PÖYRY PLC Financial Statement Release 4 February 2009 at
8:30 a.m.
PÖYRY PLC'S NOTICE CONCERNING ANNUAL ACCOUNTS FOR 2008
The Pöyry Group's consolidated net sales were EUR 821.7 million and
profit before taxes EUR 103.2 million. Earnings per share for the
financial year were EUR 1.21. The return on investment exceeded the
strategic target, amounting to 45.4 per cent. The consolidated
balance sheet is healthy, the net debt/equity ratio (gearing) was
-38.5 per cent. The order stock amounted to EUR 539.1 million at the
end of the year. The Board of Directors proposes to the Annual
General Meeting that a dividend of EUR 0.65 per share be paid.
Consolidated earnings and balance sheet
As a result of good demand, the Pöyry Group's strong market position,
and successful completion of some major projects, consolidated net
sales increased to EUR 821.7 million and profit before taxes improved
clearly during the year under review. Profit before taxes was EUR
103.2 (76.5 in the previous year) million, which equals 12.6 per cent
of net sales. The net profit for the period was EUR 72.6 (52.8)
million. Earnings per share improved by 37.5 per cent during the year
to EUR 1.21 (0.88).
The target for the Group's return on investment is 20 per cent or
more on average. In 2008 the return on investment was 45.4 (42.4) per
cent.
The consolidated balance sheet is healthy. The equity ratio is 41.7
(50.7) per cent. The Group's liquidity is good. At the end of the
year, the Group's cash and cash equivalents amounted to EUR 203.7
(98.7) million. Interest-bearing debts totalled EUR 122.5 (8.9)
million. The net debt/equity ratio (gearing) was -38.5 (-47.4) per
cent.
The Group's order stock at the end of 2008 totalled EUR 539.1
million, compared with EUR 562.8 million at the end of 2007. The
sales margin of the order stock was at a normal level.
Prospects
Pöyry's net sales for 2009 are estimated to decrease and profit
before taxes is estimated to decrease significantly compared with
2008. This assessment does not take into account possible
acquisitions during 2009.
The Auditor's report is dated 3 February 2009.
Dividend
The Pöyry Group's parent company Pöyry PLC's net profit for 2008 was
EUR 56 179 095.45 and retained earnings EUR 7 200 671.63, so the
total amount of distributable earnings was EUR 63 379 767.08. The
Board of Directors of Pöyry PLC proposes to the Annual General
Meeting on 10 March 2009 that a dividend of EUR 0.65 (0.65) per share
be paid for the year 2008. The number of shares is 58 483 602 and the
total amount of dividends thus EUR 38 014 341.30. The proposed
dividend corresponds to 53.7 (73.9) per cent of the earnings per
share for the financial year. The Board of Directors proposes that
the dividend be paid on 20 March 2009.
Annual General Meeting
Pöyry PLC's Annual General Meeting will be held on 10 March 2009 at
the Finlandia Hall, Helsinki, Finland. The invitation to the Annual
General Meeting will be published in its entirety as a separate
notice on 4 February 2009 at 9:00 a.m.
Annual report
Pöyry PLC will publish its annual report for 2008 in week 9.
Enclosure
Board of Directors' Report, 1 January - 31 December 2008
Consolidated statement of income, balance sheet, statement of changes
in financial position, changes in equity and liabilities, related
party transactions, key figures and acquisitions
PÖYRY PLC
Heikki Malinen Teuvo Salminen
President and CEO Deputy to President and CEO
Additional information by:
Heikki Malinen, President and CEO, Pöyry PLC
tel. +358 10 33 21307
Teuvo Salminen, Deputy to President and CEO, Pöyry PLC
tel. +358 10 33 22872
Satu Perälampi, VP, Corporate Communications and IR, Pöyry PLC
tel. +358 10 33 23002
www.poyry.com
DISTRIBUTION:
NASDAQ OMX in Helsinki
Major media
PÖYRY GROUP
BOARD OF DIRECTORS' REPORT, 1 JANUARY - 31 DECEMBER 2008
Consolidated earnings and balance sheet
As a result of good demand, the Pöyry Group's strong market position,
and successful completion of some major projects, consolidated net
sales increased to EUR 821.7 million and profit before taxes improved
significantly during the year under review. Profit before taxes was
EUR 103.2 (76.5 in the previous year) million, which equals 12.6 per
cent of net sales. The net profit for the period was EUR 72.6 (52.8)
million. Earnings per share improved by 37.5 per cent during the year
to EUR 1.21 (0.88). The Group's financial target is to achieve an
improvement in earnings per share averaging 15 per cent a year.
The target for the Group's return on investment is 20 per cent or
more on average. In 2008 the return on investment was 45.4 (42.4) per
cent.
The consolidated balance sheet is healthy. The equity ratio is 41.7
(50.7) per cent. The Group's liquidity is good. At the end of the
year, the Group's cash and cash equivalents amounted to EUR 203.7
(98.7) million. In addition to these, the Group had unused long-term
overdraft facilities amounting to EUR 93.1 million. Interest-bearing
debts totalled EUR 122.5 (8.9) million. The net debt/equity ratio
(gearing) was -38.5 (-47.4) per cent.
Profit before taxes in the last quarter was EUR 26.9 (23.3) million.
The profit includes non-recurring income of EUR 6.0 million from the
sale of the shares in the associated company Polartest Oy.
At the beginning of 2008 the Group announced that it expected the
profit before taxes for 2008 to improve compared to 2007. In June
2008 the Group refined its 2008 earnings estimate, stating that the
profit before taxes is estimated to improve clearly in 2008. The
improvement in the projected profit was caused by the Forest Industry
business group's favourable earnings development during January-May,
and by orders received during the spring, which created a good work
flow also for the rest of the year in the Forest Industry business
group.
Key figures, EUR million 2008 2007 2006
Net sales 821.7 718.2 623.3
Profit before taxes 103.2 76.5 50.2
Profit for the year, of which attributable to 72.6 52.8 34.8
equity holders of the parent company 70.8 51.3 33.6
Earnings/share, EUR 1.21 0.88 0.58
Return on investment, % 45.4 42.4 31.9
Equity ratio 41.7 50.7 49.2
Cash and cash equivalents 203.7 98.7 74.9
Interest-bearing debts 122.5 8.9 13.6
Gearing, % -38.5 -47.4 -37.6
Business groups' performance and earnings
The parent company of the Pöyry Group is Pöyry PLC. The parent
company is responsible, among other things, for developing the
Group's strategy and for supervising its implementation, for
financing, for realising synergistic benefits and for general
co-ordination of the Group's operations. The parent company has
charged service fees for general administration and parent company
costs to the business groups. The relative share charged is derived
from the business groups' payroll costs.
The Pöyry Group's business operations during 2008 were conducted
through three business groups: Energy, Forest Industry, and
Infrastructure & Environment. The business groups are globally
responsible for their operations. All three business groups offer a
full range of consulting, investment planning and implementation,
maintenance planning, and operations improvement services to their
clients, covering the entire lifecycle of their business.
Energy
Demand for energy-related services was good in Europe during 2008 and
remained stable in other geographical market areas. Environmental
legislation continued to drive demand for renewable energy and energy
efficiency-related services. The volatility of primary fuel prices,
the structural change in the European energy market and actions
related to the energy mix of companies boosted demand for management
consulting services. Investments in the energy sector have grown
strongly during the past few years, resulting in a shortage of
project implementation capacity. This has also resulted in increased
investment costs. These factors have contributed to delays in
implementing certain projects. The recent turmoil in financial
markets has had a relatively small impact on investment demand in the
energy sector so far.
The Energy business group's net sales for 2008 were EUR 241.3 (217.5)
million. Operating profit improved significantly, amounting to EUR
32.0 (21.0) million. The non-recurring income from the sale of the
shares in Polartest Oy improved profit in the last quarter and for
the whole year by EUR 6.0 million.
The order stock at the end of the year remained stable, amounting to
EUR 196.4 (212.7) million. The most important new projects were the
engineering services contract for a new 750 MW combined-cycle power
plant in Vietnam with PetroVietnam Nhon Trach 2 Power JS Company (EUR
3.8 million); the implementation engineering services contracts with
Stora Enso Oyj for combined heat and power plant projects in Belgium
and Germany (EUR 3 million); the engineering services for a new 2x30
MW coal-fired power plant project in Kalimantan, Indonesia, with PT
Makmur Sejahtera Wisesa (EUR 2 million); the engineering and
installation contract for the new national control centre of the
Austrian transmission network with Verbund Austrian Power Grid in
Austria (EUR 2.4 million); the engineering contract with SOFINEL
S.A., a subsidiary of the EDF Group and AREVA NP, for a nuclear power
plant in China (EUR 2.8 million); the frame agreement with Técnicas
Reunidas, Spain, for the engineering of several EPC projects (EUR 15
million); the contract with Woodside Energy as a part of the Pluto
liquefied natural gas project, currently under construction in
Western Australia (EUR 2.7 million); and implementation engineering
services for Stora Enso Oyj for a combined heat and power plant
project in Poland (EUR 3.3 million).
