YIT CORPORATION FINANCIAL STATEMENTS BULLETIN Feb 4, 2010 at 8:00 a.m.
YIT's Financial Statements for 2009:
OPERATING PROFIT IMPROVED IN EVERY QUARTER - YIT ESTIMATES THAT IN 2010 REVENUE
WILL GROW AND PROFIT BEFORE TAXES WILL GROW SIGNIFICANTLY
Development during October-December compared to previous quarter:
- Revenue increased by 18 per cent to EUR 960.5 million (7-9/2009: EUR 815.0
million).
- Operating profit increased by 31 per cent to EUR 59.7 million (7-9/2009: EUR
45.6 million).
- Operating profit margin was 6.2 (7-9/2009: 5.6%)
- Profit before taxes increased by 66 per cent to EUR 49.5 million (7-9/2009:
EUR 29.9 million).
- Operating cash flow after investments amounted to EUR 143.8 million (7-9:2009:
EUR 29.5 million).
Development in 2009 compared to previous year:
- Revenue decreased by 12 per cent to EUR 3,452.4 million (1-12/2008: EUR
3,939.7 million).
- Operating profit decreased by 36 per cent to EUR 165.5 million (EUR 260.6
million).
- Operating profit margin was 4.8 (6.6%).
- Profit before taxes decreased by 45 per cent to EUR 106.9 million (EUR 193.1
million).
- Operating cash flow after investments amounted to EUR 211.4 million (EUR -19.4
million).
- Return on investment was 10.9% (17.5%).
- Equity ratio was 33.8 per cent (30.7%).
- Gearing ratio decreased to 62.2% at year's end (79.8%).
- Service and maintenance operations generated EUR 1,201.3 million (2008: EUR
1,299.2 million), in other words, 35 per cent (33%) of Group revenue. The
Building and Industrial Services segment accounted for the majority of service
and maintenance operations; 54 per cent (53 %) of its revenue was generated by
service and maintenance operations.
- In Finland, YIT sold a total of 3,502 (1,920) residential units during the
year, of which 1,567 (1,462) were own development targeted directly at consumers
and 1,935 (458) were rental housing for investors. YIT started up the
construction of a total of 3,447 (1,542) residential units in Finland during
2009, of which 1,528 (1,084) were own housing development project aimed at
consumers.
- In Russia, YIT sold a total of 2,612 (2,793) residential units and in the
Baltic countries 256 (733) residential units. In Russia, YIT started up the
construction of a total of 672 (3,622) residential units. In Baltic countries
there were no residential start-ups.
- Order backlog decreased by 14 per cent to EUR 2,773.6 million (EUR 3,233.7
million).
- The number of personnel decreased by 9 per cent to 23,480 (25,784) at year's
end.
- The Board of Directors proposes to the Annual General Meeting that a dividend
of EUR 0.40 per share (EUR 0.50) be paid for the 2009 financial year,
representing 74.9 per cent (47.6%) of earnings per share.
Focus on profitability and operating cash flow in 2009
In 2009's challenging market situation the Group's actions focused on
accelerating sales and enhancing profitability and cash flow. The operating
profit and profitability of the Group increased in every quarter of 2009. The
operating profit for the fourth quarter was clearly better than for the previous
quarter or the corresponding period the year before. Operating cash flow after
investments was good throughout the year and very strong during the fourth
quarter. The company's financial position was good at year's end.
Profit improvement during 2009 was affected by the recovery in residential sales
in Finland and Russia. The profitability of Building and Industrial Services'
business operations was stable in January-September and improved during the
fourth quarter. The operating profit of Construction Services Finland remained
stable throughout the year. The operating profit of International Construction
Services remained negative as a whole, but turned to positive figures during the
third quarter and improved further in October-December.
The amount of Group's invested capital decreased. Invested capital decreased in
Construction Services Finland. In Russia, the invested capital decreased
slightly during the last quarter. At the end of the year, 40 per cent of the
Group's invested capital was tied up in Russia. Group's operations were
streamlined by cutting annual fixed costs by approximately EUR 60 million and
adjusting the number of personnel to match the market conditions.
Growth target was raised
Revenue and order backlog decreased on the previous year. A clear decrease in
business premises construction reduced the project activity in Building and
Industrial Services and affected Construction Services Finland. The demand for
service and maintenance operations for buildings and industry as well as
infrastructure construction remained relatively stable. Residential demand
picked up during the year in both Finland and Russia. In the Baltic countries
construction activity was clearly at a lower level than the year before.
The Group's annual revenue growth target was increased to 5-10 per cent on
average. Previously, the target was positive growth in revenue. Residential
start-ups were increased in Finland in each quarter of the year to secure
growth. YIT is prepared for growth also in Russia and new residential projects
were started up during the later part of the year. YIT has a versatile portfolio
of apartments under construction both in Finland and Russia. The company's
market share has increased due to good residential sales and increased
residential start-ups. In Building and Industrial Services the focus of
operations has been shifted to service and maintenance as well as renovation and
modernisation projects, which offers a good starting point for year 2010.
Outlook for 2010
YIT Corporation estimates that the Group's revenue will increase and profit
before taxes will increase significantly in 2010 compared to 2009.
The demand for housing is expected to remain good in 2010 in Finland as well as
Russia.
In Finland, the residential demand is supported by low interest rates, increased
consumer confidence and structural factors, such as migration, increasing
population and decreasing family sizes. The price level of apartments has
developed positively. There is a low supply of new residential units in the
market. YIT has started up new residential projects in 2009, which offers a
solid starting point for 2010. At the end of 2009, YIT had 3,773 residential
units under construction. There were 1,061 residential units on sale, of which
216 had been completed. Good plot reserves, geographically extensive operations
and the ability to react swiftly to changes in the market enable YIT to increase
residential development activity in 2010.
There is a great need for new housing in Russia, and therefore the demand
outlook for residential units aimed at YIT's customer segment is unchanged in
the long term. At the end of 2009, housing prices have stabilized and consumer
confidence has increased. New residential projects have been started up in the
market, but the supply is still limited. At the end of 2009, YIT had 4,174
residential units under construction. There were 3,603 residential units on
sale, of which 1,243 had been completed. YIT has improved its reputation as a
reliable construction company and developed its sales process. The company has
increased the availability of loans for its customers through co-operation with
banks. YIT started new residential projects during the last months of 2009 and
in 2010 the residential start-ups are increased responding to the market demand.
Residential demand is affected by consumer confidence, employment situation and
interest rate development both in Finland and Russia. Additionally, in Russia
the residential demand is dependent on oil prices and the exchange rate of the
ruble.
The opportunities for organic growth in Building and Industrial Services are
supported by the need for service and maintenance as well as renovation and
public sector projects. There is a large number of small companies operating in
building system markets and the consolidation development provides opportunities
for acquisitions. Industrial investments are low in Finland, but the demand for
industrial maintenance services will continue relatively stable. New investments
in technical building systems will decrease in all YIT markets, particularly due
to the low volumes of business premises construction. YIT has an extensive
network of local offices in the markets where it operates and a solid market
position in building system and industrial service and maintenance operations,
projects and energy-efficiency services.
New projects related to transportation will begin in the Finnish infrastructure
market in 2010; at the same time the demand in the municipal sector will
decrease. Opportunities will also open in connection with road and regional
maintenance contracts. YIT has large-scale route projects underway in
infrastructure services. The Group has special expertise in infrastructure and a
solid position as Finland's largest private provider of road maintenance
services.
Group key figures
--------------------------------------------------------------------------------
| | 1-12 | 1-12 | Change | | 1-3/0 | 4-6/09 | 7-9/09 | 10-12/ |
| | /09 | /08 | 1-12/ | | 9 | | | 09 |
| | | | 08 - | | | | | |
| | | | 1-12/0 | | | | | |
| | | | 9 | | | | | |
--------------------------------------------------------------------------------
| Revenue, MEUR | 3,45 | 3,93 | -12% | | 823.7 | 853.1 | 815.0 | 960.5 |
| | 2.4 | 9.7 | | | | | | |
--------------------------------------------------------------------------------
| Operating | 165. | 260. | -36% | | 22.1 | 38.1 | 45.6 | 59.7 |
| profit, MEUR | 5 | 6 | | | | | | |
--------------------------------------------------------------------------------
| Operating | 4.8% | 6.6% | - | | 2.7 | 4.5 | 5.6 | 6.2 |
| profit | | | | | | | | |
| margin, % | | | | | | | | |
--------------------------------------------------------------------------------
| Profit before | 106. | 193. | -45% | | 2.2 | 25.2 | 29.9 | 49.5 |
| taxes, MEUR | 9 | 1 | | | | | | |
--------------------------------------------------------------------------------
| Earnings/shar | 0.53 | 1.05 | -50% | | 0.02 | 0.12 | 0.15 | 0.24 |
| e, EUR | | | | | | | | |
--------------------------------------------------------------------------------
| Return on | 10.9 | 17.5 | - | | 14.3 | 11.4 | 9.8 | 10.9 |
| investment | | | | | | | | |
| (from the | | | | | | | | |
| last 12 | | | | | | | | |
| months), % | | | | | | | | |
--------------------------------------------------------------------------------
| Gearing ratio | 62.2 | 79.8 | - | | 88.5 | 90.6 | 83.8 | 62.2 |
| at end of | | | | | | | | |
| period, % | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 211. | -19. | - | | 10.3 | 27.8 | 29.5 | 143.8 |
| cash flow | 4 | 4 | | | | | | |
| after | | | | | | | | |
| investments, | | | | | | | | |
| MEUR. | | | | | | | | |
--------------------------------------------------------------------------------
| Order backlog | 2,77 | 3,23 | -14% | | 3,045 | 2,916. | 2,800. | 2,773 |
| at end of | 3.6 | 3.7 | | | .0 | 4 | 8 | .6 |
| period, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Personnel at | 23,4 | 25,7 | -9% | | 25,23 | 24,763 | 24,003 | 23,480 |
| end of period | 80 | 84 | | | 9 | | | |
--------------------------------------------------------------------------------
Segment key figures:
--------------------------------------------------------------------------------
| | 1-12 | 1-12 | Change | | 1-3/0 | 4-6/09 | 7-9/09 | 10-12/ |
| | /09 | /08 | 1-12/ | | 9 | | | 09 |
| | | | 08 - | | | | | |
| | | | 1-12/0 | | | | | |
| | | | 9 | | | | | |
--------------------------------------------------------------------------------
| Building and | | | | | | | | |
| Industrial | | | | | | | | |
| Services | | | | | | | | |
--------------------------------------------------------------------------------
| Revenue, MEUR | 2,12 | 2,39 | -11% | | 537.9 | 529.2 | 483.9 | 573.9 |
| | 4.9 | 6.0 | | | | | | |
--------------------------------------------------------------------------------
| Operating | 119. | 162. | -26% | | 28.6 | 28.2 | 24.9 | 37.6 |
| profit, MEUR | 3 | 0 | | | | | | |
--------------------------------------------------------------------------------
| Operating | 5.6% | 6.7% | - | | 5.3 | 5.3 | 5.1 | 6.6 |
| profit | | | | | | | | |
| margin, % | | | | | | | | |
--------------------------------------------------------------------------------
| Construction | | | | | | | | |
| Services | | | | | | | | |
| Finland | | | | | | | | |
--------------------------------------------------------------------------------
| Revenue, MEUR | 1,02 | 1,14 | -10% | | 239.8 | 253.0 | 246.3 | 290.6 |
| | 9.7 | 7.9 | | | | | | |
--------------------------------------------------------------------------------
| Operating | 81.9 | 111. | -27% | | 20.9 | 19.9 | 20.8 | 20.3 |
| profit, MEUR | | 7 | | | | | | |
--------------------------------------------------------------------------------
| Operating | 8.0% | 9.7% | - | | 8.7 | 7.9 | 8.4 | 7.0 |
| profit | | | | | | | | |
| margin, % | | | | | | | | |
--------------------------------------------------------------------------------
| International | | | | | | | | |
| Construction | | | | | | | | |
| Services | | | | | | | | |
--------------------------------------------------------------------------------
| Revenue, MEUR | 359. | 493. | -27% | | 61.4 | 87.4 | 97.6 | 113.0 |
| | 4 | 5 | | | | | | |
--------------------------------------------------------------------------------
| Operating | -17. | 9.0 | -298% | | -23.8 | -5.2 | 3.7 | 7.5 |
| profit, MEUR | 8 | | | | | | | |
--------------------------------------------------------------------------------
| Operating | -5.0 | 1.8% | - | | -38.7 | -5.9 | 3.8 | 6.6 |
| profit | % | | | | | | | |
| margin, % | | | | | | | | |
--------------------------------------------------------------------------------
Information session, webcast and conference call
YIT will hold an information session for investors, analysts and the media on
Thursday, February 4, 2010 at 10:00 a.m. (Finnish time, EEST) at YIT's head
office, address Panuntie 11, 00620 Helsinki, Finland. The information session
will be held in English. After the session, representatives of the media can
also ask questions in Finnish. The presentation materials are available in
English and Finnish.
The information session can be viewed live on YIT's website,
www.yitgroup.com/webcast. The webcast replay will be available at the same
address starting at approximately 12:00 noon. Participants are asked to call the
assigned number +44 (0)20 7162 0077 at 9:55 a.m. (Finnish time, EEST) at the
latest, i.e. a minimum of 5 minutes before the conference call begins.
Schedule in different time zones:
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| | Financial | Information | Recorded webcast |
| | Statements | session, | available |
| | bulletin | conference call | |
| | published | and | |
| | | webcast | |
--------------------------------------------------------------------------------
| EEST (Helsinki) | 08:00 | 10:00 | 12:00 |
--------------------------------------------------------------------------------
| CEST (Paris, | 07:00 | 09:00 | 11:00 |
| Stockholm) | | | |
--------------------------------------------------------------------------------
| BST (London) | 06:00 | 08:00 | 10:00 |
--------------------------------------------------------------------------------
| US EDT (New York) | 01:00 | 03:00 | 05:00 |
--------------------------------------------------------------------------------
Annual General Meeting 2010
YIT Corporation's Annual General Meeting will be held on Wednesday, March 10,
2010, starting at 1:00 p.m. (Finnish time, EEST) onwards in Finlandia Hall,
Conference Wing, Hall A, located at the address: Mannerheimintie 13, Helsinki,
Finland (entrance through doors M1 and K1). The full notice of the meeting,
including the Board of Directors' proposals to the Annual General Meeting, will
be published as a separate stock exchange release on February 4, 2010.
Financial information in 2010
The Annual Report including financial statements for 2009 and a Corporate
Governance Statement, will be published on YIT's Internet site in Finnish and
English on February 17, 2010. Interim Reports will be published on April 29,
July 23 and October 27, 2010.
YIT will apply the IFRIC15 Agreements for the Construction of Real Estate IFRS
interpretation as of the financial period starting January 1, 2010, and its
application will change mainly the recognition of YIT Group's housing
development projects to take place at the time of delivery while until now they
have been recognised as income based on the principle of percentage of
completion multiplied by the percentage of sales. In business premises
development the method of income recognition will be evaluated case by case
depending on the terms of agreements. Change in the income recognition will
cause greater variation between the different quarters. YIT will publish
IFRIC15-compliant comparison figures for the financial year 2009 on March 23,
2010. Despite of the change in accounting principle, YIT will publish the
segment information using the principle of percentage of completion multiplied
by the percentage of sales also in the future.
Financial reports and other investor information are available on YIT's website,
www.yitgroup.com/investors. The materials may be ordered via the Internet site,
by sending an e-mail to InvestorRelations@yit.fi or by telephone at +358 20 433
2467.
YIT CORPORATION
Juhani Pitkäkoski
President and CEO
For further information, please contact:
Juhani Pitkäkoski, President and CEO, +358 20 433 3301, juhani.pitkakoski@yit.fi
Timo Lehtinen, Chief Financial Officer, +358 20 433 2258, timo.lehtinen@yit.fi
Distribution: NASDAQ OMX Helsinki, main media, www.yitgroup.com
FINANCIAL STATEMENTS BULLETIN JANUARY 1 - DECEMBER 31, 2009
REVENUE EUR 3,452 MILLION
YIT Group's revenue for 2009 decreased by 12 per cent on the previous year to
EUR 3,452.4 million (1-12/2008: EUR 3,939.7 million).
