Lemminkäinen Interim Report 1 Jan – 30 Sep 2015

HELSINKI--()--Regulatory News:

LEMMINKÄINEN CORPORATION STOCK EXCHANGE RELEASE 30 OCTOBER 2015 AT 8:00 A.M.

Lemminkäinen: (HEX:LEM1S) Interim Report 1 Jan – 30 Sep 2015

July–September 2015 (7–9/2014)

-- Order inflow was EUR 312.2 million (389.4)

-- Net sales totalled EUR 568.8 million (646.4)

-- Operating profit was EUR 20.9 million (38.7), or 3.7 % (6.0) of net sales. The operating profit includes a EUR 13.2 write-down related to the company’s decision to withdraw from the planned Ilmatar project in Russia.

-- Profit for the period was EUR 12.0 million (16.2). Profit for the period in continuing operations was EUR 12.0 million (16.1).

-- Earnings per share were EUR 0.43 (0.62). Earnings per share in continuing operations were EUR 0.43 (0.62).

-- Cash flow from operations totalled EUR 50.1 million (80.9).

-- Equity ratio at the end of the review period was 35.0% (33.0) and gearing 41.7% (53.7).

-- Interest-bearing net debt at the end of the review period was EUR 154.4 million (233.5).

January–September 2015 (1–9/2014)

-- Order inflow was EUR 1,121.5 million (1,404.2)

-- Net sales totalled EUR 1,350.5 million (1,436.2)

-- Operating profit was EUR 18.4 million (36.2) or 1.4% (2.5) of net sales.

-- Profit for the period was EUR -2.7 million (24.4). Profit for the period in continuing operations was EUR -2.7 million (1.2).

-- Earnings per share were EUR -0.48 (0.81). Earnings per share in continuing operations were EUR -0.48 (-0.26).

-- Cash flow from operations totalled EUR 76.2 million (-47.3).

Profit guidance for 2015

The profit guidance for 2015 is intact. Lemminkäinen estimates that its net sales in 2015 will not increase as compared to 2014 (EUR 2,044.5 million). Operating profit (IFRS) in 2015 is expected to improve as compared to 2014 (EUR 36.3 million).

Key figures, IFRS   7-9/   7-9/   Change   1-9/   1-9/   Change   1-12/
  2015 2014 2015 2014 2014
Net sales M€ 568.8 646.4 -77.6

1,350.5

1,436.2

 

-85.7

2,044.5

 

Paving M€ 347.4 367.4 -20 670.6 671.3 -0.7 907.5
Infra projects M€ 62.5 77.4 -14.9 187.1 212.6 -25.5 286
Building construction, Finland M€ 103.4 121.9 -18.5 361.7 373 -11.3 539
Russian operations M€ 30.7 64 -33.3 66.8 114.1 -47.3 196.1
Other items M€ 24.8 15.6 9.2 64.5 65.2 -0.7 115.9
Operating profit M€ 20.9 38.7 -17.8 18.4 36.2 -17.8 36.3
Paving M€ 32.1 32.8 -0.7 20.3 27 -6.7 32.2
Infra projects M€ 3.1 4.1 -1 8.2 5.7 2.5 7.2
Building construction, Finland M€ -2.3 0.3 -2.6 1.5 12.3 -10.8 9.3
Russian operations M€ -10.6 10.6 -21.2 -8.1 9.6 -17.7 19.7
Other items M€ -1.3 -9.1 7.8 -3.5 -18.3 14.8 -32.2
Operating margin % 3.7 6 1.4 2.5 1.8
Paving % 9.2 8.9 3 4 3.5
Infra projects % 4.9 5.3 4.4 2.7 2.5
Building construction, Finland % -2.2 0.2 0.4 3.3 1.7
Russian operations % -34.5 16.6 -12.1 8.4 10.1
Pre-tax profit M€ 16.6 23.2 -6.6 2.9 6.1 -3.2 -1.7
Profit from continuing M€ 12 16.1 -4.1 -2.7 1.2 -3.9 -5
operations
Profit for the period M€ 12 16.2 -4.2 -2.7 24.4 -27.1 18.1
Earnings per share, 0.43 0.62 -0.19 -0.48 -0.26 -0.22 -0.68
continuing operations
Earnings per share for the period 0.43 0.62 -0.19 -0.48 0.81 -1.29 0.4
Cash flow from operations 1) M€ 50.1 80.9 -30.8 76.2 -47.3 123.5 -48.4

1) 1–9/2014 and 1–12/2014: Cash flow from operations includes EUR 59.7 million of damages paid in Q1/2014 related to asphalt cartel.

