SRV'S ORDER BACKLOG REMAINS AT A RECORD LEVEL - SRV'S INTERIM REPORT 1 JANUARY-30 SEPTEMBER 2010
SRV GROUP PLC INTERIM REPORT 4 November 2010, 8.30 a.m. EET
Reporting period 1 January-30 September 2010 in brief:
- SRV's revenue was EUR 327.6 million (EUR 270.3 million in January-September
2009), change 21.2%
- Operating profit was EUR 7.3 million (EUR 8.0 million), change 8.3% negative
- Profit before taxes was EUR 3.5 million (EUR 4.3 million)
- The order backlog at the close of the review period was EUR 604.3 million (EUR
465.8 million), change 29.7%
- New contracts EUR 439.9 million (EUR 275.8 million), change 59.5%
- The equity ratio was 35.0 per cent (40.9%)
- Earnings per share were EUR 0.09 (EUR 0.05)
SRV adheres to the previous outlook for 2010. Revenue in 2010 is expected to
exceed the previous year's level and profit before taxes is expected to be
positive.
Third quarter 1 July - 30 September 2010 in brief:
- Revenue amounted to EUR 115.3 million (EUR 87.3 million in July - September
2009)
- Operating profit was EUR 4.3 million (EUR 2.3 million)
- Profit before taxes was EUR 3.5 million (EUR 1.1 million)
- Earnings per share were EUR 0.08 (EUR 0.01)
The interim report has been prepared in accordance with IAS 34. The disclosed
information is unaudited.
“SRV's outlays on business premises and housing construction in Finland have
produced results. Our order backlog remained at an all-time high, amounting to
EUR 604 million. The volume of new contracts grew by 59.5 per cent.
SRV's Business Premises had excellent success in acquiring customers and its
order backlog was up 34.3 per cent. The growth of the order backlog proves that
SRV's open operating model, robust expertise in implementation, reputation as a
reliable construction firm and committed employees support new customer
acquisition also in a tight market situation.
In line with our strategy, our housing production focuses on growth centres,
where the migration of the population and structural demand lay a strong
foundation for expanding operations. In the Greater Helsinki Area, we have
bolstered our position in housing construction and have become a major player in
this field. In the first part of the year, we started up the construction of 410
developer contracting housing units in Finland and sold a total of 361 units to
consumers (121 units in January-September/2009). Projects under construction are
now also in demand. Thanks to the positive response to premarketing, SRV has
decided to start the construction of another 133 housing units.
In our Russian operations, start-ups of projects under development were pushed
back. The Russian financial and property markets are gradually recovering. In
addition to developing the implementation of our current projects, we are also
boosting our growth strategy by focusing on the preparation of the first
investment projects for the property fund as well as the development of the
shopping centre in cooperation with Shanghai Industrial Investment Group.
SRV's result is not on a satisfactory level due to postponement of projects in
the International Business Area. We will now focus our efforts on start-up of
key projects in order to raise the volume of the segment to the level required
by its cost level.
SRV boasts strong innovative project development, and we will continue our
efforts on it by utilising the support from the company's solvency and financing
position. Even though the business premises market is challenging, I believe
that through project development SRV can start projects that are important to
the business activities of our clients. As an example of successful result of
persistence we can mention the Karisto shopping centre project, the construction
contract for which was signed in June.
We seek to increase our customer focus in housing construction, all the way from
design to the sales process. We were the first to implement an electronic
reservation system for housing units in a HITAS project. This system enables
customers to reserve apartments without having to come to stand in line. It also
ensured efficient and fair treatment. The customers received an immediate
confirmation of their reservation and they had a change to have a say in the
design of their future home. With premarketing, we target our production at
the types of housing units that are in great demand among customers. We enhance
our customer service. Instead of offering mass-produced interior design
solutions, we offer individual packages that are easy to customise. As many as
half of our customers are now using our customised interior design service.
In domestic housing production our aim is to raise our market share in the
growth centres. Our innovative project development has created numerous major
long-term possibilities in the Greater Helsinki Area, such as the Keilaniemi
Towers project, the project for planning the land use of the neighbouring areas
of the future metro station in Niittykumpu district in Espoo, the acquisition of
the Perkkaa plots from Siemens in Espoo, as well as participation in Sitra's
Low2No project with the aim to develop and implement a solution for the
construction of low carbon or no-carbon sustainable urban environments,” says
Jukka Hienonen, CEO of SRV.
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| Group key figures | IFRS | IFRS | | | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 1-9/ | 1-9/ | chang | change | 7-9/ | 7-9/ | 1-12/ |
| | 2010 | 2009 | e, | ,% | 2010 | 2009 | 2009 |
| | | | MEUR | | | | |
--------------------------------------------------------------------------------
| Revenue | 327.6 | 270. | 57.3 | 21.2 | 115.3 | 87.3 | 390.5 |
| | | 3 | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 7.3 | 8.0 | -0.7 | -8.3 | 4.3 | 2.3 | 10.7 |
--------------------------------------------------------------------------------
| Financial income | -3.8 | -3.7 | -0.1 | | -0.8 | -1.2 | -4.2 |
| and expenses, total | | | | | | | |
--------------------------------------------------------------------------------
| Profit before taxes | 3.5 | 4.3 | -0.8 | -18.6 | 3.5 | 1.1 | 6.5 |
--------------------------------------------------------------------------------
| 3 | | | | | | | |
--------------------------------------------------------------------------------
| Order backlog | 604.3 | 465. | 138.5 | 29.7 | | | 481.6 |
| | | 8 | | | | | |
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| New agreements | 439.9 | 275. | 164.1 | 59.5 | 112.6 | 86.3 | 396.1 |
| | | 8 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit, % | 2.2 | 3.0 | | | 3.7 | 2.6 | 2.7 |
--------------------------------------------------------------------------------
| Net profit, % | 0.8 | 0.7 | | | 2.4 | 0.6 | 0.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio, % | 35.0 | 40.9 | | | | | 41.3 |
--------------------------------------------------------------------------------
| Net interest | 227.7 | 189. | | | | | 179.9 |
| bearing debt | | 8 | | | | | |
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| Gearing, % | 146.7 | 116. | | | | | 109.8 |
| | | 3 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | 3.1 | 5.1 | | | | | 4.9 |
| investment, % 1) | | | | | | | |
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| Return on equity, % | 2.3 | 1.6 | | | | | 1.8 |
| 1) | | | | | | | |
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| | | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.09 | 0.05 | | | 0.08 | 0.01 | 0.08 |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
| Equity per share, | 4.47 | 4.45 | | | | | 4.48 |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
| Weighted average | 33.9 | 36.1 | | -6.0 | | | 36.0 |
| number of shares | | | | | | | |
| outstanding, | | | | | | | |
| million | | | | | | | |
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1) In calculating the key ratio only the profit for the period has been
annualised
Consolidated revenue was EUR 327.6 million (EUR 270.3 million in
January-September 2009), of which Finland accounted for 96 per cent (93%) and
Russia and the Baltic countries for 4 per cent (7%). Revenue in the Business
Premises business area was EUR 216.3 million (EUR 141.1 million). Revenue in the
Housing business area was EUR 98.9 million (EUR 108.6 million). Revenue in the
International business area was EUR 12.6 million (EUR 20.6 million).
The Group's operating profit was EUR 7.3 million (EUR 8.0 million in
January-September 2009). Operating profit margin was 2.2 per cent (3.0%).
Operating profit in the Business Premises business area was EUR 13.5 million
(EUR 13.7 million). Operating profit in the Housing business area was EUR 4.5
million (EUR 3.5 million). Operating loss in the International business area was
EUR 6.5 million (operating loss of EUR 5.7 million).
The Group's profit before taxes was EUR 3.5 million (profit of EUR 4.3 million
in January-September 2009). The profit for the review period was EUR 2.8 million
(profit of EUR 2.0 million). Earnings per share were EUR 0.09 (EUR 0.05). Return
on equity was 2.3 per cent (1.6%) and return on investment was 3.1 per cent
(5.1%).
The Group's revenue for the third quarter was EUR 115.3 million (EUR 87.3
million in July-September 2009) and operating profit EUR 4.3 million (EUR 2.3
million). Profit before taxes was EUR 3.5 million (profit of EUR 1.1 million).
Earnings per share were EUR 0.08 (EUR 0.01).
The order backlog grew by 29.7 per cent and was EUR 604.3 million on 30
September 2010 (EUR 465.8 million on 30 September 2009). The major reason behind
the growth in the order backlog was the 36.3 per cent increase of the portion of
the sold production to EUR 443 million (EUR 325 million on 30 September 2009).
Start-ups of developer contracting housing projects raised the share of the
unsold order backlog to EUR 162 million (EUR 141 million on 30 September 2009).
Key figures for the Segments
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| | IFRS | IFRS | | | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| Revenue | 1-9/ | 1-9/ | chang | chang | 7-9/ | 7-9/ | 1-12/ |
| (EUR million) | 2010 | 2009 | e, | e,% | 2010 | 2009 | 2009 |
| | | | MEUR | | | | |
--------------------------------------------------------------------------------
| Business Premises | 216.3 | 141.1 | 75.2 | 53.3 | 84.8 | 40.2 | 208.0 |
--------------------------------------------------------------------------------
| Housing | 98.9 | 108.6 | -9.8 | -9.0 | 24.7 | 39.7 | 158.6 |
--------------------------------------------------------------------------------
| International | 12.6 | 20.6 | -8.1 | -39.1 | 5.8 | 7.4 | 24.0 |
--------------------------------------------------------------------------------
| Other Operations | 7.5 | 6.4 | 1.1 | 17.3 | 2.5 | 2.1 | 8.7 |
--------------------------------------------------------------------------------
| Eliminations | -7.6 | -6.4 | -1.2 | | -2.5 | -2.1 | -8.8 |
--------------------------------------------------------------------------------
| Group, total | 327.6 | 270.3 | 57.3 | 21.2 | 115.3 | 87.3 | 390.5 |
--------------------------------------------------------------------------------
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| | IFRS | IFRS | | | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| Operating profit | 1-9/ | 1-9/ | chang | chang | 7-9/ | 7-9/ | 1-12/ |
| (EUR million) | 2010 | 2009 | e, | e,% | 2010 | 2009 | 2009 |
| | | | MEUR | | | | |
--------------------------------------------------------------------------------
| Business Premises | 13.5 | 13.7 | -0.2 | -1.5 | 4.5 | 3.1 | 18.0 |
--------------------------------------------------------------------------------
| Housing | 4.5 | 3.5 | 1.0 | 28.3 | 1.4 | 1.3 | 5.4 |
--------------------------------------------------------------------------------
| International | -6.5 | -5.7 | -0.8 | | -0.4 | -1.3 | -7.7 |
--------------------------------------------------------------------------------
| Other Operations | -3.9 | -3.3 | -0.6 | | -1.1 | -0.7 | -4.7 |
--------------------------------------------------------------------------------
| Eliminations | -0.2 | -0.1 | -0.1 | | 0.0 | -0.1 | -0.3 |
--------------------------------------------------------------------------------
| Group, total | 7.3 | 8.0 | -0.7 | -8.3 | 4.3 | 2.3 | 10.7 |
--------------------------------------------------------------------------------
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| Operating profit | IFRS | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (%) | 1-9/2010 | 1-9/2009 | 7-9/2009 | 7-9/2008 | 1-12/2009 |
--------------------------------------------------------------------------------
| Business Premises | 6.2 | 9.7 | 5.3 | 7.7 | 8.6 |
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| Housing | 4.6 | 3.2 | 5.5 | 3.4 | 3.4 |
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| International | -51.9 | -27.8 | -7.1 | -17.6 | -32.1 |
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| Group, total | 2.2 | 3.0 | 3.7 | 2.6 | 2.7 |
--------------------------------------------------------------------------------
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| Order backlog | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 30.9.09 | 30.9.08 | MEUR | % | 31.12.09 |
--------------------------------------------------------------------------------
| Business Premises | 338.5 | 252.0 | 86.5 | 34.3 | 255.3 |
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| Housing | 242.6 | 187.5 | 55.1 | 29.4 | 201.7 |
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| International | 23.1 | 26.3 | -3.2 | -12.0 | 24.6 |
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| Group, total | 604.3 | 465.8 | 138.5 | 29.7 | 481.6 |
--------------------------------------------------------------------------------
| - sold order | 443 | 325 | 118 | 36.3 | 317 |
| backlog | | | | | |
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| - unsold order | 162 | 141 | 21 | 14.6 | 165 |
| backlog | | | | | |
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Earnings trends of the Segments
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| | IFRS | IFRS | | | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| Business Premises | 1-9/ | 1-9/ | chang | chang | 7-9/ | 7-9/ | 1-12/ |
| | 2010 | 2009 | e, | e,% | 2010 | 2009 | 2009 |
| (EUR million) | | | MEUR | | | | |
--------------------------------------------------------------------------------
| Revenue | 216.3 | 141.1 | 75.2 | 53.3 | 84.8 | 40.2 | 208.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 13.5 | 13.7 | -0.2 | -1.5 | 4.5 | 3.1 | 18.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit, | 6.2 | 9.7 | | | 5.3 | 7.7 | 8.6 |
| % | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | 338.5 | 252.0 | 86.5 | 34.3 | | | 255.3 |
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The Business Premises business area comprises SRV Toimitilat Oy's retail,
office, logistics and rock construction operations and property development.