Building and Industrial Services, covering all countries in which YIT operates,
generated the majority of the revenue. Revenue decreased in all segments
compared to the year before due to the weaker market conditions. International
Construction Services revenue increased in all quarters as the year went on with
a picking up of residential sales. Revenue for the fourth quarter was the
all-year high in all segments due to accelerated residential sales in Russia and
Finland and seasonal fluctuations typical of the Building and Industrial
Services segment.
Finland accounted for 45% of revenue (47%), Sweden for 15% (16%), Norway for 12%
(12%), Central Europe for 11% (5%), Russia for 9% (10%), Denmark for 4% (4%) and
the Baltic countries for 2% (4%). In local currency terms, the decrease in Group
revenue was 8 per cent.
Revenue by segment (MEUR)
--------------------------------------------------------------------------------
| | 2009 | 2008 | Change | % of the |
| | | | | Group's |
| | | | | revenue for |
| | | | | 2009 |
--------------------------------------------------------------------------------
| Building and | 2,124.9 | 2,396.0 | -11% | 62% |
| Industrial Services | | | | |
| 1) | | | | |
--------------------------------------------------------------------------------
| Construction | 1,029.7 | 1,147.9 | -10% | 30% |
| Services Finland | | | | |
--------------------------------------------------------------------------------
| International | 359.4 | 493.5 | -27% | 10% |
| Construction | | | | |
| Services | | | | |
--------------------------------------------------------------------------------
| Other items | -61.6 | -97.7 | -37% | -2% |
--------------------------------------------------------------------------------
| YIT Group, total | 3,452.4 | 3,939.7 | -12% | 100% |
--------------------------------------------------------------------------------
1) The Central European building system operations acquired from Germany,
Austria, Poland, Czech Republic, Hungary and Romania were transferred to YIT on
August 1, 2008. The revenue of these operations for August-December 2008
amounted to EUR 182.6 million.
YIT's service chain for customers covers investments, servicing and maintenance
as well as the change of premises' purpose of use. The extensive service chain
aims at better service capability, business growth and steady income flow.
Service and maintenance of buildings, industry and traditional infrastructure
accounts for a significant proportion of the Group's revenue. The target is to
increase service and maintenance operations further. In 2009, service and
maintenance operations generated EUR 1,201.3 million (2008: EUR 1,299.2
million), in other words, 35 per cent (33%) of consolidated revenue. The
Building and Industrial Services segment accounted for the majority of service
and maintenance operations; 54 per cent (53 %), or EUR 1,151.0 million (EUR
1,260.2 million), of its revenue was generated by service and maintenance
operations.
OPERATING PROFIT EUR 166 MILLION
The Group's operating profit decreased by 36 per cent to EUR 165.5 million (EUR
260.6 million). Operating profit margin was 4.8 per cent (6.6%). Return on
investment was 10.9 per cent (17.5%).
The operating profit decreased compared to the previous year in all segments.
The operating profit of International Construction Services remained negative as
a whole. The segment's operating profit was weakened on account of the volume of
residential sales in the first part of the year falling short of the previous
year, housing prices being at a lower level than last year and the Baltic market
continuing to be weak.
The Group's profitability and operating profit improved in every quarter.
Operating profit for the fourth quarter was clearly better than during the
previous quarter or the corresponding period the year before. Profit improvement
during 2009 was affected by the recovery in residential sales in Finland and
Russia. The profitability of Building and Industrial Services was stable in
January-September and improved during the fourth quarter. The operating profit
of Construction Services Finland remained stable throughout the year. The
operating profit of International Construction Services turned to positive
figures during the third quarter and improved further in October-December.
Operating profit by segment (MEUR)
--------------------------------------------------------------------------------
| | 2009 | 2008 | Change | Proportion |
| | | | | of |
| | | | | the Group's |
| | | | | operating |
| | | | | profit |
| | | | | 2009 |
--------------------------------------------------------------------------------
| Building and Industrial | 119.3 | 162.0 | -26% | 72% |
| Services 1) | | | | |
--------------------------------------------------------------------------------
| Construction Services | 81.9 | 111.7 | -27% | 50% |
| Finland 2) | | | | |
--------------------------------------------------------------------------------
| International | -17.8 | 9.0 | -298% | -11% |
| Construction Services | | | | |
--------------------------------------------------------------------------------
| Other items | -17.9 | -22.0 | -19% | -11% |
--------------------------------------------------------------------------------
| YIT Group, total | 165.5 | 260.6 | -36% | 100% |
--------------------------------------------------------------------------------
Operating profit margin by segment
--------------------------------------------------------------------------------
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Building and Industrial Services 1) | 5.6% | 6.8% |
--------------------------------------------------------------------------------
| Construction Services Finland 2) | 8.0% | 9.7% |
--------------------------------------------------------------------------------
| International Construction Services | -5.0% | 1.8% |
--------------------------------------------------------------------------------
| YIT Group, total | 4.8% | 6.6% |
--------------------------------------------------------------------------------
1a) The building system service operations acquired from Central Europe were
transferred to YIT on August 1, 2008.
1b) On September 30, 2009, the court of arbitration issued its ruling in the
dispute concerning the mechanical installation contract YIT carried out for
Neste Oil's Porvoo oil refinery. The effect of the ruling on Building and
Industrial Services' operating profit for 2009 was EUR -3.2 million.
2) On March 10, 2008, the Supreme Court issued its ruling on disputes connected
with the renovation of SOK's former head office building. The ruling had a
positive effect of EUR 3.5 million on Construction Services Finland's operating
profit for 2008.
EARNINGS PER SHARE EUR 0.53
Profit before taxes decreased by 45 per cent compared to the year before to EUR
106.9 million (EUR 193.1 million). Earnings per share decreased by 50 per cent
to EUR 0.53 (EUR 1.05).
Financial expenses decreased compared to the previous year due to a general
decrease in interest rates and a decrease in net interest-bearing liabilities.
Profit before taxes and earnings per share improved in every quarter. Profit
before taxes amounted to EUR 2.2 million for the first quarter of 2009, EUR 25.2
million for the second quarter, EUR 29.9 million for the third quarter and EUR
49.5 for the fourth quarter.
DIVIDEND PROPOSAL EUR 0.40
The Board of Directors proposes to the Annual General Meeting that a dividend of
EUR 0.40 per share (EUR 0.50) be paid for the 2009 financial year, representing
74.9 per cent (47.6%) of earnings per share.
The Board of Directors' proposal for the use of distributable equity is
presented at the end of the financial statements.
ORDER BACKLOG EUR 2,774 MILLION
The Group's order backlog was EUR 2,773.6 million (EUR 3,233.7 million) at the
end of the year, or 14 per cent less than a year before. The order backlog has a
normal margin.
The order backlog of Construction Services Finland increased particularly due to
increased housing start-ups. The order backlog decreased in the other business
segments compared to the year before. The order backlog of the Building and
Industrial Services segment declined due to the decrease in customers'
investments. The order backlog of International Construction Services decreased
as the segment's residential projects under construction in Russia were
recognised as income as construction and sales proceeded. Also new residential
projects were started up in Russia.
Due to market uncertainties, the construction of residential projects in the
start-up phase in Russia in projects whose sales had not yet begun was suspended
in October 2008. Some of the projects were restarted late in 2009. At the end of
2009, the value of the projects that were still suspended amounted to EUR 282
million in the order backlog (12/08: EUR 356 million).
The order backlog was impacted by fluctuations in the exchange rates of the
Norwegian krone, Swedish krona and Russian ruble. Also in local currency terms,
the decrease in the Group's order backlog was 14 per cent.
Order backlog by segment (MEUR)
--------------------------------------------------------------------------------
| | 2009 | 2008 | Change | Proportion |
| | | | | of |
| | | | | the Group's |
| | | | | order |
| | | | | backlog |
| | | | | 2009 |
--------------------------------------------------------------------------------
| Building Systems 1) | 850.4 | 1,050.2 | -19% | 31% |
--------------------------------------------------------------------------------
| Construction Services | 1,007.5 | 874.2 | 15% | 36% |
| Finland | | | | |
--------------------------------------------------------------------------------
| International | 960.1 | 1,369.3 | -30% | 35% |
| Construction Services 2) | | | | |
--------------------------------------------------------------------------------
| Other items | -44.4 | -60.0 | -26% | -2% |
--------------------------------------------------------------------------------
| YIT Group, total | 2,773.6 | 3,233.7 | -14% | 100% |
--------------------------------------------------------------------------------
1) The business operations acquired from Central Europe transferred to YIT on
August 1, 2008. The order backlog of these operations amounted to EUR 265.6
million at the end of 2008.
2) The order backlog includes projects suspended in October 2008. At the end of
2009, the value of the projects that were still suspended amounted to EUR 282
million in the order backlog (12/08: EUR 356 million).
The order backlog includes that portion of customer orders and ongoing
development projects that has not been recognised as revenue. Contracted
projects are recognised as income based on the percentage of completion.
Residential development projects are recognised as income by multiplying the
percentage of completion by percentage of sale. Commercial real estate
development projects are recognised as income using the principle percentage of
completion multiplied by percentage of sale multiplied by occupancy rate. As of
the beginning of 2010, the revenue recognition of the Group's own housing
development projects will change so that the projects will be recognised as
income in their entirety only upon delivery. In business premises development
the method of income recognition will be evaluated case by case depending on the
terms of agreements. Change in the income recognition will cause greater
variation between the different quarters.
The order backlog of Building and Industrial Services mainly comprises contract
orders and service and maintenance agreements. A significant part of the
segment's maintenance and servicing operations are immediately performed
assignments that are not included in the order backlog. All of the additional
works or alterations are neither included in the order backlog.
In residential and commercial development projects, YIT assumes the
responsibility for the sales of the residential units or the site. Commercial
real estate development projects are usually sold to investors either prior to
construction or during an early phase thereof. In Construction Services Finland,
more than half of the order backlog at the end of 2009 was sold and less than
half unsold production. In International Construction Services, more than half
of the order backlog consisted of unsold residential units.
GOOD FINANCIAL POSITION AT YEAR'S END
Operating cash flow after investments was good throughout the year and very
strong during the fourth quarter. The cash flow was strengthened by strong
residential sales during the second part of the year and stable profitability in
Building and Industrial Services. Operating cash flow after investments amounted
to EUR 211.4 million (1-12:2008: EUR -19.4 million). Operating cash flow after
investments was EUR 10.3 million in January-March, EUR 27.8 million in
April-June, EUR 29.5 million in July-September and EUR 143.8 million in
October-December. Cash reserves at the end of the period amounted to EUR 173.1
million (EUR 201.7 million). Dividends of EUR 63.4 million (EUR 102.0 million)
were paid. Taxes of EUR 38.7 million were paid during the year.
Of YIT's business operations, building and industrial services as well as
infrastructure and other contract construction require little capital. Capital
is particularly tied to the plot reserves, their development and ongoing or
completed production. At the end of the year, the Group's invested capital
amounted to EUR 1,471.4 million (EUR 1,653.9 million). At the end of the year,
40 per cent (33%), or EUR 582.3 million (EUR 545.2 million), of the Group's
invested capital was invested in Russia. The amount of capital invested in
Russia was increased by capital tied to unfinished and completed production. The
devaluation of the ruble decreased the amount of capital invested in Russia by
EUR 26.4 million compared to the end of 2008. At the end of the year, EUR 213.9
million of the capital invested in Russia comprised debt investments and EUR
368.5 million were equity investments or similar fixed net investments. Invested
capital is calculated by deducting non-interest bearing liabilities from the
balance sheet total. The balance sheet total at the end of the year was EUR
2,626.4 million (EUR 2,973.9 million).
The gearing ratio improved to 62.2 per cent (79.8%) at the end of the year. Net
financing debt decreased on the previous year to EUR 497.7 million (EUR 644.5
million). The equity ratio was 33.8 per cent (30.7%).
Net financial expenses decreased to EUR 58.6 million (EUR 67.5 million), or 1.7
per cent (1.7%) of the Group's revenue. The exchange rate differences recognised
under net financial expenses, totalling EUR 28.4 million (EUR 25.0 million),
were comprised nearly entirely of costs of hedging debt investments in Russia.
The loan portfolio totalled EUR 670.8 million (EUR 846.2 million) at the end of
the year, and its average interest rate was 3.6 per cent (4.7%). Fixed-interest
loans accounted for 67 per cent (51%) of the Group's entire loan portfolio. Of
the loans, 30 per cent (32%) had been raised directly on the capital and money
markets. The maturity distribution of the loans is balanced. The capital
structure was reinforced by converting EUR 60.0 million in short-term loans to
long-term loans during the first quarter. In addition, factoring financing for
Nordic trade receivables was arranged during the review period, increasing
available sources of finance by about EUR 100 million. Factoring financing was
being used at the end of the year for EUR 27.0 million. A bond of EUR 50 million
that fell due in October was paid in cash assets.
The construction-stage contract receivables sold to financing companies totalled
EUR 78.0 million (EUR 163.3 million) at the end of the year. Of this amount, EUR
37.8 million (EUR 95.5 million) is included in interest-bearing liabilities in
the balance sheet and the remainder comprises off-balance sheet items in
accordance with IAS 39. Interest expenses on receivables sold to financing
companies amounted to EUR 1.8 million (EUR 15.1 million) during the review
period and they are fully included in the financial expenses of the reported
period.
Participations in the housing corporation loans of unsold completed residential
units, EUR 34.5 million (EUR 48.2 million) at year's end, are included in
interest-bearing liabilities. The interest of participations in the housing
corporation loans, EUR 2.3 million (EUR 2.3 million), is booked in project
expenses, as it is included in housing corporation charges.
CAPITAL EXPENDITURES AND ACQUISITIONS
Gross capital expenditures on non-current assets included in the balance sheet
totalled EUR 27.9 million (EUR 85.2 million) during the financial period,
representing 0.8 per cent (2.2%) of revenue. Investments in construction
equipment amounted to EUR 9.0 million (EUR 14.2 million) and investments in
information technology to EUR 7.9 million (EUR 5.5 million). Other investments,
including acquisitions, amounted to EUR 11.0 million (EUR 65.5 million).
No significant acquisitions or divestments were made during 2009. During the
latter half of the year, YIT increased its holding in YIT Kausta in Lithuania to
97.5 per cent and in Russia in YIT Uralstroi to 99.9 per cent and in YIT Don to
78 per cent in the International Construction Services segment.
GROWTH TARGET FOR THE STRATEGIC PERIOD IS RAISED
YIT Corporation's Board of Directors confirmed the Group's strategy for
2010-2012 on August 19, 2009.
The key target of the strategy is profitable growth. The Group's annual revenue
growth target was increased to 5-10 per cent on average. Previously, the target
was positive growth in revenue. The Group's other strategic target levels remain
unchanged, and they are: return on investment of 20 per cent, operating cash
flow after investments must be sufficient for dividend payout and reduction of
debt, equity ratio of 35 per cent and dividend payout of 40 to 60 per cent of
net profit for the period.
CHANGES IN GROUP STRUCTURE
YIT Group's business operations are divided into main business segments. The
Building Systems and Industrial Services segments merged into a single segment,
Building and Industrial Services, at the beginning of 2009.
The other two business segments were Construction Services Finland and
International Construction Services.
CHANGES IN GROUP MANAGEMENT
On August 20, 2009, Arne Malonæs was appointed as President of the YIT Building
and Industrial Services segment and Timo Lehtinen as Chief Financial Officer of
YIT Group. Before this appointment, Arne Malonæs served as the President of
YIT's Norwegian subsidiary, with responsibility for the development of the
Group's building system services. Timo Lehtinen was Senior Vice President,
Finance, with responsibility for both the Construction Services Finland and
International Construction Services segments. Of the Group's Management Board
members, the previous CFO, head of Industrial Services and Senior Vice
President, Human Resources left YIT's employ during 2009. HR matters were
included within the responsibilities of the Senior Vice President,
Administration.
