SRV - Constructively different

Transcription

1 SRV - Constructively different Quarterly Report January- June 2008 Eero Heliövaara August 19th, 2008 SRV JULKINEN Hannu Linnoinen 1

2 SRV s successful first half of the year Group s operating profit grew by 74.9 per cent Business Premise construction still going strong Revenue +29.9%, operating profit margin 9.2 (4.3) Contract for Helsinki Music Centre was signed in June Order backlog back to the level on the turn of the year Housing business area still flat The market has clearly slowed down, selling times have prolonged, number of start-ups has decreased Housing sales in Q2 improved somewhat on Q1 Significant business launches in Russia EUR 60 million investment in St. Petersburg to start a mega project Significant progress in many projects The hotel in Ekaterinburg was sold in July, positive effect on profit later SRV JULKINEN Hannu Linnoinen 2 2

3 1-6/2008 in brief 1-6/ / 2007 change, % change, MEUR 1-12/ 2007 Revenue % Operating Profit % Operating Profit, % 6.3% 4.0% 2.7% Financial income and expenses, total % Profit before taxes % Net profit for the period % Earnings per share. EUR Number of shares outstanding (million) % Order backlog % Equity ratio, % SRV JULKINEN Hannu Linnoinen 3 3

4 4-6/2008 in brief 4-6/ / 2007 change, % 1-3/ / 2007 Revenue % Operating Profit % Operating Profit, % 6.4% 4.8% 6.1% 2.9% Financial income and expenses, total % Profit before taxes % Net profit for the period % Earnings per share. EUR Number of shares outstanding (million) % SRV JULKINEN Hannu Linnoinen 4 4

5 SRV Group SRV JULKINEN Hannu Linnoinen 5 5

6 Business Premises SRV JULKINEN Hannu Linnoinen 6 6

7 Housing SRV JULKINEN Hannu Linnoinen 7 7

8 SRV s developer contracting residential production in Finland Developer contracting residential production in Finland (units) 1-6/ / 2007 change, units 4-6/ / / 2007 Start-ups Sold Completed Completed and unsold 1) Under construction 1) ) at the end of the period SRV JULKINEN Hannu Linnoinen 8 8

9 Housing market in Helsinki Metropolitan area * Around 500 unsold, completed residential units (SRV 52) ** Housing production, total , , , ,184 * Under construction 2,239 Around 20 per cent more residential units for sale than last year Structural housing shortage is building up in the Helsinki Metropolitan area Sources: * etuovi.com (15 August 2008) and ** Statistics Finland SRV JULKINEN Hannu Linnoinen 9 9

10 International SRV JULKINEN Hannu Linnoinen 10 10

11 Order backlog 600 EU R million International Housing Business /06 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 SRV JULKINEN Hannu Linnoinen 11 11

12 Business outlook for 2008 Construction of business premises is estimated to remain at its present level this year. Selling times of residences have lengthened in Finland, demand d has decreased d and the demand d is estimated t to focus on projects that are close to completion. Russia s strong economic growth is set to support the development of International Operations. The volume and nature of the order backlog support the level of revenue and earnings in 2008 and provide a favourable basis for the operating profit trend. The sale of the Park Inn hotel in Ekaterinburg is estimated to bring in operating profit of EUR 13 million in the latter part of the year. Due to uncertainties concerning housing sales, revenue in 2008 is expected to remain on the 2007 level. The group s operating profit is anticipated to outperform 2007 by a substantial margin, and the Q operating profit is expected to surpass the Q operating profit. SRV JULKINEN Hannu Linnoinen 12 12

13 Market SRV JULKINEN Hannu Linnoinen 13 13

14 Business Premise market in Finland Plenty of offices will be completed in Helsinki metropolitan area in 2008 and 2009 no signs of fall in rental levels l vacancy rates still on healthy level competition in construction tightens added value and potential through development Commercial construction has steadied growth in large-volume retail has snapped low vacancy rates structural demand in shopping centres Brisk logistics construction has continued low vacancy rates Property prices have levelled off good projects sell well still financing tightens number of transactions has decreased SRV JULKINEN Hannu Linnoinen 14 14

15 Residential market in Finland Stand-by atmosphere in residential market number of completed, unsold residential units has slightly decreased in the first part of the year 1,413 units in June 2008, 1,451 units at the beginning of the year selling times have prolonged big regional differences apartments in city centres sell possible decline in interest level and tax cuts may dissolve pent-up demand structural demand in growth locations SRV JULKINEN Hannu Linnoinen 15 15