Revenue in the Business Premises business area was EUR 216.3 million (EUR 141.1
million). Operating profit was EUR 13.5 million (EUR 13.7 million), generating
an operating profit margin of 6.2 per cent (9.7%). The order backlog grew by
34.3 per cent to EUR 338.5 million (EUR 252.0 million).
Third-quarter revenue amounted to EUR 84.8 million (EUR 40.2 million) and
operating profit to EUR 4.5 million (EUR 3.1 million). Competition for new
contracts remained tight.
Among the projects completed during the review period were the first phase of
Malmi Hospital in Helsinki, the renovation of Kiinteistö Oy Niittymäentie 7 for
Ilmarinen Mutual Pension Insurance Company in Espoo, alteration and renovation
works in the mail sorting department of Itella's postal centre in Pasila,
Helsinki, as well as the repair works on the second stage of the University of
Helsinki's Metsätalo Building and the adjacent service tunnel in Unioninkatu,
Helsinki. The new equestrian centre Primus in Espoo, the bus depot in Kivikko,
Vantaa, the renovation and building of Mercuria business school in Vantaa, and a
new production building for Lassila & Tikanoja in Kerava were also completed.
The construction of Vierumäki Congress & Resort Hotel was completed and handed
over to Mutual Pension Insurance Company Varma.
In January, SRV signed a contract for the construction of the spa hotel Holiday
Club Saimaa in Lappeenranta. In addition to the hotel, the contract includes an
aqua park with a wellness area, a restaurant world and a multifunction ice
arena. The spa hotel will be completed in the summer of 2011.
In January, SRV and the Finnish Fair Corporation signed a contract for the
heightening of the Helsinki Fair Centre's car park, expanding it by
approximately 1,200 new parking spaces. The project will be completed by the end
of 2010.
In February, Citycon Oyj chose SRV as its project management contractor for the
construction and renovation of Espoontori shopping centre. The total floor area
of the project is about 18,600 square metres and the renovation will be
completed by December 2010.
In February, SRV and Helsinki University Premises and Property Services signed a
project management contract on the construction and renovation of the Kaisa-talo
building, a shopping centre in Kaisaniemenkatu, Helsinki, which will be
converted into the University's central campus library. This 30,740 square metre
project will be completed by 1 May 2012.
In June, SRV and Kesko signed the project management contract for the
construction of the shopping centre Karisma to be built in the Karisto district
in Lahti. SRV and Kesko have jointly developed the project and SRV will act as
the main contractor in the project. The total sales area in the shopping centre
is 35,000 square meters including a modern K-Citymarket and some 90 shops. The
shopping centre will open for Christmas 2011.
In July, SRV and Aro-Yhtymä Oy signed a project management contract for the
construction of a car dealership in Vantaa. The building will measure 18,400
gross square metres and will be completed towards the end of 2011.
During the review period, a contract was signed with the City of Vaasa for the
construction of day-care centre Punahilkka in Vaasa. Contracts were also signed
for the construction of new car service and repair premises for ScanAuto in
Hämeenlinna, the renovation of the premises of the European Chemicals Agency in
Annankatu, Helsinki, and the renovation of the Jyväskylä Forum shopping centre
owned by Citycon Oyj in Jyväskylä. Moreover, SRV signed a contract with the City
of Hyvinkää on the construction of new premises for the Hyvinkää town hall in
the Old Wool Factory. Contracts were also signed with the Helsinki University
Premises and Property Services for the completion of the renovation of the
Institute of Dentistry and the renovation of the Accelerator Laboratory on the
Kumpula campus, for the construction of a K-supermarket for Ruokakesko in Espoo
and for the extension works of an aviation service hangar at the Helsinki-Vantaa
airport.
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| | IFRS | IFRS | | | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| Housing | 1-9/ | 1-9/ | chang | chang | 7-9/ | 7-9/ | 1-12/ |
| (EUR million) | 2010 | 2009 | e, | e,% | 2010 | 2009 | 2009 |
| | | | MEUR | | | | |
--------------------------------------------------------------------------------
| Revenue | 98.9 | 108.6 | -9.8 | -9.0 | 24.7 | 39.7 | 158.6 |
--------------------------------------------------------------------------------
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| Operating profit | 4.5 | 3.5 | 1.0 | 28.3 | 1.4 | 1.3 | 5.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit, | 4.6 | 3.2 | | | 5.5 | 3.4 | 3.4 |
| % | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | 242.6 | 187.5 | 55.1 | 29.4 | | | 201.7 |
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The Housing business area comprises housing construction in the Helsinki
Metropolitan Area and the neighbouring municipalities, in addition to regional
business operations. Besides housing, regional business operations include
commercial, business premises and logistics construction projects.
Revenue in the Housing business area amounted to EUR 98.9 million (EUR 108.6
million) in the review period and operating profit was EUR 4.5 million (EUR 3.5
million). The order backlog was EUR 242.6 million (EUR 187.5 million). The
decline in revenue was attributable to the focus on developer contracting
housing projects and the fact that housing sales concentrated more on production
under construction. For the developer contracting housing projects SRV applies
the recognition principle based upon delivery. By using the earlier percentage
of completion method the revenue for the review period would have been around
EUR 21.7 million higher. Thirty residential units were completed during the
review period.
Third-quarter revenue amounted to EUR 24.7 million (EUR 39.7 million) and
operating profit to EUR 1.4 million (EUR 1.3 million). Housing sales
concentrated more on production under construction. One developer contracting
project sold to consumers was completed during the quarter under review: a
14-unit apartment house in Jyväskylä.
During the review period, we signed contracts worth EUR 53.9 million with
external clients. Of the signed contracts, negotiation contracts amounted to EUR
19.9 million; in these contracts, SRV serves as project developer and in
addition to construction attends to certain development tasks. In March, SRV
completed a Scania centre in Jyväskylä and a contract was signed with Scan-Auto
for the construction of a new Scania centre in Oulu for servicing large
vehicles. We signed a contract with YH-Asumisoikeus Länsi Oy for the
construction of 28 right-of-occupancy flats in the Vatiala district in Kangasala
and 20 flats in Pirkkala. In Ylöjärvi, SRV will build two blocks of flats
housing a total of 40 residential units for AVO Vuokratalot Oy. Moreover, 28
flats in terraced houses will be built for Suomen Asumisoikeus Oy in Kaarina.
Contracts worth EUR 33.9 million that were won through bidding competitions were
signed. The major contracts were for a 66-unit apartment house to be built for
VVO on Agronominkatu street in Viikki, Helsinki, and an assisted-living building
for Espoon Kruunu in Kauklahti, with 62 adjacent housing units.
More resources were allocated to developing contracting projects. During the
review period, 410 (4) new housing units were qualified for sale to consumers
and were included in the order backlog. In Helsinki, SRV will build the HITAS
project Isolokki in Arabianranta (142 price and quality controlled
owner-occupied flats) and Tampuriini in Kannelmäki (29-unit apartment house). In
Espoo, SRV started up Saunavuori, an apartment house with 57 units in
Saunalahti, and Espoon Kokki, an apartment house with 78 units in Matinkylä.
Espoon Kokki will be erected next to the Iso Omena shopping centre and the new
metro station to be built in Matinkylä. Two terraced-house projects were started
in Pirkanmaa: Pirkkalan Sinisiipi (26 units) and Tampereen Frida (11 units). SRV
builds Sello, a 26-unit apartment house, in Kaarina as well as Kirkkoväärti, a
21-unit apartment house in Vaajakoski, Jyväskylä. It is forecast that the first
building of the 20-unit terraced-house project Marjalan Saunaranta will be
completed in Joensuu before the turn of the year.
In addition to projects that are qualified for sale, SRV has decided to start
the construction of high-rise blocks in Martinlaakso, Vantaa and in Kangasala,
Pirkanmaa as well as a low-rise house project in Viikki, Nokia. The projects
include 133 housing units, but they are not yet qualified for sale and are not
included in the order backlog.
During the review period, SRV sold 477 (444) housing units. 361 (121) units were
sold to consumers, most of them in projects under construction. With negotiation
contracts, 116 (323) units were sold to investors. At the end of the period, 643
(80) residential units for sale to consumers were being constructed, 361 (79) of
which had not been sold. There were 90 (161) completed but unsold units, 24 of
which were rented at the period-end. A total of 30 (188) developer contracting
residential units were completed during the review period. Based on the current
completion schedules, SRV estimates that a total of 201 developer contracting
residential units will be completed during 2010.
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| Developer | 1-9/ | 1-9/ | change | 7-9/ | 7-9/ | 1-12/ |
| contracting housing | 2010 | 2009 | , | 2010 | 2009 | 2009 |
| production in | | | units | | | |
| Finland | | | | | | |
--------------------------------------------------------------------------------
| Start-ups | 410 | 4 | 406 | 110 | 0 | 251 |
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| Sold | 361 | 121 | 240 | 164 | 43 | 207 |
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| Completed | 30 | 188 | -158 | 14 | 37 | 252 |
--------------------------------------------------------------------------------
| Completed and unsold | 90 | 161 | -71 | | | 171 |
| 1) | | | | | | |
--------------------------------------------------------------------------------
| Under construction | 643 | 80 | 563 | | | 263 |
| 1) | | | | | | |
--------------------------------------------------------------------------------
| - of which unsold 1) | 361 | 79 | 282 | | | 231 |
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1) at the end of the period
The S-Group's Kodin Terra hardware and home decor department store and ABC
service station in the Kolmenkulma business estate in Nokia were completed in
late spring. Major developer contracting projects under construction include
Musketööri in Vantaa (88 units), Martti in the Martinlaakso district of Vantaa
(67 units), Isolokki in Arabianranta, Helsinki (142 units) and Kokki in
Matinkylä, Espoo (78 units).
SRV is participating in the Low2No project, which aims to develop and implement
a solution for the construction of low carbon or no-carbon sustainable urban
environments in order to minimise energy consumption. This project is partly
funded by Tekes. In addition to SRV, the participants include Sitra (the Finnish
Innovation Fund), VVO Yhtymä Oyj and an international design team that was
selected in a sustainable construction competition in 2009. The City of Helsinki
has reserved a city block for Sitra in Jätkänsaari that will be built in line
with the Low2No concept. The housing units and business premises in this block
will be designed as multipurpose environments that serve changing work and life
patterns, making use of innovative environment, layout and service planning.
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| | IFRS | IFRS | | | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| International | 1-9/ | 1-9/ | chang | chang | 7-9/ | 7-9/ | 1-12/ |
| Operations | 2010 | 2009 | e, | e,% | 2010 | 2009 | 2009 |
| (EUR million) | | | MEUR | | | | |
--------------------------------------------------------------------------------
| Revenue | 12.6 | 20.6 | -8.1 | -39.1 | 5.8 | 7.4 | 24.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | -6.5 | -5.7 | -0.8 | | -0.4 | -1.3 | -7.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit, | -51.9 | -27.8 | | | -7.1 | -17.6 | -32.1 |
| % | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | 23.1 | 26.3 | -3.2 | -12.0 | | | 24.6 |
--------------------------------------------------------------------------------
International Operations comprises the business activities of the SRV
International subgroup in Russia and the Baltic countries.
Revenue in the International business area was EUR 12.6 million (EUR 20.6
million). The decrease in revenue was due to the small number of projects under
construction while the activities were focused on the development of our own
projects in Russia, in particular. Operating loss was EUR 6.5 million (a loss of
EUR 5.7 million). In addition to the small number of projects under
construction, operating profit was affected by the development costs of
developer contracting projects and the fixed costs of business operations.