RESOLUTIONS PASSED AT THE ANNUAL GENERAL MEETING
YIT Corporation's Annual General Meeting was held on March 11, 2009. The Annual
General Meeting adopted the 2008 financial statements, discharged the members of
the Board of Directors and the President and CEO from liability, confirmed a
dividend of EUR 0.50 (EUR 0.80) per share, or a total of EUR 62.5 million (EUR
101.8 million) as proposed by the Board of Directors. The Annual General Meeting
confirmed the composition of the Board of Directors, decided to keep the Board
of Directors' fees unchanged and elected Henrik Ehrnrooth as Chairman of the
Board of Directors, Eino Halonen as Vice Chairman and Kim Gran, Reino Hanhinen,
Antti Herlin, Satu Huber and Lauri Ratia as members. The Annual General Meeting
elected PricewaterhouseCoopers Oy, Authorised Public Accountants, as the
company's auditor.
The Annual General Meeting decided to authorise the Board of Directors to
purchase the company's shares and to dispose of them, as proposed by the Board
of Directors. The authorisation granted to the Board of Directors covers the
acquisition of a maximum of 10,100,000 company shares, purchased with the
company's unrestricted equity, and the assignment of a maximum of 12,700,000 of
the shares bought back for and held by the company. The authorisation overrides
the authorisation to purchase and divest the company's own shares issued by the
Extraordinary General Meeting on October 6, 2008.
In its organisational meeting on March 11, 2009, the Board elected Reino
Hanhinen as chairman and Satu Huber and Lauri Ratia as members of the audit
committee from among its number. The Board elected Henrik Ehrnrooth as chairman
and Eino Halonen, Reino Hanhinen and Antti Herlin as members of the nomination
and rewards committee from among its number.
YIT Corporation published stock exchange releases on the resolutions passed at
the Annual General Meeting and the organisation of the Board of Directors on
March 11, 2009.
LEGAL PROCEEDINGS
The court of arbitration issued its ruling in the dispute between YIT Industrial
and Network Services and Neste Oil Corporation on September 30, 2009. The
dispute concerned the mechanical installation contract of production line 4 at
Neste Oil's Porvoo oil refinery carried out by YIT between 2004 and 2006. The
court of arbitration ordered Neste Oil to compensate YIT with EUR 8.7 million on
contracting works and YIT to compensate Neste Oil with EUR 7.4 million on
postponement and other compensation. The effect of the ruling on Building and
Industrial Services' operating profit for Q3/2009 was EUR -3.2 million. YIT has
published stock exchange releases concerning the matter on April 1, 2008,
September 1, 2008 and October 1, 2009.
NUMBER OF EMPLOYEES 23,480
In 2009, the Group employed 24,497 (25,057) people on average. At the end of the
year, the Group had 23,480 employees (25,784). Of the personnel, 67 per cent
(67%) were non-salaried employees and 33 per cent (33%) salaried employees. A
total of 89 per cent (89%) were men and 11 per cent (11%) women.
In 2009, the number of employees decreased in all segments. The biggest relative
decrease in the number of personnel took place in the Baltic countries and
Russia. Due to the weakened general market conditions, it was agreed to
terminate the employment of about 1,200 people in the Group towards the end of
2008. During 2009, YIT agreed to terminate the employment of about 1,200 people.
In addition, the Group has used lay-offs in adjusting the number of personnel.
Personnel by business segment
--------------------------------------------------------------------------------
| | 12/2009 | 12/2008 | Change | Share of |
| | | | | the |
| | | | | Group's |
| | | | | employees |
| | | | | 12/2009 |
--------------------------------------------------------------------------------
| Building and Industrial | 17,557 | 18,888 | -7% | 75% |
| Services | | | | |
--------------------------------------------------------------------------------
| Construction Services | 2,936 | 3,271 | -10% | 13% |
| Finland | | | | |
--------------------------------------------------------------------------------
| International | 2,647 | 3,277 | -19% | 11% |
| Construction Services | | | | |
--------------------------------------------------------------------------------
| Corporate Services | 340 | 348 | -2% | 1% |
--------------------------------------------------------------------------------
| YIT Group, total | 23,480 | 25,784 | -9% | 100% |
--------------------------------------------------------------------------------
Personnel by country
--------------------------------------------------------------------------------
| | 12/2009 | 12/2008 | Change | Share of |
| | | | | the |
| | | | | Group's |
| | | | | employees |
| | | | | 12/2009 |
--------------------------------------------------------------------------------
| Finland | 9,102 | 10,180 | -11% | 39% |
--------------------------------------------------------------------------------
| Sweden | 4,193 | 4,523 | -7% | 18% |
--------------------------------------------------------------------------------
| Norway | 3,248 | 3,280 | -1% | 14% |
--------------------------------------------------------------------------------
| Russia | 2,600 | 3,089 | -16% | 11% |
--------------------------------------------------------------------------------
| Germany, Austria, Poland, | 2,160 | 2,094 | 3% | 9% |
| the Czech Republic, | | | | |
| Hungary, Romania | | | | |
--------------------------------------------------------------------------------
| Denmark | 1,269 | 1,448 | -12% | 5% |
--------------------------------------------------------------------------------
| Lithuania, Estonia, | 908 | 1,170 | -22% | 4% |
| Latvia | | | | |
--------------------------------------------------------------------------------
| YIT Group, total | 23,480 | 25,784 | -9% | 100% |
--------------------------------------------------------------------------------
DEVELOPMENT BY BUSINESS SEGMENT
BUILDING AND INDUSTRIAL SERVICES
The Building and Industrial Services segment was formed at the beginning of 2009
by merging the Building Systems and Industrial Services segments into a single
segment. Revenue of the Industrial Services is mainly generated in Finland and
additionally in Sweden and in export countries, and it amounted to EUR 429.7
million in 2008. In 2008, YIT acquired Central European building system
operations from Germany, Austria, Poland, Czech Republic, Hungary and Romania
that were transferred to YIT on August 1, 2008. The revenue of these operations
for August-December 2008 amounted to EUR 182.6 million and in 2009 to EUR 362.1
million. In January 2010, YIT made three minor acquisitions in Sweden and one in
Norway.
The segment's revenue decreased by 11 per cent compared to the year before,
which was particularly due to a strong decrease in the volume of business
premises construction. Revenue for the fourth quarter was the all-year high due
to the typical seasonal fluctuations in these businesses. The sales focus was
shifted from new buildings to renovations and modernisations, from the private
sector to the public sector, and from project operations to maintenance. Of the
revenue, service and maintenance operations accounted for 54 per cent (53%) or
EUR 1,151.0 million (EUR 1,260.2 million).
Finland accounted for 28% of revenue (34%), Sweden for 25% (27%), Norway for 20%
(20%), Denmark for 7% (7%), Central Europe for 18% (8%), the Baltic countries
and Russia for 1% (3%) and export countries for 2% (2%). Revenue decreased
relatively the most in the Baltic countries and Russia and Finland.
Operating profit decreased by 26 per cent compared to the year before due to a
decrease in customers' new investments and a tighter market situation. The court
of arbitration issued its ruling in the third quarter, decreasing the segment's
operating profit by EUR 3.2 million. The segment's profitability was stable in
January-September and improved during the fourth quarter.
The order backlog decreased by 19 per cent in particular due to decreased
industrial investments and business premises construction. A significant part of
the segment's maintenance and servicing operations are immediately performed
assignments that are not included in the order backlog. All of the additional
works or alterations are neither included in the order backlog.
The changes in Swedish krona and Norwegian krone had the most significant
currency movement impact on the business segment's figures. Exchange rate
changes decreased the revenue in 2009 by EUR 93.3 million and on the other hand
improved the order backlog by EUR 29.8 million compared to the year before. In
local currency terms, revenue decreased by 7 per cent and order backlog by 22
per cent compared to the year before. The revenue was affected by the average
exchange rates during the year end and the order backlog by the exchange rates
at the year's end.
The Building and Industrial Services segment's business is personnel-based
business that requires little capital. Capital invested in the business segment
amounted to EUR 418.7 million at the end of the year (EUR 346.8 million). Return
on investment was 31.4 per cent (54.9%).
The number of personnel in the segment decreased compared to the year before and
was 17,557 at the end of the year (18,888).
Key figures
--------------------------------------------------------------------------------
| | 1-12 | 1-12 | Change | | 1-3/0 | 4-6/09 | 7-9/09 | 10-12/ |
| | /09 | /08 | 1-12/ | | 9 | | | 09 |
| | | | 08 - | | | | | |
| | | | 1-12/0 | | | | | |
| | | | 9 | | | | | |
--------------------------------------------------------------------------------
| Revenue, MEUR | 2,12 | 2 | -11 % | | 537,9 | 529,2 | 483,9 | 573,9 |
| | 4.9 | 396, | | | | | | |
| | | 0 | | | | | | |
--------------------------------------------------------------------------------
| - of which | 1,15 | 1,26 | -9% | | 281.2 | 286.7 | 266.0 | 317.1 |
| service and | 1.0 | 0.2 | | | | | | |
| maintenance, | | | | | | | | |
| MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 119. | 162. | -26% | | 28.6 | 28.2 | 24.9 | 37.6 |
| profit, MEUR | 3 | 0 | | | | | | |
| 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 5.6% | 6.7% | - | | 5.3 | 5.3 | 5.1 | 6.6 |
| profit | | | | | | | | |
| margin, % | | | | | | | | |
--------------------------------------------------------------------------------
| Order backlog | 850. | 1,05 | -19% | | 1,048 | 984.7 | 946.7 | 850.4 |
| at end of | 4 | 0.2 | | | .3 | | | |
| period, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Invested | 418. | 346. | 21% | | 347.1 | 371.3 | 395.0 | 418.7 |
| capital at | 7 | 8 | | | | | | |
| end of | | | | | | | | |
| period, MEUR | | | | | | | | |
| 2) | | | | | | | | |
--------------------------------------------------------------------------------
| Personnel at | 17,5 | 18,8 | -7% | | 18,52 | 18,208 | 17,849 | 17,557 |
| end of period | 57 | 88 | | | 7 | | | |
--------------------------------------------------------------------------------
1) On September 30, 2009, the court of arbitration issued its ruling in the
dispute concerning the mechanical installation contract YIT carried out for
Neste Oil's Porvoo oil refinery. The effect of the ruling on Building and
Industrial Services' operating profit for Q3/2009 was EUR -3.2 million.
2) When calculating invested capital in business segments, the interest-bearing
financial items have been netted.
Building and Industrial Services' revenue by country, MEUR
--------------------------------------------------------------------------------
| | 1-12 | 1-12 | Change | | 1-3/0 | 4-6/09 | 7-9/09 | 10-12/ |
| | /09 | /08 | 1-12/ | | 9 | | | 09 |
| | | | 08 - | | | | | |
| | | | 1-12/0 | | | | | |
| | | | 9 | | | | | |
--------------------------------------------------------------------------------
| Finland | 594. | 817. | -27% | | 161.2 | 153.5 | 135.4 | 144.4 |
| | 5 | 9 | | | | | | |
--------------------------------------------------------------------------------
| Sweden | 532. | 648. | -18% | | 122.7 | 135.0 | 116.9 | 157.7 |
| | 3 | 7 | | | | | | |
--------------------------------------------------------------------------------
| Norway | 414. | 481. | -14% | | 109.8 | 98.9 | 93.4 | 112.5 |
| | 6 | 6 | | | | | | |
--------------------------------------------------------------------------------
| Denmark | 145. | 164. | -11% | | 39.0 | 38.9 | 30.6 | 37.4 |
| | 9 | 6 | | | | | | |
--------------------------------------------------------------------------------
| Germany, | 374. | 183. | 104% | | 87.3 | 88.8 | 93.9 | 104.6 |
| Austria, | 6 | 6 | | | | | | |
| Poland, the | | | | | | | | |
| Czech | | | | | | | | |
| Republic, | | | | | | | | |
| Hungary, | | | | | | | | |
| Romania 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Lithuania, | 28.0 | 63.0 | -56% | | 8.8 | 5.1 | 7.9 | 6.2 |
| Estonia, | | | | | | | | |
| Latvia and | | | | | | | | |
| Russia | | | | | | | | |
--------------------------------------------------------------------------------
| Other | 35.0 | 36.6 | -4% | | 9.1 | 9.0 | 5.8 | 11.1 |
| countries | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 2,12 | 2,39 | -11% | | 537.9 | 529.2 | 483.9 | 573.9 |
| | 4.9 | 6.0 | | | | | | |
--------------------------------------------------------------------------------
1) The building system service operations acquired from Central Europe were
transferred to YIT on August 1, 2008.
Stable demand for maintenance and energy saving services
The demand for building system repair and maintenance work and various kinds of
service agreements was relatively steady across all countries where YIT has a
presence. Agreements were signed on building system service agreements and
outsourcing in, e.g., logistics premises and production plants. Municipalities
are seeking new solutions for arranging their maintenance services, especially
in the Nordic countries. For instance, technical maintenance of roads and
tunnels was agreed upon with the Bodo and Salten municipalities in Norway. In
Solna, Sweden, YIT is responsible for the building system servicing and
maintenance of approximately one hundred municipality-owned properties.
The demand for energy-saving solutions and services picked up in the spring in
the Nordic countries, Austria and Germany in particular and continued steadily
during the rest of the year. Several energy analyses and ESCO energy saving
agreements were performed in the private and public sectors.
The demand for industrial plant maintenance services, solutions that improve
energy efficiency and energy analysis services continued to be relatively steady
in Finland.
Decrease in new investments
New investments in building systems decreased across all market areas. The
renovation and reconstruction market picked up slightly thanks to the start-up
of public sector stimulus projects.
Industrial investments were fewer than during the year before. In particular,
investments decreased in process, forest and steel industries, with the demand
focusing on the energy industry. An extensive piping project whereby YIT
delivers all the pipelines of a power plant to Siemens AG started at the Severn
Power natural gas combined cycle power plant in Uskmouth, United Kingdom.
CONSTRUCTION SERVICES FINLAND
Construction Services Finland's revenue decreased by 10 per cent compared to the
previous year. Revenue decreased clearly in the construction of business
premises. In residential construction and infrastructure services, revenue
remained at last year's level.
Operating profit declined by 27 per cent due to a significant decline in the
construction of business premises and residential sales focusing more on rental
housing production during the first months of the year compared to previous
year. During the comparison period, the Supreme Court issued a ruling that had a
positive effect of EUR 3.5 million on the segment's operating profit for
Q1/2008.
The order backlog increased by 15 per cent compared to the end of the previous
year. The order backlog increased especially in connection with an increase in
residential start-ups.
In Construction Services Finland, development production mainly ties up capital
in the plot reserves, their development and ongoing production. Infrastructure
and other contract construction require only little capital. Capital invested in
the business segment decreased and amounted to EUR 315.7 million at the end of
the year (EUR 482.9 million). Plot investments were decreased in 2009, amounting
to EUR 54.0 million (EUR 61.6 million). Return on investment was 20.5% (28.0%).
The number of personnel in the segment decreased compared to the year before and
was 2,936 at the end of the year (3,271).