Energy, EUR million 2008 2007 2006
Net sales 241.3 217.5 197.4
Operating profit 32.0 21.0 14.6
Operating profit, % 13.2 9.7 7.4
Order stock 196.4 212.7 204.9
Personnel at year-end 1870 1838 1692
Forest Industry
The Forest Industry business group's earnings improved clearly during
2008. This was due to good capacity utilisation, the successful
completion of some major projects, and the good financial performance
and demand situation in Latin America. New investments in the forest
industry have mostly taken place in emerging markets. Demand for
chemical industry-related services was on a good level whereas demand
for local services remained stable during 2008.
The Forest Industry business group's net sales for 2008 were EUR
318.2 (276.9) million. Operating profit improved clearly and was EUR
54.0 (39.0) million.
The economic downturn sparked by the global financial crisis was
clearly reflected in the operations of the Forest Industry business
group towards the end of 2008. The downturn has impaired forest
industry companies' profitability and hampered the availability of
investment financing globally. For this reason, projects have been
postponed, preparations for new projects have been delayed and the
number of consulting assignments have declined. Demand for the
services provided by the Forest Industry business group has decreased
and it is difficult to predict when demand will recover. The business
group's order stock declined to EUR 89.1 (123.8) million. The most
important new projects were the engineering contract with Propapier
GmbH for their paper machine project at a new site in
Eisenhüttenstadt, Germany (EUR 10 million); the EPCM services
contract with Roal Oy for an enzyme plant development project in
Rajamäki, Finland (EUR 3 million); the engineering services for the
rebuild of Mondi's Syktyvkar pulp mill in Russia (EUR 10 million);
Amcor's new B9 linerboard machine project at the Botany Mill in
Australia; the pulp mill engineering project for Vietnam Paper
Corporation in Vietnam, the pre-engineering and EPCM services
contract with Ovako Wire Oy Ab for a steelworks modernisation project
in Koverhar, Finland; and the engineering and project management
services contract for the construction of SunPine AB's new production
plant for renewable vehicle fuel to be built in Piteå, Sweden (EUR
1.3 million).
Forest Industry, EUR million 2008 2007 2006
Net sales 318.2 276.9 224.9
Operating profit 54.0 39.0 22.9
Operating profit, % 17.0 14.1 10.2
Order stock 89.1 123.8 111.4
Personnel at year-end 3158 2961 2418
Infrastructure & Environment
Demand for infrastructure and environment related services remained
stable during 2008, with the exception of the weakening of office and
commercial building construction in Finland, the Baltic countries and
Russia. The business group continued to strengthen its position in
local and international markets.
The Infrastructure & Environment business group's net sales for 2008
amounted to EUR 262.2 (222.5) million. Operating profit improved
clearly and was EUR 20.1 (16.8) million.
The order stock increased, amounting to EUR 253.2 (226.3) million at
the end of the year. The most important new projects were the
extension to the existing consultancy engineering contract with Metro
de Maracaibo C.A., Venezuela (EUR 5.5 million); the consultancy
assignments for three water sector projects in Nigeria, West Africa,
financed by the World Bank (EUR 3 million); the railway engineering
services contract for the Gotthard Base Tunnel project with the Swiss
Transtec Gotthard Consortium (EUR 10 million); the contract for the
Ring Rail Link project in Helsinki, Finland, with the Finnish Rail
Administration (EUR 7.5 million); the Melamchi water supply project
with the Melamchi Water Supply Development Board in Nepal (EUR 7
million); the contract for a bus mass transit system with Instituto
de Desarrollo Urbano in Colombia (EUR 3.0 million); the extension to
the contract with Metro de Maracaibo C.A. for a metro mass transit
system in Venezuela (EUR 5.2 million); the contract with the
Government River Board Corporation for the preparation of a large
flood protection scheme in the Czech Republic (EUR 4 million); the
consultancy contract with the Ministry of Communications and
Transport of Zanzibar for rehabilitation of the rural roads on Pemba
Island, Zanzibar, funded by the Norwegian Agency for Development
Cooperation (EUR 1.0 million); and the contracts with PKP Polskie
Linie Koljowe S.A. for detail design and tender documentation for the
modernisation of the "Warsaw Diameter Line" (EUR 8.9 million) and a
feasibility study for the E75 Railway line Rail Baltica in Poland
(EUR 1.1 million).
Infrastructure & Environment, EUR million 2008 2007 2006
Net sales 262.2 222.5 201.8
Operating profit 20.1 16.8 13.0
Operating profit, % 7.7 7.5 6.4
Order stock 253.2 226.3 191.0
Personnel at year-end 2779 2378 2207
Financial targets for the business groups
The profitability target of Pöyry's business groups is a minimum
operating profit of 8 per cent in the medium term. The long-term
profitability target of the business groups is 10 per cent.
Development of Group structure
The Group continued its actions to streamline the Group's legal and
administrative structure during the financial year. The objective is
to operate under a single legal and administrative entity in as many
countries as possible.
As of 1 January 2009, Pöyry split its Infrastructure & Environment
business group into three parts: Transportation, Water & Environment,
and Construction Services. The Infrastructure & Environment business
group has consisted of three business areas with partly different
client bases, markets and growth areas, which are now reorganised as
separate business groups. The reorganisation creates a clearer
connection between Pöyry's long-term growth strategy and business
structure. At the same time, it enables investors to understand
better the different segments of Pöyry's infrastructure and
environment business.
The structure of the Energy business group remains unchanged. The
business group is Europe's leading provider of energy-related
consulting and engineering services.
The Forest Industry business group's structure also remains
unchanged, except that the Civil Engineering business unit with a
staff of 250 will become a part of the Construction Services business
group. The Forest Industry business group is the global market leader
both in consulting and engineering in its own field.
New business groups and pro forma figures
The Transportation business group focuses on rail transportation
systems and on road, tunnelling and bridge projects, as well as on
other traffic- and transportation-related engineering and expert
services. The comparable net sales for 2008 amounted to EUR 105.5
million.
The Water & Environment business group offers comprehensive
engineering and expert services related to water and environmental
technologies. The comparable net sales for 2008 amounted to EUR 87.6
million.
The Construction Services business group offers comprehensive
engineering and project management services for commercial building
and industrial projects. The comparable net sales for 2008 amounted
to EUR 92.8 million.
Segment information with comparable figures for the new business
group structure are included in the financial statements.
Acquisitions
In March 2008 Pöyry acquired the remaining 30 per cent of the shares
of CJSC "Giprobum-Pöyry" (formerly ZAO Giprobum Engineering), based
in St. Petersburg, Russia. Pöyry now owns the company's entire share
capital. The company was consolidated 100 per cent into the Forest
Industry business group in 2007. The company is Russia's leading
forest industry engineering firm, employing about 250 experts.
IDP Consult Incorporated in the Philippines, which was acquired in
2007, was consolidated into Pöyry as of the beginning of 2008. The
company has a staff of 30 and its net sales for 2008 were EUR 0.4
million.
Pöyry expanded its transportation business and market presence in the
infrastructure sector by acquiring in May 100 per cent of the shares
of Consilier Construct S.R.L, Romania. Consilier Construct is a
leading engineering consulting firm, employing about 220 experts. The
company focuses on the transportation market, in particular on the
road and rail sectors. Consilier Construct has a strong position in
the transportation sector but is also active in the water and
environment, and the building sectors. The company's net sales for
2008 were EUR 10.0 million. The acquisition represents an important
step in developing Pöyry's transportation-sector activities in the
Eastern European market. Consilier Construct will also play an active
role in expanding other Pöyry Group activities in Eastern Europe.
Pöyry also expanded its architectural design operations by acquiring
in May the entire share capital of Arket Oy, Finland. The company
employs nine architects and its net sales for 2007 were EUR 0.8
million. Arket Oy provides architectural design services. Arket Oy
has been merged with Pöyry Architects Oy on 31 December 2008.
The Infrastructure & Environment business group's operations were
strengthened by acquiring in May 100 per cent of the shares of
Geopale Oy, Finland. The company specialises in bedrock core
drillings. The company employs 14 experts and its net sales for 2007
were EUR 1.1 million. Geopale Oy has been merged with Pöyry
Environment Oy on 31 December 2008.
Pöyry expanded its real estate consulting and engineering operations
in China by acquiring in August the entire share capital of Shanghai
Kang Hong Construction Ltd. Based in Shanghai, the company employs 29
experts. Shanghai Kang Hong Construction is primarily engaged in
project management for industrial and commercial real estate
development and construction projects. The closure of the transaction
is subject to approval by the Chinese authorities.