Furthermore an entry of EUR 1.0 million relating to projects which were
completed earlier, was recorded. The order backlog was EUR 23.1 million (EUR
26.3 million).
Third-quarter revenue amounted to EUR 5.8 million (EUR 7.4 million) and
operating loss to EUR 0.4 million (loss of EUR 1.3 million). The decrease in
revenue was due to the small number of projects under construction while the
activities were focused on the development of our own projects in Russia, in
particular. The operating profit improved due to an entry of EUR 0.9 million as
the recordings related to earlier projects were confirmed from EUR 1.9 million
to EUR 1.0 million for the whole review period.
Russia
The leasing of the Etmia II office and parking facility project in the heart of
Moscow continued. More than 90 per cent of the facilities are leased. SRV's role
in the project is to act as co-owner with a 50 per cent stake and as the project
management contractor.
During the review period, SRV had a particular focus on the analysis and
clarification of the investment sites of VTBC-Ashmore Real Estate Partners I in
Moscow. The fund primarily invests in the construction of offices, commercial
premises, hotels and upscale housing in Moscow and St. Petersburg. SRV's share
of the investment commitments in the first phase is EUR 20 million. During the
spring, Deutsche Bank announced its wishes to withdraw from its position in the
General Partner company due to tightened bank control regulations. Deutsche Bank
has been replaced with Ashmore Group Plc ("Ashmore"), which also became a
shareholder in the General Partner company and, together with various funds it
manages, a Limited Partner investor. The other investors involved in the fund
are VTB Capital and the Finnish pension insurance companies Ilmarinen and Etera.
VTB Capital and Ashmore act as sponsors and general partners of the fund. Their
tasks include identifying investments and arranging financing for the projects.
SRV acts both as an investor and project management contractor with respect to
the fund, through which it expects to receive at least EUR 200 million worth of
construction contracts. The fund is currently primarily analysing Elite
residential sites as well as office, commercial and hotel sites in the heart of
Moscow.
During the review period, SRV continued the development of the shopping centre
to be built on the Baltic Pearl area. SRV and Shanghai Industrial Investment
Company (SIIC) established a joint project company, OOO Pearl Plaza, to develop
the project. SRV is responsible for the development and construction of the
project. During the review period, SRV signed a project management contract with
OOO Pearl Plaza for the design and development of the shopping centre. SRV's aim
is that the final investment decision is made by 31 December 2010, and that the
mobilisation of the project could be started towards the end of this year. The
shopping centre is part of the Baltic Pearl development project, in which Baltic
Pearl CJSC will use a land area of over 205 hectares, located south-west of
central St. Petersburg, for development. This project is China's largest
international investment project, apart from oil and natural gas investments.
The cornerstone laying ceremony of the Baltic Pearl project was held at the end
of September. Paavo Väyrynen, the Finnish Minister for Foreign Trade and
Development, attended the ceremony.
In the Moscow area, construction of the electrical connection for the Mytischi
shopping centre project, which has been developed by SRV, will be completed
during the summer. The building permit for this project was obtained already in
the summer of 2009. The majority owner of the project is the Finnish real estate
investment company Vicus, with a 75 per cent stake. The final investment
decisions will be made after the financing of the project and negotiations with
the tenants have been concluded. SRV owns 25 per cent of the shopping centre
project and its total investments amount to EUR 8.8 million.
At the Sheremetyevo airport in Moscow, SRV began the renovation of the old
Aeroport hotel. This hotel, which will move under the Park Inn brand, is a
continuation of the cooperation SRV initiated in St. Petersburg with the hotel
owner, Wenaas Group. At the end of June a new contract was signed with Wenaas
Group for the renovation of some 200 rooms in the Pulkovskaya Hotel.
Procurements for the project commenced during the review period. The renovation
works will begin in October.
SRV continued the development of the roughly 8.5 hectare land area in St.
Petersburg. The plans include the construction of office and retail space, as
well as hotel, restaurant and entertainment premises. Moreover, facilities will
be built for the IBI University. In January 2010, the Urban Planning and
Architectural Committee of St. Petersburg approved SRV's concept for the 600,000
square metre project, and site planning for phase I has begun. SRV has invested
about EUR 51.8 million in acquisition of land and properties in this area;
further investment in land acquisition is estimated at about EUR 8 million. At
the moment, SRV owns 87.5 per cent of the project, but its ownership will
decline to 77.5 per cent when all ownership arrangements have been completed
according to the cooperation contract.
The development of the Eurograd logistics area in St. Petersburg continued. SRV
has 49 per cent ownership of the Russian company that possesses a plot of 24.9
hectares located north of St. Petersburg, in the immediate vicinity of the Ring
Road. Over 100,000 square metres of logistics facilities are planned for the
site, to be built in several stages during the next few years. The zoning of the
area for logistics has been completed.
In the city of Vyborg, the intensified marketing campaign for the apartments in
the Papula residential area continued till the summer. A total of 14 housing
units have been sold while 24 units remained unsold at the end of the period.
Baltic countries
Business volumes in the Baltic countries were low. In Estonia, 12 (5)
residential units were sold during the period. All in all, there were 19 (36)
completed but unsold units at the end of the period. In Latvia, the number of
staff was adjusted to the market situation.
In Latvia, the construction of the International School of Latvia commenced in
September according to the construction contract between SRV and the school
which was signed in 2009. The project start-up was postponed due to a delay in
the financing.
--------------------------------------------------------------------------------
| | IFRS | IFRS | | | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| Other Operations | 1-9/ | 1-9/ | chang | chang | 7-9/ | 7-9/ | 1-12/ |
| (EUR million) | 2010 | 2009 | e, | e,% | 2010 | 2009 | 2009 |
| | | | MEUR | | | | |
--------------------------------------------------------------------------------
| Revenue | 7.5 | 6.4 | 1.1 | 17.3 | 2.5 | 2.1 | 8.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | -3.9 | -3.3 | -0.6 | | -1.1 | -0.7 | -4.7 |
--------------------------------------------------------------------------------
Other Operations comprise mainly the SRV Group Plc and SRV Kalusto Oy
businesses.
The revenue of Other Operations during the review period was EUR 7.5 million
(EUR 6.4 million) and operating loss was EUR 3.9 million (a loss of EUR 3.3
million). Third-quarter revenue was EUR 2.5 million (EUR 2.1 million) and
operating loss EUR 1.1 million (a loss of EUR 0.7 million). The increase in
revenue was attributable to higher operation volumes and the decrease in
operating profit was attributable to increased costs used for project
development.
Financing and financial position
Net operational cash flow was EUR 33.9 million negative (EUR -4.4 million in
January-September 2009). The weakening of the cash flow during the review period
was attributed to the increase of inventories as a result of land investments in
the housing production and the start-ups of developer contracting production.
The Group's inventories were EUR 326.0 million (EUR 304.9 million), the share of
land areas and plot-owning companies being EUR 174.4 million (EUR 153.7
million). The Group's invested capital amounted to EUR 390.2 million (EUR 356.9
million).
At the end of the review period, the Group's financing reserves were EUR 80.0
million, of which the Group's cash assets amounted to EUR 7.4 million and
committed undrawn financing reserves amounted to EUR 72.6 million. The Group's
net interest-bearing liabilities were EUR 227.7 million on 30 September 2010
(EUR 189.8 million on 30 September 2009). Net financing expenses totalled EUR
-3.8 million (EUR -3.7 million).
Investments in SRV's developer contracting housing projects in Finland consonant
with the RS-system, including completed, unsold projects, total around EUR 78.8
million. SRV estimates that the completion of these projects requires another
EUR 69.5 million. Undrawn housing corporate loans related to RS projects
totalled EUR 70.8 million. Investments in the international business area
related to unsold residential projects in Estonia amount to EUR 1.2 million, and
EUR 2.9 million in Vyborg. EUR 33.3 million is invested in the Etmia office
project.
Equity ratio was 35.0 per cent (40.9%). The change in the equity ratio and net
liabilities was affected by the EUR 8.5 million derivative agreement signed by
SRV with Nordea Bank Ab for 1,909,483 SRV Group Plc's shares which are
considered equal to treasury shares held by the company (an impact of
approximately 2.6 percentage points) as well as the increase in inventories. The
Group's shareholders' equity totalled EUR 151.5 million (EUR 159.4 million on 30
September 2009). The return on investment was 3.1 per cent (5.1%) and the return
on equity was 2.3 per cent (1.6%).
In its reporting SRV Group applies IFRIC 15 Agreements for the Construction of
Real Estate. The recognition of developer contracting production upon delivery
increases the total amount of inventories, interest bearing debts and balance
sheet, thus weakening the key figures related to the financing position for its
part.
Investments
The Group's investments totalled EUR 2.1 million (EUR 2.7 million) and were
mainly related to the acquisition of machinery and equipment.
Unbuilt land areas, land acquisition commitments and land development agreements
--------------------------------------------------------------------------------
| Land reserve | Business | Housing | International | Total |
| 30.9.2010 | Operations | | Operations | |
--------------------------------------------------------------------------------
| Unbuilt land areas and land acquisition commitments |
--------------------------------------------------------------------------------
| Building rights*, | 217 000 | 265 000 | 870 000 | 1 352 000 |
| m2 | | | | |
--------------------------------------------------------------------------------
| Land development | | | | |
| agreements | | | | |
--------------------------------------------------------------------------------
| Building rights*, | 446 000 | 379 000 | 169 000 | 994 000 |
| m2 | | | | |
--------------------------------------------------------------------------------
| * Building rights also include 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 |
--------------------------------------------------------------------------------
During the review period, SRV bought a total of 10,000 square metres of building
rights in the Matinkylä district from the City of Espoo. Furthermore, the
company has agreed with the City of Espoo on the purchase of 4,000 square metres
in Matinkylä. SRV bought 7,000 square metres of building rights in the Kaarela
area in the district of Kannelmäki in Helsinki. Moreover, the lease of 12,000
square metres of building rights in a HITAS project in the Arabianranta district
of Helsinki was transferred from VVO to SRV.
On 14 June 2010, The Trade and Competitiveness Division of the Espoo City Board
decided to make a reservation for SRV, Mutual Pension Insurance Company Varma
and SATO Oyj regarding the future Niittykumpu metro station and neighbouring
areas in the intersection of Merituulentie and Haukilahdenkatu for planning of
the metro station and related use of land. The intention is to plan and build
residential and commercial buildings in the area. The preliminary plan includes
building rights of about 150,000 m2 of floor area.
On 11 October 2010, Siemens Osakeyhtiö sold its plots and office building in the
Perkkaa area of Espoo to Kiinteistö Oy Perkkaantalo, a joint venture of SRV,
SATO Oyj and Ilmarinen Mutual Pension Insurance Company. City plan alterations
to designate new block areas for apartment houses are pending. The joint venture
will start developing the area in cooperation with the City of Espoo. The target
for residential floor area is 110,000-120,000 m2.
Group structure
SRV is Finland's leading project management contractor that builds and develops
commercial and business premises, residential units as well as infrastructure
and logistics projects. Apart from Finland, the company operates in Russia and
the Baltic countries. SRV Group Plc, the Group's parent company, is responsible
for the Group's management, treasury, finance and administrative functions. The
Property Development and Building Systems units support and serve all of the
Group's business operations.
SRV's business areas are Business Premises, Housing, International Operations,
and Other Operations. The Business Premises business area comprises the
operations of SRV Toimitilat Oy. Housing comprises the operations of SRV Asunnot
Oy and one regional subsidiary. International Operations comprises the business
activities in Russia and the Baltic countries. Other Operations consist
primarily of the SRV Group Plc and SRV Kalusto Oy businesses.
Changes in the Group management
Jukka Hienonen started as CEO of the Group on 1 August 2010. Hannu Linnoinen.
Senior Executive Vice President, CFO, has acted as CEO during 1 January - 31
July 2010. Jussi Ollilla, member of the Corporate Executive Team, Senior Vice
President, Communications and Marketing, joined another company outside the
Group as of 1 September 2010.