Key figures
--------------------------------------------------------------------------------
| | 1-12 | 1-12 | Change | | 1-3/0 | 4-6/09 | 7-9/09 | 10-12/ |
| | /09 | /08 | 1-12/ | | 9 | | | 09 |
| | | | 08 - | | | | | |
| | | | 1-12/0 | | | | | |
| | | | 9 | | | | | |
--------------------------------------------------------------------------------
| Revenue, MEUR | 1,02 | 1,14 | -10% | | 239.8 | 253.0 | 246.3 | 290.6 |
| | 9.7 | 7.9 | | | | | | |
--------------------------------------------------------------------------------
| - of which | 71.5 | 68.5 | 4% | | 19.5 | 15.2 | 20.2 | 16.6 |
| service and | | | | | | | | |
| maintenance, | | | | | | | | |
| MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 81.9 | 111. | -27% | | 20.9 | 19.9 | 20.8 | 20.3 |
| profit, MEUR | | 7 | | | | | | |
--------------------------------------------------------------------------------
| Operating | 8.0% | 9.7% | - | | 8.7 | 7.9 | 8.4 | 7.0 |
| profit | | | | | | | | |
| margin, % | | | | | | | | |
--------------------------------------------------------------------------------
| Order backlog | 1,00 | 874. | 15% | | 819.8 | 846.9 | 909.9 | 1,007 |
| at end of | 7.5 | 2 | | | | | | .5 |
| period, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Invested | 315. | 482. | -35% | | 435.5 | 481.2 | 427.4 | 315.7 |
| capital at | 7 | 9 | | | | | | |
| end of | | | | | | | | |
| period, MEUR | | | | | | | | |
| 1) | | | | | | | | |
--------------------------------------------------------------------------------
| - in plot | 325. | 350. | -7% | | 363.2 | 354.6 | 340.7 | 325.6 |
| reserves, | 6 | 5 | | | | | | |
| MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Personnel at | 2,93 | 3,27 | -10% | | 3,119 | 3,208 | 2,971 | 2,936 |
| end of period | 6 | 1 | | | | | | |
--------------------------------------------------------------------------------
1) When calculating invested capital in business segments, the interest-bearing
financial items have been netted.
At the end of the year the plot reserves included 1,630,000 m2 of floor area
(1,770,000 m2 of floor area) of residential plots and 908,000 m2 of floor area
(827,000 m2 of floor area) of plots for business premises. Plot reserves include
off-balance sheet items. Plot reserves include plots that have been planned and
an estimate of the potential building rights on areas that are under land use
planning. The building rights provided by regional development agreements made
with landowners remain as off-balance sheet items until the construction of each
phase of the plan being implemented begins or YIT pays for the plots in
accordance with the agreements.
Residential sales picked up
Due to uncertainties in the market conditions, housing construction focused on
rental housing production during the first months of the year. As the
residential sales picked up the focus was turned back on own development
projects. YIT sold 276 residential units to consumers during the first quarter,
401 during the second quarter, 380 during the third quarter and 510 during the
fourth quarter. The price level of housing developed positively at the later
part of the year.
The volume of residential start-ups for consumers was increased in each quarter
in order to ensure a sufficient number of apartments on sale. Geographically
extensive operations and plot reserves made it possible to react swiftly to
changes in the market conditions. At the end of the year, YIT had on sale a
total of 1,061 residential units, of which 216 had been completed. The
residential units on sale consist of apartments in different sizes. In the
market the number of own housing development projects started up was lower than
during the previous years.
Projects constructed for investors were started up throughout the year in
accordance with previous agreements. The most significant agreement on rental
housing was signed in August when YIT sold five rental housing projects with a
total of some 300 residential units to ICECAPITAL Housing Fund II for EUR 36.6
million. An agreement was signed with Tapiola Real Estate on the construction of
a total of 225 residential units in the Helsinki region and the Uusimaa
province. Agreements were also made with VVO and Tarveasunnot, among others.
The number of residential units sold and residential units under construction on
the whole exceeded the previous year considerably with both rental housing
production and YIT's own development projects underway. In Finland, the average
construction time of a residential project is approximately one year. About half
of YIT's ongoing projects will be completed during 2010 and half in 2011.
Residential construction in Finland in 2009 (2008), number of residential units
--------------------------------------------------------------------------------
| | 1-12 | 1-12 | Change | | 1-3/0 | 4-6/09 | 7-9/09 | 10-12/ |
| | /09 | /08 | 1-12/ | | 9 | | | 09 |
| | | | 08 - | | | | | |
| | | | 1-12/0 | | | | | |
| | | | 9 | | | | | |
--------------------------------------------------------------------------------
| Sold | 3,50 | 1,92 | 82% | | 436 | 896 | 982 | 1,188 |
| | 2 | 0 | | | | | | |
--------------------------------------------------------------------------------
| - of which | 1,56 | 1,46 | 7% | | 276 | 401 | 380 | 510 |
| directly to | 7 | 2 | | | | | | |
| consumers | | | | | | | | |
--------------------------------------------------------------------------------
| Start-ups | 3,44 | 1,54 | 124% | | 239 | 817 | 1,139 | 1,252 |
| | 7 | 2 | | | | | | |
--------------------------------------------------------------------------------
| - of which | 1,52 | 1,08 | 41% | | 90 | 327 | 537 | 574 |
| aimed | 8 | 4 | | | | | | |
| directly to | | | | | | | | |
| consumers | | | | | | | | |
--------------------------------------------------------------------------------
| Completed | 1,56 | 2,46 | -37% | | 440 | 409 | 288 | 425 |
| | 2 | 4 | | | | | | |
--------------------------------------------------------------------------------
| Under | 3,77 | 1,88 | 100% | | 1,686 | 2,095 | 2,946 | 3,773 |
| construction | 3 | 7 | | | | | | |
| at the end of | | | | | | | | |
| the period | | | | | | | | |
--------------------------------------------------------------------------------
| - of which | 2,92 | 1,13 | 148% | | 1,141 | 1,563 | 2,215 | 2,928 |
| sold at the | 8 | 4 | | | | | | |
| end of the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Unsold at the | 1,06 | 1,11 | -5% | | 921 | 834 | 997 | 1,061 |
| end of the | 1 | 1 | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| - of which | 216 | 358 | -40% | | 366 | 302 | 266 | 216 |
| completed | | | | | | | | |
--------------------------------------------------------------------------------
Lower volume in business premises construction than in the previous year
The volume of business premises construction decreased clearly compared to the
previous year. Construction of offices and industrial premises declined
significantly. Demand for new business and warehouse premises remained moderate.
The start up of stimulus measures by the public sector increased slightly the
demand for renovation and modernisation projects.
The business focused on completing ongoing projects and obtaining leaseholders
for new, ongoing and completed sites. YIT put effort on the tenant and project
development activities and in activating investor sales. Some new development
projects were started during the year and contracts were won in competitive
bidding. In addition, several renovation and modernisation projects were carried
out.
With regard to projects as the Group's own development, the sports and wellness
centre located in Salmisaari, Helsinki was sold to Varma Mutual Pension
Insurance Company in January. In November, YIT sold a shopping centre located in
Joensuu to Fennia Mutual Insurance Company after the agreement made in 2007 with
a Danish real estate investor on the premises had been cancelled.
The construction of the first low-energy office and commercial building was
started in Järvenpää in the autumn.
From now on, all new offices constructed by
YIT will be low-energy offices, consuming less energy than required by current
regulations.
Infrastructure construction is steady
The demand for infrastructure construction was decreased by the lower
construction levels of new housing and business premises and the impaired state
of the municipal economy. Several infrastructure projects concerning basic road
and railway maintenance started in Finland, boosted by state stimulus measures.
The demand for environmental restoration services was good. Infrastructure
construction developed steadily as a whole.
YIT has special expertise in infrastructure construction in rock excavations,
maintenance works and municipal services. As for large-scale road projects, a
project of EUR 17 million with bridge and road work was started in the centre of
Savonlinna. A tunnel for the Kehärata (Ring line) projects was started in
Vantaa. As regards municipal services, the City of Varkaus outsourced the
production and maintenance of its streets, water supply and outdoor lighting. In
addition, lifecycle projects were implemented for municipalities, covering
repair investments and maintenance of sites.
INTERNATIONAL CONSTRUCTION SERVICES
International Construction Services' revenue decreased by 27 per cent compared
to the previous year due to the weaker market conditions. Revenue decreased by
17 per cent in Russia and by 63 per cent in the Baltic countries. Russia
accounted for 85 per cent (75%) of the revenue for 2009, the Baltic countries
for 12 per cent (24%). Revenue increased during all quarters of the year as
Russian residential sales picked up and the construction of sites progressed.
The segment's operating profit for 2009 was negative. Operating profit turned
positive during the third quarter and continued to improve during the fourth
quarter. The segment's operating profit was weakened on account of the volume of
residential sales in the first part of the year falling short of the previous
year, housing prices being at a lower level than last year, the low volume of
business premises construction in Russia and the Baltic market continuing to be
weak. The project margin forecasts of the business segment were weakened in
particular during the first quarter. Write-downs of approximately EUR 7 million
were recognised during the year for the plot reserves mainly located in Latvia
and Lithuania.
The order backlog of International Construction Services decreased by 30 per
cent compared to the year before. Residential projects under construction in
Russia were recognised as income as construction and sales proceeded. During the
year there were more apartments sold than apartment start-ups. Due to market
uncertainties, the construction of residential projects in the start-up phase in
Russia in projects whose sales had not yet begun was suspended in October 2008.
At the end of 2009, the value of the projects that were still suspended amounted
to EUR 282 million in the order backlog (12/08: EUR 356 million).
Exchange rate changes of the ruble decreased the revenue in 2009 by EUR 65.2
million and order backlog by EUR 41.1 million compared to the year before. When
the figures for Russia are calculated in local currency, the change in revenue
for the business segment was -14 per cent and change in the order backlog was
-27 per cent compared to the previous year.
In International Construction Services, capital has been tied mainly to ongoing,
completed and suspended production and additionally to the plot reserves and
their development. Capital invested in the business segment amounted to EUR
681.3 million (EUR 653.1 million) at the end of 2009. No new housing projects
were started in early 2009, and investments were decreased considerably. Housing
start-ups were restarted once sales picked up and the market conditions improved
again in September, and decisions on a few new plot investments were made during
the fourth quarter. Return on investment was -2.7 per cent (1.7%).
The Group's capital invested in Russia is primarily accounted for by the
International Construction Services segment. At the end of the year, the Group's
capital invested in Russia amounted to EUR 582.3 million (EUR 545.2 million).
The amount of capital invested in Russia was increased by capital tied to
unfinished and completed production. The devaluation of the ruble decreased the
amount of capital invested in Russia by EUR 26.4 million compared to the
previous year.
During the latter half of the year, YIT increased its holding in YIT Kausta in
Lithuania to 97.5 per cent, in Russia in YIT Uralstroi to 99.9 per cent and in
YIT Don to 78 per cent. In January 2010, YIT increased its holding in YIT Don to
100 per cent.
Key figures
--------------------------------------------------------------------------------
| | 1-12 | 1-12 | Change | | 1-3/0 | 4-6/09 | 7-9/09 | 10-12/ |
| | /09 | /08 | 1-12/ | | 9 | | | 09 |
| | | | 08 - | | | | | |
| | | | 1-12/0 | | | | | |
| | | | 9 | | | | | |
--------------------------------------------------------------------------------
| Revenue, MEUR | 359. | 493. | -27% | | 61.4 | 87.4 | 97.6 | 113.0 |
| | 4 | 5 | | | | | | |
--------------------------------------------------------------------------------
| Operating | -17. | 9.0 | -298% | | -23.8 | -5.2 | 3.7 | 7.5 |
| profit, MEUR | 8 | | | | | | | |
--------------------------------------------------------------------------------
| Operating | -5.0 | 1.8% | - | | -38.7 | -5.9 | 3.8 | 6.6 |
| profit | % | | | | | | | |
| margin, % | | | | | | | | |
--------------------------------------------------------------------------------
| Order backlog | 960. | 1,36 | -30% | | 1,239 | 1,126. | 998.4 | 960.1 |
| at end of | 1 | 9.3 | | | .1 | 8 | | |
| period, MEUR | | | | | | | | |
| 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Invested | 681. | 653. | 4% | | 632.8 | 667.9 | 677.1 | 681.3 |
| capital at | 3 | 1 | | | | | | |
| end of | | | | | | | | |
| period, MEUR | | | | | | | | |
| 2) | | | | | | | | |
--------------------------------------------------------------------------------
| - in plot | 246. | 228. | 8% | | 218.7 | 235.4 | 244.8 | 246.5 |
| reserves, | 5 | 9 | | | | | | |
| total | | | | | | | | |
--------------------------------------------------------------------------------
| - in plot | 171. | 145. | 18% | | 136.1 | 157.8 | 166.9 | 171.7 |
| reserves in | 7 | 7 | | | | | | |
| Russia | | | | | | | | |
--------------------------------------------------------------------------------
| - in plot | 74.8 | 83.2 | -10% | | 82.6 | 77.6 | 77.7 | 74.8 |
| reserves in | | | | | | | | |
| the Baltic | | | | | | | | |
| countries | | | | | | | | |
--------------------------------------------------------------------------------
| Personnel at | 2,64 | 3,27 | -19% | | 3,214 | 2,965 | 2,841 | 2,647 |
| end of period | 7 | 7 | | | | | | |
--------------------------------------------------------------------------------
1) The order backlog includes residential projects suspended in Russia in
October 2008. At the end of 2009, the value of the projects that were still
suspended amounted to EUR 282 million in the order backlog (12/08: EUR 356
million).
2) When calculating invested capital in business segments, the interest-bearing
financial items have been netted.
At the end of the year the plot reserves in Russia included 1,974,000 m2 of
floor area (2,256,000 m2 of floor area) of residential plots and 563,000 m2 of
floor area (565,000 m2 of floor area) of plots for business premises. The plot
reserves in the Baltic countries included 353,000 m2 of floor area (398,000 m2
of floor area) of residential plots and 136,000 m2 of floor area (62,000 m2 of
floor area) of plots for business premises.
International Construction Services' revenue by country, MEUR
--------------------------------------------------------------------------------
| | 1-12 | 1-12 | Change | | 1-3/0 | 4-6/09 | 7-9/09 | 10-12/ |
| | /09 | /08 | 1-12/ | | 9 | | | 09 |
| | | | 08 - | | | | | |
| | | | 1-12/0 | | | | | |
| | | | 9 | | | | | |
--------------------------------------------------------------------------------
| Russia | 305. | 368. | -17% | | 45.9 | 72.3 | 85.2 | 102.3 |
| | 7 | 2 | | | | | | |
--------------------------------------------------------------------------------
| Lithuania, | 44.3 | 118. | -63% | | 14.7 | 14.0 | 11.6 | 4.0 |
| Estonia, | | 7 | | | | | | |
| Latvia | | | | | | | | |
--------------------------------------------------------------------------------
| Other | 9.4 | 6.6 | 42% | | 0.8 | 1.1 | 0.8 | 6.7 |
| countries | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 359. | 493. | -27% | | 61.4 | 87.4 | 97.6 | 113.0 |
| | 4 | 5 | | | | | | |
--------------------------------------------------------------------------------
Residential sales strengthened in Russia as the year advanced
YIT is involved in its own housing development projects in St Petersburg,
Moscow, cities in the Moscow region, Yekaterinburg, Rostov-on-Don and Kazan.
Housing sales strengthened in Russia during every quarter of 2009. YIT sold 323
residential units in Russia during the first quarter, 494 during the second
quarter, 829 during the third quarter and 966 during fourth quarter. A majority
of the residential units were sold directly to consumers. In December, YIT sold
90 residential units in Moscow's surroundings to the Ministry of Defence in a
single transaction.
Sales received a boost from greater consumer confidence in YIT, the company's
own marketing and sales measures, a more appealing offering when sites are
completed or are nearing completion and improved credit availability and terms
for the customers. In order to support sales, YIT agreed on cooperation with
several banks, whereby YIT customers now have the option to take out a mortgage
under special terms and conditions. In St. Petersburg, approximately one-fifth
of residential sales made with YIT in October-December were made with loan
financing. In other cities where the company operates loan financing was
utilised less frequently.
Housing prices decreased in rubles on average, varying by city, approximately on
one-fifth between September 2008 and October 2009. The rate of decline in
housing prices slowed down during the third quarter of 2009, and prices remained
steady for the rest of the year. The supply of housing in the market declined in
2009 after numerous constructors had halted their projects, thereby increasing
YIT's market share in residential sales. Some construction companies restarted
their halted projects towards the end of the year.
YIT started the construction of 672 residential units during the last months of
the year. The first new residential site since summer 2008 was started in
September 2009 in one of the cities surrounding Moscow, Zhukovsky. Residential
construction projects were started up in the Moscow region, Moscow and St.
Petersburg during the fourth quarter. The housing sales portfolio improved
following the completion of sites and new residential start-ups.
