YIT CORPORATION STOCK EXCHANGE RELEASE MARCH 23, 2010 at 8 a.m.
YIT'S COMPARISON FIGURES FOR 2009 IN ACCORDANCE WITH THE NEW IFRS INTERPRETATION
YIT will apply the IFRIC 15 Agreements for the Construction of Real Estate IFRS
interpretation from the start of the financial period beginning on January 1,
2010. The adoption of the new interpretation will have an impact on certain
items of the consolidated income statement, balance sheet and cash flow
statement and the key figures based on them. The adoption of the interpretation
will not have any impact on the figures covering YIT's segments published by the
Group as the information will continue to be calculated in accordance with
existing accounting principles.
The IFRIC 15 interpretation contains guidelines on when the revenue generated by
the construction of real estate must be recognised on the basis of the handover
of the building and when the percentage of completion method can be applied. In
YIT, the new interpretation will have an impact on the recognition of
development projects involving residential and commercial real estate. The
interpretation will not have any impact on construction contracting or building
and industrial services.
Under the new practice, the quarterly revenue and profits of the YIT Group will
now fluctuate more in accordance with the completion dates of building projects.
The consolidated balance sheet total will be higher, while at the same time the
key figures calculated from the balance sheet will weaken. The new revenue
recognition practice also means that it will take more time for the Group's
financial figures to reflect changes in production volumes.
MAIN CHANGES
Project revenue recognition
In the future, the revenue generated by YIT's own residential development
projects will be recognised in Group-level reports when the project is complete
i.e. when the residential units are ready to be handed over to the client. The
share of income and expenses to be recognized will be calculated also in the
future by multiplying the percentage of completion by the percentage of sale.
Under the old practice, the revenue recognition began when the building work
started using the percentage of completion method.
In YIT's own commercial real estate development projects, the recognition
practice will be evaluated on a case-by-case basis and in accordance with the
terms and conditions of each contract. In the future, the projects already sold
will be recognised when the construction work has started or when the project is
complete. The share of income and expenses to be recognized will be calculated
also in the future by using the formula percentage of completion multiplied by
the percentage of sale multiplied by the occupancy rate. Under the old practice,
the recognition of sold projects was possible to start always immediately when
the building work started. YIT usually sells its commercial real estate
development projects to investors before the start of construction or during the
early stages of the construction work, which together with other facts means
that in most cases the revenue of these projects can be recognised in accordance
with the old practice also in the future.
Consolidated income statement and order backlog
In the consolidated income statement, the new interpretation will affect the
revenue, operating profit and profit before taxes. There will be no changes in
the reporting of financial expenses. There will be no material changes in the
tax rate but the change in the timing of revenue recognition will affect the
deferred taxes. By changing the revenue recognition practices, the new
interpretation will also have an impact on the Group's order backlog which
covers the portion of the customer orders and ongoing own development projects
that has not been recognised as revenue.
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| EUR million | 1-3/2009 | 1-6/2009 | 1-9/2009 | 1-12/2009 |
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| Revenue | | | | |
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| - Reported in 2009 | 823.7 | 1,676.8 | 2,491.8 | 3,452.4 |
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| - Adjustments | +19.5 | +29.2 | -31.5 | +33.2 |
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| - Adjusted comparison data | 843.2 | 1,706.0 | 2,460.3 | 3,485.6 |
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| Operating profit | | | | |
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| - Reported in 2009 | 22.1 | 60.2 | 105.8 | 165.5 |
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| - Adjustments | +6.6 | +11.8 | -1.0 | +2.6 |
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| - Adjusted comparison data | 28.7 | 72.0 | 104.8 | 168.1 |
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| Profit before taxes | | | | |
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| - Reported in 2009 | 2.2 | 27.4 | 57.4 | 106.9 |
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| - Adjustments | +6.6 | +11.8 | -1.0 | +2.6 |
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| - Adjusted comparison data | 8.8 | 39.2 | 56.4 | 109.5 |
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| Order backlog | | | | |
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| - Reported in 2009 | 3,045.0 | 2,916.4 | 2,800.8 | 2,773.6 |
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| - Adjustments | +211.3 | +203.6 | +258.8 | +209.7 |
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| - Adjusted comparison data | 3,256.3 | 3,120.0 | 3,059.6 | 2,983.3 |
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Consolidated balance sheet
The most important reporting change concerning the consolidated balance sheet is
that YIT's production to which the new rule applies will be reported as part of
current assets and the payments received from the customers in advances received
until the completion of the project - i.e. until the moment it will begin to be
recognised as revenue. As a result, there will be an increase in current assets,
advances received and the balance sheet total.