Personnel
SRV had an average payroll of 787 (783) employees, of whom 568 (551) were
white-collar. The parent company had an average staff of 47 (55) white-collar
employees. At the close of the review period, the Group had 793 (747) employees,
of whom 45 (47) were employed by the parent company. An average of 15 per cent
(17) of the employees work in subsidiaries and representative offices abroad. At
the end of the review period, SRV had a total of 23 (20) trainees working in the
Group's operations in Finland (in summer jobs and in work training as well as
students working on their thesis or diploma).
In 2010, SRV launched an extensive training programme for leadership and
interaction skills. More than 100 supervisors from all SRV locations, both
offices and the work site organisation, are participating in the programme. Our
partner is JTO School of Management.
--------------------------------------------------------------------------------
| Personnel by business area | 30.9.2010 | 30.9.2009 | Share of Group |
| | | | personnel. |
| | | | 30.9.2010, % |
--------------------------------------------------------------------------------
| Business Premises | 342 | 278 | 43,1 |
--------------------------------------------------------------------------------
| Housing | 220 | 225 | 27,7 |
--------------------------------------------------------------------------------
| International | 151 | 164 | 19,1 |
--------------------------------------------------------------------------------
| Other Operations | 80 | 80 | 10,1 |
--------------------------------------------------------------------------------
| Group, total | 793 | 747 | 100,0 |
--------------------------------------------------------------------------------
The share-based incentive plan for 2010 includes about 70 employees and the
reward is based mainly on consolidated and partly on business area performance.
The rewards to be paid for the earning period 2010 correspond to the total
maximum of 240,000 SRV Group Plc shares plus a corresponding sum of money paid
for tax withholding purposes.
Outlook for construction
During the review period, the world economy continued to grow. The recovery is
unstable and the situation continues to be challenging in the property and
construction markets. Expectations for increases in interest rates have been
postponed in Europe and the United States due to the slow start of the recovery.
The total number of building permits increased during the review period due to a
sharp rise in permits for residential buildings while the number of permits for
commercial and office buildings declined. Due to revived residential
construction, there have been delays in the availability of certain building
materials. On monthly level, the construction costs have shown an upward trend.
Strong consumer confidence in the housing markets and the low interest level has
sustained demand. The volume of new start-ups in developer contracting housing
projects is still growing. Weak employment trends will have a negative
short-term effect on the housing markets. In the longer term, trends such as
migration to population growth centres and the smaller size of households will
increase the need for housing construction.
New start-ups in commercial and office construction continued to decrease during
the period. Vacancy rates in office premises in particular have reached a high
level and construction is slow. The near future outlook for commercial and
logistics construction is somewhat better.
The slight growth in renovations is expected to continue in 2010. The cutback in
civil engineering is predicted to be over at the end of the year.
The economic situation in the Baltic countries has remained weak. The Estonian
economy is predicted to grow during the ongoing year. In Latvia and Lithuania,
the growth in total production is meagre. Construction and the property markets
are slow, still. In the short term, the economic situation in the Baltic
countries will continue to be challenging.
The Russian economy continues to be challenging. The Russian national economy
has revived due to rising oil prices, inflation has abated and interest rates
have declined while the scarce availability of financing limits growth
opportunities. In 2010, Russia's total production is expected to grow by 4-5 per
cent.
Risks, risk management and corporate governance
General economic trends and changes in customers' operating environments have an
immediate effect on the construction and property markets. A change in the
general interest level has a direct impact on both SRV's cash flow from
operating activities and financing costs. The general economic trend is upward
but unstable. Demand for property investments has remained weak. Interest rates
are low but, compared to pre-recession times, the availability of credit from
banks is lower and loan margins are clearly higher. The global financial crisis
is making it more difficult for SRV's clients to obtain financing and is
hampering the functioning of the property markets. Property values face
pressures and the number of property transactions and, in particular, new
large-scale project start-ups have decreased due to difficulties in securing
financing. The financial crisis adds SRV's risk to be forced to tie up capital
in projects longer than intended.
SRV's revenue is generated by construction projects, and the company's result
depends on the profitability of individual projects as well as their progress.
Fierce competition for new orders in the construction sector may affect the
volume and profitability of SRV's new order backlog. In developer contracting
projects, recognition of revenue is based mainly on the Completed Contract
method. Revenue recognition depends on the percentage of sold premises in
delivered projects. Project sales are affected by factors such as the
availability of financing for the buyer and occupancy rate. When sales are
delayed, the recognition of revenue and operating profit is delayed
correspondingly. Postponed start-ups of developer contracting projects increase
the level of development expenses, which are recorded as costs. The slowdown in
housing sales will increase sales and marketing costs and interest expenses in
developer contracting housing production. After a rapid decline, housing sales
have recovered in Finland while remaining virtually at a standstill in Estonia.
Construction is subject to significant cost risks relating to subcontracting and
deliveries, and the control of these underlines the need for long-term planning.
A weak economic cycle increases financial risks relating to subcontractors.
SRV's contracting model requires skilled and competent personnel. Warranty and
liability obligations related to construction can span up to ten years.
Construction costs in many materials are rising. The swift growth in residential
construction has hampered the availability of purchases in adjusted production
chains.
Besides land acquisition risks, property projects face other challenges, such as
those related to the outcome of zoning, soil conditions, financing,
commercialisation of projects, partners, and the geographical location and type
of project. In accordance with its strategy, SRV has focused on developer
contracting projects and has increased its land acquisition in Finland and
Russia, in particular. The crisis in the international financial market has
substantially weakened the availability of financing in property projects for
property development and investments. It has also put project start-ups on hold.
The financial risks connected with SRV's operations are interest rate, currency,
liquidity and contractual party risks, which are discussed in more detail in the
Notes to the 2009 Financial Statements. Currency risks are divided into
transaction risks and translation risks. Transaction risks are related to
currency-denominated business and financing cash flows. Translation risks
encompass investments made in foreign subsidiaries, the accounting effects of
which are recorded in the translation differences of equity in the consolidated
figures.
Liquidity risks may have an effect on the Group's earnings and cash flow if the
Group is unable to ensure sufficient financing for its operations. SRV maintains
adequate liquidity by means of efficient management of cash flows and solutions
linked to it, such as binding lines of credit that are valid until further
notice. The company has a long-term liquidity arrangement of EUR 100 million,
part of which will mature in 2012 and the rest in 2013. The company's financing
agreements contain customary terms and conditions. The financial terms and
conditions of the agreements concern the equity ratio.
The Group's risk management is carried out in line with the Group's operations
system and control is exercised in accordance with the Group strategy approved
by the Board of Directors of the Group's parent company. SRV also makes every
effort to cover operational risks by means of insurance and contractual terms.
A more detailed account of SRV's risks, risk management and corporate governance
policies has been disclosed in the 2009 Annual Report and Financial Statements.
Corporate governance and resolutions of general meetings
The Annual General Meeting was held on 16 March 2010. The AGM adopted the
financial statements for 2009 and granted release from liability to the members
of the Board of Directors and the Presidents and CEOs. A dividend of EUR 0.12
per share was declared. Mr Ilpo Kokkila was elected chairman of the Board of
Directors and Mr Arto Hiltunen, Mr Timo Kokkila, Mr Lasse Kurkilahti, Mr Matti
Mustaniemi and Mr Ilkka Salonen were elected to seats on the Board. The firm of
public accountants Ernst & Young Oy was elected as the company's auditor. Mikko
Rytilahti, authorised public accountant, will act as the principal auditor.
The general meeting authorised the Board of Directors to decide on the
acquisition of the company's own shares, using the company's unrestricted
equity. The Board was authorised to acquire a maximum of 3,676,846 own shares,
however, in such a manner that the number of shares acquired on the basis of
this authorisation when combined with the shares already owned by the company
and its subsidiaries, does not at any given time exceed 3,676,846 shares, or 10
per cent of all shares of the company. Based on this authorisation, the Board
may acquire a maximum of 3,676,846 shares of the company in public trading
arranged by Nasdaq OMX Helsinki Oy at a market price valid at the moment of
acquisition, and a maximum of 2,400,000 shares of the company in public trading
arranged by Nasdaq OMX Helsinki Oy or otherwise for a maximum price of EUR 4.45
per share, the maximum being, however, 3,676,846 shares. The aforementioned
authorisations include the right to acquire own shares otherwise than in
proportion to the holdings of the shareholders. These authorisations will remain
in force for 18 months from the decision of the meeting.
The general meeting authorised the Board of Directors to decide on the issue of
new shares or the transfer of treasury shares against payment or without
consideration. This authorisation includes the right to issue new shares or to
transfer the treasury shares in deviation from the shareholders' pre-emptive
subscription right under the terms of the Companies Act. This authorisation is
in force for two years from the decision of the meeting.
In its organisational meeting on 16 March 2010, the Board of Directors elected
Lasse Kurkilahti vice chairman of the Board, Matti Mustaniemi chairman of the
Audit Committee, Lasse Kurkilahti and Timo Kokkila members of the Audit
Committee, Arto Hiltunen and Ilkka Salonen members of the Nomination and
Remuneration Committee and Ilpo Kokkila chairman of the Nomination and
Remuneration Committee.
Shares and shareholders
SRV Group Plc's share capital is EUR 3,062,520. The share has no nominal value
and the number of shares outstanding is 36,768,468. The company has one class of
shares. SRV had a total of 5,740 shareholders on 30 June 2010. The company
received four flagging notifications during the reporting period. On 5 January
2010, Eero Heliövaara announced that he had sold and Nordea Bank AB (publ)
announced that it had bought 1,909,483 SRV Group Plc shares, increasing Nordea
Group's total holding in SRV to 5.28 per cent. On 17 March 2010, Nordea Bank
Suomi Oyj announced that it had purchased the above-mentioned shares from Nordea
Bank AB (publ), after which the total holding of Nordea Group in SRV was 5.28
per cent. On 17 May 2010 Nordea Bank AB (publ) announced that it had bought the
above-mentioned shares, the holding of Nordea Group being 5.27%. The flagging
notifications are related to a futures contract between Nordea and SRV. Upon
termination of the contract, the shares will be sold and Nordea Group's holding
in SRV will fall to below 1/20.
The share closing price at OMX Helsinki at the end of the review period was EUR
6.14 (EUR 5.89 on 31 December 2009). The highest share price in the review
period was EUR 7.14 and the lowest was EUR 5.50. The change in the all-share
index of the Helsinki Stock Exchange (OMX Helsinki) during the same period was
6.3 per cent and the OMX Industrial and Services index 26.2 per cent.
At the end of the review period, the company had a market capitalisation of EUR
208.3 million, excluding the Group's own shares. About 10.4 million shares were
traded during the period and the trade volume was EUR 59.8 million.
On 5 January 2010, SRV implemented the agreement signed with Eero Heliövaara on
11 August 2009, and Nordea Bank AB (publ) acquired Heliövaara's shares for a
per-share price of EUR 4.45. In the same connection, SRV signed an EUR 8.5
million derivative agreement with Nordea for 1,909,483 company shares, according
to which the shares will be sold to SRV or an entity named by SRV. These shares
are considered equal to treasury shares held by the company. The derivative
agreement will mature in November 2010.
At the end of the review period, SRV Group Plc had 2,850,741 of SRV Group Plc's
shares taking account of the derivative contract concluded with Nordea Bank AB
(7.8 per cent of the total number of the company's shares and combined number of
votes). On 4 November 2010, the Group had 2,860,539 shares (7.8 per cent of the
total number of the company's shares and combined number of votes).
Financial targets
As SRV's medium term aim, the Board of Directors has set the achievement of
annual average growth of approximately 15 per cent in Group revenue and annual
average growth of over 30 per cent in revenue from International Operations. SRV
aims to increase the level of operating profit and, in the medium to long term,
to achieve an operating margin of 8 per cent. In addition, the company aims to
maintain an equity ratio of over 30 per cent.
The international economic and financial crisis has hampered the growth outlook
for business operations. Realisation of the sales of developer contracting
projects has a substantial effect on the development of profitability. In the
current economic conditions, the set financial targets cannot be met. The
company is endeavouring to maintain profitability by rationalising operations
and cutting costs.
Events after the end of the reporting period
On 11 October 2010, SRV signed an agreement with Siemens Osakeyhtiö for the
construction of a head office in Perkkaa, Espoo and the leasing of the premises
to Siemens. The company seeks a LEED GOLD environmental certificate for the
offices, which will be built on a plot owned by SRV. It is planned that the
Derby Business Park will feature a total of 19,000 m2 of state-of-the-art office
space. Siemens' share is about 7,400 m2. The new business premises for Siemens
will be completed by August 2014 at the latest.