The costs of completing the 4,174 residential units under construction are
estimated to be approximately EUR 178 million. The residential start-ups in 2009
account for EUR 42 million of the costs of completion. Capital is freed up
simultaneously with the sale of residential units. In Russia the projects are
long and the value of them is large. The majority of the projects under
construction will be completed during 2010.
Residential construction in Russia in 2009 (2008), number of residential units
--------------------------------------------------------------------------------
| | 1-12 | 1-12 | Change | | 1-3/0 | 4-6/09 | 7-9/09 | 10-12/ |
| | /09 | /08 | 1-12/ | | 9 | | | 09 |
| | | | 08 - | | | | | |
| | | | 1-12/0 | | | | | |
| | | | 9 | | | | | |
--------------------------------------------------------------------------------
| Sold | 2,61 | 2,79 | -6% | | 323 | 494 | 829 | 966 |
| | 2 | 3 | | | | | | |
--------------------------------------------------------------------------------
| Start-ups | 672 | 3,62 | -81% | | 0 | 0 | 105 | 567 |
| | | 2 | | | | | | |
--------------------------------------------------------------------------------
| Completed | 4,96 | 2,60 | 91% | | 1,524 | 937 | 0 | 2,499 |
| | 0 | 0 | | | | | | |
--------------------------------------------------------------------------------
| Under | 4,17 | 8,40 | -50% | | 6,874 | 5,969 | 6,080 | 4,174 |
| construction | 4 | 7 | | | | | | |
| at the end of | | | | | | | | |
| the period 1) | | | | | | | | |
--------------------------------------------------------------------------------
| - of which | 1,81 | 3,12 | -42% | | 2,523 | 2,004 | 2,532 | 1,814 |
| sold at the | 4 | 0 | | | | | | |
| end of the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Unsold at the | 3,60 | 5,53 | -35% | | 5,218 | 4,747 | 4,014 | 3,603 |
| end of the | 3 | 4 | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| - of which | 1,24 | 247 | 403% | | 867 | 782 | 466 | 1,243 |
| completed | 3 | | | | | | | |
--------------------------------------------------------------------------------
1) Due to the uncertain market situation, YIT made a decision in October 2008 to
suspend the construction of residential projects in the start-up phase in Russia
in projects whose sales had not yet begun. The residential units whose
construction was suspended are not included in the residential units under
construction in the above table, as the restarting of their construction will be
handled as new building start-ups. Changes in the number of residential units
may take place after the start of construction due to the division or
combination of residences.
Development of the Gorelovo industrial park continued
The development of the Gorelovo industrial park in St. Petersburg was continued
in the autumn by starting up the realisation of production and distribution
logistics premises used in packaging cosmetic products for Dermosil. The
development of business premise projects was also continued in Moscow and its
vicinity. YIT signed a strategic partnership agreement with BPT on business
premise development.
The water and drain connections of the food plant completed in the Gorelovo area
were connected in October 2009, and the authorities granted the official permits
for putting into operation the production plant at the end of December. Thus,
YIT's obligations based on the agreements made with the customer have been
fulfilled.
Weak market situation in the Baltic countries
The market situation remained weak in the Baltic countries. Competition for
construction projects was tight and production volumes were low. The market
price level of housing dropped on average to approximately half of what it was
at the end of 2007.
The focus of YIT's operations was shifted from residential construction to
contracting in the Baltic countries. Minor construction contracts were won,
making it possible to halt the rapid decrease in operational volumes. The
largest construction sites were mainly production and logistics premises for
Western customers in Estonia and Lithuania.
No new residential projects were started up during 2009, but the preparation of
new projects continued. In 2009, 256 (1-12/08: 733) residential units were sold
in Lithuania, Estonia and Latvia. Of these units, 53 were sold during the first
quarter, 147 during the second quarter, 50 during the third quarter and 6 during
the fourth quarter. 592 (736) residential units were completed during the
period. No residential units were under construction at year's end (12/08: 592).
At the end of the year, YIT had 40 (296) unsold residential units.
SHARES, SHARE OPTIONS AND SHAREHOLDERS
The company has one series of shares. Each share carries one vote and confers an
equal right to a dividend.
Shares could be subscribed for in 2009 under the Series M and N share options
issued in 2006 between April 1 and November 30, 2009. The subscription period
under the Series M share options ended on November 30, 2009.
Share capital and number of shares
YIT Corporation's share capital was EUR 149,216,748.22 at the beginning of the
review period, and the number of shares outstanding was 127,223,422. The share
capital and number of shares did not change during the year.
Own shares and authorisations of the Board of Directors
In accordance with the Companies Act, the General Meeting decides on the buyback
and conveyance of shares, as well as any decisions leading to changes in the
share capital.
At the beginning of 2009, YIT Corporation held 1,425,000 of its own shares,
purchased based on the authorisation given by the General Meeting of October 6,
2008.
The Annual General Meeting of YIT Corporation resolved on March 11, 2009, to
authorise the Board of Directors to purchase the company's shares and to dispose
of them, as proposed by the Board of Directors. The authorisation granted to the
Board of Directors covers the acquisition of a maximum of 10,100,000 company
shares, purchased with the company's unrestricted equity, and the assignment of
a maximum of 12,700,000 of the shares bought back for and held by the company.
The authorisation overrides the authorisation to purchase and divest the
company's own shares issued by the Extraordinary General Meeting on October 6,
2008.
Between February 10 and February 23, 2009, YIT purchased 720,000 of its own
shares at an average price of EUR 5.6. At the end of 2009, YIT Corporation held
2,145,000 of its own shares. During the period, no shares in the parent company
were owned by subsidiaries.
There were no share issues during the year and the company did not float
convertible bonds or bonds with warrants. At the end of the period, the parent
company's Board of Directors did not have valid share issue authorisations or
authorisations to issue convertible bonds or bonds with warrants.
Trading in the shares and share options
At the end of 2009, the closing rate of YIT's share was EUR 14.45 (2008: EUR
4.58). YIT's share price increased by 216 per cent during 2009. The highest
price of the share during 2009 was EUR 14.49 (EUR 19.99), the lowest EUR 4.31
(EUR 3.70). The average price was EUR 8.52 (EUR 10.89).
Market capitalisation at the end of the year was EUR 1,807.4 million (EUR 576.2
million). The market capitalisation at the end of year has been calculated
excluding the shares held by the company.
Share turnover in 2009 amounted to 190,057,125 shares (295,155,593). The value
of share turnover was EUR 1,631.4 million (EUR 3,221.4 million). The average
daily turnover was 757,200 shares (1,166,623).
No Series M or N share options issued in 2006 were traded in 2009.
Number of shareholders: 29,678
The number of registered shareholders was 25,515 (15,265) at the beginning of
the review period and 29,678 (25,515) at the end of the period. The number of
households among the owners increased by 4,070. At the beginning of the year, a
total of 36.5 per cent (52.9%) of the shares were owned by nominee-registered
and non-Finnish investors, while this figure was 38.7 per cent (36.5%) at year's
end.
During 2009, one notification of changes in holdings was made in accordance with
Chapter 2, section 9 of the Securities Market Act. Suomi Mutual Life Assurance
Company notified that its holdings have decreased to below 5 per cent of YIT
Corporation's shares and votes following a share transaction on April 3, 2009.
The company held a total of 6,184,119 YIT shares, which equals 4.86 per cent of
YIT Corporation's shares.
ESTIMATE OF FUTURE DEVELOPMENT
Market outlook
In the Building and Industrial Services segment, the slight increase in the
demand for service and maintenance operations for building systems will
continue. The increasing amount of technology in buildings and low new
investments will increase the need for service and maintenance operations. The
economic recession will open new opportunities for outsourcing real estate
services. The demand for energy-efficiency services will increase in the next
few years in the Nordic countries, Germany and Austria in particular with public
sector stimulus measures and renewed environmental legislation. New investments
in office and retail properties will remain slight. In new construction
projects, public sector investments will be realised. The increase in the demand
for renovation and reconstruction projects will continue with the support of
public sector stimulus measures and renovation subsidies. Industrial investments
are low in Finland, but the demand for industrial maintenance services will
continue relatively stable.
With regard to Construction Services Finland, housing demand is expected to
remain good, construction of business premises to decrease and infrastructure
construction to remain relatively steady. The demand for owner-occupied housing
will be supported by low interest rates, an increase in consumer confidence and
the limited housing supply. The need for new housing is also maintained by the
decreasing family sizes, migration and increasing population. Decreased
employment rates and rising interest rates may increase insecurity in the
housing market in the future. With regard to the business premises market,
construction of offices and industrial premises will decline. Demand for retail
and warehouse premises will remain moderate. The need for renovation is rising
steadily. State stimulus measures will increase the public sector construction
projects, but the weakness of municipal finances leads to uncertainty concerning
the number of public sector construction projects. New projects related to
transportation will begin in the Finnish infrastructure market in 2010; at the
same time the demand in the municipal sector will decrease. Opportunities will
also open in connection with road and regional maintenance contracts. Capacity
underutilisation in infrastructure construction keeps the competitive situation
tight.
As for International Construction Services, housing demand in Russia is expected
to remain good, and a slight recovery can be expected in the Baltic countries.
There is still a great need for housing in Russia, and the demand outlook for
residential units aimed at YIT's customer segment is unchanged in the long term.
Russia's economic situation and consumer behaviour are strongly dependent on the
development of oil prices and the ruble exchange rate. In addition the
development of the functionality of housing finance, employment rates, interest
rates and purchasing power affect residential sales. The construction market has
reached an extremely low level in the Baltic countries. Due to the extensive
impact of the recession, no significant recovery of the market conditions can be
expected in the near future; however there are signs of a recovery in the
housing market and there have been some new project start-ups in the market. In
Russia, the underutilisation rate of offices is high and their construction is
low, but the demand for industrial and retail premises is increasing. Minor
business premise projects are underway in the Baltic market.
Strategic targets
YIT Corporation's Board of Directors confirmed the Group's strategy for
2010-2012 on August 19, 2009. The Group's strategic target levels are: average
annual revenue growth of 5-10 per cent, return on investment of 20 per cent,
operating cash flow after investments must be sufficient for dividend payout and
reduction of debt, equity ratio of 35 per cent and dividend payout of 40 to 60
per cent of net profit for the period.
In Building and Industrial Services, YIT aims to be the leading provider of
technical system maintenance in the Nordic countries and Central Europe and a
forerunner in energy-saving services. The target is to increase the service and
maintenance operations faster than other operations. Growth is sought both
organically and through acquisitions.
In Construction Services Finland, YIT's aim is to strengthen its position in all
of its three key construction areas - housing, business premises and
infrastructure. With regard to residential construction, development projects
will be increased so that the turnover of capital is accelerated. In business
premises, the focus will be on developing and repairing existing properties
during the beginning of the strategy period. In infrastructure services, the
market position will be reinforced and maintenance activity will be increased.
In International Construction Services, YIT aims to increase its residential
production responding to the market demand. The strong need for housing has not
decreased, and the demand outlook for residential units aimed at YIT's customer
segment is favourable in the long term, which provides opportunities for growth.
Also in the Baltic countries and Central Eastern Europe, YIT will aim to take
advantage of emerging market opportunities. Additionally, YIT seeks to boost the
capital efficiency and higher profitability in the business segment.
Major business risks and uncertainties
YIT has specified the major risk factors and their management from the point of
view of the Group as a whole, taking the special characteristics of YIT's
business operations and environment into consideration. Risks are divided into
strategic, operational, financial and event risks. A more detailed account of
YIT's risk management policy and the most significant risks is published in the
Annual Report 2009. Financing risks are described in more detail in the notes to
the financial statements for 2009.
The most significant operational short-term business risks and uncertainties are
connected with the continuity of the favourable development of residential sales
and the sales and price risk of the order backlog mainly due to unsold
residential units. At the end of the year, YIT's residential units under
construction or completed but unsold totalled 3,603 in Russia, 1,061 in Finland
and 40 in the Baltic countries. In addition, there are 2,145 residential units
in Russia whose construction has been suspended. YIT manages sales risk by
matching the number of housing start-ups with the estimated residential demand
and the number of unsold residential units. Housing start-ups were increased
towards the end of the year in order to ensure a sufficient number of apartments
on sale. A more detailed account of the structure of the order backlog is
presented above under Order Backlog. An account of housing production and
related measures can be found under Development by business segment.
There is a currency risk related to investments in ruble terms. The Group's
invested capital in Russia amounted to EUR 582.3 million at year's end. At the
turn of the year 2008-2009, net equity investments in Russia were increased by
classifying a part of the loans given to the subsidiaries as fixed net
investments. Net investments totalled EUR 368.5 million at the end of the year.
Net investments in the Russian subsidiaries are unhedged in accordance with the
finance policy, and the possible devaluation of the ruble would have a negative
impact equal to the amount of decrease in equity on the Group's shareholders'
equity. Debt investments amounted to EUR 213.9 million at the end of the year,
and this exposure was hedged in full. The difference in the interest rates
between the euro and ruble has an effect on hedging costs and therefore net
financial expenses.
YIT tests the value of its plots as required by the IFRS accounting principles.
Plot reserves are measured at acquisition cost and the value is impaired when it
is estimated that the building being constructed on the plot will be sold at a
price lower than the sum of the price of the plot and the construction costs.
Write-downs of approximately EUR 7 million were recognised during the yearly
mainly for the plot reserves in Latvia and Lithuania.
OUTLOOK FOR 2010
YIT Corporation estimates that the Group's revenue will increase and profit
before taxes will increase significantly in 2010 compared to 2009.
The demand for housing is expected to remain good in 2010 in Finland as well as
Russia.
In Finland, the residential demand is supported by low interest rates, increased
consumer confidence and structural factors, such as migration, increasing
population and decreasing family sizes. The price level of apartments has
developed positively. There is a low supply of new residential units in the
market. YIT has started up new residential projects in 2009, which offers a
solid starting point for 2010. At the end of 2009, YIT had 3,773 residential
units under construction. There were 1,061 residential units on sale, of which
216 had been completed. Good plot reserves, geographically extensive operations
and the ability to react swiftly to changes in the market enable YIT to increase
residential development activity in 2010.
There is a great need for new housing in Russia, and therefore the demand
outlook for residential units aimed at YIT's customer segment is unchanged in
the long term. At the end of 2009, housing prices have stabilized and consumer
confidence has increased. New residential projects have been started up in the
market, but the supply is still limited. At the end of 2009, YIT had 4,174
residential units under construction. There were 3,603 residential units on
sale, of which 1,243 had been completed. YIT has improved its reputation as a
reliable construction company and developed its sales process. The company has
increased the availability of loans for its customers through co-operation with
banks. YIT started new residential projects during the last months of 2009 and
in 2010 the residential start-ups are increased responding to the market demand.
Residential demand is affected by consumer confidence, employment situation and
interest rate development both in Finland and Russia. Additionally, in Russia
the residential demand is dependent on oil prices and the exchange rate of the
ruble.
The opportunities for organic growth in Building and Industrial Services are
supported by the need for service and maintenance as well as renovation and
public sector projects. There is a large number of small companies operating in
building system markets and the consolidation development provides opportunities
for acquisitions. Industrial investments are low in Finland, but the demand for
industrial maintenance services will continue relatively stable. New investments
in technical building systems will decrease in all YIT markets, particularly due
to the low volumes of business premises construction. YIT has an extensive
network of local offices in the markets where it operates and a solid market
position in building system and industrial service and maintenance operations,
projects and energy-efficiency services.
New projects related to transportation will begin in the Finnish infrastructure
market in 2010; at the same time the demand in the municipal sector will
decrease. Opportunities will also open in connection with road and regional
maintenance contracts. YIT has large-scale route projects underway in
infrastructure services. The Group has special expertise in infrastructure and a
solid position as Finland's largest private provider of road maintenance
services.
BOARD OF DIRECTORS' PROPOSAL FOR THE USE OF DISTRIBUTABLE EQUITY
The distributable equity of YIT Corporation on December 31, 2009 amounts
228,281,847.21 euros, of which profit for the financial year 2009 is
54,474,447.59 euros.
