Interim Report January September 2013

Transcription

1 Interim Report January September 2013 Juhani Pitkäkoski President and CEO November 1, 2013

2 Contents Financial development Development by business Financial position Market outlook and guidance

3 July September 2013: s first quarter as an independent company showed improvement in profitability

4 July September 2013: EBITDA improved for the second consecutive quarter EBITDA In Sweden, efficiency programme is progressing well and profitability is improving according to plan. Weak profitability in Norwegian project business - improvement actions ongoing. Tight price competition in tender-based projects and low capacity utility rate in service and maintenance Revenue and order backlog Increased selectiveness in project business resulted in decrease in revenue. Order backlog increased from the end of June especially in Germany, which is expected to contribute favorably to the revenue development during the first half of Cash flow Operating cash flow after investments increased from the previous year. 4

5 Key figures EUR million 7 9/13 7 9/12 1) Change 1 9/13 1 9/12 1) Change 1 12/12 1) Revenue % 1, , % 2,803.2 EBITDA % % 85.3 EBITDA margin, % Operating profit % % 61.1 Operating profit margin, % Net profit for the period % % 40.8 Working capital % % 94.0 Operating cash flow after investments Interest-bearing net debt, end of period 2) Gearing, end of period, % 2) Earnings per share, EUR 3) % % 0.32 Personnel, average for the period 18,016 19,172-6% 18,174 19,254-6% 18,592 1) The revised IAS 19 standard has had the following effects on the consolidated income statement for 1-12/2012: personnel expenses increased by EUR 0.1 million and EBITDA and operating profit and profit before taxes decreased correspondingly by EUR 0.1 million. The revised IAS 19 standard has had the following effects on the consolidated income statement for 1-9/2012: personnel expenses increased by EUR 0.5 million and EBITDA and operating profit and profit before taxes decreased correspondingly by EUR 0.5 million. The revised IAS 19 standard has had the following effects on the consolidated income statement for 7-9/2012: personnel expenses increased by EUR 0.2 million and EBITDA and operating profit and profit before taxes decreased correspondingly by EUR 0.2 million. 2) Interest-bearing net debt and gearing for 2012 are not comparable to the figures in 2013 due to the new credit facility transferred to Corporation as a result of the partial demerger as per June 30, ) Excluding the financial cost effect for January-June 2013 of the new financing arrangements transferred to Corporation as a result of the partial demerger. If the refinancing under new loan agreement would have been drawn down in the beginning of the financial year, the net financing expenses in January-September would have amounted to approximately EUR 6.1 million. 5

6 Profitability improved according to plan EBITDA, Group EBITDA, Northern Europe 1 9/12: 75.4 (3.7%) 1 9/13: 45.6 (2.5%) % 3.6% 4.0% % % 1.3% 1.5% EBITDA, EUR million EBITDA margin, % 1 9/12: 59.2 (3.8%) % 3.6% 4.3% 1 9/13: 33.8 (2.4%) % % 1.3% 2.0% 1-3/12 4-6/12 7-9/ /12 1-3/13 4-6/13 7-9/13 EBITDA for July September decreased from the previous year by 11%, but improved from the previous two quarters. o Excluding demerger-related costs EBITDA for July September was EUR 26.8 million (7 9/12: EUR 26.3 million). EBITDA, Central Europe 1 9/12: 21.2 (4.1%) 1 9/13: 15.7 (3.5%) % 4.4% 3.8% 6.2% 3.2% 2.9% 4.3% 6

7 The impact of efficiency measures already visible in Northern Europe Restructuring of operations proceeded in all countries during July September The focus has been on closing unprofitable units and improving the business mix in Sweden and Norway. Increased selectiveness in project business Previously announced measures to decrease personnel by further 600 employees finalized during July September. Restructuring has had a positive impact on regaining profitability in Sweden Profitability improved in July September according to plan. Profitability improvement actions still ongoing in Norway, especially in project business. Impact expected to be seen in Adjustment of costs continues during the rest of 2013 Service efficiency programme is ongoing in all countries. 7

8 Group revenue EUR 595 million in July September Group (EUR million) 1 9/12: 2, /13: 1, /12: X,XXX Northern Europe (EUR million) 1 9/12: 1, /13: 1, /12 4-6/12 7-9/ /12 1-3/13 4-6/13 7-9/13 Increased selectiveness in project business in Norway and Sweden Low project volume in Germany Changes in foreign exchange rates decreased the revenue in July September by EUR 15 million compared to the previous year. Central Europe (EUR million) 1 9/12: /13: Lower volume in service and maintenance 8

9 Revenue by country Revenue development (EUR million) Distribution of revenue 1 9/ (-5%) 399 (-11%) (-11%) (-15%) Sweden 26% (-1%) (-8%) (-10%) Sweden Finland Norway Germany Austria Denmark Other countries 1 9/12 1 9/13 (Russia, Estonia, Lithuania, Latvia, Poland, the Czech Republic, Romania) Finland 21% Norway 20% Germany 18% Austria 6% Denmark 5% Other countries 3% 9

