FINANCIAL STATEMENT RELEASE January-June 2018

Transcription

1 1 FINANCIAL STATEMENT RELEASE January-June 2018 Martin à Porta, President and CEO Juuso Pajunen, CFO August 9, 2018

2 CONTENTS 1. January June overview 2. Continuous improvement 3. Key projects, contract wins & offering highlights 4. Outlook Martin à Porta President & CEO 5. Financial performance Juuso Pajunen CFO 6. Appendices H1/2018 PRESENTATION 2

3 A BIG IMPROVEMENT TOWARDS THE RIGHT DIRECTION Still on the journey to reach our benchmarks, with significant improvements in: Adjusted and reported profit All units improving Strong units even stronger Reduction in loss making units Cost savings materialized as planned Order intake Improved book-to-bill in majority of units New orders at solid margins Cash flow Net debt -25 MEUR Strong cash flow driven by reduction in net working capital Also supported by closure of problematic cases People Increase in FTEs Further increased high employee engagement H1/2018 PRESENTATION 3

4 1: JANUARY JUNE OVERVIEW

5 MARKET REVIEW: OVERVIEW Further demand increase seen in Europe, but remains fragile The Middle East shows many opportunities but remains challenging overall Mixed development in Asia, with strong demand in markets relevant to Pöyry Delicate recovery in Latin America, with signs of increased investments Market demand in the US continues to be good H1/2018 PRESENTATION 5

6 MARKET REVIEW: BUSINESS GROUPS ENERGY Higher demand in the Middle East for desalination and new power capacity Low overall market activity but selective investments in Northern and Central Europe Continued good demand in Asia and increasing in Latin America INDUSTRY Strong market in Europe, especially in Bioproducts Mixed market development in Asia and Latin America Customers reinitiating postponed investments INFRA, WATER & ENVIRONMENT Increased opportunities in water, infrastructure and environmental services Good performance in Northern Europe, especially in Finland Strong competition throughout the markets MANAGEMENT CONSULTING Good market situation in Central and Western Europe especially in energy sector Steady demand improvement in industry sector H1/2018 PRESENTATION 6

7 H1: STRONG IMPROVEMENT IN BOTH OPERATIONAL PROFIT & CASH FLOW Adjusted operating result Strongly increased and positive in all Business Groups Adjusted operating margin for H1 is 6.8% and in benchmark corridor Net sales Overall increase in H1 Increased in the Industry, Management Consulting and Infra, Water & Environment Business Groups Order stock Group order stock increased by 21.9% Order stock increased in Energy and Industry Business Groups Order stock includes 33 MEUR from EPC-deliveries All business groups improved profitability Cash flow improved significantly & gearing at -15.9% Stronger order stock continues to justify positive outlook H1/2018 PRESENTATION 7

8 OPERATING RESULT IMPROVING MEUR 1-6/ /2017 Change Order stock % Net sales % Operating result % Adjusted operating result % Net result n.a. H1/2018 PRESENTATION 8

9 Net sales, MEUR Adjusted operating margin, % DEVELOPMENT H H % % % 3.7% % H1/2016 H2/2016 H1/2017 H2/2017 H1/ * Book to bill*) *) Book to bill = order intake / net sales *) 1.5 at comparable currencies H1/2018 PRESENTATION 9

10 ADJUSTED OPERATING RESULT H MEUR Settlements in several former Urban Business Group cases Settlement in Rigesa-arbitration Operating result Restructuring expenses and labour claims Gains/losses from former Urban Business Group Projects finalised over two years ago Other Adjusted operating result H1/2018 PRESENTATION 10

11 2: CONTINUOUS IMPROVEMENT

12 WE CONTINUE IMPLEMENTING OUR OPERATIONAL FRAMEWORK AND ENHANCING CLIENT FOCUS Strengthening client focus Simplify and empower Strengthen the core Scale up Clear expectations set Employee engagement clearly up Intrapreneur concept introduced New management added & increased management commitment Fixed cost reduction started, showing first impacts Simplification initiated New business management system introduced & transparency increased Number of loss-making units reduced Living The connected company Defend market share & increase margin Increase value & differentiate Next generation Pöyry Continued emphasis in client focus enabling increase in orderstock Strengthened intrapreneur concept Continued reduction of fixed expenses Continued improvement in employee engagement #PöyryDigital Building a High Performance Organisation Develop leadership in the front line and increase ambition Drive efficiency Materialize growth Increase value & differentiate Next generation Pöyry H1/2018 PRESENTATION 12

13 GROUP EXECUTIVE COMMITTEE Dorien Terpstra Head of Strategy and Transformation Richard Pinnock Energy Business Group Martin à Porta President and CEO Juuso Pajunen Finance Nicholas Oksanen Industry Business Group H1/2018 PRESENTATION 13

