Interim Report II. January June July 29, 2004

Transcription

1 Interim Report II January June 2004 July 29, 2004

2 2 Business groups The Jaakko Pöyry Group s net sales for the period under review were EUR (206.3 in the same period 2003) million. Profit before extraordinary items was EUR 12.0 (21.6) million. The profit for 2003 included a gain of EUR 11.0 million from the sale of Jaakko Pöyry Group Oyj s headquarter property. The Group s consolidated balance sheet is healthy. The equity ratio was 46.2 (50.7) per cent and the net debt/equity ratio (gearing) (-20.5) per cent. The Jaakko Pöyry Group s earnings per share were EUR 0.50 (1.03) and the return on investment 18.7 (34.5) per cent. The Group s order stock was EUR million. It increased by EUR 55.3 million during the period under review. Consolidated net sales will increase clearly during Profit before extraordinary items is estimated to improve in 2004, if the capital gain of EUR 11 million from the sale of the head office property in 2003 is disregarded in the comparison. Forest Industry Net sales for the period under review were EUR 95.5 (88.5) million. Operating profit amounted to EUR 7.9 (7.5) million. A credit loss allowance of EUR 0.7 million has been taken into account in the result to cover receivables from the Canadian Papier Gaspesia Inc. Investment activity in the forest industry has remained low and demand for consulting services has also been slack. Taking into account the market situation, the business group s order stock has remained good. The order stock amounted to EUR 90.4 (at the end of 2003 EUR 90.8) million. The most important new projects were the rebuild of Mondi Ltd s paper machine at Merebank in South Africa, Holmen Paper AB s paper machine project in Spain, Korsnäs AB s paper machine rebuild in Sweden, S.A. Industrias Celulosa Aragonesa s board mill project in Spain and Norske Skog s paper mill rebuild project in Australia. Energy Net sales for the period under review were EUR 62.6 (48.1) million. Operating profit was EUR 3.5 (1.5) million. The improvement in operating profit is due to the strengthening of the business group s market position and the partial recovery of demand in the energy sector. The order stock amounted to EUR (129.2) million. The increase was partly due to new projects, partly to the order stock of Verbundplan GmbH s energy business. Verbundplan GmbH was acquired by this year. The most important new projects were Petro Vietnam s gas turbine power plant project in Vietnam and United Pulp & Paper Corporatio n s power plant project in the Philippines, and several waste-toenergy projects in Europe.

3 3 GROUP STRUCTURE ORDER STOCK Infrastructure & Environment Net sales for the period under review were EUR 76.3 (69.8) million. Operating profit was EUR 3.3 (4.1) million. Traffic systems investments in Western Europe, especially in Germany, have declined strongly. For this reason, operations have been streamlined to correspond to the reduced demand. Non-recurring expenses due to streamlining actions amounted to EUR 0.8 million during the review period. The order stock was EUR (115.7) million, remaining at a good level. The increase was due to the order stocks of Verbundplan GmbH s infrastructure and environment bus i- ness, Verbundplan Prüf- und Messtechnik GmbH and AQUATIS a.s., which were acquired this year. In April 2004, and Verbund AG, Austria, signed an agreement according to which the ownership and voting rights in subsidiaries owned by the Verbund group were transferred to as follows: per cent of Verbundplan GmbH in Austria per cent of Verbundplan Prüf- und Messtechnik GmbH in Austria per cent of AQUATIS a.s. in the Czech Republic The acquired companies have been consolidated into Jaakko Pöyry Group from the beginning of The acquired companies impact on the consolidated net sales, operating profit and order stock for the first and second quarters has been taken into account in the data for each business group given in this interim report. The transaction price paid for the companies was EUR 6.1 million. The parties retain the option to buy/sell the 25.1 per cent interest in Verbundplan GmbH which remains in the hands of a subsidiary controlled by Verbund AG. The option can be exercised during The parties have the obligation to buy/sell this interest if the other party so requires. The Verbundplan companies net sales for the period under review were EUR 21.5 million and their operating profit was EUR 0.35 million. The companies have no interest-bearing debt. Of total net sales, 47 per cent is derived from the energy sector in which the main business areas are hydropower, renewable energy, transmission networks and management consulting. The remaining 53 per cent of net sales is derived from the infrastructure and environment sectors in which the main business areas are tunnelling, water and environmental activities. The companies have had an average of 435 employees. The Group s order stock is good. It increased by EUR 55.3 million during the period under review, totalling EUR million at the end of June, compared with EUR million at the end of June At the end of 2003 the order stock was EUR million.