10 Order backlog on par with the end of June EUR million Group order backlog has increased by 8% since December ,470 1,429 1,340 1,199 1,315 1,274 1,296 Increase in Central Europe by 31% since December: Northern Europe Central Europe Increased order intake in Germany expected to contribute favorably to the revenue development during the first half of /12 6/12 9/12 12/12 3/13 6/13 9/13 Decrease in Northern Europe is partly due to s own selectiveness in project business. +2% 10

11 Examples of orders received in July September 2013 Lintuvaara school and day care centre in Espoo, Finland. Delivery of building systems. Service and maintenance contract for 25 years (life cycle model). Energy optimization: geotermal energy, demand controlled ventilation and lighting, LED lighting. Contract value EUR 16 million. Kalmar municipality, Sweden. Among Sweden s largest energy efficiency projects. Guaranteed energy-savings of EUR 21 million over 20 years by upgrading building systems, among others. Wachau shopping centre, Krems, Austria Building systems for expansion of the property. HVAC, sanitary facilities, sprinkler systems. Contract value EUR 7 million. Milaneo building complex, Stuttgart, Germany. Building systems for shopping centre, office spaces, hotel and apartments. HVAC systems, sanitation. Holmen Paper, Braviken, Sweden. Facility management at a paper mill. Property maintenance including office, production spaces and external areas. Agreement until Burger King restaurants in St. Petersburg and Moscow, Russia. Service and maintenance cooperation expanded to cover 65 restaurants. 11 Combined heat and power plant in Linköping, Sweden. Electricity, telecommunications, HVAC and plumbing. Contract value EUR 7 million.

12 Cash flow strengthened in July September. Focus on more efficient use of capital. Operating cash flow after investments (EUR million) Rolling 12 months o Demerger-related IT investments EUR 5.7 million in July September o Working capital EUR million at the end of September (9/12: EUR 128.3) /12 4 6/12 7 9/ /12 1 3/13 4 6/13 7 9/13 12

13 17,890 employees in 13 countries Employees by country at the end of September 2013 Number of employees decreased in January September by 728 employees (-4%) Updated Code of Conduct published o Provides common ethical operating principles for working with different stakeholders such as owners, customers, competitors and subcontractors. Finland 27% Sweden 23% Norway 20% Germany 14% Austria 4% Denmark 6% Other countries 7% (Russia, Estonia, Latvia, Lithuania, the Czech Republic, Poland, Romania) 13

14 Share price increased by 100% during July September Daily highest price, EUR Opening price on July 1: EUR 3.00 Closing rate on September 30: EUR 6.00 At the end of September, had 34,942 shareholders (39,250 on June 28)

15 Development by business

16 54% of revenue from service and maintenance Group % of revenue in 7 9/13 Northern Europe Service and maintenance 54% (7 9/12: 54%) Projects 46% (46%) Service and maintenance 59% (7 9/12: 63%) Projects 41% (37%) Central Europe Service and maintenance 39% (7 9/12: 32%) Projects 61% (68%) 16

17 Lower volume in service and maintenance Group revenue in service and maintenance was EUR 320 million in July September (7 9/12: EUR 361 million) Northern Europe Service and maintenance revenue, EUR million % of total revenue % 64% 63% 63% 62% 61% 59% Focus on: Increasing the share of service and maintenance, long-term service agreements and life cycle projects. Developing service concepts (ServiFlex), facility management concept and remote monitoring of buildings. o Central Europe % 30% 32% 33% 35% 38% 39% 17

18 Low project business revenue in Central Europe Lower volumes in Germany: Order backlog increased, but has not yet turned into revenue. Increased selectiveness in projects and lower project sales in Norway and Sweden. Northern Europe Project business revenue, EUR million % of total revenue % 36% 37% 37% 38% 39% 41% Focus on: Central Europe Total technical solutions and Design & Build projects Strengthening technical expertise and R&D Improving profitability of project business % 70% 68% 67% % 61% 65% 18

19 Financial position

20 Diversified debt structure Debt maturity EUR million External financing EUR 201 million amortizing loans EUR 22 million bridge loan due June 2014 EUR 23 million commercial papers due during 2013 EUR 60 million revolving credit facility due June 2016 (fully undrawn) Loan portfolio Banks 84% Commercial papers 9% Insurance companies 6% Others 1% Interest rate type (after hedges) Fixed interest 31% Floating interest 69% o o Loan portfolio total: EUR million Average interest rate after hedges: 2.09% 20

21 Financing position enables the implementation of the Group s strategy Net debt decreased slightly to EUR 190 million mainly due to increased cash and cash equivalents Net debt, 7 9/2013 EUR million Liquidity reserve, 7 9/2013 EUR million 172 Long-term borrowings Short-term borrowings Cash and cash equivalents 190 Solid liquidity reserve of EUR 135 million to meet the debt repayments and potential funding need of business operations Net debt Unused credit facilities Cash and cash equivalents 21

22 Market outlook and guidance

23 Market outlook for s business in 2013 Service and maintenance Project business o Growth opportunities favorable in all of s operational areas o o Decision-making on new investments is still slow, but positive signs can be seen New investments expected to increase slightly Energy efficiency o o The demand for energy efficiency services is expected to remain stable Energy costs and tightening legislation support the demand for energyefficient solutions 23

24 repeats the guidance for the second half of 2013 estimates that the Group s revenue for the second half of 2013 is more than EUR 1.3 billion and EBITDA more than EUR 50 million. The guidance does not take into account the non-recurring expenses related to the demerger, nor the expenses related to any potential mergers or acquisitions. 24

25 Updated financial targets for the strategy period Annual revenue growth more than 10 per cent on average Profitability: EBITDA over 6 per cent of revenue Negative working capital (New target) 25

26 Dividend policy Dividend payout at least 50 per cent of the net profit for the period 26

27

28 Appendix

29 designs, builds and maintains user-friendly and energy-efficient building systems and offers industrial services in Northern and Central Europe.

