Consolidated earnings and balance sheet
Net sales for the period under review were EUR 300.0 million (EUR 321.1 million in the same period 2001). Discontinued and divested businesses reduced net sales by EUR 13.1 million. Profit before extraordinary items was EUR 13.3 (18.2) million.
The Jaakko Pöyry Group's consolidated balance sheet is healthy. The equity ratio was 48.0 (46.8) per cent and the net debt/equity ratio (gearing) 7.9 (1.7) per cent.
The Jaakko Pöyry Group's earnings per share were EUR 0.59 (0.92) and the return on investment 13.1 (19.5) per cent.
Business groups
Forest Industry
Net sales for the period under review were EUR 103.9 (112.2) million. The operating profit amounted to EUR 10.8 (14.1) million. The decline in operating profit is due to the forest industry's reduced investment ac-tivity. The order stock was EUR 72.2 (at the end of 2001 74.2) million.
Forest Industry Consulting
Net sales for the period under review were EUR 28.2 (35.0) million. The operating profit was EUR 1.0 (0.5) million. The operating profit for the period under review does not include any major fees from mergers & acquisitions activities. The order stock amounted to EUR 6.9 (18.5) million.
At the beginning of the year, Jaakko Pöyry Consulting Oy sold 75.0 per cent of its 90.0 per cent-owned subsidiary JP Development Oy, whose net sales for 2001 amounted to EUR 7.0 million and order stock to EUR 5.7 million at the end of 2001.
Energy
Net sales for the period under review were EUR 82.8 (95.1) million. Discontinued businesses reduced net sales by EUR 7.4 million. The operating profit was EUR -2.2 (-2.3) million. The order stock amounted to EUR 125.4 (123.5) million.
The operating profit for the period under review includes a provision of EUR 1.5 million related to business in Latin America and especially projects in Argentina.
Infrastructure & Environment
Net sales for the period under review were EUR 85.9 (77.8) million. The operating profit was EUR 5.9 (4.5) million. The order stock was EUR 97.3 (103.7) million.
Group structure
Efforts to further develop the Group's structure and business operations continued during the period under review.
The Jaakko Pöyry Group has expanded its operations in North America by acquiring the business of Ajami, Bédard, Gagnon, Sexton Inc., a Canadian forest industry engineering company. Its operations will continue in Jaakko Pöyry ABGS Inc., a company 100 per cent owned by the Jaakko Pöyry Group. The company has been consolidated into the Jaakko Pöyry Group as of July 1, 2002. The acquired business employs about 100 forest industry experts and its net sales were EUR 14 million in 2001.
The Forest Industry Consulting business group has sold 75.0 per cent of its 90.0 per cent-owned subsidiary JP Development Oy. The divestment is a part of the on-going rationalisation of Jaakko Pöyry Consulting to focus exclusively on management consulting, operations consulting and investment banking for the global forest products industry value chain.
The Energy business group has acquired the air laboratory of Stora Enso's research centre in Imatra, Finland. The air laboratory specialises in air emission measurements and process analyses for pulp and paper mills and their power plants. Furthermore, the Energy business group has concluded a co-operation agreement with GreenStream Network Oy, Finland, acquiring a 13.3 per cent shareholding in this company. GreenStream Network is the first company in the Nordic countries to act as a broker in the trade in emissions and green certificates.
The Infrastructure & Environment business group has acquired the transport consulting business of Heusch/Boesefeldt GmbH in Germany. The acquired business employs 55 people, with net sales amounting to EUR 3.4 million.
After the period under review, the group has sold Jaakko Pöyry Electrowatt (Chile) S.A. to the company's management. The company is a part of Forest Industry business group and its net sales amounted to EUR 0.6 million in 2001 and it employs about 20 people. The company has been lossmaking in 2001 and 2002. The sale of the company will have no effect on the Group's earnings in 2002.
Efforts to further develop the Group's structure and business operations will continue. In response to the globalisation of the forest products industry, the local office network of the Forest Industry business group will be expanded especially in Western Europe. There are also plans to expand the operations of the Energy and the Infrastructure & Environment business groups.