4 The combined order stock of Verbundplan GmbH, Verbundplan Prüf- und Messtechnik GmbH and AQUATIS a.s. was 30.1 as at December 31, The order stock as at June 30, 2004 was EUR 44.7 million. The most important new project during the period under review was Natsionalna Elektricheska Kompania plc s hydropower project in Bulgaria. CAPITAL EXPENDITURE The Group s capital expenditure for the period under review totalled EUR 9.8 (10.5) million, of which EUR 3.4 (4.7) million consisted of computer software, systems and hardware and EUR 6.4 (5.8) million of business acquisitions. SHARE CAPITAL AND SHARES The total number of shares at the end of 2003 was The Annual General Meeting on March 3, 2004 decided to cancel of the company s own shares and thus decrease the share capital to EUR The total number of shares after the cancellation on March 25, 2004, was During the period under review new shares were subscribed based on warrants pursuant to the Bond Loan with Warrants issued in Following these subscriptions, the number of shares totals The Annual General Meeting decided that a dividend of EUR 1.00 be distributed per outstanding share for 2003 (EUR 0.60 for 2002), totalling EUR 13.8 million. The dividend was paid on March 15, The Annual General Meeting further decided that an additional dividend of EUR 0.50 be distributed per outstanding share, totalling EUR 6.9 million. The record date for distribution of the additional dividend is November 23, 2004 and the payment date is November 30, The warrants related to the Bond Loan with Warrants issued by in 1998 to the Group personnel and the parent company s Board of Directors carry subscription rights for a total of 1.3 million of the company s shares. The subscription period ends for all warrants on April 30, A total of shares have been subscribed based on the warrants. According to the terms and conditions of the 1998 Bond Loan with Warrants, the subscribed shares entitle the holder to receive dividend for the financial year in which the subscription has taken place. Shares subscribed in 2004 entitle the holder to receive dividend for the first time for the financial year Other shareholder rights commence when the increase in share capital has been entered into the Trade Register. will pay an additional dividend of EUR 0.50 per share for the financial year The new shares subscribed with warrants during 2004 do not entitle the holder to receive additional dividend for the financial year Accordingly, they cannot be combined with the company s share JPG1V until after the said record date. The new shares subscribed with warrants will be registered with the Finnish Central Securities Depository as a separate book entry category. The company intends to register the new shares for trading under their own trading code on the Main List of the Helsinki Exchanges, provided that a sufficient number of subscriptions is made. This will be announced separately. The new shares will be taken up for trading together with the old shares JPG1V after the record date for the additional dividend. This is expected to take place on November 24,

5 Interim Report II/2004 The Annual General Meeting on March 3, 2004 decided to issue stock options to the management of the Group as well as to a wholly-owned subsidiary of. The stock options entitle to subscription of a maximum of shares in Jaakko Pöyry Group Oyj. Each stock option entitles the holder to subscribe one share in the company. The share subscription period shall be the following: for shares between March 1, 2007 and March 31, 2010, for shares between March 1, 2008 and March 31, 2011, and for shares between March 1, 2009 and March 31, All stock options have been issued and their receipt confirmed. The Annual General Meeting authorised the Board of Directors to decide on an increase in the share capital by a new issue and/or by taking a convertible loan and/or by issuing option rights so that based on the new issue, the convertible bonds and the option rights the share capital can be increased by a maximum of EUR 1.0 million by issuing for subscription a maximum of 1.0 million new shares. The authorisation is in force until March 3, The Annual General Meeting authorised the Board of Directors to acquire and convey the company s own shares to a maximum of shares, which equals less than 5 per cent of the company s share capital. The authorisations are in force until March 3, The company s shares are quoted on the Helsinki Exchanges. The average trading price during the period under review was EUR 21.56, with a high of EUR and a low of EUR A total of 2.9 million of the company s shares (equalling 21.3 per cent of the total number of shares) were traded, corresponding to a turnover of EUR 63.5 million. ADOPTION OF THE IAS/IFRS STANDARDS PROSPECTS The Jaakko Pöyry Group will report its accounts according to the International Financial Reporting Standards (IAS/IFRS) from the beginning of The reporting systems in the Group have been adjusted to comply with the new requirements, and the Group s accounting principles are already largely in line with the IAS/IFRS standards. This applies for example to project revenue recognition and property rental agreements. The most significant open issue is the pension liability. The interpretation of pension liabilities is still open. The adoption of the IAS/IFRS standards does not have a negative impact on shareholders equity. In late 2003 and early 2004 the world economy has shown signs of recovery, especially in North America. Continued economic growth presumes that no new major political or other uncertainties emerge. The Jaakko Pöyry Group s market position has strengthened in recent years. The Group s order stock increased by EUR 55.3 million during the review period, amounting to EUR million. The Group s balance sheet position and liquidity are also good. Investment activity in the forest industry has remained low. Demand for forest industry consulting services has also been slack. If economic growth picks up during 2004 according to expectations, activities to prepare and implement investments can be expected to increase. Taking into account the market situation, the Forest Ind ustry business group s earnings development during the review period has been good and the order stock is stable. The business group s operating profit will increase slightly during 2004 compared with