After the end of the review period, SRV and Pohjola Insurance Ltd signed a
contract agreement for a logistics centre to be built in line with the STC
(Smart Tech Centre) concept in Viinikkala, Vantaa. The centre will have four
buildings with a total of 9,500 m2 of leasable space and is slated for
completion in September 2011.
Previous outlook for 2010 (11 February 2010)
Revenue in 2010 is expected to exceed the previous year's level and profit
before taxes is expected to be clearly positive.
Previous outlook for 2010 (5 May 2010)
SRV changes the previous outlook for 2010 due to the postponement of start-ups
of projects in Russia. Revenue in 2010 is expected to exceed the previous year's
level and profit before taxes is expected to be positive.
Outlook for 2010
SRV repeats the previous outlook for the revenue and profit before taxes in
2010.
Revenue in 2010 is expected to exceed the previous year's level and profit
before taxes is expected to be positive.
Espoo, 4 November 2010
Board of Directors
All forward-looking statements in this review are based on the management's
current expectations and beliefs about future events, and actual results may
differ materially from the expectations and beliefs such statements contain.
For further information, please contact:
Jukka Hienonen, CEO, +358 201 455 213
Hannu Linnoinen, Senior Executive Vice President, CFO, +358 201 455 990. +358 50
523 5850
Distribution: Nasdaq OMX Helsinki, principal media, www.srv.fi
Key figures:
--------------------------------------------------------------------------------
| | | IFRS | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| | | 1-9/ | 1-9/ | 7-9/ | 7-9/ | 1-12/ |
| | | 2010 | 2009 | 2010 | 2010 | 2009 |
--------------------------------------------------------------------------------
| Revenue | EUR | 327.6 | 270.3 | 115.3 | 87.3 | 390.5 |
| | million | | | | | |
--------------------------------------------------------------------------------
| Operating profit | EUR | 7.3 | 8.0 | 4.3 | 2.3 | 10.7 |
| | million | | | | | |
--------------------------------------------------------------------------------
| Operating profit, % of | % | 2.2 | 3.0 | 3.7 | 2.6 | 2.7 |
| revenue | | | | | | |
--------------------------------------------------------------------------------
| Profit before taxes | EUR | 3.5 | 4.3 | 3.5 | 1.1 | 6.5 |
| | million | | | | | |
--------------------------------------------------------------------------------
| Profit before taxes, % | % | 1.1 | 1.6 | 3.0 | 1.2 | 1.7 |
| of revenue | | | | | | |
--------------------------------------------------------------------------------
| Net profit | EUR | 3.1 | 1.9 | 2.7 | 0.5 | 2.9 |
| attributable to equity | million | | | | | |
| holders of the parent | | | | | | |
| company | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity 1) | % | 2.3 | 1.6 | | | 1.8 |
--------------------------------------------------------------------------------
| Return on investment | % | 3.1 | 5.1 | | | 4.9 |
| 1) | | | | | | |
--------------------------------------------------------------------------------
| Invested capital | EUR | 390.2 | 356.9 | | | 349.0 |
| | million | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio | % | 35.0 | 40.9 | | | 41.3 |
--------------------------------------------------------------------------------
| Net interest-bearing | EUR | 227.7 | 189.8 | | | 179.9 |
| debt | million | | | | | |
--------------------------------------------------------------------------------
| Gearing ratio | % | 146.7 | 116.3 | | | 109.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | EUR | 604.3 | 465.8 | | | 481.6 |
| | million | | | | | |
--------------------------------------------------------------------------------
| New agreements | | 439.9 | 275.8 | | | 396.1 |
--------------------------------------------------------------------------------
| Personnel on average | | 787 | 783 | | | 776 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Property, plant and | EUR | 2.1 | 2.7 | 1.1 | 0.4 | 3.7 |
| equipment investments | million | | | | | |
--------------------------------------------------------------------------------
| Property, plant and | % | 0.6 | 1.0 | 1.0 | 0.5 | 0.9 |
| equipment investments, | | | | | | |
| % of revenue | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | EUR | 0.09 | 0.05 | 0.08 | 0.01 | 0.08 |
| share issue adjusted | | | | | | |
--------------------------------------------------------------------------------
| Equity per share, | EUR | 4.47 | 4.45 | - | - | 4.48 |
| share issue adjusted | | | | | | |
--------------------------------------------------------------------------------
| Dividend per share, | EUR | 0.12 | 0.12 | - | - | 0.12 |
| share issue adjusted | | | | | | |
--------------------------------------------------------------------------------
| Dividend payout ratio | % | 133.3 | 240.0 | - | - | 150.0 |
--------------------------------------------------------------------------------
| Dividend yield | % | 2.0 | 2.1 | - | - | 2.0 |
--------------------------------------------------------------------------------
| Price per earnings | | 68.2 | 112.8 | - | - | 73.6 |
| ratio | | | | | | |
--------------------------------------------------------------------------------
| Share price | | | | - | - | |
| development | | | | | | |
--------------------------------------------------------------------------------
| Share price at the end | EUR | 6.14 | 5.64 | - | - | 5.89 |
| of the period | | | | | | |
--------------------------------------------------------------------------------
| Average share price | EUR | 6.33 | 3.89 | - | - | 4.06 |
--------------------------------------------------------------------------------
| Lowest share price | EUR | 5.50 | 2.75 | - | - | 2.75 |
--------------------------------------------------------------------------------
| Highest share price | EUR | 7.14 | 5.94 | - | - | 5.97 |
--------------------------------------------------------------------------------
| Market capitalisation | EUR | 208.3 | 201.8 | - | - | 210.7 |
| at the end of the | million | | | | | |
| period | | | | | | |
--------------------------------------------------------------------------------
| Trading volume | 1,000 | 10 | 7 646 | - | - | 8 309 |
| | | 360 | | | | |
--------------------------------------------------------------------------------
| Trading volume | % | 30.5 | 21.2 | - | - | 23.1 |
--------------------------------------------------------------------------------
| Weighted average | 1,000 | 33 | 36 075 | - | - | 35 999 |
| number of shares | | 928 | | | | |
| outstanding | | | | | | |
--------------------------------------------------------------------------------
| Number of shares | 1,000 | 33 | 35 788 | - | - | 35 768 |
| outstanding at the end | | 918 | | | | |
| of the period | | | | | | |
--------------------------------------------------------------------------------
In calculating the key ratio only the profit for the period has been annualised
Calculation of key figures:
--------------------------------------------------------------------------------
| Net gearing ratio, % | Net interest-bearing debt x 100 / |
| | Total equity |
--------------------------------------------------------------------------------
| Return on equity, % | Profit before taxes - income taxes) x 100/ |
| | Total equity. average |
--------------------------------------------------------------------------------
| Return on investment, % | (Profit before taxes + interest and other |
| | financial expenses) x 100 / |
| | Invested capital. average |
--------------------------------------------------------------------------------
| Equity ratio, % | Total equity x 100 / |
| | (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 | Net profit for the period attributable to |
| issue adjusted | equity holders of the parent company / |
| | Weighted average number of shares outstanding |
--------------------------------------------------------------------------------
| Equity per share, share | Shareholders' equity attributable to equity |
| issue adjusted | 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, % | Dividend per share. share issue adjusted x |
| | 100 / |
| | Earnings per share. share issue adjusted |
--------------------------------------------------------------------------------
| Dividend yield, % | Dividend per share. share issue adjusted x |
| | 100 / |
| | Share price at the end of the period. share |
| | issue adjusted |
--------------------------------------------------------------------------------
| Average share price | Number of shares traded in euros during the |
| | period / |
| | Number of shares traded during the period |
--------------------------------------------------------------------------------
| Market capitalisation at the | Number of shares outstanding at the end of |
| end of the period | the period x share price at the end of the |
| | period |
--------------------------------------------------------------------------------
| Trading volume | Number of shares traded during the period and |
| | in relation to the weighted average number of |
| | shares outstanding |
--------------------------------------------------------------------------------
SRV Group Plc Interim Report 1.1. - 30.9.2010: TABLES
APPENDIXES
1) Condensed consolidated financial statements: income statement, balance sheet,
statement of changes in equity, cash flow statement, commitments and contingent
liabilities, derivative contracts liabilities
2) Quarterly development
3) Segment information
4) Events after the reporting period
1. Group financials 1.1. - 30.9.2010
IFRS standards and operating segments
The interim report has been prepared in accordance with the accounting policies
set out in the IAS 34 standard and the information disclosed is unaudited. SRV
has applied the same accounting principles as in its year-end financial
statements for 2009. The figures in the tables have been rounded which should be
noted when counting the total sums.
SRV's reporting segments comprise Business Premises, Housing, International
Operations and Other Operations. The operating segment figures are disclosed in
accordance with IFRS 8, following the accounting principles applied in the
consolidated financial statements.
Estimate of the impacts of the new standards, changes and interpretations:
As from 1 January 2010, SRV Group will apply IFRIC 15 Agreements for the
Construction of Real Estate in its reporting. This interpretation concerns the
recognition of revenue from developer contracting projects. The interpretation
specifies whether revenue from a construction project should be recognised on a
percentage of completion basis or upon delivery. The adoption of the
interpretation primarily affects the recognition of revenue from SRV Group's
developer contracting housing projects. The Group previously recognised revenue
from developer contracting housing projects on a percentage of completion basis.
Under the new interpretation, revenue will from now on mainly be recognised on
the basis of project delivery.The change in revenue recognition affects SRV
Group's income statement and balance sheet items, the key figures based on them,
and the order backlog. It will result in greater variation between quarterly
trends in revenue and earnings, as the recognition of revenue from developer
contracting projects may depend on the date of their completion. The delayed
revenue recognition of projects will increase the balance sheet total and weaken
the key figures calculated on the basis of the balance sheet.
SRV Group's internal management reporting follows earnings in line with the new
interpretation and the Group publishes its segment reports in accordance with
the new accounting principles.