The Board of directors proposes that the profit be disposed of as follows:
Payment of a dividend
EUR 0.40 per share to shareholders 50,031,368.80
Remains in distributable equity 178,250,478.41
228,281,847.21
Further the Board of Directors proposes that the Annual General Meeting grants
the Board the authority to donate the sum of no more than EUR 500,000 to support
activities of colleges and universities and, in the same context, that the Board
of Directors be authorised to decide the schedule of payments and any other
terms and conditions governing the donations.
No significant changes have taken place in the company's financial position
after the end of the financial year. The company's liquidity is good and in the
view of Board of Directors the proposed dividend payout does not jeopardise the
company's solvency.
Helsinki, February 3, 2010
Henrik Ehrnrooth Eino Halonen
Chairman Vice chairman
Reino Hanhinen Antti Herlin
Satu Huber Lauri Ratia
Kim Gran Juhani Pitkäkoski
President and CEO
FINANCIAL STATEMENTS BULLETIN JAN 1 - DEC 31, 2009: TABLES
(The financial statements bulletin is based on the audited financial statements
for 2009.)
1. Key figures of YIT Group
Key figures
YIT Group figures by quarter
Segment information by quarter
2. Consolidated financial statements January 1 - December 31, 2009
Consolidated income statement January 1 - December 31, 2009
Statement of comprehensive income January 1 - December 31, 2009
Consolidated income statement October 1 - December 31, 2009
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
3. Notes
Accounting principles of the financial statements bulletin
Financial risk management
Segment information
Unusual items affecting operating profit
Acquired and divested businesses
Changes in property, plant and equipment
Inventories
Notes on equity
Interest-bearing liabilities
Change in contingent liabilities and assets and commitments
Transactions with associated companies
1. KEY FIGURES OF YIT GROUP
KEY FIGURES
--------------------------------------------------------------------------------
| | 12/2009 | 12/2008 | change |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.53 | 1.05 | -50% |
--------------------------------------------------------------------------------
| Diluted earnings per share, EUR | 0.53 | 1.05 | -50% |
--------------------------------------------------------------------------------
| Equity per share, EUR | 6.38 | 6.38 | - |
--------------------------------------------------------------------------------
| Average share price during the | 8.52 | 10.89 | -22% |
| period, EUR | | | |
--------------------------------------------------------------------------------
| Share price at end of period, EUR | 14.45 | 4.58 | 216% |
--------------------------------------------------------------------------------
| Market capitalization at end of | 1,807.4 | 576.2 | 214% |
| period, MEUR | | | |
--------------------------------------------------------------------------------
| Weighted average share-issue adjusted | 125,167 | 127,104 | -2% |
| number of shares outstanding, | | | |
| thousands | | | |
--------------------------------------------------------------------------------
| Weighted average share-issue adjusted | 125,167 | 127,104 | -2% |
| number of shares outstanding, | | | |
| thousands, diluted | | | |
--------------------------------------------------------------------------------
| Share-issue adjusted number of shares | 125,078 | 125,798 | -1% |
| outstanding at end of period, | | | |
| thousands | | | |
--------------------------------------------------------------------------------
| Net interest-bearing debt at end of | 497.7 | 644.5 | -23% |
| period, MEUR | | | |
--------------------------------------------------------------------------------
| Return on investment, from the last | 10.9 | 17.5 | -38% |
| 12 months, % | | | |
--------------------------------------------------------------------------------
| Return on equity, % | 8.2 | 16.5 | -50% |
--------------------------------------------------------------------------------
| Equity ratio, % | 33.8 | 30.7 | 10% |
--------------------------------------------------------------------------------
| Gearing ratio, % | 62.2 | 79.8 | -22% |
--------------------------------------------------------------------------------
| Gross capital expenditures, MEUR | 27.7 | 85.2 | -67% |
--------------------------------------------------------------------------------
| % of revenue | 0.8 | 2.2 | -64% |
--------------------------------------------------------------------------------
| Order backlog at end of period, MEUR | 2,773.6 | 3,233.7 | -14% |
| 1) | | | |
--------------------------------------------------------------------------------
| of which order backlog outside | 1,549.0 | 2,118.9 | -27% |
| Finland | | | |
--------------------------------------------------------------------------------
| Average number of personnel | 24,497 | 25,057 | -2% |
--------------------------------------------------------------------------------
1) Portion of binding orders and own development projects not recognized as
income.
YIT GROUP FIGURES BY QUARTER
--------------------------------------------------------------------------------
| | I/20 | II/2 | III/ | IV/20 | I/200 | II/20 | III/2 | IV/20 |
| | 08 | 008 | 2008 | 08 | 9 | 09 | 009 | 09 |
--------------------------------------------------------------------------------
| Revenue, MEUR | 927. | 991. | 970. | 1,050 | 823.7 | 853.1 | 815.0 | 960.5 |
| | 0 | 2 | 8 | .7 | | | | |
--------------------------------------------------------------------------------
| Operating | 78.6 | 70.5 | 63.1 | 48.4 | 22.1 | 38.1 | 45.6 | 59.7 |
| profit, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| % of revenue | 8.5 | 7.1 | 6.5 | 4.6 | 2.7 | 4.5 | 5.6 | 6.2 |
--------------------------------------------------------------------------------
| Financial | 3.2 | 0.6 | 0.9 | 1.2 | 1.3 | 0.4 | 0.9 | 1.9 |
| income, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Exchange rate | -0.8 | -2.6 | 6.0 | -27.6 | -9.6 | -5.1 | -7.8 | -5.9 |
| differences, | | | | | | | | |
| MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Financial | -10. | -8.0 | -13. | -16.7 | -11.6 | -8.2 | -8.8 | -6.1 |
| expenses, MEUR | 7 | | 0 | | | | | |
--------------------------------------------------------------------------------
| Profit before | 70.3 | 60.5 | 56.9 | 5.4 | 2.2 | 25.2 | 29.9 | 49.6 |
| taxes, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| % of revenue | 7.6, | 6.1 | 5.9 | 0.5 | 0.3 | 3.0 | 3.7 | 5.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet | 2,52 | 2,60 | 2,86 | 2,973 | 2,839 | 2,837 | 2,845 | 2,626 |
| total, MEUR | 5.8 | 5.5 | 8.5 | .9 | .7 | .9 | .9 | .4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | 0.40 | 0.33 | 0.29 | 0.03 | 0.02 | 0.12 | 0.15 | 0.26 |
| share, EUR | | | | | | | | |
--------------------------------------------------------------------------------
| Equity per | 5.97 | 6.32 | 6.61 | 6.38 | 5.70 | 5.90 | 6.09 | 6.38 |
| share, EUR | | | | | | | | |
--------------------------------------------------------------------------------
| Share price at | 17.9 | 15.9 | 7.30 | 4.58 | 5.05 | 7.40 | 13.01 | 14.45 |
| end of period, | 7 | 8 | | | | | | |
| EUR | | | | | | | | |
--------------------------------------------------------------------------------
| Market | 2,28 | 2,03 | 928. | 576.2 | 631.6 | 925.6 | 1,627 | 1,807 |
| capitalization | 6.1 | 3.0 | 7 | | | | .3 | .4 |
| at end of | | | | | | | | |
| period, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | 28.1 | 25.6 | 21.9 | 17.5 | 14.3 | 11.4 | 9.8 | 10.9 |
| investment, | | | | | | | | |
| from the last | | | | | | | | |
| 12 months, % | | | | | | | | |
--------------------------------------------------------------------------------
| Equity ratio, % | 33.3 | 34.5 | 33.4 | 30.7 | 28.3 | 29.3 | 29.7 | 33.8 |
--------------------------------------------------------------------------------
| Net | 462. | 625. | 696. | 644.5 | 635.2 | 671.4 | 640.4 | 497.7 |
| interest-bearin | 7 | 2 | 9 | | | | | |
| g debt at end | | | | | | | | |
| of period, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Gearing ratio, | 60.6 | 77.2 | 82.5 | 79.8 | 88.5 | 90.6 | 83.8 | 62.2 |
| % | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross capital | 11.8 | 14.0 | 51.1 | 8.3 | 6.7 | 3.9 | 5.1 | 12.0 |
| expenditures, | | | | | | | | |
| MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Order backlog | 3,62 | 3,67 | 3,96 | 3,233 | 3,045 | 2,916 | 2,800 | 2,773 |
| at end of | 7.0 | 0.4 | 4.9 | .7 | .0 | .4 | .8 | .6 |
| period, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Personnel at | 23,6 | 24,9 | 26,6 | 25,78 | 25,23 | 24,76 | 24,00 | 23,48 |
| end of period | 44 | 78 | 88 | 4 | 9 | 3 | 3 | 0 |
--------------------------------------------------------------------------------
SEGMENT INFORMATION BY QUARTER
Revenue by business segment (EUR million)
--------------------------------------------------------------------------------
| | I/2 | II/2 | III/ | IV/20 | I/200 | II/20 | III/2 | IV/20 |
| | 008 | 008 | 2008 | 08 | 9 | 09 | 009 | 09 |
--------------------------------------------------------------------------------
| Building and | 507 | 589. | 586. | 713.0 | 537.9 | 529.2 | 483.9 | 573.9 |
| Industrial | .8 | 1 | 1 | | | | | |
| Services 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Construction | 284 | 308. | 285. | 268.6 | 239.8 | 253.0 | 246.3 | 290.6 |
| Services Finland | .9 | 6 | 8 | | | | | |
--------------------------------------------------------------------------------
| International | 154 | 119. | 123. | 96.4 | 61.4 | 87.4 | 97.6 | 113.0 |
| Construction | .3 | 5 | 3 | | | | | |
| Services | | | | | | | | |
--------------------------------------------------------------------------------
| Other items | -20 | -26. | -24. | -27.3 | -15.5 | -16.4 | -12.8 | -17.0 |
| | .0 | 0 | 4 | | | | | |
--------------------------------------------------------------------------------
| YIT Group, total | 927 | 991. | 970. | 1 | 823.7 | 853.1 | 815.0 | 960.5 |
| | .0 | 2 | 8 | 050.7 | | | | |
--------------------------------------------------------------------------------
1) The building system operations acquired from Central Europe transferred to
YIT on August 1, 2008. The revenue of these operations for August-December 2008
amounted to EUR 182.6 million.
Operating profit by business segment (EUR million)
--------------------------------------------------------------------------------
| | I/2 | II/2 | III/ | IV/20 | I/200 | II/20 | III/2 | IV/20 |
| | 008 | 008 | 2008 | 08 | 9 | 09 | 009 | 09 |
--------------------------------------------------------------------------------
| Building and | 31. | 41.0 | 43.5 | 46.0 | 28.6 | 28.2 | 24.9 | 37.6 |
| Industrial | 5 | | | | | | | |
| Services 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Construction | 35. | 29.4 | 28.1 | 18.8 | 20.9 | 19.9 | 20.8 | 20.3 |
| Services Finland | 4 | | | | | | | |
| 2) | | | | | | | | |
--------------------------------------------------------------------------------
| International | 16. | 6.1 | -4.0 | -9.2 | -23.8 | -5.2 | 3.7 | 7.5 |
| Construction | 1 | | | | | | | |
| Services | | | | | | | | |
--------------------------------------------------------------------------------
| Other items | -4. | -6.0 | -4.5 | -7.1 | -3.6 | -4.8 | -3.8 | -5.7 |
| | 4 | | | | | | | |
--------------------------------------------------------------------------------
| YIT Group, total | 78. | 70.5 | 63.1 | 48.5 | 22.1 | 38.1 | 45.6 | 59.7 |
| | 6 | | | | | | | |
--------------------------------------------------------------------------------
Operating profit margin by business segment (%)
--------------------------------------------------------------------------------
| | I/2 | II/2 | III/ | IV/20 | I/200 | II/20 | III/2 | IV/20 |
| | 008 | 008 | 2008 | 08 | 9 | 09 | 009 | 09 |
--------------------------------------------------------------------------------
| Building and | 6.2 | 7.0% | 7.4% | 6.5% | 5.3% | 5.3% | 5.1% | 6.6% |
| Industrial | % | | | | | | | |
| Services 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Construction | 12. | 9.5% | 9.8% | 7.0% | 8.7% | 7.9% | 8.4% | 7.0% |
| Services Finland | 4% | | | | | | | |
| 2) | | | | | | | | |
--------------------------------------------------------------------------------
| International | 10. | 5.1% | -3.2 | -9.5% | -38.7 | -5.9% | 3.8% | 6.6% |
| Construction | 4% | | % | | % | | | |
| Services | | | | | | | | |
--------------------------------------------------------------------------------
| YIT Group, total | 8.5 | 7.1% | 6.5% | 4.6% | 2.7% | 4.5% | 5.6% | 6.2% |
| | % | | | | | | | |
--------------------------------------------------------------------------------
1a) The building system operations acquired from Central Europe transferred to
YIT on August 1, 2008.
1b) On September 30, 2009, the court of arbitration issued its ruling in the
dispute concerning the mechanical installation contract YIT carried out for
Neste Oil's Porvoo oil refinery. The effect of the ruling on Building and
Industrial Services' operating profit for Q3/2009 was EUR -3.2 million.
2) The Supreme Court issued its ruling on disputes connected with the renovation
of SOK's former head office building on March 10, 2008. The ruling had a
positive effect of EUR 3.5 million on the Construction Services Finland
operating profit for Q1/2008.
Order backlog by business segment at end of period (EUR million)
--------------------------------------------------------------------------------
| | I/20 | II/2 | III/ | IV/2 | I/200 | II/20 | III/2 | IV/20 |
| | 08 | 008 | 2008 | 008 | 9 | 09 | 009 | 09 |
--------------------------------------------------------------------------------
| Building and | 1,04 | 1,02 | 1,28 | 1,05 | 1,048 | 984.7 | 946.7 | 850.4 |
| Industrial | 8.0 | 1.3 | 4.1 | 0.2 | .3 | | | |
| Services 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Construction | 1,30 | 1,26 | 1,08 | 874. | 819.8 | 846.9 | 909.9 | 1,007 |
| Services Finland | 6.4 | 4.8 | 5.9 | 2 | | | | .5 |
--------------------------------------------------------------------------------
| International | 1,38 | 1,48 | 1,67 | 1,36 | 1,239 | 1,126 | 998.4 | 960.1 |
| Construction | 1.7 | 3.7 | 8.2 | 9.3 | .1 | .8 | | |
| Services 2) | | | | | | | | |
--------------------------------------------------------------------------------
| Other items | -109 | -99. | -83. | -60. | -62.1 | -42.0 | -54.2 | -44.4 |
| | .1 | 4 | 3 | 0 | | | | |
--------------------------------------------------------------------------------
| YIT Group, total | 3,62 | 3,67 | 3,96 | 3,23 | 3,045 | 2,916 | 2,800 | 2,773 |
| | 7.0 | 0.4 | 4.9 | 3.7 | .0 | .4 | .8 | .6 |
--------------------------------------------------------------------------------
1) The business operations acquired from Central Europe transferred to YIT on
August 1, 2008. The order backlog of these operations amounted to EUR 265.6
million at the end of 2008.
2) The order backlog includes residential projects suspended in Russia in
October 2008. At the end of 2009, the value of the projects that were still
suspended amounted to EUR 282 million in the order backlog (12/08: EUR 356
million).