Order stock
The Group's order stock amounted to EUR 301.8 million at the end of September, compared with EUR 287.1 million at the end of September 2001. Discontinued and divested operations reduced the order stock by EUR 9.2 million. At the end of December 2001 the order stock was EUR 319.9 million.
Capital expenditure
The Group's capital expenditure for the period under review totalled EUR 9.0 (5.4) million, of which EUR 6.5 million consisted of computer software, systems and hardware.
Share capital and shares
The Annual General Meeting on March 6, 2002 authorised the Board of Directors to cancel the acquired 309 300 own shares and thus decrease the share capital from EUR 13 932 861 to EUR 13 623 561. After the cancellation, the total number of shares was 13 623 561. During the period under review 153 040 new shares were subscribed based on warrants pursuant to the Bond Loan with Warrants of 1998. In addition, 15 000 new shares were subscribed in October 2002. Following these subscriptions, the number of shares totals 13 791 601.
The warrants related to the Bond Loan with Warrants issued by Jaakko Pöyry Group Oyj in 1998 to the Group personnel and the parent company's Board of Directors carry subscription rights for a total of 1.3 million of the company's shares, with the subscription period beginning partly (390 000 shares) on April 1, 2000, partly (390 000 shares) on April 1, 2001, and partly on April 1, 2002 (520 000 shares). The subscription period ends for all warrants on April 30, 2005. A total of 430 615 shares have been subscribed based on the warrants.
The Annual General Meeting on March 6, 2002 authorised the Board of Directors to decide on an increase in the share capital by a new issue and/or by taking a convertible loan and/or by issuing option rights, so that based on the new issue, the convertible bonds and option rights the share capital can be increased by a maximum of EUR 1.0 million by issuing for subscription a maximum of 1.0 million new shares. The authorisation is in force until March 6, 2003.
The Annual General Meeting authorised the Board of Directors to acquire and convey the company's own shares to a maximum of 5.0 per cent of the company's share capital. The Board of Directors decided on March 6, 2002 to exercise the authorisations. The authorisations are in force until March 6, 2003. From September 30 to October 7, 2002 the company acquired 10 000 own shares. The average acquisition price was EUR 12.88.
The company's shares are quoted on the Helsinki Exchanges. The average trading price during the period under review was EUR 16.97, with a high of EUR 19.00 and a low of EUR 13.00. A total of 1.4 million of the company's shares (equalling 10.3 per cent of the total number of shares) were traded, corresponding to a turnover of EUR 23.9 million.
The Annual General Meeting approved the Board of Directors' proposal that a dividend of EUR 0.60 be paid per share for the year 2001 (EUR 0.60 for the year 2000), totalling EUR 8.2 million. The dividend was paid on March 18, 2002.
Prospects
The current year is characterised by slow growth of the world economy. The economic uncertainty has reduced investment activity and postponed investment decisions.
The weak economic development has also depressed the forest industry's investment activity. Numerous pre-studies and preliminary engineering projects are in progress, but investment decisions have been postponed. Taking into account the market situation, the Forest Industry business group's operating profit for 2002 will be satisfactory, though lower than in the previous year. The operating profit of the Forest Industry Consulting business group for the review period has improved compared with 2001. In 2002 the business group's operating profit will improve clearly compared with last year. However, the improvement will be dependent on commissions from mergers and acquisitions in the final months of the year. In the energy sector, market prospects are still uncertain, though demand for services related to renewable sources of energy, power plant modernisations and consulting work has recovered. The Energy business group's order stock has grown, but its favourable effect on operating profit will not be seen until 2003. The Energy business group's operating profit for 2002 will remain at last year's level. The Infrastructure & Environment business group's operating profit for the review period is good and its order stock is stable. The operating profit for 2002 will remain at the previous year's level.
In spite of the difficult market situation, the Jaakko Pöyry Group's order stock has grown during the summer and autumn 2002 and its market position is strong. Taking into account the business groups' prospects as outlined above, the consolidated profit before extraordinary items for 2002 is estimated at EUR 17-21 million.
Vantaa, October 28, 2002
JAAKKO PÖYRY GROUP OYJ
Board of Directors
JAAKKO PÖYRY GROUP OYJ
Erkki Pehu-Lehtonen
President and CEO
Teuvo Salminen
Executive Vice President
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