Pöyry expanded its transportation business by acquiring in October
the entire share capital of ETT Proyectos S.L, Spain. Employing 45
experts, the company is based in Madrid. Its net sales for 2007 were
EUR 3.2 million. ETT Proyectos provides engineering and consultancy
services in the rail sector, including both conventional railways as
well as bullet train systems. This acquisition supports Pöyry's
strategy of expanding its transportation activities into the Spanish
market, while at the same time providing synergies for Pöyry's
established position in Latin America.
Pöyry expanded its presence in the Swiss infrastructure and
environment market by acquiring in December Kündig & Partner AG, a
specialised engineering consultancy company. Kündig & Partner employs
ten experts and its net sales for 2007 were EUR 1.5 million.
Order stock
The Group's order stock at the end of 2008 totalled EUR 539.1
million, compared with EUR 562.8 million at the end of 2007. The
sales margin of the order stock was at a normal level.
The share of consulting services, operation improvement and
maintenance services of the order stock increased. Assignments in
these areas are short-term and are partly booked under net sales
without being recorded in the order stock.
Order stock, EUR million 2008 2007 2006
Consulting and engineering 538.6 551.4 500.8
EPC 0.5 11.4 6.8
Order stock, total 539.1 562.8 507.6
Human resources
Personnel structure
The total number of personnel in the Group increased during 2008. The
Group had an average of 7702 employees during the year, which is 12.4
per cent more than in 2007. The number of personnel at the end of the
year was 7924. Mergers and acquisitions added 328 people to the
total. Of the total personnel, 91 per cent were operative. About 600
persons worked in management consulting and the rest in projects. 5
per cent of the total personnel had a fixed-term contract.
Personnel, pro forma 2008 2007 2006
Energy 1870 1838 1692
Forest Industry 2917 2734 2300
Transportation 1073 798 797
Water & Environment 976 926 920
Construction Services 971 881 608
Other 117 92 73
Personnel at year-end, total 7924 7269 6390
Personnel on average, total 7702 6852 6038
Personnel expenses
Wages and salaries as well as bonuses in the Pöyry Group are
determined on the basis of local collective and individual
agreements, individual employees' performance and the required
qualification level. Supplementing the basic salary, the Group has
implemented bonus schemes which are primarily aimed at Group
companies' line management, but which will be increasingly directed
to individual experts, for example staff in project work. In 2008,
personnel expenses totalled EUR 433.8 million.
Personnel expenses, EUR million 2008 2007 2006
Wages and salaries 337.6 297.8 262.3
Bonuses 18.4 15.6 11.1
Expenses from share-based incentive programmes
1.8 0.5 0.7
Social expenses 76.0 62.0 53.6
Personnel expenses, total 433.8 375.9 327.7
Human resources management
The year under review was again a year of growth for Pöyry. Towards
the end of the year Pöyry experienced a change in demand due to the
downturn, which was most evident in the Forest Industry and
Construction Services business groups. To make the best possible use
of its resources for project work and to maintain good capacity
utilisation, the company intensified the sharing of resources both
across business unit and geographical borders.
To ensure that the Pöyry Group's capabilities will develop in
accordance with changing business needs, the principles and actions
for competence development are defined as a part of the annual
strategy process. Developing managerial skills and encouraging job
mobility within the organisation were major focus areas, as in the
previous year. The reorganisation of the company's business
operations resulted in significantly increased job mobility, which is
an important step in the development towards an even more
multi-skilled and diverse leadership pool.
The Group's human resources network was strengthened by new
recruitments in several key countries and by developing the operating
plan in accordance with short- and long-term business objectives.
Examples of successfully implemented Pöyry-wide processes are the
global employee survey 'Pöyry Pulse' and the 'Pöyry Dialogue'
framework for individual discussion between line manager and team
members. The benefits of adopting a uniform Pöyry identity and
aligned operating practices are already clearly visible.
Research and development
The Pöyry Group's research and development co-operation committee
consists of representatives of the business groups, IT staff and the
company's management. Its main objectives are to promote internal
research and development, to assist in obtaining supplementary
financing and engaging clients in development processes, and to keep
the research and development focus on the Group's strategic
objectives.
The Pöyry Group is engaged in numerous research and development
projects each year, relying on the expertise, experience and
innovativeness of its employees. Research and development efforts are
conducted in partnership with clients and research institutions,
often in an interdisciplinary manner, making use of the Group's
technical and technological expertise to improve the competitiveness
of the Group and its clients.
The income and expenses attributable to research and development are
mostly part of the Group's client work and cannot therefore be
defined in exact monetary terms. The income and expenses have been
taken into account in the statement of income for the financial year.
At the beginning of 2009 Pöyry launched a new Knowledge Management
programme. Its aim is to assemble, structure and analyse the special
expertise and knowledge available in different parts of the Group
organisation and then make it available to the entire staff. In the
initial phase focus is on collecting ideas through interviews. Based
on this development, an approach including short and long-term goals
will be selected.
Capital expenditure and depreciation
The Group's capital expenditure totalled EUR 19.6 million, of which
EUR 10.7 million consisted mainly of computer software, systems and
hardware and EUR 8.9 million was due to business acquisitions.
Capital expenditure and depreciation, 2008 2007 2006
EUR million
Capital expenditure, operative 10.7 9.1 9.8
Capital expenditure, shares 8.9 44.2 27.9
Capital expenditure, total 19.6 53.3 37.7
Depreciation 9.0 8.4 7.8
Financing
The net debt/equity ratio (gearing) was -38.5 (-47.4) per cent. The
Group's financing status improved significantly during the financial
year. At the end of the year, the Group's cash and cash equivalents
totalled EUR 203.7 (98.7) million. In addition to these, the Group
had long-term unused overdraft facilities amounting to EUR 93.1
million. Interest-bearing debts amounted to EUR 122.5 (8.9) million.
In the last quarter of the year, the Group companies in Finland drew
loans totalling EUR 97.8 million by lending back funds from
employment pension insurance companies. The equity ratio is 41.7
(50.7) per cent. The ratio was affected by the new loans.
Financing, EUR million 2008 2007 2006
Cash and cash equivalents 203.7 98.7 74.9
Interest-bearing debts 122.5 8.9 13.6
Unused overdraft facilities 93.1 37.9 25.3
Gearing, % -38.5 -47.4 -37.6
Cash flow before financing 45.7 58.6 26.4
Assessment of operational risks and uncertainties
The Group's most significant risks and uncertainties identified
during the financial year were related to the global final crisis and
the economic downturn set off by it.
The economic downturn has been clearly reflected in the operations of
Pöyry's Forest Industry business group. Demand for the Forest
Industry business group's services has decreased. Demand for the
Construction Services business group's services has declined in its
business sectors in Finland, Russia and the Baltic countries. It is
difficult to foresee when demand will recover for either of the
business groups.
In January 2009 Pöyry launched major actions to adapt the operations
of its Forest Industry and Construction Services business groups to
the prevailing situation. The actions will consist of temporary and
permanent lay-offs and other measures of adaptation. In addition, in
autumn 2008 Pöyry introduced an action programme to keep the Group's
profitability at as high a level as possible. The programme focused
on sales, resources, cost structure, investments and financing.
The financial crisis hampered the availability of loan financing.
Pöyry countered this by significantly strengthening its already
strong financial position and liquidity.
Pöyry's risk management
Pöyry's risks are managed in accordance with the Group's risk
management policy and instructions. Risks related to business
operations are monitored based on a classification into external and
internal risk. Internal risks include strategic and operational
risks, and financial risks. If realised, the identified potential
risks could have a significant negative impact on Pöyry's business,
earnings, financial position or reputation. All identified major
risks have been rated and necessary actions to contain them defined.
The implementation of risk management actions in the Group is
monitored on a regular basis. The principles of Pöyry's risk
management and typical risks identified in Pöyry's business are
described in more detail in the Corporate Governance section of the
annual accounts.
Share capital and shares
The share capital of Pöyry PLC is EUR 14 588 478. The total number of
shares at the end of 2007 was 58 652 614. During 2008, 225 988 new
shares were subscribed with stock options 2004A and 2004B pursuant to
the stock option programme 2004 of Pöyry PLC. Following the
registration of the subscribed shares, the total number of shares
increased to 58 878 602.
Authorisation to issue shares
The Annual General Meeting (AGM) on 10 March 2008 authorised the
Board of Directors to decide to issue new shares and to convey the
company's own shares held by the company in one or more tranches. The
share issue can be carried out as a share issue against payment or
without consideration on terms to be determined by the Board of
Directors and in relation to a share issue against payment at a price
to be determined by the Board of Directors.
A maximum of 11 600 000 new shares can be issued. A maximum of
5 800 000 own shares held by the company can be conveyed. The
authorisation is in force for three years from the decision of the
AGM. The Board has not exercised the authorisation during 2008.
The decision made by the AGM was published in its entirety in a stock
exchange notice on 10 March 2008.
