 7.4 | 40.0 | 44.6 |
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| Operating profit | 0.9 | -2.2 | 3.1 | | -3.6 |
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| Segment's assets | | | | | |
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| Non-current assets | 6.3 | 5.8 | 0.5 | 9.3 | 0.4 |
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| Current assets | 67.7 | 55.7 | 11.9 | 21.4 | 65.2 |
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| Total assets | 74.0 | 61.6 | 12.5 | 20.2 | 65.6 |
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| Segment's liabilities | | | | | |
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| Non-current liabilities | 2.6 | 17.4 | -14.8 | -85.3 | 17.5 |
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| Current liabilities | 60.0 | 32.7 | 27.2 | 83.1 | 36.9 |
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| Total liabilities | 62.5 | 50.1 | 12.4 | 24.7 | 54.3 |
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| Invested capital at end | 58.6 | 46.4 | 12.2 | 26.2 | 33.0 |
| of period | | | | | |
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| Return on investment, % | 4.0 | -7.1 | | | -7.8 |
| 1) | | | | | |
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| Order backlog at end of | 64.4 | 23.5 | 40.8 | 173.3 | 11.6 |
| period | | | | | |
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1) In calculating the key ratio only the profit for the period has been
annualised
3. Other key figures of SRV Group
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IFRSIFRSchange,IFRSIFRSIFRS1-6/20071-6/2006%4-6/20074-6/20062006Operating
profit, %4.05.24.814.05.1Return on invested capital, %
1)11.616.815.156.815.9Return on equity, % 1)11.027.017.6142.227.3Net interest
bearing debt, EUR million-10.431.664.6Equity ratio, %59.432.531.7Gearing ratio,
%-5.858.8103.9Earnings per share, EUR 2)0.250.25-3.70.170.630.56Equity per
share, EUR 2)4.461.92132.92.22Cash earnings per share, EUR
2)-1.213.07-1.594.221.86Share price at the end of period, EUR10.10Market
capitalization at end of period, EUR million394.6Weighted number of shares
outstanding, 100027 42926 0645.228 77826 06426 064Number of shares outstanding
at end of period, 100039 06526 06449.939 06526 06426 064Order backlog, EUR
million517.4307.368.4453.7Personnel, average 74462419.37846556681) In
calculating the key ratio only the profit for the period has been annualised2)
Key figures per share have been adjusted to reflect the increase in the number
of shares, which came into effect on 11 April 2007 (split) and new issue of
shares on 11 June 2007
SRV GROUP INTERIM REPORT 1 January - 30 June 2007: SIGNIFICANT GROWTH IN REVENUE AND ORDER BACKLOG
| Source: SRV Yhtiöt Oyj