6 The economic recovery in East Asia, China and to some degree in Europe, together with the expanding EU, creates good opportunities for growth in demand for energy-related services. This applies in particular to renewable energy, plant refurbishments and management consulting services. The business group s earnings development has been good and its order stock has grown. The business group will clearly improve its operating profit for 2004 compared with Demand prospects for the Infrastructure & Environment business group are variable. Demand for traffic system expertise will remain good in Latin America and Asia. In Western Europe, especially in Germany, investments in traffic systems are declining, which has been reflected in the business group s activities. A weakening market situation may lead to further streamlining of operations. In the water and environment sector, demand is expected to remain unchanged. Demand for building services is still focused on renovation building. The business group s order stock is good. The operating profit will decline in 2004 compared with The general market situation and economic growth are recovering. Economic growth is expected to strengthen during The Jaakko Pöyry Group s order stock, balance sheet structure and market position are good. Consolidated net sales will increase clearly during Profit before extraordinary items is estimated to improve in 2004, if the capital gain of EUR 11 million from the sale of the head office property in 2003 is disregarded in the comparison. 6 Vantaa, July 28, 2004 Board of Directors

7 7 Consolidated Statement of Income 1-6/ / /2003 NET SALES 234,3 206,3 411,6 Other operating income 0,3 12,0 12,9 Share of associated companies' results 0,2 0,0 0,2 Materials and supplies -27,2-23,5-47,1 Personnel expenses -136,5-119,6-235,4 Depreciation of consolidation goodwill -2,7-2,5-5,0 Other depreciation -4,5-4,4-9,2 Other operating expenses -52,2-46,5-92,6 OPERATING PROFIT 11,7 21,8 35,4 Proportion of net sales, % 5,0 10,6 8,6 Interest income 0,5 0,2 1,3 Interest expenses -0,2-0,3-0,8 Exchange rate differences 0,0-0,1-0,1 PROFIT BEFORE EXTRAORDINARY ITEMS 12,0 21,6 35,8 Proportion of net sales, % 5,1 10,5 8,7 Extraordinary items 0,0 0,0 0,0 PROFIT BEFORE TAXES AND MINORITY INTEREST 12,0 21,6 35,8 Income taxes -4,5-7,3-10,8 Minority interest -0,5-0,2-0,3 NET PROFIT FOR THE PERIOD 7,0 14,1 24,7