Authorisation to acquire the company's own shares
The Annual General Meeting on 10 March 2008 authorised the Board of
Directors to decide to acquire the company's own shares with
distributable funds on the terms given in the authorisation. The
acquisition of shares reduces the company's distributable
non-restricted shareholders' equity.
A maximum of 5 800 000 shares can be acquired. The company's own
shares can be acquired in accordance with the decision of the Board
of Directors either through public trading or by public offer at
their market price at the time of purchase. The authorisation is in
force for 18 months from the decision of the AGM.
The decision made by the AGM was published in its entirety in a stock
exchange notice on 10 March 2008.
The AGM on 5 March 2007 authorised the Board of Directors to decide
to acquire a maximum of 5 800 000 own shares of the company. On 10
December 2007 the Board of Directors resolved to exercise the
authorisation for the implementation of the Performance share plan
2008-2010. 237 557 own shares were acquired during the period 6
February to 7 March 2008. On 10 March 2008 the Board of Directors
resolved to exercise the authorisation given by the Annual General
Meeting on 10 March 2008 and to continue the share buy back. During
the period 18 March to 10 September 2008, 148 529 own shares were
acquired based on this authorisation. The average price of the shares
acquired on the basis of the said authorisations was EUR 15.27.
Furthermore a subsidiary of Pöyry PLC owns 8914 Pöyry PLC shares and
thus the total number of own shares held by the company on 31
December 2008 was 395 000, representing 0.7 per cent of all shares
and 0.7 per cent of all votes.
Option programme 2004
Pöyry PLC issued in 2004 stock options to the management of the Group
as well as to a wholly-owned subsidiary of Pöyry PLC. The number of
stock options is 550 000, entitling to subscription of four shares
each, i.e. a total of 2 200 000 shares in Pöyry PLC.
The share subscription periods are for stock options 2004A (660 000
shares) between 1 March 2007 and 31 March 2010, for 2004B (660 000
shares) between 1 March 2008 and 31 March 2011, and for 2004C
(880 000 shares) between 1 March 2009 and 31 March 2012. All stock
options have been issued and their receipt confirmed.
During 2007 173 768 new shares were subscribed with 43 442 stock
options 2004A. During 2008 a total amount of 225 988 new shares were
subscribed with 26 090 stock options 2004A and 30 407 stock options
2004B.
Performance share plan 2008-2010
In December 2007 the Board of Directors of Pöyry PLC has approved a
new share-based incentive plan for key personnel of Pöyry.
The plan comprises three earning periods, which are the calendar
years 2008, 2009 and 2010. The rewards will be paid partly in the
company's shares and partly in cash in 2009, 2010 and 2011.
The shares must be held for an approximate period of two years from
the transfer date. No rewards shall be paid if the person or the
company gives notice of termination before the end of an earning
period. The paid reward must be returned to the company if the person
or the company gives notice of termination within two years from the
end of the earning period.
The number of participants in the first earnings period 2008 amounts
to 292 persons. The payout from the plan is based on the Group's
earnings per share (EPS) and net sales growth. For the earnings
period 2008 the payout-ratio will be 181.89 per cent corresponding to
a value of 431 151 shares. The payments will be made to the
participants in April 2009, after the AGM has adopted the financial
statements.
During 2008 93.1 per cent were granted and 3.1 per cent were returned
of the maximum rewards for the earning period 2008.
Board of Directors' proposal
The Pöyry Group's parent company Pöyry PLC's net profit for 2008 was
EUR 56 179 095.45 and retained earnings EUR 7 200 671.63, so the
total amount of distributable earnings was EUR 63 379 767.08. The
Board of Directors of Pöyry PLC proposes to the Annual General
Meeting on 10 March 2009 that a dividend of EUR 0.65 (0.65) per share
be paid for the year 2008. The number of shares is 58 483 602 and the
total amount of dividends thus EUR 38 014 341.30. The proposed
dividend corresponds to 53.7 (73.9) per cent of the earnings per
share for the financial year. The Board of Directors proposes that
the dividend be paid on 20 March 2009.
Board of Directors and President
Members of the Board of Directors of Pöyry PLC elected in the Annual
General Meeting are Henrik Ehrnrooth (Chairman), Heikki Lehtonen
(Vice Chairman), Pekka Ala-Pietilä, Alexis Fries, Harri Piehl, Karen
de Segundo and Franz Steinegger.
President and CEO of the company has until 31 May 2008 been Mr Erkki
Pehu-Lehtonen, M.Sc. (Eng.) and as of 1 June 2008 Mr Heikki Malinen,
M.Sc. (Econ), MBA. Deputy to the President and CEO has been Mr Teuvo
Salminen, M.Sc. (Econ).
Auditors
Auditors have been KPMG Oy Ab, Authorised Public Accountants, with Mr
Sixten Nyman, Authorised Public Accountant, as responsible auditor.
Prospects
Energy
Changes within the structure of energy sources coupled with energy
legislation work, particularly in the EU, are expected to drive
demand for strategic management consulting services. Long lead time
in projects in the hydropower sector may be affected in some markets
in the short term, but prospects in the medium term specifically in
the emerging markets remain strong. Environmental legislation focused
on combating climate change will continue to drive demand for
renewable energy and energy efficiency related services. The
continued demand for energy, particularly in Russia, China, Asia, the
Middle East and Southern Africa, is expected to remain, but client's
investments in the short to medium term are expected to be driven by
long-term energy supply diversity and energy security. Cooling of the
previously overheated thermal power sector is expected in the medium
term which will have a positive effect in investments by lowering
equipment supply costs and delivery times. The power and heat sector
is expected to see improved growth. The nuclear power renaissance is
clearly picking up speed not only within the European markets but
also in new markets, such as the Middle East and Asia. Volatility in
the price of crude oil is expected to continue in the short term but
with a softening price trend. The drive to secure new reserves by
oil companies will continue to create new business opportunities in
the oil & gas sector in the Asia-Pacific, Middle East and North Sea
markets. The business group has maintained its strong market position
and its order stock has remained stable. The Energy business group's
operating profit is estimated to remain stable in 2009, if the
positive effect on earnings of the non-recurring income from the sale
of Polartest Oy's shares is not taken into account in the operating
profit.
Forest Industry
The Forest Industry business group's market position is stable. The
order stock declined in the last quarter of 2008 impaired by the
global financial crisis. Nearly all major planned projects have been
stopped. Preliminary engineering work for new investment projects
still continues in certain areas, notably in Russia. In Latin
America, the volume of investments will go down significantly in
2009. The order stock for chemical-industry projects is stable, but
in this sector, too, many of the largest projects have been put on
hold. Demand for local services in the forest industry sector has
decreased, while it has remained stable in other industrial sectors.
Demand for management consulting services has declined and is
increasingly focused on improving forest product companies'
profitability, including business development and energy savings. The
restructuring of the pulp and paper industry may lead to increased
demand for management consulting and investment banking services.
Adaptation measures have been started in many units of the business
group. The impact of these measures will be visible from the second
quarter of 2009 onwards. The Forest Industry business group's
operating profit is estimated to decrease significantly in 2009.
Transportation
Despite difficult economic conditions in almost all regions of the
world, investments in the transportation sector have continued to
take place, with a similar pattern as in previous years. In
particular, Eastern Europe where EU funds are being made available to
the new EU member states, Latin America and India remain buoyant.
Investments in Western Europe remain stable except in Germany. Many
of these new investments are taking place in order to provide new
roads, rail and metro systems, together with the associated tunnels.
All of these investments are core areas of the Transportation
business group. The operations of the Transportation business group
are therefore expected to remain stable and the operating profit is
estimated to improve in 2009.
Water & Environment
The global economic downturn has very limited effects on the Water &
Environment business group's business, as only a small part of the
services are provided for private-sector clients. The demand for
services in water supply and sanitation, solid waste, and
environmental studies remains high. Many governments around the
world, such as Germany, Abu Dhabi and China, have announced major
programmes to help fight the impact of the global downturn. All these
programmes have a sizable component of investments into public
infrastructure, which includes water supply and waste water. The
number of extreme weather events leading to loss of lives and major
damage to infrastructure continues to increase as a result of climate
change. Therefore, the public sector will increase its spending for
rehabilitation and protection of the built-up environment. All these
drivers will result in new opportunities for the business group
around the world. The operating profit of the Water & Environment
business group is estimated to improve in 2009.
Construction Services
The impacts of the financial crisis are visible in commercial and
office building construction in the markets of the Construction
Services business group. Many projects have also been cancelled or
postponed in the industrial sector. The business group's order stock
decreased during the fourth quarter of 2008. It is difficult to
predict when demand will recover. Adaptation measures have been
started in most units of the business group. The impact of these
measures will be visible from the second quarter of 2009 onwards.
Stable or positive development is expected in infrastructure projects
and consultancy services where the business group's market position
is strong. The Construction Services business group's operating
profit is estimated to decrease clearly in 2009.