16 Real estate and construction market in Russia Strong growth in real estate market in Russia Estimated growth of Russian economy +7.6% in 2008 Structural development in real estate market rental levels are rising investors yield requirements have levelled off number of investors grows steadily Shortage of modern premises in Moscow and St. Petersburg, in particular tenant demand and interest in investing remain high SRV JULKINEN Hannu Linnoinen 16 16

17 Major developer contracting projects under construction Volume Ownership Completion Business premises Keilaniemi HTC 39,200 m2 sold to MEAG 8/2007 1/2009 Park Inn hotel in Ekaterinburg 160 rooms 100 %, sold 7/2008 completed Keravanportti-business premises 7,200 m2 REFF I Ky, sold 3/2008 8/2008 Kuninkaanportti-business premises 4,300 m2 100 % 9/2009 Kamppiparkki parking garage 500 spaces 100% 11/2008 Etmia, offices + parking Moscow 14,000 m2 50 % 2008 Mitischi, shopping centre Moscow 100,000 m2 25% 07/08 contract EUR 107 million 12/2008 final investment decision Housing Espoon Vallikallion Helmi 67 units 100 % spring/2009 Vantaan Ulrikanhuippu 46 units 51 % spring/2009 Töölön Oscar, phase 1 65 units 100 % fall/2009 Papula, Vyborg 36 units 100 % 12/

18 Development of business and projects in Russia Etmia II office project (Moscow) completion at the end of 2008, tenant search in progress Mytischi shopping centre (Moscow) commercialisation continues, contract signed final investment decision by the end of 2008 Area development (St. Petersburg) 8.5 hectares, office and commercial premises EUR 50 million invested, development and construction starts in 2009 Eurograd - logistics area (St. Petersburg) ownership raised to 49 per cent, majority by the end of 2008 construction starts by the end of 2008 Further renovation of Rezidor hotels (St. Petersburg) Pulkovskaya and Pribaltiskaya hotels Papula housing project (Vyborg) completion o at the end of 2008 Park Inn hotel (Ekaterinburg) hotel property sold 7/

19 SRV Constructively different Thank you! 19

20 SRV s strategy SRV JULKINEN Hannu Linnoinen 20 20

21 Success is based on 20 years of experience Own property development Project management implementation Committed personnel Managing the business as one entity 21 21

22 Business focus Finland A leading commercial constructor Focus on growth centres and increasingly i on residential construction Oulu Tampere Turku Helsinki Tallinn Riga Vyborg St. Petersburg Moscow Russia >60 completed projects Moscow and St. Petersburg region and other large cities Focus on commercial construction Yekaterinburg Nizhniy Kazan Novgorod Samara The Baltic countries >70 completed projects Focus on commercial construction Selective residential projects Vilnius 22

23 Basis for Competitiveness Project development Project management model SRV Approach 23

24 SRV Approach SRV SRV Approach Malli Customer Network SRV Needs and changes in operational environment Use of property Subcontractor Network 24

25 Diversified business portfolio Proper rty Deve elopmen nt Business Premises Housing International Shopping centers, retail parks Offices and hotels Logistics centers Apartments t in city centers Terraced house projects Shopping centers Offices and hotels Logistics centers 25

26 Flexible capacity flexible structure 26

27 SRV's operational models 27

28 SRV s financial targets Annual average growth of 15 % in Group revenue in the medium term Annual average growth of more than 30 % in the International business area Equity ratio at least 30 % To increase the Operating profit margin to 8 % in the medium to long term 28

29 SRV Quarterly Report January June 2008 Appendices 29

30 Group key figures IFRS IFRS IFRS IFRS IFRS Group key figures 1-6/ 1-6/ change, change, 4-6/ 4-6/ 1-12/ (EUR million) MEUR % Revenue Operating profit Financial income and expenses, total Profit before taxes Net profit for the period Order backlog Operating profit, % Net profit, % Equity ratio, % Net interest bearing debt Gearing, % Return on investment, % 1) Return on equity, % 1) Earnings per share, EUR 2) Equity per share, EUR 2) Weighted average number of shares outstanding ) In calculating the key ratio only the profit for the period has been annualised. 2) Key figures per share have been adjusted to reflect the increase in the number of shares, which came into effect on 11 April 2007 (split), the rights issue on 11 June 2007 and the rights issue and cancellation of treasury shares in connection with the merger of the SRV Henkilöstö Oy on 28 September 2007 and purchases of own shares 30