In Finland, YIT finances its projects by selling construction-stage contract
receivables to financing companies. According to the new interpretation, sold
residential units from own development projects will be recognised as revenue
when the project is complete. As a result, all construction-stage contract
receivables related to residential production and sold to financing companies
must be reported as part of the interest-bearing liabilities on the balance
sheet. Under the old practice, part of construction-stage contract receivables
related to residential production was reported as off-balance sheet items.
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| EUR million | 3/2009 | 6/2009 | 9/2009 | 12/2009 |
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| Current assets | | | | |
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| - Reported in 2009 | 1,426.8 | 1,418.9 | 1,357.7 | 1,309.5 |
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| - Adjustments | +186.1 | +182.9 | +230.8 | +168.1 |
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| - Adjusted comparison data | 1,612.9 | 1,601.8 | 1,588.5 | 1,477.6 |
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| Current receivables | | | | |
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| - Reported in 2009 | 718.6 | 751.5 | 764.0 | 660.7 |
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| - Adjustments | -33.6 | -33.7 | -43.9 | -20.6 |
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| - Adjusted comparison data | 685.0 | 717.8 | 720.1 | 640.1 |
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| Financial liabilities | | | | |
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| - Reported in 2009 | 843.7 | 859.8 | 886.2 | 670.8 |
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| - Adjustments | +38.9 | +28.3 | +34.0 | +31.4 |
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| - Adjusted comparison data | 882.6 | 888.1 | 920.2 | 702.2 |
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| Other current liabilities | | | | |
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| - Reported in 2009 | 1,094.2 | 1,055.9 | 1,009.3 | 971.5 |
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| - Adjustments | +149.2 | +152.3 | +197.6 | +162.0 |
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| - Adjusted comparison data | 1,243.4 | 1,208.2 | 1,206.9 | 1,133.5 |
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| Total equity | | | | |
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| - Reported in 2009 | 717.5 | 741.3 | 764.5 | 800.6 |
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| - Adjustments | -31.8 | -28.1 | -38.2 | -36.5 |
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| - Adjusted comparison data | 685.7 | 713.2 | 726.3 | 764.1 |
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| Balance sheet total | | | | |
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| - Reported in 2009 | 2,839.7 | 2,837.9 | 2,845.9 | 2,626.4 |
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| - Adjustments | +158.9 | +155.4 | +195.7 | +150.7 |
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| - Adjusted comparison data | 2,998.6 | 2,993.3 | 3,041.6 | 2,777.1 |
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Consolidated cash flow statement
Under the new interpretation, all sold residential units from own development
projects will be recognised as income after the project is completed. As a
result, the all cash flow connected with construction-stage contract receivables
will in the future be reported as part of the cash flow from financing
activities. Under the old practice, the proportion of the construction-stage
contract receivables directed at sold residential units was reported as part of
the cash flow from operating activities.
The reporting of the net change in cash and cash equivalents and their amount at
the end of the period will not be affected.
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| EUR million | 1-3/2009 | 1-6/2009 | 1-9/2009 | 1-12/2009 |
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| Net cash generated from | | | | |
| operating activities | | | | |
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| - Reported in 2009 | 24.4 | 55.0 | 87.4 | 242.5 |
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| - Adjusted comparison data | 35.3 | 76.5 | 103.1 | 260.9 |
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| Net cash used in investing | | | | |
| activities | | | | |
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| - Reported in 2009 | -14.1 | -16.9 | -19.8 | -31.1 |
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| - Adjusted comparison data | -14.1 | -16.9 | -19.8 | -31.1 |
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| Operating cash flow after | | | | |
| investments | | | | |
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| - Reported in 2009 | 10.3 | 38.1 | 67.6 | 211.4 |
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| - Adjusted comparison data | 21.2 | 59.7 | 83.4 | 229.8 |
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| Net cash used in financing | | | | |
| activities | | | | |
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| - Reported in 2009 | -4.1 | -53.7 | -24.0 | -238.5 |
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| - Adjusted comparison data | -15.1 | -75.2 | -39.8 | -256.9 |
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Consolidated key figures
The new accounting principle will have an impact on nearly all key figures based
on the income statement, balance sheet and cash flow statement items.
