Financial year 1.1.-31.12.2008 in brief:
- SRV's revenue was EUR 537.0 million (EUR 561.4 million 1-12/2007)
- Operating profit grew to EUR 32.9 million (EUR 15.1 million)
- Profit before taxes grew EUR 23.7 million (EUR 11.5 million)
- The order backlog at the close of the financial year was EUR 455.3 million
(EUR 528.7 million)
- The equity ratio was 41.3 per cent (55,4 %)
- Earnings per share were EUR 0.43 (EUR 0,22)
- The proposed dividend 0.12 (EUR 0.12) per share
Fourth quarter 1.10.-31.12.2008 in brief:
- Revenue amounted to EUR 121.4 million (EUR 165,5 million10-12/2007)
- Operating profit was EUR 0.7 million (EUR -2.9 million)
- Loss before taxes was EUR 2.6 million (EUR -5.2 million)
- Earnings per share were EUR -0.06 (EUR -0.17 )
”The significant slowing down of the economy clearly affected SRV's business
operations towards the end of 2008, with revenue falling below the previous
year's level. However, the rull-year operating profit grew substantially.
In the past year, SRV Business premises reached its best result ever, and its
order backlog has stayed on a good level. Robust project management know-how,
open cooperation with long-time clients together with innovative project
development supports the competitiveness of the business area in the challenging
market situation.
SRV Approach enables fast reacting to market changes. Thanks to the open
operating model, SRV's clients can benefit from declined construction costs.
Resources can be allocated flexibly to new projects both in Finland and Russia.
Testimony to the competitiveness of SRV's approach in challenging projects can
be found in its being awarded the contract to build the Helsinki Music Centre
and the transfer of the Stockmann department store expansion project to SRV in
October as well as the contract agreement to build the Vierumäki Congress &
Resort hotel, which was signed in January 2009.
SRV's activities in development of Russian operations continued and two major
new development projects, including land, in St Petersburg were acquired. The
sale of the hotel in Ekaterinburg, which was concluded in July, raised SRV's
operating profit substantially and also released equity for the development of
Russian operations.
Financial result of Housing business area was a clear disappointment. Demand for
housing has slackened, the number of start-ups has declined and sales have
turned down, weakening the forecast for the Housing business area for 2009.
However, long-term demand for housing construction will continue in growth
centres, providing a solid foundation for growth for SRV.
With the spread of the global financial crisis, the outlook for the Finnish
economy has weakened and growth in the Russian economy has slowed down
considerably. The outlook for the Baltic national economies is difficult.
SRV's 41.3 per cent equity ratio gives a solid base to utilise SRV's innovative
property development know-how in the years to come. SRV's financing position is
good. To secure the financing needs, SRV has undrawn loan commitments and
binding financing agreement amounting to over EUR 169 million and, ” says Eero
Heliövaara, President and CEO of SRV.
--------------------------------------------------------------------------------
| | IFRS | IFRS | | | IFRS | IFRS |
--------------------------------------------------------------------------------
| Group key figures | 1-12/ | 1-12/ | change | change | 10-12/ | 10-12/ |
| (EUR million) | 2008 | 2007 | , MEUR | ,% | 2008 | 2007 |
--------------------------------------------------------------------------------
| Revenue | 537.0 | 561.4 | -24.5 | -4.4 | 121.4 | 165.5 |
--------------------------------------------------------------------------------
| Operating profit | 32.9 | 15.1 | 17.9 | 118.6 | 0.7 | -2.9 |
--------------------------------------------------------------------------------
| Financial income and | -9.2 | -3.5 | -5.7 | 161.3 | -3.3 | -2.3 |
| expenses, total | | | | | | |
--------------------------------------------------------------------------------
| Profit before taxes | 23.7 | 11.5 | 12.2 | 105.5 | -2.6 | -5.2 |
--------------------------------------------------------------------------------
| Net profit for the | 15.3 | 7.6 | 7.6 | 99.6 | -2.8 | -5.1 |
| financial year | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | 455.3 | 528.7 | -73.3 | -13.9 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit, % | 6.1 | 2.7 | | | 0.6 | -1.8 |
--------------------------------------------------------------------------------
| Net profit, % | 2.8 | 1.4 | | | -2.3 | -3.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio, % | 41.3 | 55.4 | | | | |
--------------------------------------------------------------------------------
| Net interest bearing | 169.4 | 43.2 | | | | |
| debt | | | | | | |
--------------------------------------------------------------------------------
| Gearing, % | 85.1 | 27.3 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | 12.9 | 9.7 | | | | |
| investment, % | | | | | | |
--------------------------------------------------------------------------------
| Return on equity, % | 9.4 | 6.9 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | 0.43 | 0.22 | | 95.5 | -0.06 | -0.17 |
| EUR 1) | | | | | | |
--------------------------------------------------------------------------------
| Equity per share, | 4.54 | 4.22 | | 7.6 | | |
| EUR 1) | | | | | | |
--------------------------------------------------------------------------------
| Weighted average | 36.5 | 32.7 | | 11.7 | 36.3 | 36.8 |
| number of shares | | | | | | |
| outstanding | | | | | | |
--------------------------------------------------------------------------------
| 1)Key figures per share have been adjusted to reflect the increase in the |
| number of shares, which came into effect on 11 April 2007 (split), the |
| rights issue on 11 June 2007 and the rights issue and cancellation of |
| treasury shares in connection with the merger of SRV Henkilöstö Oy on 28 |
| September 2007 and purchases of own shares. |
--------------------------------------------------------------------------------
In the financial year, consolidated revenue was EUR 349.1 million (EUR 561,4
million 1-12/2007). The share of revenue generated in Finland was 89 per cent
(91 %), whereas 11 per cent (9 %) came from Russia and the Baltic countries.