31 Key figures (1) IFRS IFRS IFRS IFRS IFRS 1-6/ / / / / 2007 Revenue EUR million Operating profit EUR million Operating profit, % of revenue % Profit before taxes EUR million Profit before taxes, % of revenue % Net profit attributable t bl to equity holders of the parent company EUR million Return on equity 1 % Return on investment 1 % Invested capital EUR million Equity ratio % Net interest-bearing debt EUR million Gearing ratio % Order backlog Personnel on average Property, plant and equipment investments EUR million Property, plant and equipment investments, % of revenue %

32 Key figures (2) IFRS IFRS IFRS IFRS IFRS 1-6/ / / / / 2007 Earnings per share, share issue adjusted 2 EUR Equity per share, share issue adjusted 2 EUR Dividend per share, share issue adjusted EUR Dividend payout ratio % Dividend yield % Price per earnings ratio Share price development Share price at the end of the period EUR Average share price EUR Lowest share price EUR Highest share price EUR Market capitalisation at the end of the period EUR million Trading volume 1, Trading volume % Weighted average number of shares outstanding 1, Number of shares outstanding at the end of the period 1, ) In calculating the key ratio only the profit for the period has been annualised 2) Key figures per share have been adjusted to reflect the increase in the number of shares, which came into effect on 11 April 2007 (split), the rights issue on 11 June 2007 and the rights issue and cancellation of treasury shares in connection with the merger of the SRV Henkilöstö Oy on 28 September 2007 and purchases of own shares 32

33 Consolidated income statement Consolidated income statement (EUR million) IFRS IFRS IFRS IFRS IFRS 1-6/ 1-6/ change, change, 4-6/ 4-6/ 1-12/ MEUR % Revenue Other operating income Change in inventories of finished goods and work in progress Use of materials and services Employee benefit expenses Depreciation and impairments i Other operating expenses Operating profit Financial income Financial expenses Financial income and expenses, total Profit before taxes Income taxes Net profit for the period Attributable to Equity holders of the parent company Minority interest Earnings per share calculated on the profit attributable to equity holders of the parent company (undiluted and diluted) 1) ) Key figures per share have been adjusted to reflect the increase in the number of shares, which came into effect on 11 April 2007 (split), new issue of shares on 11 June 2007 and the new issue of shares and the cancellation of treasury shares in connection with the merger of the SRV Henkilöstö Oy on 29 September 2007 and purchases of own shares 33

34 Consolidated balance sheet: Assets ASSETS Consolidated Balance Sheet IFRS IFRS change IFRS (EUR million) % Non-current assets Property, plant and equipment Goodwill Other intangible assets Other financial assets Receivables Deferred tax assets Non-current assets, total Current assets Inventories Trade and other receivables Current tax receivables Cash and cash equivalents Current assets, total ASSETS, TOTAL

35 Consolidated balance sheet: Equity and liabilities EQUITY AND LIABILITIES Consolidated Balance Sheet IFRS IFRS change IFRS (EUR million) % Equity attributable to equity holders of the parent company Share capital Invested free equity fund Translation differences , Fair value reserve Retained earnings Equity attributable to equity holders of the parent company, total Minority interest Equity, total Non-current liabilities Deferred tax liabilities Provisions Interest-bearing liabilities Other liabilities Non-current liabilities, total Current liabilities Trade and other payables Current tax payables Provisions Interest-bearing liabilities Current liabilities, total Liabilities, total EQUITY AND LIABILITIES

36 Changes in Group equity 1-6/2008 Equity attributable to the equity holders of the parent company Share Invested Translationed value (EUR million) capital m equity dff differ- Retai- Fair IFRS Share premiu free reserve earnings reserve fund ences Total Minority interest Total equity Equity on Translation differences Net gains on availablefor-sale financial assets Other changes Net income recognised directly in equity Net profit for the period Total income and expenses for the period Dividends paid Purchase of treasury shares Equity on

37 Inventories Inventories IFRS IFRS change, IFRS (EUR million) % Raw materials and consumables Work in progress Land areas and plot-owning companies Shares in completed housing corporations and real estate t companies Advance payments Other inventories Inventories, total

38 Group and Segment information by quarter SRV Group IFRS IFRS IFRS IFRS IFRS IFRS (EUR million) 4-6/ / / / / /2007 Revenue Operating profit Financial income and expenses, total Profit before taxes Order backlog 1) Earnings per share, eur Equity per share, eur 1) Share price, eur 1) Equity ratio, % 1) Net interest bearing debt 1) Gearing, % 1) ) at the end of the period 38