30 Corporation was established through the partial demerger of YIT Corporation on June 30, 2013, when YIT s Building Services and Industrial Services operations were transferred to an independent company. Trading in shares at Helsinki stock exchange began on July 1,

31 31 External / Internal / Confidential

32 Services cover all building systems throughout the entire life cycle of the property and industrial facility Design Installation Service and maintenance Heating Water Airconditioning Electricity Tele ICT Automation and remote monitoring Security Fire-safety Technical Facility Management Energyefficiency Energy certificates forbuildings Pre-fabricates for industry Cooling 32

33 Megatrends support the demand for our services Increasing amount of technology in buildings Building systems account for about 40% of costs of new buildings. Increasing demand for special technical competence as well as continuous service and maintenance. Outsourcing of services. Extensive service packages from one partner. Climate change, energy efficiency Tightening legislation, growing energy consumption and need for modernizations in energy sector. Energy efficiency key criterion for customers when selecting service provider. Digitalization Demand for automation and remote monitoring is increasing. Maintenance is increasingly based on preventive measures as well as on actual needs and conditions. Fragmented market A lot of small companies in the market. Extensive services is a competitive advantage especially in large projects. Growth potential especially in Germanspeaking areas.

34 s vision is to be the leading and most efficient building systems company in Europe.

35 Strategic targets Increasing profitability in Northern Europe Strong growth in Central Europe organically and through acquisitions Wide, new and advanced projects and services Continuous development of service efficiency by developing operations and tools Lower organization and centralizing project business in centres of excellence. More careful project selection in terms of profitability and risks Better project management, more systematic risk management and more efficient procurement and tendering process Service and maintenance productization - ServiFlex Selected acquisitions especially in German-speaking areas Increasing the share of service and maintenance business: The share of service and maintenance of revenue in 2012: Central Europe 31%, Northern Europe 64% Total technical solutions (TTS) and large Design & Build projects, where is involved from the beginning, including design Long-term service agreements in service and maintenance, developing service concepts Strengthening technical expertise and R&D 35

36 34,942 shareholders on September 30, 2013 Largest shareholders Major shareholders on June 28,2013 Shares, pcs % of all shares Change after June 28, pcs Change, % 1. Structor S.A. 17,140, ,710, Varma Mutual Pension Insurance Company 7,732, Funds owned by Herlin Antti 5,000, , OP funds 4,100, , 790, Fondita funds 2,760, , 746, Ilmarinen Mutual Pension Insurance Company 2,322, Nordea funds 1,804, , Odin funds 1,776, , Danske Invest funds 1,734, , Svenska litteratursällskapet i Finland r.f. 1,680, The State Pension Fund 1,470, , Brotherus Ilkka 1,304, Etera Mutual Pension Insurance Company 1,189, , Aktia funds 1,145, , Tapiola Mutual Pension Insurance Company 1,009, , Evli funds 977, , Veritas Pension Insurance Company Ltd. 535, , Foundation of Brita Maria Renlunds minne 412, Säästöpankki funds 371, , Sigrid Jusélius Foundation 361, largest, total 54,825, All shares125,596, Owners by category by shares owned Nominee registered and non-finnish holders 39% (June 28: 35%) Households 21% (22%) General government 12% (13%) Financial and insurance corporations 11% (13%) Non-profit institutions 7% (7%) Non-financial corporations and housing corporations 10% (7%) 34,942 owners (39,250) 36

37 New non-residential investments forecasted to remain stable in Northern Europe in New non-residential construction volumes in Northern Europe, index E 2014E 2015E Finland Sweden Norway Denmark The Baltic countries No data for Russia is available. The Baltic countries figures include both new non-residential construction and renovation. Source: Euroconstruct, June

38 Stable demand for service and maintenance estimated in Northern Europe during Non-residential service and renovation volumes in Northern Europe, index E 2014E 2015E Finland Sweden Norway Denmark No data for Russia or the Baltic countries is available. Source: Euroconstruct, June

39 New non-residential investments forecasted to increase slightly in in Central Europe New non-residential construction volumes in Central Europe, index E 2014E 2015E Germany Austria Poland the Czech Republic Source: Euroconstruct, June

40 Stable demand in service and maintenance continues in in Central Europe Non-residential service and renovation volumes in Central Europe, index Index E 2014E 2015E Germany Austria Poland the Czech Republic Source: Euroconstruct, June

41