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| | 1-3/09 | 1-6/09 | 1-9/09 | 1-12/09 |
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| Earnings per share, EUR | | | | |
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| - Reported in 2009 | 0.02 | 0.14 | 0.29 | 0.53 |
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| - Adjusted comparison data | 0.06 | 0.21 | 0.29 | 0.55 |
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| Diluted earnings per share, EUR | | | | |
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| - Reported in 2009 | 0.02 | 0.14 | 0.29 | 0.53 |
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| - Adjusted comparison data | 0.06 | 0.21 | 0.29 | 0.55 |
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| Equity per share, EUR | | | | |
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| - Reported in 2009 | 5.70 | 5.90 | 6.09 | 6.38 |
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| - Adjusted comparison data | 5.46 | 5.67 | 5.78 | 6.09 |
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| Net interest-bearing debt at | | | | |
| the end of period, EUR million | | | | |
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| - Reported in 2009 | 635.1 | 671.4 | 640.4 | 497.7 |
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| - Adjusted comparison data | 674.1 | 699.7 | 674.4 | 529.1 |
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| Return on investment from the | | | | |
| last 12 months, % | | | | |
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| - Reported in 2009 | 14.3 | 11.4 | 9.8 | 10.9 |
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| - Adjusted comparison data | 16.5 | 11.5 | 11.1 | 11.0 |
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| Equity ratio at end of period, | | | | |
| % | | | | |
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| - Reported in 2009 | 28.3 | 29.3 | 29.7 | 33.8 |
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| - Adjusted comparison data | 27.0 | 28.1 | 28.2 | 32.4 |
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| Gearing ratio at the end of | | | | |
| period, % | | | | |
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| - Reported in 2009 | 88.5 | 90.6 | 83.8 | 62.2 |
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| - Adjusted comparison data | 98.3 | 98.1 | 92.9 | 69.2 |
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| Gross capital expenditure on | | | | |
| non-current assets, % of | | | | |
| revenue | | | | |
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| - Reported in 2009 | 0.8 | 0.6 | 0.6 | 0.8 |
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| - Adjusted comparison data | 0.8 | 0.6 | 0.6 | 0.8 |
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| Order backlog at the end of | | | | |
| period, EUR million | | | | |
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| - Reported in 2009 | 3,045.0 | 2,916.4 | 2,800.8 | 2,773.6 |
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| - Adjusted comparison data | 3,256.3 | 3,120.0 | 3,059.6 | 2,983.3 |
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| Dividend payout, % | | | | |
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| - Reported in 2009 | - | - | - | 74.9 |
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| - Adjusted comparison data | - | - | - | 73.2 |
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Information session, webcast and conference call
YIT will hold an information session for investors and analysts on Tuesday,
March 23, 2010, at 10:00 a.m. (Finnish time, EEST) at YIT's head office, at
Panuntie 11, 00620 Helsinki, Finland. The information session will be held in
English. After the session, there will also be an opportunity to ask questions
in Finnish. The presentation material is available in English and Finnish.
The information session can be viewed live on YIT's website, at
www.yitgroup.com/webcast. The webcast replay will be available at the same
address starting at approximately 12:00 noon. Participants are requested to call
the assigned number +44 (0)207 1620 177 at 9:55 a.m. (Finnish time, EEST) at the
latest, i.e., at least 5 minutes before the conference call begins.
For further information, please contact:
Timo Lehtinen, Chief Financial Officer, +358 (0)20 433 2258,
timo.lehtinen@yit.fi
YIT CORPORATION
Virva Salmivaara
Senior Vice President, Corporate Communications
Distribution: NASDAQ OMX, principal media, www.yitgroup.com