39 Revenue and operating profit by quarter Revenue IFRS IFRS IFRS IFRS IFRS IFRS (EUR million) 4-6/ / / / / /2007 Business Premises Housing International Other Operations Eliminations Group, total Operating profit IFRS IFRS IFRS IFRS IFRS IFRS (EUR million) 4-6/ / / / / /2007 Business Premises Housing International Other Operations Eliminations Group, total Operating profit IFRS IFRS IFRS IFRS IFRS IFRS (%) 4-6/ / / / / /2007 Business Premises Housing International Group, total

40 Order backlog, invested capital and residential production in Finland by quarter Order backlog IFRS IFRS IFRS IFRS IFRS IFRS (EUR million) Business Premises Housing International Group, total Invested capital IFRS IFRS IFRS IFRS IFRS IFRS (EUR million) Business Premises Housing International Other and eliminations Group, total Residential production IFRS IFRS IFRS IFRS IFRS IFRS in Finland (units) 4-6/ / / / / /2007 Start-ups Sold Completed Completed and unsold 1) Under construction 1) ) at the end of the period 40

41 Segments: Assets, liabilities and invested capital Assets IFRS IFRS change, change, IFRS (EUR million) MEUR % Business Premises Housing International Other Operations Eliminations Group, total Liabilities IFRS IFRS change, change, IFRS (EUR million) MEUR % Business Premises Housing International Other Operations Eliminations Group, total Invested capital IFRS IFRS change, change, IFRS (EUR million) MEUR % Business Premises Housing International Other operations and eliminations Group, total

42 Unbuilt land areas and land acquisition commitments Land reserve Business International Housing 30 June 2008 Operations Operations Total Unbuilt land areas and land acquisition commitments Building rights*, m 2 138, , ,000 1,117,000 Capital invested incl. commitments, EUR million Land development agreements Building rights*, m 2 411, , , ,000 * * Building rights include also the estimated building rights/construction volume of unzoned land reserves and land areas covered by agreements in projects that are wholly or partly owned by SRV 42

43 Personnel Personnel by business area 30 June June 2007 Share of Group personnel, 30 June 2008, % Business Premises Housing International Other Operations Group, total Non-salaried % Salaried % 43

44 Shareholders Shareholder Number of shares % of shares and votes Kokkila Ilpo ,9 % Kolpi Investments Oy ,1 % Heliövaara Eero ,2 % Keskinäinen Työeläkevakuutusyhtiö Varma ,1 % Kuntien Eläkevakuutus ,7 % Linnoinen Hannu ,7 % Alfred Berg Finland Sijoitusrahasto it t ,5% Fondita Nordic Micro Cap Placeringsfond ,4 % Valtion Eläkerahasto ,3 % Veritas Eläkevakuutusosakeyhtiö ,2 % Nieminen Timo ,1% Sundholm Göran ,9 % Stiftelsen För Åbo Akademi ,8 % Keskinäinen Eläkevakuutusyhtiö Ilmarinen ,7 % Maa- Ja Vesitekniikan Tuki Ry ,6 % Alfred Berg Optimal Sijoitusrahasto ,5 % Suomen Itsenäisyyden Juhlarahasto ,4 % Laakkonen Mikko Kalervo ,4 % Ålandsbanken Nordic Value ,4 % SRV Kalusto Oy ,4% 20 largest shareholders ,2 % Nominee registration ,4 % Other shareholders *) ,4 % *) includes own shares owned by SRV Group Plc 44

45 Calculation of key figures Gearing ratio, % = 100 x Return on equity, % = 100 x Return on investment, % = 100 x Equity ratio, % = 100 x Net interest-bearing debt Total equity Profit before taxes - income taxes Total equity. average Profit before taxes + interest and other financial i expenses Invested capital. average Total equity Total assets - advances received Invested capital = Total assets - non-interest bearing debt - deferred tax liabilities provisions Net interest bearing debt = Interest bearing debt - cash and cash equivalents Earnings per share, share issue adjusted Equity per share, share issue adjusted = = Net profit for the period attributable to equity holders of the parent company Weighted average number of shares outstanding Shareholders' equity attributable to equity holders of the parent company Number of shares outstanding at the end of the period. share issue adjusted Price per earnings ratio Share price at the end of the period = Earnings per share. share issue adjusted Dividend payout ratio, % = 100 x Dividend per share. share issue adjusted Earnings per share. share issue adjusted Dividend yield, % Dividend per share. share issue adjusted = 100 x Share price at the end of the period. share issue adjusted Average share price Market capitalisation at the end of the period Trading volume = = = Number of shares traded in euros during the period Number of shares traded during the period Number of shares outstanding at the end of the period x share price at the end of the period Number of shares traded during the period and in relation to the weighted average number of shares outstanding 45