8 June 30, June 30, December 31, Consolidated Balance Sheet ASSETS FIXED ASSETS Consolidation goodwill 32,2 34,4 34,3 Intangible assets 5,0 4,9 4,7 Tangible assets 16,8 23,8 16,2 Non-current investments 10,0 9,9 9,4 64,0 73,0 64,6 CURRENT ASSETS Non-current receivables 10,7 5,9 9,7 Work in progress 54,2 40,4 35,4 Accounts receivable 93,0 76,9 87,0 Other receivables 15,6 19,1 11,1 Investments, cash in hand and at banks 44,8 36,8 63,1 218,3 179,1 206,3 TOTAL 282,3 252,1 270,9 SHAREHOLDERS' EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY Share capital 13,9 13,8 14,0 Share premium reserve 26,8 24,9 26,3 Legal reserve 18,2 18,2 18,2 Retained earnings 38,7 34,1 34,7 Net profit for the period 7,0 14,1 24,7 104,6 105,1 117,9 MINORITY INTEREST 6,9 4,1 4,2 LIABILITIES *) Non-current loans from credit institutions 10,4 12,8 11,2 Other non-current liabilities 7,7 8,7 7,7 Current loans from credit institutions 2,1 1,6 2,2 Project advances 41,3 36,6 37,5 Accounts payable 11,8 12,0 10,6 Other current liabilities 97,5 71,2 79,6 170,8 142,9 148,8 TOTAL 282,3 252,1 270,9 *) Interest bearing liabilities 12,5 14,4 13,4 Non-interest bearing liabilities 158,3 128,5 135,4 Interim Report II/2004 8

9 9 Statement of changes in financial situation 1-6/ / /2003 FROM OPERATIONS Operating profit 11,7 21,8 35,4 Depreciation and value decrease 7,2 6,9 14,2 Gain on sale of fixed assets 0,0-11,0-11,3 Share of associated companies' results -0,2 0,0-0,2 Change in net working capital -8,4 5,1 16,0 Financial income and expenses 0,5 0,1 0,6 Taxes -6,3-2,8-2,8 Total from operations 4,5 20,1 51,9 CAPITAL EXPENDITURE Investments in shares in subsidiaries -6,4-5,8-5,8 Investments in other shares 0,0 0,0-0,6 Investments in fixed assets -3,4-4,7-9,0 Sales of shares in associated companies 0,0 2,5 2,5 Sales of other 0,0 10,3 10,4 Sales of fixed assets 0,3 6,0 8,4 Capital expenditure total -9,5 8,3 5,9 Cash flow before financing -5,0 28,4 57,8 FINANCING New loans 0,0 0,0 0,0 Repayments of loans -0,8-0,8-1,7 Change in current financing -0,1-4,7-4,8 Change in non-current investments 0,0 0,0-0,6 Dividends -13,8-8,3-8,4 Acquisition of own shares 0,0-2,2-2,2 Share subscription 0,4 0,1 1,6 Translation difference 1,0-1,7-4,6 Financing total -13,3-17,6-20,7 Change in liquid assets -18,3 10,8 37,1 Liquid assets January 1 63,1 26,0 26,0 Liquid assets at the end of period 44,8 36,8 63,1

10 June 30, June 30, December 31, Contingent Liabilities Pledged assets and mortgages for own debt Mortgages on company assets 0,0 0,0 0,0 Other obligations Pledged assets 0,2 0,2 0,3 Rent and leasing obligations 106,9 102,9 110,2 Pension obligations 0,0 0,0 0,0 Other obligations 44,7 23,8 31,7 For others Pledged assets 0,1 0,0 0,1 Mortgages, real estate 0,0 0,0 0,0 Other obligations 0,0 0,1 0,0 Derivative Instruments Foreign exchange forward contracts, Notional values 18,6 14,6 21,7 Fair values -0,2 0,1-0,2 has made interest rate swaps for EUR 12.5 million external loans. Interim Report II/

11 11 Key Figures 1-6/ / /2003 Earnings / share, EUR 0,50 1,03 1,80 Corrected with dilution effect 0,49 1,01 1,76 Shareholders' equity / share, EUR 7,55 7,71 8,54 Return on investment, % p.a. 18,7 34,5 27,7 Return on equity, % p.a. 12,8 26,1 21,7 Equity ratio, % 46,2 50,7 52,3 Equity / Assets ratio, % 39,5 43,3 45,1 Net debt / Equity ratio (gearing), % -29,0-20,5-40,7 Consulting and engineering, 371,3 317,0 319,3 EPC, 19,7 3,8 16,4 Order stock total, 391,0 320,8 335,7 Capital expenditure, operating, 3,4 4,7 9,0 Capital expenditure in shares, 6,4 5,8 6,4 Personnel in group companies on average Personnel in group companies at the end of the period Personnel in associated companies at the end of the period