Group
The economic downturn set off by the global financial crisis has had
a clear impact on investment demand worldwide. In the Pöyry Group,
the impacts have most markedly affected the operations of the Forest
Industry and Construction Services business groups at the end of 2008
and the beginning of 2009.
To combat the impacts of the deepening downturn, Pöyry launched in
autumn 2008 an action programmed intended to keep the Group's
profitability at as high a level as possible. The programme focuses
on sales, resources, cost structure, investments and financing. Pöyry
has taken comprehensive action to intensify sales and to promote
internal networking and sharing of resources. In addition, fixed-term
employment contracts and subcontracting will be cut back as projects
in progress are being completed.
As a part of the adaptation measures, statutory employee negotiations
were started in January 2009 in the Forest Industry and Construction
Services business groups' units based in Finland. The negotiations
are concerned with temporary and permanent lay-offs, and other
actions to adapt operations to the current market situation. The
specific need for temporary lay-offs and their length, possible
permanent lay-offs and other measures will be decided in detail as
the negotiations proceed. The adaptation is estimated to equal a
capacity of about 350 persons in the Forest Industry business group
and about 250 persons in the Construction Services business group. In
the Forest Industry business group's Brazilian unit, the capacity
will be down-sized by about 200 persons, in addition to other local
cutback measures. In addition to the above mentioned steps, the
Forest Industry business group has initiated adaptation measures in
its business units in North America in the beginning of 2009.
Demand for the Energy, Transportation, and Water & Environment
business groups' services has remained stable and public-sector
stimulus programmes are expected to improve demand further,
especially in the transportation sector.
The duration of the downturn and all of its impacts are difficult to
foresee. Pöyry intends to continue developing its operations in
various ways. Pöyry is utilising its office network in 49 countries
to direct sales and resources to the services and markets for which
there is demand. Operations will be improved further, for example by
investing in knowledge management, internal networking and sharing of
resources and the development of IT applications. Human resources
competence development will be continued by implementing internal
training programmes. The economic downturn also creates good
opportunities for developing Pöyry's business operations through
acquisitions. Pöyry's excellent liquidity makes it possible to
participate actively in this consolidation process.
Pöyry's net sales for 2009 are estimated to decrease and profit
before taxes is estimated to decrease significantly compared with
2008. This assessment does not take into account possible
acquisitions during 2009.
PÖYRY GROUP
STATEMENT OF INCOME
EUR million 10-12/2008 10-12/2007 1-12/2008 1-12/2007
NET SALES 213.6 205.5 821.7 718.2
Other operating income 6.1 0.6 6.6 2.5
Share of associated
companies' results +0.0 +0.0 +2.2 +0.4
Materials and supplies -3.7 -5.4 -15.3 -14.3
External charges,
subconsulting -28.8 -25.7 -101.0 -89.5
Personnel expenses -113.6 -103.9 -433.8 -375.9
Depreciation -2.6 -2.2 -9.0 -8.4
Other operating expenses -44.3 -46.7 -170.8 -159.2
OPERATING PROFIT 26.7 22.2 100.6 73.8
Proportion of net sales, % 12.5 10.8 12.2 10.3
Financial income +2.3 +1.4 +6.3 +4.3
Financial expenses -1.8 -0.1 -3.5 -1.3
Exchange rate differences -0.2 -0.1 -0.1 -0.2
Value decrease -0.1 -0.1 -0.1 -0.1
PROFIT BEFORE TAXES 26.9 23.3 103.2 76.5
Proportion of net sales, % 12.6 11.3 12.6 10.7
Income taxes -6.6 -6.7 -30.6 -23.7
NET PROFIT FOR THE PERIOD 20.3 16.6 72.6 52.8
Attributable to:
Equity holders of the
parent company 19.8 15.9 70.8 51.3
Minority interest 0.5 0.7 1.8 1.5
Earnings/share,
attributable to the equity
holders of the parent
company, EUR 0.34 0.27 1.21 0.88
Corrected with dilution
effect 0.34 0.27 1.19 0.86
BALANCE SHEET
EUR million 31 Dec. 2008 31 Dec. 2007
ASSETS
NON-CURRENT ASSETS
Goodwill 95.9 95.6
Intangible assets 6.2 6.6
Tangible assets 18.8 17.8
Shares in associated companies 5.8 5.2
Other shares 1.7 2.4
Loans receivable 0.1 0.1
Deferred tax receivables 6.2 5.7
Pension receivables 0.3 0.6
Other 5.0 4.9
Total 140.0 138.9
CURRENT ASSETS
Work in progress 69.3 64.5
Accounts receivable 143.5 141.9
Loans receivable 0.8 0.6
Other receivables 10.3 15.6
Prepaid expenses and accrued income 12.7 10.9
Cash and cash equivalents 203.7 98.7
Total 440.3 332.2
TOTAL 580.3 471.1
EQUITY AND LIABILITIES
EQUITY
EQUITY ATTRIBUTABLE TO THE EQUITY HOLDERS
OF THE PARENT COMPANY
Share capital 14.6 14.6
Share premium reserve 32.4 32.4
Legal reserve 20.5 19.5
Invested free equity reserve 5.8 4.6
Translation difference -22.4 -13.9
Retained earnings 152.5 125.4
Total 203.4 182.6
Minority interest 7.7 6.9
Total 211.1 189.5
LIABILITIES
NON-CURRENT LIABILITIES
Interest bearing non-current liabilities 100.8 1.9
Pension obligations 6.7 6.6
Deferred tax liability 4.7 3.3
Other non-current liabilities 5.0 9.4
Total 117.2 21.2
CURRENT LIABILITIES
Amortisations of interest bearing
non-current liabilities 20.5 2.6
Interest bearing current liabilities 1.2 4.4
Provisions 5.8 5.0
Project advances 73.6 97.3
Accounts payable 21.8 22.9
Other current liabilities 43.0 38.3
Current tax payable 3.6 13.7
Accrued expenses and deferred income 82.5 76.2
Total 252.0 260.4
TOTAL 580.3 471.1
STATEMENT OF CHANGES IN FINANCIAL POSITION
EUR million 10-12/ 10-12/ 1-12/ 1-12/
2008 2007 2008 2007
FROM OPERATING ACTIVITIES
Net profit for the period 20.3 16.6 72.6 52.8
Depreciation and value decrease +2.7 +2.2 +9.1 +8.4
Gain on sale of fixed assets -6.3 -1.6 -6.3 -2.3
Share of associated companies' results +0.6 -0.0 -1.6 -0.4
Financial items -0.1 -1.1 -2.5 -2.7
Income taxes +6.6 +6.7 +30.6 +23.7
Change in work in progress +12.3 +9.1 -4.8 -11.7
Change in accounts and other receivables +3.9 -11.0 +1.9 -5.6
Change in advances received +2.5 +8.3 -23.7 +27.4
Change in payables and other liabilities -5.5 +7.1 +8.6 +13.1
Received financial income +2.2 +1.4 +6.2 +4.3
Paid financial expenses -1.4 -0.3 -3.0 -1.5
Paid income taxes -5.8 -4.7 -30.5 -19.1
Total from operating activities +32.0 +32.7 +56.6 +86.4
CAPITAL EXPENDITURE
Investments in shares in subsidiaries
deducted with cash acquired -3.4 -3.0 -8.7 -23.4
Sales of shares in subsidiaries +0.0 +0.3 +0.0 +0.3
Investments in fixed assets -2.9 -4.0 -10.7 -9.9
Sales of shares in associated companies +6.9 +1.8 +6.9 +1.8
Sales of other shares -0.3 +1.6 +0.4 +2.2
Sales of fixed assets +0.1 +0.5 +1.2 +1.2
Capital expenditure total, net +0.4 -2.8 -10.9 -27.8
Net cash before financing +32.4 +29.9 +45.7 +58.6
FINANCING
New loans +97.7 +0.0 +118.2 +0.0
Repayments of loans -0.8 -0.8 -2.6 -2.6
Change in current financing -7.6 -19.0 -3.7 -2.2
Change in non-current investments +0.0 +0.5 +0.0 +0.5
Dividends -0.0 -0.5 -39.1 -30.0
Acquisitions of own shares -0.0 -0.0 -5.9 -0.0