2. CONSOLIDATED FINANCIAL STATEMENTS JAN 1 - DEC 31, 2009
CONSOLIDATED INCOME STATEMENT JAN 1 - DEC 31, 2009 (EUR million)
--------------------------------------------------------------------------------
| | 1-12/2009 | 1-12/2008 | change |
--------------------------------------------------------------------------------
| Revenue | 3,452.4 | 3,939.7 | -12% |
--------------------------------------------------------------------------------
| of which activities outside Finland | 1,885.7 | 2,072.9 | -9% |
--------------------------------------------------------------------------------
| Other operating income and expenses | -3,252.6 | -3,647.1 | -11% |
--------------------------------------------------------------------------------
| Share of results of associated | -0.6 | -0.1 | 500% |
| companies | | | |
--------------------------------------------------------------------------------
| Depreciation and write-downs | -33.6 | -31.8 | 6% |
--------------------------------------------------------------------------------
| Operating profit 1) | 165.5 | 260.6 | -36% |
--------------------------------------------------------------------------------
| % of revenue | 4.8 | 6.6 | -27% |
--------------------------------------------------------------------------------
| Financial income 2) | 4.5 | 5.9 | -24% |
--------------------------------------------------------------------------------
| Exchange rate differences | -28.4 | -25.0 | 14% |
--------------------------------------------------------------------------------
| Financial expenses | -34.7 | -48.4 | -28% |
--------------------------------------------------------------------------------
| Profit before taxes | 106.9 | 193.1 | -45% |
--------------------------------------------------------------------------------
| % of revenue | 3.1 | 4.9 | -37% |
--------------------------------------------------------------------------------
| Income taxes 3) | -40.7 | -58.8 | -30% |
--------------------------------------------------------------------------------
| Profit for the report period | 66.2 | 134.3 | -51% |
--------------------------------------------------------------------------------
| % of revenue | 2.0 | 3.4 | -41% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to | | | |
--------------------------------------------------------------------------------
| Equity holders of the parent company | 66.8 | 132.9 | -50% |
--------------------------------------------------------------------------------
| Minority interests | -0.6 | 1.4 | -136% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share attributable to | | | |
| the equity holders of the parent | | | |
| company | | | |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.53 | 1.05 | -50% |
--------------------------------------------------------------------------------
| Diluted earnings per share, EUR | 0.53 | 1.05 | -50% |
--------------------------------------------------------------------------------
1) The operating profit 2009 includes EUR -3.2 million due to the ruling issued
by the court of arbitration on September 30, 2009 concerning the mechanical
installation contract YIT carried out for Neste Oil's Porvoo oil refinery.
The
operating profit 2008 includes EUR 3.5 million due to the ruling of the Supreme
Court of disputes over the refurbishing of SOK's former head office in Finland.
2) The financial income of the 2008 period includes EUR +2.2 million due to the
ruling of the Supreme Court of disputes over the refurbishing of SOK's former
head office in Finland.
3) During 2009 the Group's tax rate was 38.1 per cent (2008: 30.4%). Increase in
tax rate was mainly due to negative profits in several companies in Baltic
countries and Russia.
STATEMENT OF COMPREHENSIVE INCOME JAN 1 - DEC 31, 2009 (EUR million)
--------------------------------------------------------------------------------
| | 1-12/2009 | 1-12/2008 |
--------------------------------------------------------------------------------
| Profit for the report period | 66.2 | 134.3 |
--------------------------------------------------------------------------------
| Other comprehensive income and expenses | | |
--------------------------------------------------------------------------------
| - Change in the fair value of interest | -3.1 | -4.7 |
| derivatives | | |
--------------------------------------------------------------------------------
| -- Deferred tax | 0.0 | 1.2 |
--------------------------------------------------------------------------------
| -- Transferred to income statement | 3.1 | 0.0 |
--------------------------------------------------------------------------------
| - Change in translation differences | -5.9 | -35.8 |
--------------------------------------------------------------------------------
| - Other change | -0.6 | -0.3 |
--------------------------------------------------------------------------------
| Other comprehensive income, total | -6.4 | -39.6 |
--------------------------------------------------------------------------------
| Total comprehensive income | 59.7 | 94.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to | | |
--------------------------------------------------------------------------------
| Equity holders of the parent company | 60.9 | 93.7 |
--------------------------------------------------------------------------------
| Minority interests | -1.2 | 1.0 |
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT OCT 1 - DEC 31, 2009 (EUR million)
--------------------------------------------------------------------------------
| | 10-12/2009 | 10-12/2008 | change |
--------------------------------------------------------------------------------
| Revenue | 960.5 | 1 050.7 | -9% |
--------------------------------------------------------------------------------
| of which activities outside Finland | 543.0 | 586.8 | -7% |
--------------------------------------------------------------------------------
| Other operating income and expenses | -892.3 | -993.5 | -10% |
--------------------------------------------------------------------------------
| Depreciation and write-downs | -0.6 | -0.1 | 500% |
--------------------------------------------------------------------------------
| Operating profit | -8.4 | -8.7 | -3% |
--------------------------------------------------------------------------------
| % of revenue | 59.7 | 48.4 | 23% |
--------------------------------------------------------------------------------
| Financial income 1) | 6.2 | 4.6 | 35% |
--------------------------------------------------------------------------------
| Exchange rate differences | 1.9 | 1.2 | 58% |
--------------------------------------------------------------------------------
| Financial expenses | -5.9 | -27.6 | -79% |
--------------------------------------------------------------------------------
| Profit before taxes | -6.2 | -16.7 | -63% |
--------------------------------------------------------------------------------
| % of revenue | 49.5 | 5.3 | 834% |
--------------------------------------------------------------------------------
| Income taxes 2) | 5.2 | 0.5 | 931% |
--------------------------------------------------------------------------------
| Profit for the report period | -19.2 | -2.6 | 654% |
--------------------------------------------------------------------------------
| % of revenue | 30.2 | 2.8 | 1007% |
--------------------------------------------------------------------------------
| | 3.2 | 0.3 | 1223% |
--------------------------------------------------------------------------------
| Attributable to | | | |
--------------------------------------------------------------------------------
| Equity holders of the parent company | | | |
--------------------------------------------------------------------------------
| Minority interests | 30.3 | 2.7 | 1004% |
--------------------------------------------------------------------------------
| | -0.1 | 0.1 | -200% |
--------------------------------------------------------------------------------
| Earnings per share attributable to | | | |
| the equity holders of the parent | | | |
| company | | | |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.24 | 0.03 | 700% |
--------------------------------------------------------------------------------
| Diluted earnings per share, EUR | 0.24 | 0.03 | 700% |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET (EUR million)
--------------------------------------------------------------------------------
| | 12/2009 | 12/2008 | change |
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 99.8 | 104.6 | -5% |
--------------------------------------------------------------------------------
| Goodwill | 291.0 | 291.0 | 0% |
--------------------------------------------------------------------------------
| Other intangible assets | 32.8 | 35.1 | -7% |
--------------------------------------------------------------------------------
| Shares in associated companies | 3.2 | 3.8 | -16% |
--------------------------------------------------------------------------------
| Investments | 2.0 | 2.5 | -20% |
--------------------------------------------------------------------------------
| Receivables | 14.4 | 12.7 | 13% |
--------------------------------------------------------------------------------
| Deferred tax assets | 39.8 | 34.6 | 14% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 1,309.5 | 1,509.9 | -13% |
--------------------------------------------------------------------------------
| Trade and other receivables | 660.8 | 778.0 | -15% |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 173.1 | 201.7 | -14% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 2,626.4 | 2,973.9 | -12% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity attributable to equity holders | | | |
| of the parent company | | | |
--------------------------------------------------------------------------------
| Share capital | 149.2 | 149.2 | - |
--------------------------------------------------------------------------------
| Other equity | 648.8 | 653.9 | -1% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Minority interests | 2.6 | 4.6 | -43% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity | 800.6 | 807.7 | -1% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 73.6 | 68.4 | 8% |
--------------------------------------------------------------------------------
| Pension liabilities | 17.6 | 19.7 | -11% |
--------------------------------------------------------------------------------
| Provisions | 49.0 | 45.0 | 9% |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 502.0 | 516.2 | -3% |
--------------------------------------------------------------------------------
| Other liabilities | 3.3 | 4.0 | -18% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Trade and other payables | 971.5 | 1 140.8 | -15% |
--------------------------------------------------------------------------------
| Provisions | 40.0 | 42.0 | -5% |
--------------------------------------------------------------------------------
| Interest-bearing current liabilities | 168.8 | 330.1 | -49% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity and liabilities | 2,626.4 | 2,973.9 | -12% |
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR million)
--------------------------------------------------------------------------------
| | Shar | Lega | Othe | Cumul | Fair | Trea | Retain | Minor | Total |
| | e | l | r | ative | valu | sury | ed | ity | equit |
| | capi | rese | rese | trans | e | shar | earnin | inter | y |
| | tal | rve | rve | latio | rese | es | gs | est | |
| | | | | n | rve | | | | |
| | | | | diffe | | | | | |
| | | | | rence | | | | | |
| | | | | s | | | | | |
--------------------------------------------------------------------------------
| Equity | 149. | 1.4 | 13.9 | -35.2 | -1.7 | -6.6 | 682.1 | 4.6 | 807.7 |
| on Jan | 2 | | | | | | | | |
| 1, 2009 | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | - | - | - | - | - | | -62.5 | -0.8 | -63.3 |
| paid, | | | | | | | | | |
| EUR | | | | | | | | | |
| 0.50/sha | | | | | | | | | |
| re | | | | | | | | | |
--------------------------------------------------------------------------------
| Purchase | - | - | - | - | - | -4.0 | - | - | -4.0 |
| of | | | | | | | | | |
| treasury | | | | | | | | | |
| shares | | | | | | | | | |
--------------------------------------------------------------------------------
| Shares | - | - | - | - | - | - | - | - | |
| subscrib | | | | | | | | | |
| ed with | | | | | | | | | |
| options | | | | | | | | | |
--------------------------------------------------------------------------------
| Employee | - | - | -2.3 | - | - | - | 2.8 | - | 0.5 |
| share | | | | | | | | | |
| option | | | | | | | | | |
| scheme | | | | | | | | | |
--------------------------------------------------------------------------------
| Transfer | - | 0.3 | - | - | - | - | -0.3 | - | 0.0 |
| from | | | | | | | | | |
| retained | | | | | | | | | |
| earnings | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | - | - | - | -7.3 | 0.0 | - | 68.2 | -1.2 | 59.7 |
| comprehe | | | | | | | | | |
| nsive | | | | | | | | | |
| income, | | | | | | | | | |
| total | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 149. | 1.7 | 11.6 | -42.5 | -1.7 | -10. | 690.3 | 2.6 | 800.6 |
| on Dec | 2 | | | | | 6 | | | |
| 31, 2009 | | | | | | | | | |
--------------------------------------------------------------------------------
| | Shar | Lega | Othe | Cumul | Fair | Trea | Retain | Minor | Total |
| | e | l | r | ative | valu | sury | ed | ity | equit |
| | capi | rese | rese | trans | e | shar | earnin | inter | y |
| | tal | rve | rve | latio | rese | es | gs | est | |
| | | | | n | rve | | | | |
| | | | | diffe | | | | | |
| | | | | rence | | | | | |
| | | | | s | | | | | |
--------------------------------------------------------------------------------
| Equity | 149. | 1.0 | 13.9 | -9.0 | 2.0 | 0.0 | 657.6 | 3.8 | 818.4 |
| on Jan | 1 | | | | | | | | |
| 1, 2008 | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | - | - | - | - | - | - | -101.8 | -0.2 | -102. |
| paid, | | | | | | | | | 0 |
| EUR | | | | | | | | | |
| 0.80/sha | | | | | | | | | |
| re | | | | | | | | | |
--------------------------------------------------------------------------------
| Purchase | - | - | - | - | - | -6.6 | - | - | -6.6 |
| of | | | | | | | | | |
| treasury | | | | | | | | | |
| shares | | | | | | | | | |
--------------------------------------------------------------------------------
| Shares | 0.1 | - | - | - | - | - | - | - | 0.1 |
| subscrib | | | | | | | | | |
| ed with | | | | | | | | | |
| options | | | | | | | | | |
--------------------------------------------------------------------------------
| Employee | - | - | - | - | - | - | 3.2 | - | 3.2 |
| share | | | | | | | | | |
| option | | | | | | | | | |
| scheme | | | | | | | | | |
--------------------------------------------------------------------------------
| Transfer | - | 0.4 | - | - | - | - | -0.4 | - | 0.0 |
| from | | | | | | | | | |
| retained | | | | | | | | | |
| earnings | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | - | - | 0.0 | -26.2 | -3.7 | - | 123.5 | 1.0 | 94.6 |
| comprehe | | | | | | | | | |
| nsive | | | | | | | | | |
| income, | | | | | | | | | |
| total | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 149. | 1.4 | 13.9 | -35.2 | -1.7 | -6.6 | 682.1 | 4.6 | 807.7 |
| on Dec | 2 | | | | | | | | |
| 31, 2008 | | | | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT (EUR million)
--------------------------------------------------------------------------------
| | 1-12/2009 | 1-12/2008 | change |
--------------------------------------------------------------------------------
| Cash flows from operating activities | | | |
--------------------------------------------------------------------------------
| Net profit for the period | 65.9 | 134.3 | -51% |
--------------------------------------------------------------------------------
| Reversal of accrual-based items | 165.2 | 197.1 | -16% |
--------------------------------------------------------------------------------
| Change in working capital | | | |
--------------------------------------------------------------------------------
| Change in trade and other receivables | 124.3 | 4.5 | 2662% |
--------------------------------------------------------------------------------
| Change in inventories | 148.7 | -318.2 | -147% |
--------------------------------------------------------------------------------
| Change in current liabilities | -170.3 | 132.4 | -229% |
--------------------------------------------------------------------------------
| Change in working capital, total | 102.7 | -181.3 | -157% |
--------------------------------------------------------------------------------
| Interest paid | -35.3 | -45.5 | -22% |
--------------------------------------------------------------------------------
| Realised exchange rate gain or losses | -22.0 | 2.7 | -915% |
--------------------------------------------------------------------------------
| Interest received | 4.7 | 5.8 | -18% |
--------------------------------------------------------------------------------
| Taxes paid | -38.7 | -65.3 | -41% |
--------------------------------------------------------------------------------
| Net cash generated from operating | 242.5 | 47.8 | 407% |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from investing activities | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries, net of | -7.5 | -38.9 | -81% |
| cash | | | |
--------------------------------------------------------------------------------
| Acquisition of shares in associated | 0.0 | -0.2 | -100% |
| companies | | | |
--------------------------------------------------------------------------------
| Purchase of property, plant and | -20.8 | -33.5 | -38% |
| equipment | | | |
--------------------------------------------------------------------------------
| Purchase of intangible assets | -7.2 | -4.1 | 76% |
--------------------------------------------------------------------------------
| Disposals of subsidiaries and | 0.0 | 4.2 | -100% |
| businesses | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of tangible and | 4.1 | 4.7 | -13% |
| intangible assets | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of other | 0.3 | 0.6 | -50% |
| investments | | | |
--------------------------------------------------------------------------------
| Net cash used in investing activities | -31.1 | -67.2 | -54% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating cash flow after investments | 211.4 | -19.4 | - |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing activities | | | |
--------------------------------------------------------------------------------
| Proceeds from share issues | 0.0 | 0.1 | -100% |
--------------------------------------------------------------------------------
| Change in current liabilities | -120.2 | 103.3 | -216% |
--------------------------------------------------------------------------------
| Proceeds from borrowings | 60.0 | 265.0 | -77% |
--------------------------------------------------------------------------------
| Repayments of borrowings | -110.6 | -97.5 | 13% |
--------------------------------------------------------------------------------
| Payments of financial leasing debts | -0.3 | -0.5 | -40% |
--------------------------------------------------------------------------------
| Purchase of treasury shares | -4.0 | -6.6 | -39% |
--------------------------------------------------------------------------------
| Dividends paid | -63.4 | -102.0 | -38% |
--------------------------------------------------------------------------------
| Net cash used in financing activities | -238.5 | 161.8 | -247% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net change in cash and cash | -27.1 | 142.4 | -119% |
| equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the | 197.7 | 59.2 | 234% |
| beginning of the period | | | |
--------------------------------------------------------------------------------
| Change in the fair value of the cash | 2.5 | -3.9 | -164% |
| equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end | 173.1 | 197.7 | -12% |
| of the period | | | |
--------------------------------------------------------------------------------
3. NOTES
ACCOUNTING PRINCIPLES OF THE FINANCIAL STATEMENTS BULLETIN
YIT Corporation's financial statements for January 1 - December 31, 2009 have
been drafted in line with the IAS 34 Interim Financial Reporting standard. The
consolidated financial statements have been drafted in compliance with the
International Financial Reporting Standards, and the IAS/IFRS standards approved
by the EU Commission by December 31, 2009 and SIC and IFRIC interpretations have
been complied with in the drafting of the statements. Standard amendments or new
interpretations that took effect in 2009 have not had a significant effect on
the Group's financial statements for 2009. The financial statements bulletin is
based on the audited financial statements for 2009.