--------------------------------------------------------------------------------
| Consolidated | IFRS | IFRS | | | IFRS | IFRS | IFRS |
| income | | | | | | | |
--------------------------------------------------------------------------------
| statement | 1-9/ | 1-9/ | chang | chang | 7-9/ | 7-9/ | 1-12/ |
| (EUR million) | 2010 | 2009 | e, | e,% | 2010 | 2009 | 2009 |
| | | | MEUR | | | | |
--------------------------------------------------------------------------------
| Revenue | 327.6 | 270.3 | 57.3 | 21.2 | 115.3 | 87.3 | 390.5 |
--------------------------------------------------------------------------------
| Other operating | 2.2 | 1.6 | 0.6 | 35.5 | 0.7 | 0.5 | 2.6 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Change in | 23.6 | 4.0 | 19.6 | 486.8 | 6.1 | -3.9 | -10.3 |
| inventories of | | | | | | | |
| finished goods | | | | | | | |
| and work in | | | | | | | |
| progress | | | | | | | |
--------------------------------------------------------------------------------
| Use of materials | -298. | -225. | -72.9 | 32.3 | -102.6 | -69.2 | -313.5 |
| and services | 2 | 4 | | | | | |
--------------------------------------------------------------------------------
| Employee benefit | -35.6 | -32.2 | -3.3 | 10.3 | -10.8 | -9.0 | -44.5 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Depreciation and | -2.6 | -2.9 | 0.3 | -10.9 | -0.9 | -1.1 | -3.7 |
| impairments | | | | | | | |
--------------------------------------------------------------------------------
| Other operating | -9.8 | -7.5 | -2.3 | 30.2 | -3.6 | -2.3 | -10.4 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 7.3 | 8.0 | -0.7 | -8.3 | 4.3 | 2.3 | 10.7 |
--------------------------------------------------------------------------------
| Financial income | 2.0 | 5.5 | -3.5 | -63.3 | 1.2 | 4.2 | 6.0 |
--------------------------------------------------------------------------------
| Financial | -5.8 | -9.2 | 3.3 | -36.4 | -2.0 | -5.5 | -10.2 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Financial income | -3.8 | -3.7 | -0.1 | | -0.8 | -1.2 | -4.2 |
| and expenses, | | | | | | | |
| total | | | | | | | |
--------------------------------------------------------------------------------
| Profit before | 3.5 | 4.3 | -0.8 | -18.6 | 3.5 | 1.1 | 6.5 |
| taxes | | | | | | | |
--------------------------------------------------------------------------------
| Income taxes | -0.8 | -2.3 | 1.6 | -67.8 | -0.8 | -0.5 | -3.6 |
--------------------------------------------------------------------------------
| Net profit for | 2.8 | 2.0 | 0.8 | 38.9 | 2.7 | 0.5 | 2.9 |
| the period | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to | | | | | | | |
--------------------------------------------------------------------------------
| Equity holders of | 3.1 | 1.9 | | | 2.7 | 0.5 | 2.9 |
| the parent | | | | | | | |
| company | | | | | | | |
--------------------------------------------------------------------------------
| Minority interest | -0.3 | 0.1 | | | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Earnings per | 0.09 | 0.05 | | 80.0 | 0.08 | 0.01 | 0.08 |
| share calculated | | | | | | | |
| on the profit | | | | | | | |
| attributable to | | | | | | | |
| equity holders of | | | | | | | |
| the parent | | | | | | | |
| company | | | | | | | |
| (undiluted and | | | | | | | |
| diluted) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | IFRS | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| Statement of comprehensive | 1-9/ | 1-9/ | 7-9/ | 7-9/ | 1-12/ |
| income | 2010 | 2009 | 2010 | 2010 | 2009 |
| (EUR million) | | | | | |
--------------------------------------------------------------------------------
| Net profit for the period | 2.8 | 2.0 | 2.7 | 0.5 | 2.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Items recognised directly in | | | | | |
| equity: | | | | | |
--------------------------------------------------------------------------------
| Exchange differences on | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| translating foreign operations | | | | | |
--------------------------------------------------------------------------------
| Available for sale financial | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| assets | | | | | |
--------------------------------------------------------------------------------
| Net gain (loss) on cash flow | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| hedges | | | | | |
--------------------------------------------------------------------------------
| Deferred tax | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Income (loss) recognised | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| directly in equity net of tax | | | | | |
--------------------------------------------------------------------------------
| Total comprehensive income for | 2.8 | 2.0 | 2.7 | 0.6 | 2.9 |
| the period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the period | | | | | |
| attributable to: | | | | | |
--------------------------------------------------------------------------------
| Equity holders of the parent | 3.1 | 1.9 | 2.7 | 0.6 | 2.9 |
| company | | | | | |
--------------------------------------------------------------------------------
| Minority interest | -0.3 | 0.1 | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated balance sheet | IFRS | IFRS | change, | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 30.9.10 | 30.9.09 | % | 31.12.09 |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Property, plant and | 14.7 | 16.9 | -12.9 | 16.3 |
| equipment | | | | |
--------------------------------------------------------------------------------
| Goodwill | 1.7 | 1.7 | 0.0 | 1.7 |
--------------------------------------------------------------------------------
| Other intangible assets | 0.4 | 0.4 | -14.0 | 0.5 |
--------------------------------------------------------------------------------
| Other financial assets | 5.3 | 4.3 | 22.9 | 4.8 |
--------------------------------------------------------------------------------
| Receivables | 17.6 | 13.8 | 27.7 | 16.2 |
--------------------------------------------------------------------------------
| Deferred tax assets | 5.0 | 2.2 | 128.5 | 2.3 |
--------------------------------------------------------------------------------
| Non-current assets, total | 44.7 | 39.3 | 13.7 | 41.7 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | 326.0 | 304.9 | 6.9 | 292.2 |
--------------------------------------------------------------------------------
| Trade and other receivables | 84.2 | 69.4 | 21.4 | 76.9 |
--------------------------------------------------------------------------------
| Current tax receivables | 1.6 | 5.8 | -72.3 | 1.9 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 7.4 | 3.9 | 90.9 | 5.2 |
--------------------------------------------------------------------------------
| Current assets, total | 419.2 | 383.9 | 9.2 | 376.2 |
--------------------------------------------------------------------------------
| ASSETS, TOTAL | 463.9 | 423.2 | 9.6 | 418.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated balance sheet | IFRS | IFRS | change, | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 30.9.10 | 30.9.09 | % | 31.12.09 |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity attributable to | | | | |
| equity holders of the parent | | | | |
| company | | | | |
--------------------------------------------------------------------------------
| Share capital | 3.1 | 3.1 | 0.0 | 3.1 |
--------------------------------------------------------------------------------
| Invested free equity fund | 87.3 | 87.3 | 0.0 | 87.3 |
--------------------------------------------------------------------------------
| Translation differences | -0.1 | 0.0 | 206.7 | -0.1 |
--------------------------------------------------------------------------------
| Fair value reserve | -0.1 | -0.1 | 0.0 | -0.1 |
--------------------------------------------------------------------------------
| Retained earnings | 61.3 | 69.1 | -11.4 | 69.9 |
--------------------------------------------------------------------------------
| Equity attributable to | 151.5 | 159.4 | -5.0 | 160.1 |
| equity holders of the parent | | | | |
| company, total | | | | |
--------------------------------------------------------------------------------
| Minority interest | 3.7 | 3.8 | -3.1 | 3.8 |
--------------------------------------------------------------------------------
| Equity, total | 155.1 | 163.2 | -4.9 | 163.9 |
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 1.0 | 0.3 | 233.8 | 0.5 |
--------------------------------------------------------------------------------
| Provisions | 4.2 | 4.2 | -0.6 | 4.8 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 70.5 | 93.5 | -24.6 | 96.9 |
--------------------------------------------------------------------------------
| Other liabilities | 1.3 | 0.2 | 524.0 | 0.8 |
--------------------------------------------------------------------------------
| Non-current liabilities, | 77.0 | 98.2 | -21.6 | 102.9 |
| total | | | | |
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Trade and other payables | 60.6 | 54.9 | 10.3 | 56.4 |
--------------------------------------------------------------------------------
| Current tax payables | 3.0 | 3.3 | -10.1 | 2.6 |
--------------------------------------------------------------------------------
| Provisions | 3.5 | 3.2 | 10.0 | 3.8 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 164.6 | 100.2 | 64.2 | 88.2 |
--------------------------------------------------------------------------------
| Current liabilities, total | 231.7 | 161.7 | 43.3 | 151.1 |
--------------------------------------------------------------------------------
| Liabilities, total | 308.8 | 260.0 | 18.8 | 254.1 |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | 463.9 | 423.2 | 9.6 | 418.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated cash flow statement | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 1-9/2010 | 1-9/2009 | 1-12/2009 |
--------------------------------------------------------------------------------
| Cash flows from operating activities | | | |
--------------------------------------------------------------------------------
| Net profit for the period | 2.8 | 2.0 | 2.9 |
--------------------------------------------------------------------------------
| Adjustments: | | | |
--------------------------------------------------------------------------------
| Depreciation and impairments | 2.6 | 2.9 | 3.7 |
--------------------------------------------------------------------------------
| Non-cash transactions | 8.8 | 1.5 | 2.7 |
--------------------------------------------------------------------------------
| Financial income and expenses | 3.8 | 3.7 | 4.2 |
--------------------------------------------------------------------------------
| Capital gains on sales of tangible and | 0.0 | 0.0 | 0.0 |
| intangible assets | | | |
--------------------------------------------------------------------------------
| Income taxes | 0.8 | 2.3 | 3.6 |
--------------------------------------------------------------------------------
| Adjustments, total | 15.9 | 10.3 | 14.1 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Changes in working capital: | | | |
--------------------------------------------------------------------------------
| Change in loan receivables | 4.6 | -2.7 | -13.5 |
--------------------------------------------------------------------------------
| Change in trade and other receivables | -13.1 | 16.9 | 17.7 |
--------------------------------------------------------------------------------
| Change in inventories | -33.0 | -2.8 | 10.0 |
--------------------------------------------------------------------------------
| Change in trade and other payables | -5.2 | -14.1 | -12.3 |
--------------------------------------------------------------------------------
| Changes in working capital, total | -46.6 | -2.7 | 1.9 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Interest paid | -5.7 | -10.5 | -12.7 |
--------------------------------------------------------------------------------
| Interest received | 2.0 | 4.4 | 5.7 |
--------------------------------------------------------------------------------
| Dividends received | 0.1 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Income taxes paid | -2.3 | -7.9 | -5.9 |
--------------------------------------------------------------------------------
| Net cash flow from operating | -33.9 | -4.4 | 6.1 |
| activities | | | |
--------------------------------------------------------------------------------
| | -33.9 | | |
--------------------------------------------------------------------------------
| Cash flow from investing activities | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries, net of | -0.3 | -2.0 | -2.3 |
| cash | | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | -1.3 | -0.6 | -0.8 |
--------------------------------------------------------------------------------
| Intangible assets | 0.0 | 0.0 | -0.1 |
--------------------------------------------------------------------------------
| Other financial assets | -0.4 | -0.1 | -0.5 |
--------------------------------------------------------------------------------
| Sale of property, plant and equipment | 0.1 | 0.0 | 0.0 |
| and intangible assets | | | |
--------------------------------------------------------------------------------
| Sale of financial assets | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Net cash used in investing activities | -1.9 | -2.7 | -3.7 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash flows from financing activities | | | |
--------------------------------------------------------------------------------
| Proceeds from share issue | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Proceeds from loans | 0.4 | 15.3 | 19.6 |
--------------------------------------------------------------------------------
| Repayments of loans | -4.5 | -20.8 | -22.2 |
--------------------------------------------------------------------------------
| Change in loan receivables | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Change in housing corporation loans | 8.0 | 0.5 | -9.2 |
--------------------------------------------------------------------------------
| Change in credit limits | 38.1 | 18.6 | 17.5 |
--------------------------------------------------------------------------------
| Purchase of treasury shares | 0.0 | -1.7 | -1.8 |
--------------------------------------------------------------------------------
| Dividends paid | -4.1 | -4.4 | -4.4 |
--------------------------------------------------------------------------------
| Net cash from financing activities | 37.9 | 7.6 | -0.6 |
--------------------------------------------------------------------------------
| Net change in cash and cash | 2.2 | 0.5 | 1.8 |
| equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the | 5.2 | 3.4 | 3.4 |
| beginning of period | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end | 7.4 | 3.9 | 5.2 |
| of period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inventories | IFRS | IFRS | change, | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 30.9.10 | 30.9.09 | % | 31.12.09 |
--------------------------------------------------------------------------------
| Raw materials and consumables | 0.0 | 0.0 | 143.0 | 0.0 |
--------------------------------------------------------------------------------
| Work in progress | 53.9 | 65.4 | -17.6 | 35.1 |
--------------------------------------------------------------------------------
| Land areas and plot-owning | 174.4 | 153.7 | 13.5 | 153.0 |
| companies | | | | |
--------------------------------------------------------------------------------
| Shares in completed housing | 78.2 | 67.4 | 16.1 | 86.5 |
| corporations and real estate | | | | |
| companies | | | | |
--------------------------------------------------------------------------------
| Advance payments | 5.3 | 3.6 | 46.9 | 3.6 |
--------------------------------------------------------------------------------
| Other inventories | 14.2 | 14.8 | -4.2 | 14.0 |
--------------------------------------------------------------------------------
| Inventories, total | 326.0 | 304.9 | 6.9 | 292.2 |
--------------------------------------------------------------------------------
Statement of changes in Group equity 1.1 - 30.9.2010
--------------------------------------------------------------------------------
| | Equity attributable to | |
| | the equity holders of the parent company | |
--------------------------------------------------------------------------------
| IFRS | Shar | Inves | Trans | Fair | Retai | Tota | Minor | Total |
| (EUR million) | e | ted | -lati | valu | -ned | l | ity | equit |
| | capi | free | on | e | earni | | inter | y |
| | tal | equit | diffe | rese | ngs | | est | |
| | | y | r-enc | rve | | | | |
| | | fund | es | | | | | |
--------------------------------------------------------------------------------
| Equity on | 3.1 | 87.3 | -0.1 | -0.1 | 69.9 | 160. | 3.8 | 163.9 |
| 1.1.2010 | | | | | | 1 | | |
--------------------------------------------------------------------------------
| Total income | 0.0 | 0.0 | 0.0 | 0.0 | 3.1 | 3.1 | | |
| and expenses | | | | | | | | |
| for the | | | | | | | | |
| financial year | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends paid | | | | | -4.1 | -4.1 | | |
--------------------------------------------------------------------------------
| Share based | | | | | 1.2 | 1.2 | | |
| incentive plan | | | | | | | | |
--------------------------------------------------------------------------------
| Purchase of | | | | | -8.5 | -8.5 | | |
| treasury shares | | | | | | | | |
--------------------------------------------------------------------------------
| Other changes | | | | | -0.4 | -0.4 | | |
--------------------------------------------------------------------------------
| Equity on | 3.1 | 87.3 | -0.1 | -0.1 | 61.2 | 151. | 3.7 | 155.1 |
| 30.9.2010 | | | | | | 5 | | |
--------------------------------------------------------------------------------
Statement of changes in Group equity 1.1 - 30.9.2009
--------------------------------------------------------------------------------
| | Equity attributable to | |
| | the equity holders of the parent company | |
--------------------------------------------------------------------------------
| IFRS | Shar | Inves | Trans | Fair | Retai | Tota | Minor | Total |
| (EUR million) | e | ted | -lati | valu | -ned | l | ity | equit |
| | capi | free | on | e | earni | | inter | y |
| | tal | equit | diffe | rese | ngs | | est | |
| | | y | r-enc | rve | | | | |
| | | fund | es | | | | | |
--------------------------------------------------------------------------------
| Equity on | 3.1 | 87.3 | -0.1 | -0.1 | 73.4 | 163. | 2.2 | 165.9 |
| 1.1.2009 | | | | | | 6 | | |
--------------------------------------------------------------------------------
| Total income | 0.0 | 0.0 | 0.0 | 0.0 | 1.9 | 1.9 | | |
| and expenses | | | | | | | | |
| for the | | | | | | | | |
| financial year | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends paid | | | | | -4.3 | -4.3 | | |
--------------------------------------------------------------------------------
| Share based | | | | | 0.1 | 0.1 | | |
| incentive plan | | | | | | | | |
--------------------------------------------------------------------------------
| Purchase of | | | | | -1.7 | -1.7 | | |
| treasury shares | | | | | | | | |
--------------------------------------------------------------------------------
| Other changes | | | | | -0.2 | -0.2 | | |
--------------------------------------------------------------------------------
| Equity on | 3.1 | 87.3 | -0.1 | -0.1 | 69.2 | 159. | 3.8 | 163.2 |
| 30.9.2009 | | | | | | 4 | | |
--------------------------------------------------------------------------------
Statement of changes in Group equity 1.1 - 31.12.2009
--------------------------------------------------------------------------------
| | Equity attributable to | |
| | the equity holders of the parent company | |
--------------------------------------------------------------------------------
| IFRS | Shar | Inves | Trans | Fair | Retai | Tota | Minor | Total |
| (EUR million) | e | ted | -lati | valu | -ned | l | ity | equit |
| | capi | free | on | e | earni | | inter | y |
| | tal | equit | diffe | rese | ngs | | est | |
| | | y | r-enc | rve | | | | |
| | | fund | es | | | | | |
--------------------------------------------------------------------------------
| Equity on | 3.1 | 87.3 | -0.1 | -0.1 | 73.4 | 163. | 2.2 | 165.9 |
| 1.1.2009 | | | | | | 6 | | |
--------------------------------------------------------------------------------
| Total income | 0.0 | 0.0 | 0.0 | 0.0 | 2.9 | 2.9 | | |
| and expenses | | | | | | | | |
| for the | | | | | | | | |
| financial year | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends paid | | | | | -4.3 | -4.3 | | |
--------------------------------------------------------------------------------
| Share based | | | | | 0.0 | 0.0 | | |
| incentive plan | | | | | | | | |
--------------------------------------------------------------------------------
| Purchase of | | | | | -1.8 | -1.8 | | |
| treasury shares | | | | | | | | |
--------------------------------------------------------------------------------
| Other changes | | | | | -0.2 | -0.2 | | |
--------------------------------------------------------------------------------
| Equity on | 3.1 | 87.3 | -0.1 | -0.1 | 69.9 | 160. | 3.8 | 163.9 |
| 31.12.2009 | | | | | | 2 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commitments and contingent | IFRS | IFRS | change, | IFRS |
| liabilities | | | | |
--------------------------------------------------------------------------------
| (EUR million) | 30.9.10 | 30.9.09 | % | 31.12.09 |
--------------------------------------------------------------------------------
| Collateral given for own | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Real estate mortgages given | 111.1 | 111.3 | -0.2 | 106.0 |
--------------------------------------------------------------------------------
| Pledges given | 0.0 | 0.0 | | 0.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other commitments | | | | |
--------------------------------------------------------------------------------
| Guarantees given for liabilities | 0.0 | 0.0 | | 0.0 |
| on uncompleted projects | | | | |
--------------------------------------------------------------------------------
| Investment commitments given | 21.9 | 22.1 | -0.9 | 22.1 |
--------------------------------------------------------------------------------
| Plots purchase commitments | 22.3 | 31.1 | -28.3 | 19.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fair and nominal | IFRS | IFRS | IFRS |
| values of | 30.9.10 | 30.9.2009 | 31.12.09 |
| derivative | | | |
| instruments | | | |
--------------------------------------------------------------------------------
| (EUR million) | Fair Values | Fair Values | Fair Values |
--------------------------------------------------------------------------------
| | Positi | Negati | Positi | Negativ | Positiv | Negativ |
| | ve | ve | ve | e | e | e |
--------------------------------------------------------------------------------
| Hedge accounting | | | | | | |
| not applied | | | | | | |
--------------------------------------------------------------------------------
| Foreign exchange | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| forward contracts | | | | | | |
--------------------------------------------------------------------------------
| Interest rate swaps | 0.0 | 1.7 | 0.0 | 0.6 | 0.0 | 0.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Nominal values of | | IFRS | | IFRS | | IFRS |
| derivative | | | | | | |
| instruments | | | | | | |
--------------------------------------------------------------------------------
| | | 30.9.1 | | 30.9.09 | | 31.12.0 |
| | | 0 | | | | 9 |
--------------------------------------------------------------------------------
| Foreign exchange | | 0.0 | | 0.0 | | 0.0 |
| forward contracts | | | | | | |
--------------------------------------------------------------------------------
| Interest rate swaps | | 63.4 | | 63.4 | | 63.4 |
--------------------------------------------------------------------------------
| The fair values of derivative instruments are based on market prices at the |
| end of the reporting period. |
| Open foreign exchange forward contracts are hedging the financing cash flow. |
--------------------------------------------------------------------------------
2. Group and Segment information by quarter
--------------------------------------------------------------------------------
| SRV Group | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 7-9/10 | 4-6/1 | 1-3/1 | 10-12 | 7-9/0 | 4-6/09 | 1-3/09 |
| | | 0 | 0 | /09 | 9 | | |
--------------------------------------------------------------------------------
| Revenue | 115.3 | 117.3 | 95.0 | 120.1 | 87.3 | 96.0 | 87.0 |
--------------------------------------------------------------------------------
| Operating profit | 4.3 | 1.5 | 1.6 | 2.7 | 2.3 | 3.9 | 1.8 |
--------------------------------------------------------------------------------
| Financial income | -0.8 | -1.6 | -1.4 | -0.5 | -1.2 | -1.0 | -1.5 |
| and expenses, | | | | | | | |
| total | | | | | | | |
--------------------------------------------------------------------------------
| Profit before | 3.5 | -0.1 | 0.2 | 2.2 | 1.1 | 2.9 | 0.3 |
| taxes | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog 1) | 604.3 | 604.4 | 530.0 | 481.6 | 465.8 | 461.1 | 458.5 |
--------------------------------------------------------------------------------
| New agreements | 112.6 | 186.7 | 140.6 | 120.4 | 86.2 | 98.2 | 91.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | 0.08 | 0.02 | -0.01 | 0.03 | 0.01 | 0.04 | 0.00 |
| share, EUR | | | | | | | |
--------------------------------------------------------------------------------
| Equity per share, | 4.47 | 4.38 | 4.36 | 4.48 | 4.45 | 4.44 | 4.40 |
| EUR 1) | | | | | | | |
--------------------------------------------------------------------------------
| Share price, EUR | 6.14 | 6.16 | 6.41 | 5.89 | 5.64 | 4.18 | 3.00 |
| 1) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio, % | 35.0 | 35.1 | 37.0 | 41.3 | 40.9 | 40.1 | 40.5 |
| 1) | | | | | | | |
--------------------------------------------------------------------------------
| Net interest | 227.7 | 216.7 | 199.8 | 179.9 | 189.8 | 186.8 | 172.6 |
| bearing debt 1) | | | | | | | |
--------------------------------------------------------------------------------
| Gearing, % 1) | 146.7 | 142.3 | 132.3 | 109.8 | 116.3 | 116.6 | 107.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 7-9/10 | 4-6/1 | 1-3/1 | 10-12 | 7-9/0 | 4-6/09 | 1-3/09 |
| | | 0 | 0 | /09 | 9 | | |
--------------------------------------------------------------------------------
| Business Premises | 84.8 | 76.8 | 54.7 | 66.9 | 40.2 | 46.1 | 54.8 |
--------------------------------------------------------------------------------
| Housing | 24.7 | 35.8 | 38.3 | 49.9 | 39.7 | 42.4 | 26.6 |
--------------------------------------------------------------------------------
| International | 5.8 | 4.8 | 2.0 | 3.4 | 7.4 | 7.6 | 5.6 |
--------------------------------------------------------------------------------
| Other Operations | 2.5 | 2.5 | 2.5 | 2.3 | 2.1 | 2.1 | 2.2 |
--------------------------------------------------------------------------------
| Eliminations | -2.5 | -2.6 | -2.5 | -2.3 | -2.1 | -2.1 | -2.2 |
--------------------------------------------------------------------------------
| Group, total | 115.3 | 117.3 | 95.0 | 120.1 | 87.3 | 96.0 | 87.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 7-9/10 | 4-6/1 | 1-3/1 | 10-12 | 7-9/0 | 4-6/09 | 1-3/09 |
| | | 0 | 0 | /09 | 9 | | |
--------------------------------------------------------------------------------
| Business Premises | 4.5 | 4.7 | 4.3 | 4.3 | 3.1 | 4.6 | 5.9 |
--------------------------------------------------------------------------------
| Housing | 1.4 | 0.7 | 2.4 | 1.9 | 1.3 | 2.3 | -0.1 |
--------------------------------------------------------------------------------
| International | -0.4 | -2.2 | -3.9 | -2.0 | -1.3 | -1.9 | -2.5 |
--------------------------------------------------------------------------------
| Other Operations | -1.1 | -1.6 | -1.2 | -1.4 | -0.7 | -1.0 | -1.6 |
--------------------------------------------------------------------------------
| Eliminations | 0.0 | -0.1 | -0.1 | -0.2 | -0.1 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Group, total | 4.3 | 1.5 | 1.6 | 2.7 | 2.3 | 3.9 | 1.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (%) | 7-9/10 | 4-6/1 | 1-3/1 | 10-12 | 7-9/0 | 4-6/09 | 1-3/09 |
| | | 0 | 0 | /09 | 9 | | |
--------------------------------------------------------------------------------
| Business Premises | 5.3 | 6.1 | 7.9 | 6.5 | 7.7 | 10.0 | 10.8 |
--------------------------------------------------------------------------------
| Housing | 5.5 | 2.1 | 6.3 | 3.8 | 3.4 | 5.3 | -0.4 |
--------------------------------------------------------------------------------
| International | -7.1 | -46.6 | -197. | -58.4 | -17.6 | -25.6 | -44.4 |
| | | | 5 | | | | |
--------------------------------------------------------------------------------
| Group, total | 3.7 | 1.3 | 1.6 | 2.2 | 2.6 | 4.1 | 2.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 7-9/10 | 4-6/1 | 1-3/1 | 10-12 | 7-9/0 | 4-6/09 | 1-3/09 |
| | | 0 | 0 | /09 | 9 | | |
--------------------------------------------------------------------------------