Share subscription +0.4 +0.2 +1.2 +0.9
Net cash from financing +89.7 -19.6 +68.1 -33.4
Change in cash and cash equivalents +122.1 +10.3 +113.8 +25.3
Cash and cash equivalents at the beginning
of the period 88.1 89.8 98.7 74.9
Impact of translation differences in
exchange rates -6.5 -1.4 -8.8 -1.4
Cash and cash equivalents 31 December 203.7 98.7 203.7 98.7
CHANGES IN EQUITY
EUR million
Inves-
Share ted
pre- free Trans- Re- Minor-
Share mium Legal equity lation tained ity
cap- re- re- re- differ- earn- inter- Total
ital serve serve serve ences ings Total est equity
Equity
1 October
2007 14.6 32.1 19.3 4.6 -12.2 109.5 167.9 6.1 174.0
Net income
recorded
direct to
equity 0.0 0.0 0.0
Trans-
lation
differ-
ences -1.7 -1.7 -1.7
Net profit
for the
period 15.9 15.9 0.7 16.6
Income and
expenses
for the
period -1.7 15.9 14.2 0.8 15.0
Share
issue 0.0 0.0
Shares
subscribed
with stock
options 0.3 0.3 0.3
Payment of
dividend 0.0 0.0
Transfer,
retained
earnings 0.2 -0.2 0.0 0.0
Expenses
from
share-
based
incentive
programme 0.1 0.1 0.1
Other
changes 0.3 0.2 0.0 0.0 0.4 0.4
Equity 31
December
2007 14.6 32.4 19.5 4.6 -13.9 125.4 182.6 6.9 189.5
Equity
1 January
2007 14.5 31.5 19.1 0.0 -10.9 102.6 156.8 6.1 162.9
Net income
recorded
direct to
equity 0.0 0.0
Trans-
lation
differ-
ences -2.9 -2.9 -2.9
Net profit
for the
period 51.3 51.3 1.5 52.8
Income and
expenses
for the
period -2.9 51.3 48.4 1.5 49.9
Share
issue 4.6 0.4 5.0 5.0
Shares
subscribed
with stock
options 0.1 0.9 1.0 1.0
Payment of
dividend -29.1 -29.1 -0.7 -29.8
Transfer,
retained
earnings 0.4 -0.4 0.0 0.0
Expenses
from
share-
based
incentive
programme 0.5 0.5 0.5
Other
changes 0.1 0.9 0.4 4.6 -28.5 -22.6 -0.7 -23.4
Equity 31
December
2007 14.6 32.4 19.5 4.6 -13.9 125.4 182.6 6.9 189.4
Equity
1 October
2008 14.6 32.4 20.2 5.4 -16.0 132.5 189.1 7.4 196.5
Net income
recorded
direct to
equity 0.0 0.0
Trans-
lation
differ-
ences -4.0 -4.0 -0.1 -4.1
Trans-
lation
differ-
ences from
equity
hedging -2.4 -2.4 -2.4
Net profit
for the
period 19.8 19.8 0.5 20.3
Income and
expenses
for the
period -6.4 19.8 13.4 0.4 13.8
Share
issue
Shares
subscribed
with stock
options 0.4 0.4 0.4
Payment of
dividend 0.0 0.0
Acquisi-
tion of
own shares 0.0 0.0 0.0
Transfer,
retained
earnings 0.3 -0.3 0.0 0.0
Expenses
from
share-
based
incentive
programme 0.4 0.4 0.4
Other
changes 0.3 0.4 0.1 0.8 0.0 0.8
Equity 31
December
2008 14.6 32.4 20.5 5.8 -22.4 152.5 203.4 7.7 211.1
Equity
1 January
2008 14.6 32.4 19.5 4.6 -13.9 125.4 182.6 6.9 189.5
Net income
recorded
direct to
equity 0.0 0.0 0.0
Trans-
lation
differ-
ences -6.1 -6.1 -0.1 -6.2
Exchange
losses
from
equity
hedging -2.4 -2.4 -2.4
Net profit
for the
period 70.8 70.8 1.8 72.6
Income and
expenses
for the
period -8.5 70.8 62.3 1.7 64.0
Share
issue
Shares
subscribed
with stock
options 1.2 1.2 1.2
Payment of
dividend -38.0 -38.0 -1.0 -39.0
Acquisi-
tion of
own shares -5.9 -5.9 -5.9
Transfer,
retained
earnings 1.0 -1.0 0.0 0.0
Expenses
from
share-
based
incentive
programme 1.2 1.2 1.2
Minority
change -0.1 -0.1 0.1 0.0
Other
changes 1.0 1.2 -43.8 -41.6 -0.9 -42.5
Equity 31
December
2008 14.6 32.4 20.5 5.8 -22.4 152.5 203.4 7.7 211.1
PROFITABILITY AND OTHER KEY FIGURES 10-12/ 10-12/ 1-12/ 1-12/
2008 2007 2008 2007
Return on investment, % 45.4 42.4
Return on equity, % 38.7 31.9
Equity ratio, % 41.7 50.7
Equity/assets ratio, % 36.4 40.2
Net debt/equity ratio (gearing), % -38.5 -47.4
Net debt, EUR million -81.2 -89.9
Current ratio 1.7 1.3
Consulting and engineering, EUR million 538.6 551.4
EPC, EUR million 0.5 11.4
Order stock total, EUR million 539.1 562.8
Capital expenditure, operating
EUR million 2.9 3.1 10.7 9.1
Proportion of net sales, % 1.4 1.5 1.3 1.3
Capital expenditure in shares,
EUR million 3.6 7.9 8.9 44.2
Proportion of net sales, % 1.7 3.8 1.1 6.2
Personnel in group companies
on average 7702 6852
Personnel in associated companies
on average 267 271
Personnel in group companies
at year-end 7924 7269
Personnel in associated companies
at year-end 142 277
KEY FIGURES FOR THE SHARES 10-12/ 10-12/ 1-12/ 1-12/
2008 2007 2008 2007
Earnings/share, EUR 0.34 0.27 1.21 0.88
Diluted 0.34 0.27 1.19 0.86
Shareholders' equity/share, EUR 3.45 3.11
Dividend, EUR million 38.0 1) 38.1
Dividend/share, EUR 0.65 1) 0.65
Dividend/earnings, % 53.7 73.9
Effective return on dividend, % 8.3 3.8
Price/earnings multiple 6.5 19.7
Issue-adjusted trading prices, EUR
Average trading price 13.86 16.08
Highest trading price 18.34 20.14
Lowest trading price 6.90 11.37
Closing price at year-end 7.82 17.31
Total market value of shares,
outstanding shares, EUR million 457.3 1015.3
own shares, EUR million 3.1
Trading volume of shares
Shares, 1000 17 420 17 326
Proportion of total volume, % 29.8 29.7
Issue-adjusted number of outstanding
shares, 1000
On average 58 540 58 323
At year-end 58 879 58 653
1) Board of Directors' proposal.
CHANGE IN INTANGIBLE ASSETS
EUR million 10-12/2008 10-12/2007 1-12/2008 1-12/2007
Book value at beginning of
period 6.4 7.1 6.6 7.9
Acquired companies 0.7 0.2 0.7 0.9
Capital expenditure -0.4 0.6 1.4 1.4
Decreases 0.0 0.0 0.0 0.0
Depreciation and expensed -0.7 -1.2 -2.5 -3.5
Translation difference 0.2 -0.1 0 -0.1
Book value at end of period 6.2 6.6 6.2 6.6
Change in tangible assets
Book value at beginning of
period 18.6 17.6 17.8 17.0
Acquired companies 0.0 0 0.7 0.6
Capital expenditure 3.3 1.9 9.3 7.1
Decreases -1.1 -0.1 -2.2 -0.8
Depreciation -2.0 -1.5 -6.6 -6.0
Translation difference 0.0 -0.1 -0.2 -0.1
Book value at end of period 18.8 17.8 18.8 17.8
CONTINGENT LIABILITIES
EUR million 31 Dec. 2008 31 Dec. 2007
Other obligations
Pledged assets 0.1 0.3
Other obligations 45.2 40.4
Total 45.3 40.7
For others
Pledged assets 0.1 0.1
Other obligations 0.1 0.1
Total 0.2 0.2
Rent and lease obligations 118.2 113.6
RELATED PARTY TRANSACTIONS 2008 2007
To the related parties of Pöyry Group
belong the subsidiaries and the associated
companies, the Board of Directors, the
President and CEO, the Deputy to the
President and CEO and the members of the
Group Executive Committee. Furthermore
Corbis S.A. belongs to the related parties.
Employee benefits for the Board of
Directors, the President and CEO, the
Deputy to the President and CEO and the
members of the Group Executive Committee
Salaries, bonuses and other short-term
employee benefits 3.4 3.2
Shareholding and option rights of related
parties, option programme 2004
The members of the Board of Directors, the
President and CEO, the Deputy to the
President and CEO and the members of the
Group Executive Committee owned on 31
December 2008 a total of 167 437 shares and
150 679 stock options (on 31 December 2007
a total of 207 107 shares, and 236 975
stock options 2004).With the stock options
the shareholding can be increased by 602
716 shares equalling 1.0 per cent of the
total number of shares and votes.
Performance share plan 2008-2010
In December 2007 the Board of Directors of
Pöyry PLC approved a share-based incentive
plan for key personnel. The plan includes
three earning periods which are the
calendar years 2008, 2009 and 2010.
The option programme 2004 and the
performance share plan 2008-2010 are
described in the Board of Directors'
report.