Impact of new standards or interpretations
The following revised standards that have come into force in 2009 had an impact
on YIT Group's financial reporting:
IFRS 8 Operating Segments: According to standard, the segment figures presented
must be based on the internal reports regularly reviewed by the entity's
management. Adopting this standard 2009 has not changed significantly Group's
segment reporting, as already previously published segment information was based
on internal reporting structure.
IAS 23 (revised) Borrowing cost: Standard provides, that borrowing costs
directly attributable to certain qualified assets, e.g. construction project,
shall be capitalised as part of the cost of that asset. Previously all borrowing
costs could be recognised as an expense immediately. Borrowing costs
attributable to construction projects that begin on January 1, 2009 or later
will be capitalised in the balance sheet and are recognised to Profit and loss
account when project revenue is recognised.
IAS 1 (revised) Presentation of financial statements: The change in accounting
policy only impacts presentation of profit and loss account and the statement of
changes in equity as well as some terms in the financial statements. Non-owner
changes in equity are presented in a comprehensive income statement. In 2009
Group has disclosed two separate calculations Income statement and Comprehensive
income statement. Also comparative information has been re-presented.
Evaluation of the future impact of new interpretations
IFRIC 15 Agreements for the Construction of Real Estate: The interpretation
provides guidance on when to account for revenue from the construction of real
estate based on delivery according to the IAS 18 standard and when the
percentage of completion method can be used in accordance with the IAS 11
standard. The entry into force of the interpretation will change YIT Group's
revenue recognition in Construction Services Finland and International
Construction Services segments from housing developer contracting to take place
mainly at the time of delivery, while so far revenue and operating profit have
been recognized based on the percentage of completion and percentage of sale.
Application of the percentage of completion method according to IAS 11 may
possibly continue contract specific in construction of business premises. The
application will mainly have an impact on the reporting of revenue, operating
profit, profit for the period, inventories, trade receivables, advances
received, interest-bearing liabilities, deferred taxes, shareholders' equity and
balance sheet total. The amendment will also have an impact on the key figures.
The interpretation shall be applied to the financial period starting on January
1, 2010. YIT Group has analyzed the impact of the implementation of IFRIC 15 for
Group's key figures, using preliminary comparative figures for the year 2009.
The adjusted revenue for the year 2009 is about EUR 3,486 million (effect EUR
+33 million, +1.0%), adjusted profit before taxes EUR 110 million (effect EUR +3
million, +2.5%), adjusted retained earnings about EUR 654 million (effect EUR
-37 million, -5.3% ), adjusted equity ratio 32.4% (effect -1.4 %-units),
adjusted return on investment 10.8% (effect -0.1 %-units), adjusted operating
cash flow after investments about EUR 230 million (effect EUR +18 million,
corresponding negative effect in cash flow from financing activities and no
effect on total net change in cash), adjusted dividend payout ratio according to
Board of Directors proposal 73.2% (effect -1.7 %-units). The effect of the
IFRIC15 adoption will fluctuate significantly in reporting periods depending on
the amount of completions of different construction projects during that period.
The adoption of IFRIC15 will not change the management's segment reporting or
the accounting principles in there.
Other applied or future standards, amendments or interpretations have minor
effects on YIT Group's reporting.
The effects are fully described in the financial statements 2009.
Currency exchange rates used in the Financial Statements
--------------------------------------------------------------------------------
| | | Average | Balance | | Average | Balance sheet |
| | | rate | sheet rate | | rate | rate |
| | | 1-12/2009 | December | | 1-12/2008 | December 31, |
| | | | 31, 2009 | | | 2008 |
--------------------------------------------------------------------------------
| 1 EUR | SEK | 10.6189 | 10.2520 | | 9.6101 | 10.8700 |
| = | | | | | | |
--------------------------------------------------------------------------------
| | NOK | 8.7287 | 8.3000 | | 8.2181 | 9.7500 |
--------------------------------------------------------------------------------
| | DKK | 7.4463 | 7.4418 | | 7.4560 | 7.4506 |
--------------------------------------------------------------------------------
| | EEK | 15.6466 | 15.6466 | | 15.6466 | 15.6466 |
--------------------------------------------------------------------------------
| | LVL | 0.7028 | 0.7028 | | 0.7028 | 0.7028 |
--------------------------------------------------------------------------------
| | LTL | 3.4528 | 3.4528 | | 3.4528 | 3.4528 |
--------------------------------------------------------------------------------
| | RUB | 44.1306 | 43.1540 | | 36.3922 | 41.2830 |
--------------------------------------------------------------------------------
| | HUF | 280.39 | 270.42 | | 253.20 | 266.70 |
--------------------------------------------------------------------------------
| | CZK | 26.436 | 26.473 | | 24.833 | 26.875 |
--------------------------------------------------------------------------------
| | PLN | 4.3270 | 4.1045 | | 3.5883 | 4.1535 |
--------------------------------------------------------------------------------
FINANCIAL RISK MANAGEMENT
Financial risks include liquidity, interest rate, currency and credit risk, and
their management is a part of the Group's financing policy. The Board of
Directors has approved the Corporate Finance Policy. The Group's Finance
Department is responsible for the practical implementation of the policy in
association with the business segments and groups.
The Group's strategic financial targets guide the use and management of the
Group's capital. Achieving the strategic targets is supported by maintaining an
optimum Group capital structure. Capital structure is mainly influenced by
controlling the investments and the amount of working capital tied to business
operations.
A more detailed account of financial risks will be published in the notes to the
financial statements for 2009.
SEGMENT INFORMATION
As of the beginning of 2009, the operations of YIT Group have been divided into
three business segments: Building and Industrial Services, Construction Services
Finland and International Construction Services. The segment structure was
adjusted at the beginning of the year by merging the Building Systems and
Industrial Services segments into a single segment, Building and Industrial
Services.
The figures for 2008 are comparison figures calculated as the business segment
structure changed on January 1, 2009. YIT published the comparison figures for
2008 according to the new segment structure in a stock exchange release on March
23, 2009.
The chief operating decision-maker has been identified as the YIT Group's
Management Board, which review the Group's internal reporting in order to assess
performance and allocate resources to the segments.
Revenue by business segment (EUR million)
--------------------------------------------------------------------------------
| | 1-12/2009 | 1-12/2008 | change |
--------------------------------------------------------------------------------
| Building and Industrial Services 1) | 2,124.9 | 2,396.0 | -11% |
--------------------------------------------------------------------------------
| - Group internal | -58.6 | -90.2 | -35% |
--------------------------------------------------------------------------------
| - external | 2,066.3 | 2,305.8 | -10% |
--------------------------------------------------------------------------------
| Construction Services Finland | 1,029.7 | 1,147.9 | -10% |
--------------------------------------------------------------------------------
| - Group internal | -1.8 | -3.7 | -51% |
--------------------------------------------------------------------------------
| - external | 1,028.0 | 1,144.2 | -10% |
--------------------------------------------------------------------------------
| International Construction Services | 359.4 | 493.5 | -27% |
--------------------------------------------------------------------------------
| - Group internal | -3.1 | -6.4 | -52% |
--------------------------------------------------------------------------------
| - external | 356.3 | 487.1 | -27% |
--------------------------------------------------------------------------------
| Other items | 1.8 | 2.6 | -37% |
--------------------------------------------------------------------------------
| YIT Group -external | 3,452.4 | 3,939.7 | -12% |
--------------------------------------------------------------------------------
1) The building system operations acquired from Central Europe transferred to
YIT on August 1, 2008. The revenue of these operations for August-December 2008
amounted to EUR 182.6 million.
Operating profit by business segment (EUR million)
--------------------------------------------------------------------------------
| | 1-12/2009 | 1-12/2008 | change |
--------------------------------------------------------------------------------
| Building and Industrial Services 1) | 119.3 | 162.0 | -26% |
--------------------------------------------------------------------------------
| Construction Services Finland 2) | 81.9 | 111.7 | -27% |
--------------------------------------------------------------------------------
| International Construction Services | -17.8 | 9.0 | -298% |
--------------------------------------------------------------------------------
| Other items | -17.9 | -22.0 | -19% |
--------------------------------------------------------------------------------
| YIT Group, total | 165.5 | 260.6 | -36% |
--------------------------------------------------------------------------------
1a) The building system operations acquired from Central Europe transferred to
YIT on August 1, 2008.
1b) On September 30, 2009, the court of arbitration
issued its ruling in the dispute concerning the mechanical installation contract
YIT carried out for Neste Oil's Porvoo oil refinery. The effect of the ruling on
Building and Industrial Services' operating profit for 2009 was EUR -3.2
million.
2) The Supreme Court issued its ruling on disputes connected with the renovation
of SOK's former head office building on March 10, 2008. The ruling had a
positive effect of EUR 3.5 million on the Construction Services Finland
operating profit for 2008.
Order backlog by business segment at end of period (EUR million)
--------------------------------------------------------------------------------
| | 12/2009 | 12/2008 | change |
--------------------------------------------------------------------------------
| Building and Industrial Services 1) | 850.4 | 1,050.2 | -19% |
--------------------------------------------------------------------------------
| Construction Services Finland | 1,007.5 | 874.2 | 15% |
--------------------------------------------------------------------------------
| International Construction Services | 960.1 | 1,369.3 | -30% |
| 2) | | | |
--------------------------------------------------------------------------------
| Other items | -44.4 | -60.0 | -26% |
--------------------------------------------------------------------------------
| YIT Group, total | 2,773.6 | 3,233.7 | -14% |
--------------------------------------------------------------------------------
1) The business operations acquired from Central Europe transferred to YIT on
August 1, 2008. The order backlog of these operations amounted to EUR 265.6
million at the end of 2008.
2) The order backlog includes projects suspended in October 2008. At the end of
2009, the value of the projects that were still suspended amounted to EUR 282
million in the order backlog (12/08: EUR 356 million).
UNUSUAL ITEMS AFFECTING OPERATING PROFIT (EUR million)
--------------------------------------------------------------------------------
| | 1-12/2009 | 1-12/2008 |
--------------------------------------------------------------------------------
| Building and Industrial Services 1) | -3.2 | - |
--------------------------------------------------------------------------------
| Construction Services Finland 2) | - | 3.5 |
--------------------------------------------------------------------------------
| YIT Group, total | -3.2 | 3.5 |
--------------------------------------------------------------------------------
1) On September 30, 2009, the court of arbitration issued its ruling in the
dispute concerning the mechanical installation contract YIT carried out for
Neste Oil's Porvoo oil refinery. The effect of the ruling on Building and
Industrial Services' operating profit for 2009 was EUR -3.2 million.
2) The Supreme Court issued its ruling on disputes connected with the renovation
of SOK's former head office building on March 10, 2008. The ruling had a
positive effect of EUR 3.5 million on the Construction Services Finland
operating profit for 2008.
ACQUIRED AND DIVESTED BUSINESSES (EUR million)
During the review period there were no acquisitions or major divestments.
The cash flow effect of the business acquired in 2008 was EUR 7.5 million for
the review period. In 2008, YIT acquired building systems operations in Germany,
Austria, Poland, the Czech Republic, Hungary and Romania and they were
transferred to YIT on August 1, 2008.
CHANGES IN PROPERTY, PLANT AND EQUIPMENT (EUR million)
--------------------------------------------------------------------------------
| | 1-12/2009 | 1-12/2008 | change |
--------------------------------------------------------------------------------
| Carrying value at the beginning of | 104.6 | 92.5 | 13% |
| period | | | |
--------------------------------------------------------------------------------
| Increase | 21.5 | 33.2 | -35% |
--------------------------------------------------------------------------------
| Increase through acquisitions | 0.0 | 6.2 | -100% |
--------------------------------------------------------------------------------
| Decrease | -3.4 | -3.4 | - |
--------------------------------------------------------------------------------
| Depreciation and value adjustments | -22.9 | -24.6 | -7% |
--------------------------------------------------------------------------------
| Reclassification | 0.0 | 0.7 | -100% |
--------------------------------------------------------------------------------
| Carrying value at the end of period | 99.8 | 104.6 | -5% |
--------------------------------------------------------------------------------
INVENTORIES (EUR million)
--------------------------------------------------------------------------------
| | 12/2009 | 12/2008 | change |
--------------------------------------------------------------------------------
| Raw materials and consumables | 18.8 | 20.1 | -6% |
--------------------------------------------------------------------------------
| Work in progress | 441.9 | 690.5 | -36% |
--------------------------------------------------------------------------------
| Land areas and plot owing companies | 572.1 | 579.3 | -1% |
--------------------------------------------------------------------------------
| Shares in completed housing and real | 224.8 | 135.9 | 65% |
| estate companies | | | |
--------------------------------------------------------------------------------
| Advance payments | 51.5 | 83.7 | -38% |
--------------------------------------------------------------------------------
| Other inventories | 0.4 | 0.4 | 0% |
--------------------------------------------------------------------------------
| Total inventories | 1,309.5 | 1,509.9 | -13% |
--------------------------------------------------------------------------------
NOTES ON EQUITY (EUR million)
--------------------------------------------------------------------------------
| Share capital and share premium | Number of | Share | Treasury | Total |
| reserve | shares, | capita | shares | |
| | 1000 | l | | |
--------------------------------------------------------------------------------
| Jan 1, 2009 | 125,798,4 | 149.2 | 125,798,4 | -6.6 |
| | 22 | | 22 | |
--------------------------------------------------------------------------------
| Purchase of own shares | -720,000 | | -720,000 | -4.0 |
--------------------------------------------------------------------------------
| Dec 31, 2009 | 125,078,4 | 149.2 | 125,078,4 | -10.6 |
| | 22 | | 22 | |
--------------------------------------------------------------------------------
INTEREST-BEARING LIABILITIES (EUR million)
No new long-term bonds were issued during the review period.
CHANGE IN CONTINGENT LIABILITIES AND ASSETS AND COMMITMENTS (EUR million)
--------------------------------------------------------------------------------
| | 12/2009 | 12/2008 | change |
--------------------------------------------------------------------------------
| Collateral given for own commitments | | | |
--------------------------------------------------------------------------------
| - Corporate mortgages | 29.3 | 29.3 | 0% |
--------------------------------------------------------------------------------
| - Other mortgages | 45.2 | - | |
--------------------------------------------------------------------------------
| Other commitments | | | |
--------------------------------------------------------------------------------
| - Repurchase commitments | 106.4 | 139.1 | -24% |
--------------------------------------------------------------------------------
| - Operating leases | 321.9 | 352.2 | -9% |
--------------------------------------------------------------------------------
| - Rental guarantees for clients | 9.2 | 11.0 | -16% |
--------------------------------------------------------------------------------
| - Other contingent liabilities | 0.4 | 0.6 | -33% |
--------------------------------------------------------------------------------
| Liability under derivative contracts | | | |
--------------------------------------------------------------------------------
| - Value of underlying instruments | | | |
--------------------------------------------------------------------------------
| -- Interest rate derivatives | 362.3 | 239.2 | 51% |
--------------------------------------------------------------------------------
| -- Foreign currency forward contracts | 83.5 | 213.7 | -61% |
--------------------------------------------------------------------------------
| - Market value | | | |
--------------------------------------------------------------------------------
| -- Interest rate forward contracts | -5.9 | -5.3 | 11% |
--------------------------------------------------------------------------------
| - Foreign currency forward contracts | -9.4 | 26.8 | -135% |
--------------------------------------------------------------------------------
TRANSACTIONS WITH ASSOCIATED COMPANIES (EUR million)
--------------------------------------------------------------------------------
| | 1-12/2009 | 1-12/2008 | change |
--------------------------------------------------------------------------------
| Sales to associated companies | 1.3 | 3.6 | -64% |
--------------------------------------------------------------------------------
| Purchases from associated companies | 0.2 | 14.4 | -99% |
--------------------------------------------------------------------------------
| Trade and other receivables | 0.1 | 0.1 | - |
--------------------------------------------------------------------------------
| Trade and other liabilities | 0.1 | 0.5 | -80% |
--------------------------------------------------------------------------------