Key figures, 30 Sep 30 Sep Change 30 June Change 31 Dec IFRS 2015 2014 Q3/15 vs. 2015 3) Q3/15 vs. 2014 Q3/14 Q2/15

Key figures, IFRS     30-Sep   30-Sep   Change   30-Jun   Change   31-Dec
2015 2014 Q3/15 vs. 2015 3) Q3/15 vs. 2014
Q3/14 Q2/15
Order book, continuing operations M€ 1,268.50 1,910.90 -642.4 1,667.10 -398,6 1,456.10
Operating capital M€ 486.1 627.9 -141.8 547 -60,9 590.4
Balance sheet total M€ 1,235.60 1,543.70 -308.1 1,292.30 -56,7 1,257.80
Interest-bearing net debt M€ 154.4 233.5 -79.1 211.7 -57,3 213.6
Equity ratio 1) % 35 33 33.1 37.1
Gearing 2) % 41.7 53.7 57.2 51.8
Return on investment,
rolling 12 months % 9.2 -2.3 10.9 13.5

1) Equity ratio, if hybrid bond was treated as debt: 9/2015: 24.5%, 9/2014: 22.5% and 12/2014: 24.6%.

2) Gearing, if hybrid bond was treated as debt: 9/2015: 102.8%, 9/2014: 125.5% and 12/2014: 128.4%.

3) The figures include assets held for sale.

President and CEO Casimir Lindholm:

“Lemminkäinen’s financial position has improved clearly year-on-year,” says Casimir Lindholm, President and CEO. “Our operating capital has decreased from EUR 630 million to EUR 485 million during the last 12 months. We have reduced investments and decreased our net working capital by improving invoicing efficiency, divesting non-strategic plots and assets and by maintaining a good level of housing sales in Russia. Our interest-bearing net debt has decreased from EUR 235 million to EUR 155 million despite the partial repurchase of the first hybrid bond (EUR 27 million). In addition, our cash flow in January–September was significantly better than in the corresponding period last year.”

“During the review period, we completed the divestments of the building construction business in Sweden and the road maintenance business in Norway. In addition, we decided to withdraw from the Ilmatar project in Russia. Our decision was influenced by the uncertainties in the operating environment and weakened economic situation in the country as well as the risk level of the project for Lemminkäinen. The streamlining of our portfolio has had a negative impact of more than EUR 20 million on our 2015 result, which is more than we originally estimated. However, these measures are in line with our strategy and they will improve our competitiveness over the long term and enable us to focus on our core businesses. Overall we are proceeding as planned.”

“Lemminkäinen’s result in the third quarter was weaker than in the comparison period. In Paving, the result was on a par with the comparison period. In Infra projects, the year-on-year result was weaker, but the market situation is still favourable. In Building construction, Finland, the lower number of sold units decreased the result. In Russian operations, the result is weakened by a EUR 13.2 million write-down related to our decision to withdraw from the planned Ilmatar project. The cuts in fixed costs carried out in 2014 can be seen in the other operations’ result.”

“Infra projects’ order inflow improved by EUR 96 million. In August, Building construction, Finland, signed an agreement on Finavia’s terminal contract, with a total value of EUR 170 million. This project is only partially recorded in our order book. In Russia, we have not started any new residential projects. There is still room for growth in our order book; and we see the market situation for infra projects positive especially in Sweden and Norway.”

Market outlook

The total volume of construction in Finland in 2015 declines year-on-year, but is expected to increase slightly in 2016. The completion of major infrastructure projects creates uncertainty in infrastructure construction. Renovation in building construction grows, but new construction is expected to remain at the current level. Paving volumes are growing, but the falling price of bitumen impacts the growth in net sales. In Sweden and Norway, infrastructure construction is supported by major road projects and investments in energy production infrastructure. In Russia, housing demand in comfort class has decreased somewhat compared to the previous year. In the Baltic countries, the demand for infrastructure construction has remained stable. (Sources: The economic outlook of the Confederation of Finnish Construction Industries RT / autumn 2015, Euroconstruct June/2015)

Briefing

A Finnish-language briefing for analysts and the media will be held at 10:00 a.m. on Friday, 30 October at Lemminkäinen’s head office. The street address is Salmisaarenaukio 2, Helsinki, Finland. Lemminkäinen's President and CEO Casimir Lindholm will present the Interim report. Presentation material can be found in Finnish and English at the company’s website, www.lemminkainen.com/investors.

Financial reporting in 2015

In 2015 the Interim Reports will be published as follows:

5 February 2015 Financial statements bulletin 2014

29 April 2015 Interim Report 1 Jan – 31 March 2015

29 July 2015 Interim Report 1 Jan – 30 June 2015

30 October 2015 Interim Report 1 Jan – 30 Sep 2015

LEMMINKÄINEN CORPORATION

Corporate Communications

DISTRIBUTION: NASDAQ OMX Helsinki Key media www.lemminkainen.com

Together with our customers we create conditions that make living, working and travelling functional, safe and healthy. We operate in Northern Europe and employ about 5,600 professionals. In 2014, our net sales were about EUR 2.0 billion. Lemminkäinen Corporation's share is quoted on NASDAQ OMX Nordic Exchange Helsinki. www.lemminkainen.com

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Contacts

Lemminkäinen
Casimir Lindholm, President and CEO
tel. +358 2071 53304
or
Ilkka Salonen, CFO
tel. +358 2071 53304

Contacts

Lemminkäinen
Casimir Lindholm, President and CEO
tel. +358 2071 53304
or
Ilkka Salonen, CFO
tel. +358 2071 53304