Own shares
Pöyry PLC holds 386 086 own shares and a
subsidiary of Pöyry PLC owns 8914 shares,
or totally 395 000 shares, corresponding to
0.7 per cent of the total number of shares.
Transactions with the associated companies
The transactions with the associated
companies are determined on an arm's length
basis.
Sales to associated companies 0.3 0.1
Loans receivable from associated companies 0.1 0.1
Accounts receivable from associated
companies 0.0 0.0
BUSINESS SEGMENTS
EUR million 1-12/2008 1-12/2007
NET SALES
Energy 241.3 217.5
Forest Industry 318.2 276.9
Infrastructure & Environment 262.2 222.5
Unallocated 0.0 1.3
Total 821.7 718.2
OPERATING PROFIT AND NET PROFIT FOR THE
PERIOD
EUR million, proportion of net sales % % %
Energy 32.0 13.2 21.0 9.7
Forest Industry 54.0 17.0 39.0 14.1
Infrastructure & Environment 20.1 7.7 16.8 7.5
Unallocated -5.5 -3.0
OPERATING PROFIT TOTAL 100.6 12.2 73.8 10.3
Financial items 2.6 2.7
PROFIT BEFORE TAXES 103.2 76.5
Income taxes -30.6 -23.7
NET PROFIT FOR THE PERIOD 72.6 52.8
Attributable to:
Equity holders of the parent company 70.8 51.3
Minority interest 1.8 1.5
ORDER STOCK
Energy 196.4 212.7
Forest Industry 89.1 123.8
Infrastructure & Environment 253.2 226.3
Unallocated 0.4 0.0
Total 539.1 562.8
Consulting and engineering 538.6 551.4
EPC 0.5 11.4
Total 539.1 562.8
GEOGRAPHICAL SEGMENTS
The Nordic countries 234.3 201.1
Europe 363.1 307.8
Asia 72.6 67.3
North America 27.7 34.2
South America 89.5 82.2
Other 34.5 25.6
Total 821.7 718.2
PERSONNEL
Energy 1 870 1 838
Forest Industry 3 158 2 961
Infrastructure & Environment 2 779 2 378
Unallocated 117 92
Total 31 December 7 924 7 269
BUSINESS SEGMENTS
EUR million 1-3/ 4-6/ 7-9/ 10-12/
2008 2008 2008 2008
NET SALES
Energy 58.1 62.1 56.8 64.3
Forest Industry 76.8 88.4 74.4 78.6
Infrastructure & Environment 60.9 67.1 62.1 72.1
Unallocated 0.4 0.4 0.6 -1.4
Total 196.2 218.0 193.9 213.6
OPERATING PROFIT AND NET PROFIT FOR THE
PERIOD
Energy 5.6 8.3 6.3 11.8
Forest Industry 12.8 17.7 13.3 10.2
Infrastructure & Environment 4.4 5.4 4.0 6.3
Unallocated -0.8 -1.4 -1.7 -1.6
OPERATING PROFIT TOTAL 22.0 30.0 21.9 26.7
Financial items 0.6 0.5 1.3 0.2
PROFIT BEFORE TAXES 22.6 30.5 23.2 26.9
Income taxes -7.1 -9.4 -7.5 -6.6
NET PROFIT FOR THE PERIOD 15.5 21.1 15.7 20.3
Attributable to:
Equity holders of the parent company 15.1 20.5 15.4 19.8
Minority interest 0.4 0.6 0.3 0.5
OPERATING PROFIT %
Energy 9.6 13.4 11.1 18.3
Forest Industry 16.6 20.0 17.9 13.0
Infrastructure & Environment 7.3 8.0 6.4 8.7
OPERATING PROFIT TOTAL 11.2 13.8 11.3 12.5
ORDER STOCK
Energy 205.8 195.8 216.1 196.4
Forest Industry 135.6 126.7 122.4 89.1
Infrastructure & Environment 232.5 232.8 255.6 253.2
Unallocated 0.4 0.4 0.4 0.4
Total 574.3 555.7 594.5 539.1
Consulting and engineering 568.5 551.5 592.5 538.6
EPC 5.8 4.2 2.0 0.5
Total 574.3 555.7 594.5 539.1
BUSINESS SEGMENTS
EUR million 1-3/ 4-6/ 7-9/ 10-12/
2007 2007 2007 2007
NET SALES
Energy 51.4 51.8 51.6 62.7
Forest Industry 64.6 67.4 65.2 79.7
Infrastructure & Environment 50.8 53.4 55.6 62.7
Unallocated 0.2 0.4 0.3 0.4
Total 167.0 173.0 172.7 205.5
OPERATING PROFIT AND NET PROFIT FOR THE
PERIOD
Energy 5.3 4.6 5.7 5.4
Forest Industry 7.8 8.6 9.9 12.7
Infrastructure & Environment 3.7 3.5 4.4 5.2
Unallocated -0.8 -0.4 -0.7 -1.1
OPERATING PROFIT TOTAL 16.0 16.3 19.3 22.2
Financial items 0.5 0.5 0.6 1.1
PROFIT BEFORE TAXES 16.5 16.8 19.9 23.3
Income taxes -5.3 -5.4 -6.3 -6.7
NET PROFIT FOR THE PERIOD 11.2 11.4 13.6 16.6
Attributable to:
Equity holders of the parent company 10.9 11.0 13.5 15.9
Minority interest 0.3 0.4 0.1 0.7
OPERATING PROFIT %
Energy 10.3 8.9 11.0 8.6
Forest Industry 12.1 12.8 15.2 16.0
Infrastructure & Environment 7.3 6.6 7.9 8.2
OPERATING PROFIT TOTAL 9.6 9.4 11.2 10.8
ORDER STOCK
Energy 214.8 233.8 223.7 212.7
Forest Industry 154.1 140.2 143.3 123.8
Infrastructure & Environment 198.4 204.6 216.7 226.3
Unallocated 0.3 0.3 0.0 0.0
Total 567.6 578.9 583.7 562.8
Consulting and engineering 553.1 558.1 566.2 551.4
EPC 14.5 20.8 17.5 11.4
Total 567.6 578.9 583.7 562.8
BUSINESS SEGMENTS PROFORMA
EUR million 1-12/ 1-12/
2008 2007
NET SALES
Energy 241.3 217.5
Forest Industry 294.5 260.6
Transportation 105.5 91.7
Water and Environment 87.6 78.5
Construction Services 92.8 68.6
Unallocated 0.0 1.3
Total 821.7 718.2
OPERATING PROFIT AND NET PROFIT FOR THE PERIOD
PROFORMA
EUR million, proportion of net sales % % %
Energy 32.0 13.2 21.0 9.7
Forest Industry 50.8 17.2 36.3 13.9
Transportation 9.2 8.7 7.2 7.8
Water and Environment 4.2 4.8 3.5 4.5
Construction Services 9.9 10.7 8.8 12.9
Unallocated -5.5 -3.0
OPERATING PROFIT TOTAL 100.6 12.2 73.8 10.3
Financial items 2.6 2.7
PROFIT BEFORE TAXES 103.2 76.5
Income taxes -30.6 -23.7
NET PROFIT FOR THE PERIOD 72.6 52.8
Attributable to:
Equity holders of the parent company 70.8 51.3
Minority interest 1.8 1.5
ORDER STOCK PROFORMA
Energy 196.4 212.7
Forest Industry 86.3 119.6
Transportation 130.9 107.0
Water and Environment 76.8 72.4
Construction Services 48.3 51.1
Unallocated 0.4 0.0
Total 539.1 562.8
Consulting and engineering 538.6 551.4
EPC 0.5 11.4
Total 539.1 562.8
BUSINESS SEGMENTS, PROFORMA
EUR million 1-3/ 4-6/ 7-9/ 10-12/
2008 2008 2008 2008
NET SALES
Energy 58.1 62.1 56.8 64.3
Forest Industry 70.8 81.9 69.3 72.5
Transportation 23.7 26.5 26.3 29.0
Water and Environment 20.3 21.6 20.3 25.4
Construction Services 22.9 25.4 20.6 23.9
Unallocated 0.4 0.5 0.6 -1.5
Total 196.2 218.0 193.9 213.6
OPERATING PROFIT
Energy 5.6 8.3 6.3 11.8
Forest Industry 11.7 16.9 12.7 9.5
Transportation 2.1 1.4 2.4 3.3
Water and Environment 0.7 1.4 0.3 1.8
Construction Services 2.7 3.4 1.9 1.9
Unallocated -0.8 -1.4 -1.7 -1.6
OPERATING PROFIT TOTAL 22.0 30.0 21.9 26.7
OPERATING PROFIT %
Energy 9.6 13.4 11.1 18.3
Forest Industry 16.5 20.6 18.3 13.1
Transportation 8.9 5.3 9.1 11.3
Water and Environment 3.4 6.5 1.5 7.3
Construction Services 11.8 13.4 9.2 8.1
OPERATING PROFIT TOTAL 11.2 13.8 11.3 12.5
ORDER STOCK
Energy 205.8 195.8 216.1 196.4
Forest Industry 133.0 123.3 116.3 86.3
Transportation 113.1 114.5 130.3 130.9
Water and Environment 74.7 75.0 78.3 76.8
Construction Services 47.3 46.7 53.1 48.3
Unallocated 0.4 0.4 0.4 0.4
Total 574.3 555.7 594.5 539.1
BUSINESS SEGMENTS PROFORMA
EUR million 1-3/ 4-6/ 7-9/ 10-12/
2007 2007 2007 2007
NET SALES
Energy 51.4 51.8 51.6 62.7
Forest Industry 61.3 64.1 61.2 74.0
Transportation 22.3 21.9 22.8 24.7
Water and Environment 18.2 19.5 19.2 21.6
Construction Services 13.6 15.3 17.6 22.1
Unallocated 0.2 0.4 0.3 0.4
Total 167.0 173.0 172.7 205.5
OPERATING PROFIT
Energy 5.3 4.6 5.7 5.4
Forest Industry 7.2 8.2 9.1 11.8
Transportation 2.3 1.0 1.9 2.0
Water and Environment 0.5 1.1 0.4 1.5
Construction Services 1.5 1.8 2.9 2.6
Unallocated -0.8 -0.4 -0.7 -1.1
OPERATING PROFIT TOTAL 16.0 16.3 19.3 22.2
OPERATING PROFIT %
Energy 10.3 8.9 11.0 8.6
Forest Industry 11.7 12.8 14.9 15.9
Transportation 10.1 4.6 8.4 8.1
Water and Environment 2.9 5.6 1.7 7.2
Construction Services 11.2 11.9 16.5 11.9
OPERATING PROFIT TOTAL 9.6 9.4 11.2 10.8
ORDER STOCK
Energy 214.8 233.8 223.7 212.7
Forest Industry 149.0 135.4 134.7 119.6
Transportation 90.8 88.4 96.8 107.0
Water and Environment 72.2 71.6 72.0 72.4
Construction Services 40.5 49.4 56.5 51.1
Unallocated 0.3 0.3 0.0 0.0
Total 567.6 578.9 583.7 562.8
ACQUISITIONS DURING 2008
Acquisition Acquired
Name and business date interest %
Arket Oy 7 May 2008 100
The company specialises in architectural
design services for healthcare, office,
retail and industrial buildings. The
company is based in Espoo, Finland
employing nine persons. The company has
been merged with Pöyry Architects Oy.