14 3: KEY PROJECTS, CONTRACT WINS & OFFERING HIGHLIGHTS

15 EXPANSION OF OUTOKUMPU MINE Kemi, Finland Client: Outokumpu Expected completion: 2020 Project: Kemi mine will be deepened from the current 500-metre level to 1,000 metres to ensure continued ore supply for the future. Pöyry s assignment includes basic and detailed engineering services as well as Procurement support, project management and control services, site supervision and commissioning support. H1/2018 PRESENTATION 15

16 NORTH NEGROS BIOMASS POWER PLANT Northern Negros, Philippines Client: North Negros Biopower Inc. (NNBP) Project: The 25 MW power plant will be fuelled with the sugar cane trash that remains on the fields after the harvest. Pöyry is assigned the Engineering, procurement and construction (EPC), including the design, procurement of all components, construction, erection and commissioning and testing of the entire power plant project. H1/2018 PRESENTATION 16

17 EPCM SERVICES ASSIGNMENT IN THE FOOD INDUSTRY SECTOR Santa Catarina, Brazil First production line start-up: 2019 Project: After the earlier successful delivery of work on the conceptual study and basic engineering, Pöyry s scope includes detailed engineering services and the procurement and construction management of a plant. When built, the factory will cover an area of more than 30,000m². H1/2018 PRESENTATION 17

18 PÖYRY HYDRO FORECASTING Prepares Hydropower Plant operators for future energy and revenue generation, as well as for extreme events like floods Forecasts short term and seasonal water inflow to hydro power plants Creates excellent planning and optimisation opportunities Sales already in Africa and Eastern Europe Scalable platform with subscription fees for different user access H1/2018 PRESENTATION 18

19 PÖYRY PERFORMANCE BOOSTER Allows District Heating companies to monitor, evaluate, manage and optimize performance by fully harnessing the raw data Reduces time lag of decision making information from >30 days to 1 hour Uses proprietary algorithms to visualize company s operative performance Guides client to tangible cost savings Currently engaged in an on-going pilot project with client H1/2018 PRESENTATION 19

20 4: OUTLOOK

21 OUTLOOK FOR 2018 The Group s adjusted operating result is expected to improve clearly Market conditions Updated on 17 July 2018 Guidance is based on orderstock at , solid prospect pipeline and well progressed transformation program. Outlook good for pulp and paper in Europe and North America, low demand in Latin America, mixed in Asia Transformation of European energy market continues to create challenges for engineering services but opportunities for consulting Continued growth in Europe, but remains fragile with potential to change rapidly Modest signs of recovery & investment in Brazil, but continues to be fragile The North American market remains strong but trade barriers and potential counter measures increase uncertainty In Economic growth in the majority of Asian countries continues to be fuelled by stronger domestic demand H1/2018 PRESENTATION 21

22 5: FINANCIAL PERFORMANCE

23 ORDER STOCK Solid increase fuelled by Industry and Energy MEUR H1/ (474.5) MEUR Increased on comparable currencies by 7.0 % Increased in Energy and Industry Decreased in Infra, Water and Environment and in Management Consulting Includes 33 MEUR of EPC deliveries Energy Infra, Water and Environment Industry Management Consulting H1/2018 PRESENTATION 23

24 NET SALES Increase in comparable currencies of 7% when excluding one-time items MEUR (267.3) MEUR Increased in Industry, Infra, Water and Environment as well as in Management Consulting Decreased in Energy H1/2018 LTMR H1/2017 H1/2018 Comparable figures after divestments H1/2018 PRESENTATION 24

25 ADJUSTED OPERATING RESULT Improvement in all Business Groups MEUR H1/2018 LTMR H1/2017 H1/ (10.0) MEUR Increased in all Business Groups Adjusted items MEUR (6.3 MEUR) belong to clearly defined categories 1. Restructuring expenses and labour claims 2. Gains/losses from former Urban Business Group 3. Projects finalized over two years ago 4. Other Comparable figures after divestments H1/2018 PRESENTATION 25

26 NET SALES AND HEADCOUNT 1-6/2018 by Business Group Net sales EUR (267.3) million Headcount 5,488 (5,305) 12% 22% 8% 21% 27% 28% 38% 44% FTEs at the end of period 4,662 Indicating increase from 2017 of 0.5% Energy Industry Infra, Water and Environment Management Consulting H1/2018 PRESENTATION 26