12 12 Key Figures for the Business Groups 1-6/04 1-6/ /03 7-9/ /02 1-3/03 4-6/03 7-9/ /03 1-3/04 4-6/04 NET SALES Forest Industry 95,5 88,5 176,0 37,6 41,6 43,2 45,3 40,8 46,7 47,1 48,4 Energy 62,6 48,1 97,6 30,9 28,4 24,3 23,8 24,2 25,3 30,2 32,4 Infrastructure & Environment 76,3 69,8 138,6 28,0 36,8 34,4 35,4 31,2 37,6 38,3 38,0 Other -0,1-0,1-0,6-0,4 0,2 0,1-0,2-0,5 0,0-0,1 0,0 Total 234,3 206,3 411,6 96,1 107,0 102,0 104,3 95,7 109,6 115,5 118,8 OPERATING PROFIT AND PROFIT BEFORE EXTRAORDINARY ITEMS Forest Industry 7,9 7,5 16,1 2,3 1,7 3,7 3,8 4,0 4,6 3,5 4,4 Energy 3,5 1,5 4,5-0,3 1,5 0,8 0,7 1,3 1,7 2,0 1,5 Infrastructure & Environment 3,3 4,1 9,0 2,3 2,6 2,0 2,1 2,1 2,8 1,6 1,7 Other -3,0 8,7 5,8-0,8-1,0 9,9-1,2-1,3-1,6-1,4-1,6 Operating profit total 11,7 21,8 35,4 3,5 4,8 16,4 5,4 6,1 7,5 5,7 6,0 Financial items 0,3-0,2 0,4-0,4 0,0 0,0-0,2 0,1 0,5 0,1 0,2 Profit before extraordinary items 12,0 21,6 35,8 3,1 4,8 16,4 5,2 6,2 8,0 5,8 6,2 ORDER STOCK Forest Industry 90,4 91,6 90,8 79,1 85,2 101,0 91,6 91,6 90,8 94,6 90,4 Energy 168,9 114,9 129,2 125,4 123,8 122,0 114,9 107,0 129,2 153,0 168,9 Infrastructure & Environment 131,7 114,3 115,7 97,3 99,4 118,9 114,3 126,3 115,7 135,2 131,7 Total 391,0 320,8 335,7 301,8 308,4 341,9 320,8 324,9 335,7 382,8 391,0 Consulting and engineering 371,3 317,0 319,3 292,6 301,6 336,8 317,0 322,2 319,3 368,0 371,3 EPC 19,7 3,8 16,4 9,2 6,8 5,1 3,8 2,7 16,4 14,8 19,7 Total 391,0 320,8 335,7 301,8 308,4 341,9 320,8 324,9 335,7 382,8 391,0 NET SALES BY AREA The Nordic countries 60,0 61,4 112,9 Europe 106,4 88,2 174,8 Asia 33,1 24,7 56,7 North America 10,1 12,7 26,1 South America 10,5 8,3 18,4 Other 14,2 11,0 22,7 Total 234,3 206,3 411,6 The figures in the interim report are unaudited.

13 13 NET SALES OPERATING PROFIT BEFORE PROFIT EXTRAORDINARY ITEMS EUR EARNINGS/SHARE 140,0 20 1,00 120,0 100,0 15 0,90 0,80 0,70 80,0 10 0,60 0,50 60,0 0,40 40,0 5 0,30 0,20 20,0 0,10 0, , % 60 RETURN ON INVESTMENT %% 30 NET DEBT/EQUITY RATIO (GEARING) 70 FINANCING /02 9/02 12/02 9/02 12/02 3/03 3/03 6/03 6/03 9/03 12/03 9/03 12/03 3/04 6/04 3/ /02 6/02 12/02 9/02 12/02 3/03 6/03 3/03 9/03 6/03 12/03 9/03 12/03 3/04 6/04 3/ /02 9/02 12/02 9/02 12/02 3/03 3/03 6/03 6/03 9/03 12/03 9/03 12/03 3/04 3/04 6/04 Cash in hand Inter.-bear. liab. Cash in hand Inter.-bear. liab. Net cash Net cash ORDER STOCK PERSONNEL /026/02 12/029/023/03 12/026/03 3/03 9/03 6/03 12/03 9/03 3/04 12/03 6/04 3/04 Consulting Consulting and and engineering EPC /02 12/02 3/03 6/03 9/03 12/03 3/04 6/04 6/02 9/02 12/02 3/03 6/03 9/03 12/03 3/04 Group companies Associated Associated companies companies