Geopale Oy 12 May 2008 100
The company specialises in bedrock core
drillings. The company is based in
Jyväskylä, Finland employing 14 persons.
The company has been merged with Pöyry
Environment Oy.
Consilier Construct S.R.L. 27 May 2008 100
The company focuses on the transportation
market, in particular on the road and rail
sector. The company is based in Bucharest,
Romania and has a staff of 220.
ETT Proyectos S.L. 1 October 2008 100
The company provides engineering and
consultancy services in the rail sector,
including both conventional railways as
well as bullet train systems. The company
is based in Madrid, Spain and has a staff
of 45.
Kündig & Partner AG 3 December 2008 100
The company is specialised in HVAC
building services, and brings in a focus
on complex and sophisticated sanitary
designs of hospitals and laboratory
facilities. The company is based in Bern,
Switzerland and has a staff of 10.
Shanghai Kang Hong Construction Ltd 2008 100
The company is primarily engaged in
project management for industrial and
commercial real estate development and
construction projects. The company is
based in Shanghai, China and has a staff
of 29. The acquisition is subject to
approval by the Chinese authorities. The
company has not been consolidated into
Pöyry Group in 2008, and thus not included
in the above figures.
ACQUISITIONS DURING 2007
Acquisition Acquired
date interest %
Rakennuslaskenta NHL Oy 25 May 2007 100
The company specialises in quantity and
cost calculations, building consulting
and condition assessment services. The
company is based in Turku, Finland and
has a staff of 23. The company has been
merged with Pöyry Building Services Oy.
CJSC "Giprobum-Pöyry" (ZAO Giprobum 15 June 2007 70
Engineering) 19 March 2008 30
The company specialises in investment
studies, services related to permitting
and agreements with authorities, various
sectors of plant engineering, and
construction management in the forest
industry. The company is based in St.
Petersburg, Russia and has a staff of
260.
Pöyry Evata Oy (Evata Worldwide Oy) 27 June 2007 70
The company specialises in architectural
and interior design, workplace design,
office property consulting and services
related to real estate development. The
company is based in Helsinki, Finland and
has a staff of 100.
Pöyry AS (ECON Analyse AS) 27 August 2007 100
The company provides research, analysis
and strategic advice relating to the
interaction of markets and policies. In
addition to consulting assignments, the
company offers a set of subscription
services related to energy and carbon
markets as well as manages multi-client
and scenario studies. The company is
based in Oslo and Stavanger, Norway and
Stockholm, Sweden and Copenhagen,
Denmark, and has a staff of 85.
Insinööritoimisto Pöysälä & Sandberg Oy 5 September 2007 100
The company specialises in industrial
building construction and structural
engineering of office and commercial
buildings. The company is based in
Helsinki, Kuopio and Oulu in Finland and
has a staff of 100. The company has been
merged with Pöyry Civil Oy.
Ingenieurgemeinschaft Wirzenhausen Fricke& Türk GmbH (IGW) 5 October 2007 100
The company specialises in waste
management, especially in mechanical and
biological waste treatment. The company
is based in Germany and has a staff of
20. The company has been merged with
Pöyry Environment GmbH.
Perforex Inc. 21 November 2007 100
The company specialises in management
consulting services in forest industry.
The company's main operational bases are
in Toronto, Canada and in Atlanta and
Portland (Oregon), USA. The company has a
staff of 35.
Quatrocon Oy 30 November 2007 100
The company specialises in HVAC design.
The company is based in Espoo, Finland
and has a staff of 14. The company has
been merged with Pöyry Building Services
Oy.
IDP Consult Incorporated 18 December 2007 67
The company is serving international
donors in technical assistance projects
in the water sector. The company is based
in Manila, Philippines and has a staff of
30. The company has been consolidated
into Pöyry Group as of the beginning of
2008 and therefore not included in the
2007 figures.
Aggregate figures for the above acquisitions 2008 2007
Fixed price, paid 8.8 30.2
Fixed price, unpaid 0.0 0.3
Additional 30%, estimate 0.0 3.0
Earnout estimate 0.2 5.4
Share issue 0.0 5.0
Order intake estimate 0.0 0.0
Fees 0.1 0.2
Total 9.1 44.1
Price allocation 4.7 10.5
Equity 0.0 0.0
Fair value adjustments:
Client relationship 0.0 0.3
Order stock 0.0 0.0
Other 4.7 10.8
Total
Remaining = goodwill 4.4 33.3
Market leadership, experienced management and staff, and
earnings expectations are factors contributing to the
amount booked as goodwill.
Impact on the Pöyry Group's income statement
Operating profit from acquisition date to
31 December 2008 1.8 2.0
Sales volume on a 12-month calendar year basis 2007 17.4 50.1
Operating profit on 12-month calendar year basis 2007 2.4 5.3
Impact on the Pöyry Group's number of personnel 328 637
Impact on the Pöyry Group's assets and liabilities
EUR million 2008 2007
Book Book
values values
at at Fair
acqui- Fair Adjusted acqui- value Adjusted
sition value IFRS sition adjust- IFRS
date adjust-ments values date ments values
Goodwill 0.0 0.0 0.0 0.0 -0.1 -0.1
Intangible
assets 0.1 0.0 0.1 0.7 0.3 1.0
Tangible assets 0.8 0.1 0.9 0.5 0.0 0.5
Shares 0.0 0.0 0.0 0.1 0.1 0.2
Work in progress 0.9 0.6 1.5 1.6 0.0 1.6
Accounts
receivable 4.6 0.0 4.6 6.5 6.5
Other
receivables 1.6 -0.2 1.4 1.7 1.7
Cash and cash
equivalents 2.5 0.0 2.5 8.9 -0.2 8.7
Assets total 10.5 0.5 11.0 20.0 0.1 20.1
Interest bearing
liabilities 0.5 0.5 0.4 0.4
Project advances 0.0 0.0 0.6 0.6
Accounts payable 1.7 1.7 1.1 1.1
Other current
liabilities 3.4 0.7 4.1 7.4 -0.2 7.2
Liabilities
total 5.6 0.7 6.3 9.5 -0.2 9.3
Net identifiable
assets and
liabilities 4.9 -0.2 4.7 10.5 0.3 10.8
Total cost of
business
combinations 9.1 44.1
Goodwill 4.4 33.3
Consideration
paid, satisfied
in cash 8.8 30.4
Cash acquired 2.5 8.7
Net cash outflow 6.3 21.7