| Business Premises | 338.5 | 358.2 | 331.7 | 255.3 | 252.0 | 224.3 | 252.8 |
--------------------------------------------------------------------------------
| Housing | 242.6 | 220.5 | 174.3 | 201.7 | 187.5 | 206.1 | 174.3 |
--------------------------------------------------------------------------------
| International | 23.1 | 25.7 | 24.0 | 24.6 | 26.3 | 30.7 | 31.5 |
--------------------------------------------------------------------------------
| Group, total | 604.3 | 604.4 | 530.0 | 481.6 | 465.8 | 461.1 | 458.5 |
--------------------------------------------------------------------------------
| - sold order | 443 | 426 | 389 | 317 | 325 | 306 | 291 |
| backlog | | | | | | | |
--------------------------------------------------------------------------------
| - unsold order | 162 | 178 | 141 | 165 | 141 | 155 | 168 |
| backlog | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Invested capital | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 30.9.1 | 30.6. | 31.3. | 31.12 | 30.9. | 30.6.0 | 31.3.0 |
| | 0 | 10 | 10 | .09 | 09 | 9 | 9 |
--------------------------------------------------------------------------------
| Business Premises | 79.2 | 75.8 | 56.2 | 42.0 | 61.0 | 77.0 | 69.2 |
--------------------------------------------------------------------------------
| Housing | 127.7 | 127.7 | 121.6 | 122.9 | 124.1 | 137.0 | 136.7 |
--------------------------------------------------------------------------------
| International | 175.2 | 177.2 | 173.6 | 176.3 | 165.6 | 152.0 | 150.5 |
--------------------------------------------------------------------------------
| Other and | 8.2 | 4.2 | 6.0 | 7.7 | 6.2 | -12.2 | -14.0 |
| eliminations | | | | | | | |
--------------------------------------------------------------------------------
| Group, total | 390.2 | 384.9 | 357.5 | 349.0 | 356.9 | 353.8 | 342.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Residential | | | | | | | |
| production | | | | | | | |
--------------------------------------------------------------------------------
| in Finland | 7-9/10 | 4-6/1 | 1-3/1 | 10-12 | 7-9/0 | 4-6/09 | 1-3/09 |
| (units) | | 0 | 0 | /09 | 9 | | |
--------------------------------------------------------------------------------
| Start-ups | 110 | 300 | 0 | 247 | 0 | 0 | 4 |
--------------------------------------------------------------------------------
| Sold | 164 | 102 | 95 | 86 | 43 | 51 | 27 |
--------------------------------------------------------------------------------
| Completed 1) | 14 | 0 | 16 | 64 | 37 | 93 | 58 |
--------------------------------------------------------------------------------
| Completed and | 90 | 105 | 138 | 171 | 161 | 185 | 156 |
| unsold 1) | | | | | | | |
--------------------------------------------------------------------------------
| Under | 643 | 547 | 247 | 263 | 80 | 118 | 211 |
| construction 1 | | | | | | | |
--------------------------------------------------------------------------------
| - of which unsold | 361 | 400 | 169 | 231 | 79 | 100 | 180 |
| 1) | | | | | | | |
--------------------------------------------------------------------------------
1) at the end of the period
3. Segment information
--------------------------------------------------------------------------------
| Assets | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 30.9.10 | 30.9.09 | MEUR | % | 31.12.09 |
--------------------------------------------------------------------------------
| Business Premises | 112.6 | 90.8 | 21.8 | 24.0 | 88.7 |
--------------------------------------------------------------------------------
| Housing | 155.8 | 152.9 | 2.9 | 1.9 | 151.5 |
--------------------------------------------------------------------------------
| International | 179.7 | 169.7 | 10.0 | 5.9 | 182.5 |
--------------------------------------------------------------------------------
| Other Operations | 219.5 | 191.7 | 27.8 | 14.5 | 214.5 |
--------------------------------------------------------------------------------
| Eliminations | -203.6 | -181.9 | -21.7 | | -219.3 |
--------------------------------------------------------------------------------
| Group, total | 463.9 | 423.2 | 40.7 | 9.6 | 418.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 30.9.10 | 30.9.09 | MEUR | % | 31.12.09 |
--------------------------------------------------------------------------------
| Business Premises | 84.4 | 64.0 | 20.5 | 32.0 | 55.5 |
--------------------------------------------------------------------------------
| Housing | 134.9 | 136.6 | -1.7 | -1.3 | 133.2 |
--------------------------------------------------------------------------------
| International | 187.7 | 173.5 | 14.2 | 8.2 | 181.7 |
--------------------------------------------------------------------------------
| Other Operations | 110.9 | 70.2 | 40.6 | 57.8 | 79.2 |
--------------------------------------------------------------------------------
| Eliminations | -209.2 | -184.4 | -24.8 | | -195.6 |
--------------------------------------------------------------------------------
| Group, total | 308.8 | 260.0 | 48.8 | 18.8 | 254.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Invested capital | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 30.9.10 | 30.9.09 | MEUR | % | 31.12.09 |
--------------------------------------------------------------------------------
| Business Premises | 79.2 | 61.0 | 18.2 | 29.9 | 42.0 |
--------------------------------------------------------------------------------
| Housing | 127.7 | 124.1 | 3.6 | 2.9 | 122.9 |
--------------------------------------------------------------------------------
| International | 175.2 | 165.6 | 9.5 | 5.7 | 176.3 |
--------------------------------------------------------------------------------
| Other and eliminations | 8.2 | 6.2 | 1.9 | 31.1 | 7.7 |
--------------------------------------------------------------------------------
| Group, total | 390.2 | 356.9 | 33.3 | 9.3 | 349.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inventories | IFRS | IFRS | change, | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 30.9.10 | 30.9.09 | MEUR | 31.12.09 |
--------------------------------------------------------------------------------
| Land areas and plot-owning | 174.4 | 153.7 | 20.7 | 153.0 |
| companies | | | | |
--------------------------------------------------------------------------------
| Business Premises | 34.0 | 26.1 | 7.8 | 27.8 |
--------------------------------------------------------------------------------
| Housing | 52.5 | 42.8 | 9.7 | 41.4 |
--------------------------------------------------------------------------------
| International | 87.7 | 84.5 | 3.2 | 83.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Work in progress | 53.9 | 65.4 | -11.5 | 35.1 |
--------------------------------------------------------------------------------
| Business Premises | 0.0 | 7.6 | -7.6 | 0.0 |
--------------------------------------------------------------------------------
| Housing | 52.3 | 45.6 | 6.7 | 21.2 |
--------------------------------------------------------------------------------
| International | 1.6 | 12.2 | -10.6 | 14.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shares in completed housing | 78.2 | 67.4 | 10.9 | 86.5 |
| corporations and real estate | | | | |
| companies | | | | |
--------------------------------------------------------------------------------
| Business Premises | 25.7 | 26.9 | -1.2 | 25.5 |
--------------------------------------------------------------------------------
| Housing | 34.5 | 34.6 | -0.1 | 55.5 |
--------------------------------------------------------------------------------
| International | 18.0 | 5.8 | 12.2 | 5.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other inventories | 19.5 | 18.4 | 1.1 | 17.6 |
--------------------------------------------------------------------------------
| Business Premises | 5.1 | 5.1 | 0.0 | 5.1 |
--------------------------------------------------------------------------------
| Housing | 5.7 | 4.6 | 1.1 | 3.7 |
--------------------------------------------------------------------------------
| International | 9.7 | 9.8 | 0.0 | 9.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inventories, total | 326.0 | 304.9 | 21.2 | 292.2 |
--------------------------------------------------------------------------------
| Business Premises | 64.8 | 65.7 | -0.9 | 58.4 |
--------------------------------------------------------------------------------
| Housing | 144.9 | 127.6 | 17.3 | 121.7 |
--------------------------------------------------------------------------------
| International | 117.0 | 112.3 | 4.8 | 112.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Business Premises | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 1-9/201 | 1-9/200 | MEUR | % | 2009 |
| | 0 | 9 | | | |
--------------------------------------------------------------------------------
| Revenue | 216.3 | 141.1 | 75.2 | 53.3 | 208.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 13.5 | 13.7 | -0.2 | -1.5 | 18.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment's assets | | | | | |
--------------------------------------------------------------------------------
| Non-current assets | 0.8 | 0.9 | -0.1 | -7.6 | 0.9 |
--------------------------------------------------------------------------------
| Current assets | 111.8 | 89.9 | 21.8 | 24.3 | 87.8 |
--------------------------------------------------------------------------------
| Total assets | 112.6 | 90.8 | 21.8 | 24.0 | 88.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment's liabilities | | | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | 0.9 | 11.1 | -10.2 | -92.0 | 11.0 |
--------------------------------------------------------------------------------
| Current liabilities | 83.5 | 52.9 | 30.7 | 58.0 | 44.5 |
--------------------------------------------------------------------------------
| Total liabilities | 84.4 | 64.0 | 20.5 | 32.0 | 55.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Invested capital at end | 79.2 | 61.0 | 18.2 | 29.9 | 42.0 |
| of period | | | | | |
--------------------------------------------------------------------------------
| Return on investment, % | 30.8 | 30.1 | | | 35.2 |
| 1) | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog at end of | 338.5 | 252.0 | 86.5 | 34.3 | 255.3 |
| period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Housing | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 1-9/201 | 1-9/200 | MEUR | % | 2009 |
| | 0 | 9 | | | |
--------------------------------------------------------------------------------
| Revenue | 98.9 | 108.6 | -9.8 | -9.0 | 158.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 4.5 | 3.5 | 1.0 | 28.3 | 5.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment's assets | | | | | |
--------------------------------------------------------------------------------
| Non-current assets | 0.8 | 1.6 | -0.8 | -49.4 | 1.4 |
--------------------------------------------------------------------------------
| Current assets | 155.0 | 151.3 | 3.7 | 2.4 | 150.1 |
--------------------------------------------------------------------------------
| Total assets | 155.8 | 152.9 | 2.9 | 1.9 | 151.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment's liabilities | | | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | 61.7 | 72.7 | -10.9 | -15.0 | 68.2 |
--------------------------------------------------------------------------------
| Current liabilities | 73.2 | 64.0 | 9.2 | 14.4 | 65.0 |
--------------------------------------------------------------------------------
| Total liabilities | 134.9 | 136.6 | -1.7 | -1.3 | 133.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Invested capital at end | 127.7 | 124.1 | 3.6 | 2.9 | 122.9 |
| of period | | | | | |
--------------------------------------------------------------------------------
| Return on investment, % | 4.8 | 3.6 | | | 4.2 |
| 1) | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog at end of | 242.6 | 187.5 | 55.1 | 29.4 | 201.7 |
| period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| International Operations | IFRS | IFRS | change, | change, | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 1-9/201 | 1-9/200 | MEUR | % | 2009 |
| | 0 | 9 | | | |
--------------------------------------------------------------------------------
| Revenue | 12.6 | 20.6 | -8.1 | -39.1 | 24.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | -6.5 | -5.7 | -0.8 | | -7.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment's assets | | | | | |
--------------------------------------------------------------------------------
| Non-current assets | 25.8 | 22.5 | 3.3 | 14.9 | 25.1 |
--------------------------------------------------------------------------------
| Current assets | 153.8 | 147.2 | 6.6 | 4.5 | 157.4 |
--------------------------------------------------------------------------------
| Total assets | 179.7 | 169.7 | 10.0 | 5.9 | 182.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment's liabilities | | | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | 9.1 | 8.4 | 0.6 | 7.7 | 18.4 |
--------------------------------------------------------------------------------
| Current liabilities | 178.6 | 165.0 | 13.6 | 8.2 | 163.4 |
--------------------------------------------------------------------------------
| Total liabilities | 187.7 | 173.5 | 14.2 | 8.2 | 181.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Invested capital at end | 175.2 | 165.6 | 9.5 | 5.7 | 176.3 |
| of period | | | | | |
--------------------------------------------------------------------------------
| Return on investment, % | -4.5 | -0.6 | | | -1.4 |
| 1) | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog at end of | 23.1 | 26.3 | -3.2 | -12.0 | 24.6 |
| period | | | | | |
--------------------------------------------------------------------------------
1) In calculating the key ratio only the profit for the period has been
annualised
Events after the end of the reporting period
On 11 October 2010, SRV signed an agreement with Siemens Osakeyhtiö for the
construction of a head office in Perkkaa, Espoo and the leasing of the premises
to Siemens. The company seeks a LEED GOLD environmental certificate for the
offices, which will be built on a plot owned by SRV. It is planned that the
Derby Business Park will feature a total of 19,000 m2 of state-of-the-art office
space. Siemens' share is about 7,400 m2. The new business premises for Siemens
will be completed by August 2014 at the latest.
After the end of the review period, SRV and Pohjola Insurance Ltd signed a
contract agreement for a logistics centre to be built in line with the STC
(Smart Tech Centre) concept in Viinikkala, Vantaa. The centre will have four
buildings with a total of 9,500 m2 of leasable space and is slated for
completion in September 2011.