27 ENERGY BUSINESS GROUP Improved adjusted operating result, net sales stabilizing Net sales & adjusted operating margin, % MEUR % 120 7% 10% 9% 8% 7% 6% 5% Sales 62.4 (64.3) MEUR Decreased slightly Adjusted operating result 4.1 (3.5) MEUR Operating result 4.1 (3.5) MEUR 60 4% 4% 40 3% 2% 20 1% 0 H1/2016 H2/2016 H1/2017 H2/2017 H1/2018 Net sales Adjusted operating margin, % Rolling 12 months 0% H1/2018 PRESENTATION 27

28 INDUSTRY BUSINESS GROUP Improved adjusted operating result, net sales up Net sales & adjusted operating margin, % MEUR % % % H1/2016 H2/2016 H1/2017 H2/2017 H1/2018 Net sales Adjusted operating margin, % Rolling 12 months 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Sales (102.1) MEUR Supported by a positive development in Northern Europe Adjusted operating result 12.1 (8.0) MEUR Operating result 10.7 (6.6) MEUR Adjusted items include losses related to projects finalized over two years ago, labour claim expenses, as well as restructuring expenses mainly in Latin America H1/2018 PRESENTATION 28

29 INFRA, WATER AND ENVIRONMENT Improvement in adjusted operating result Net sales & adjusted operating margin, % MEUR % % % 120 7% 100 6% 5% 4% 80 4% 60 3% 3% 40 2% 1% 1% 20 0% 0-1% H1/2016 H2/2016 H1/2017 H2/2017 H1/2018 Net sales Adjusted operating margin, % Comparable figures after divestments, rolling 12 months Sales 77.6 (70.7) MEUR Declined in Central Europe and North America Increased in the other regions Increase mainly driven by one-time items Adjusted operating result 3.8 (1.3) MEUR Operating result: 19.0 (-1.3) MEUR Adjusted items mainly include project gains on projects originating from the former Urban Business Group. H1/2018 PRESENTATION 29

30 MANAGEMENT CONSULTING Improved adjusted operating result, net sales up Net sales & adjusted operating margin, % MEUR % % 30 6% H1/2016 H2/2016 H1/2017 H2/2017 H1/2018 Net sales Adjusted operating margin, % Rolling 12 months 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Sales 34.7 (30.6) MEUR Supported by a solid project base across regions Adjusted operating result 4.1 (1.6) MEUR Operating result 4.1 (1.6) MEUR H1/2018 PRESENTATION 30

31 CASH FLOW Strong cash generation supported by working capital decrease and settlements in old legal cases MEUR *) /2018 From operations Before financing Cash flow from operations 37.3 (-1.9) MEUR Change in working capital 9.3 MEUR (-7.8 MEUR) Settlements in old legal cases Positive impact from the settlements announced on 10 July 2018 expected in H2/2018 Cash flow before financing 36.3 (-3.1) MEUR *) 2014 includes the divestment of real estate business in Finland H1/2018 PRESENTATION 31

32 NET DEBT, EQUITY AND GEARING Strong improvement in balance sheet position due to solid cash flow from operations MEUR % 25% 20% 15% Net debt (37.8) MEUR Equity (124.2) MEUR % 10% 5% 0% -5% -10% -15% Gearing (30.5)% Pöyry is in process of renegotiating financing packages based on significantly improved balance sheet position. Closure expected in Q End of period -20% Equity Net debt Gearing -% H1/2018 PRESENTATION 32

33 Thank you

34 6: APPENDICES

35 RETURN ON INVESTMENT, % 50% 40% 42.1% 30% 20% 10% 0% -10% End of period H1/2018 PRESENTATION 35

36 STATEMENT OF INCOME MEUR 1-6/ /2017 Net sales Other operating income Materials and supplies External charges, sub-consulting Personnel expenses Other operating expenses Operating result Net financial items Share of associated companies results Result before taxes Income taxes Net result for the period H1/2018 PRESENTATION 36

37 BALANCE SHEET MEUR 30 Jun Jun 2017 Goodwill Other non-current assets Work in progress Accounts receivable Other current assets Cash and cash equivalents Total assets Equity Interest bearing liabilities Pension obligations and other noncurrent liabilities Project advances Accounts payable Other current liabilities Total equity and liabilities H1/2018 PRESENTATION 37

38 CASH FLOW MEUR 1-6/ /2017 Net result for the period Adjustments Depreciation and impairment losses Financial items and taxes Other adjustments Change in working capital Paid income taxes Total from operating activities Net cash flow from investing activities Net cash before financing Net cash from financing Change in cash H1/2018 PRESENTATION 38

39 KEY FIGURES 1-6/ /2017 Earnings per share, EUR (diluted) Earnings per share adjusted, EUR Equity per share, EUR ROI-% ROE-% Equity ratio-% Gearing-% Net debt, EUR million Capital expenditure, operating, EUR million Personnel on average (FTE) 4,614 4,545 H1/2018 PRESENTATION 39