Revenue in the Business Premises business area was EUR 349.9 million (EUR 345.4
million). Revenue in the Housing business area declined to EUR 127.9 million
(EUR 163.1 million). Revenue in the International business area was EUR60.1
million (EUR 53.2 million).
The Group's operating profit for the financial yearwas EUR 32.9 million (EUR
15.1 million 1-12/2007). Its operating profit margin was 6.1 per cent (2.7 %).
Operating profit in Business Premises grew to EUR27.8 million (EUR 18.0
million). Operating profit in the International business area was EUR 9.2
million (operating loss of EUR 10.2 million). Operating profit in the Housing
business area declined to EUR 0.7 million (EUR 10.7 Million).
The Group's profit before taxes for the financial year was EUR 23.7 million (EUR
11.5 million 1-12/2007). The profit for the financial year was EUR 15.3 million
(EUR 7.6 million). Earnings per share were EUR 0.43 (EUR 0.22). The increase in
the number of shares is due to the share issues and structural changes in 2007.
Return on equity was 9.4 per cent (6.9 %) and return on investment 12.9 per cent
(9.7 %).
The Group's revenue for the fourth quarter amounted to EUR 121.4 million (EUR
165.5 million 10-12/2007) and operating profit to EUR 0.7 million (operating
loss of EUR 2.9 million). Loss before taxes was EUR 2.6 million (EUR -5.2
Million). Earnings per share were EUR -0.06 (EUR -0.17).
The order backlog was EUR 455.3 million on 31.12.2008 (EUR 528.7 million
31.12.2007).
Key figures for the Segments
--------------------------------------------------------------------------------
| | IFRS | IFRS | | | IFRS | IFRS |
--------------------------------------------------------------------------------
| Revenue | 1-12/ | 1-12/ | change, | change, | 10-12/ | 10-12/ |
| (EUR million) | 2008 | 2007 | MEUR | % | 2008 | 2007 |
--------------------------------------------------------------------------------
| Business Premises | 349.1 | 345.4 | 3.7 | 1.1 | 77.9 | 103.2 |
--------------------------------------------------------------------------------
| Housing | 127.9 | 163.1 | -35.2 | -21.6 | 33.3 | 43.5 |
--------------------------------------------------------------------------------
| International | 60.1 | 53.2 | 6.9 | 12.9 | 10.2 | 18.8 |
--------------------------------------------------------------------------------
| Other Operations | 11.5 | 11.2 | 0.3 | 2.6 | 3.0 | 2.7 |
--------------------------------------------------------------------------------
| Eliminations | -11.6 | -11.4 | -0.1 | | -3.1 | -2.7 |
--------------------------------------------------------------------------------
| Group, total | 537.0 | 561.4 | -24.5 | -4.4 | 121.4 | 165.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | IFRS | IFRS | | | IFRS | IFRS |
--------------------------------------------------------------------------------
| Operating profit | 1-12/ | 1-12/ | change, | change, | 10-12/ | 10-12/ |
| (EUR million) | 2008 | 2007 | MEUR | % | 2008 | 2007 |
--------------------------------------------------------------------------------
| Business Premises | 27.8 | 18.0 | 9.8 | 54.2 | 6.0 | 4.7 |
--------------------------------------------------------------------------------
| Housing | 0.7 | 10.7 | -10.0 | -93.4 | -1.2 | 2.8 |
--------------------------------------------------------------------------------
| International | 9.2 | -10.2 | 19.5 | | -2.7 | -9.4 |
--------------------------------------------------------------------------------
| Other Operations | -4.9 | -3.1 | -1.9 | | -1.4 | -1.1 |
--------------------------------------------------------------------------------
| Eliminations | 0.1 | -0.4 | 0.4 | | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Group, total | 32.9 | 15.1 | 17.9 | 118.6 | 0.7 | -2.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (%) | 1-12/2008 | 1-12/2007 | 10-12/2008 | 10-12/2007 |
--------------------------------------------------------------------------------
| Business Premises | 8.0 | 5.2 | 7.8 | 4.5 |
--------------------------------------------------------------------------------
| Housing | 0.6 | 6.5 | -3.6 | 6.5 |
--------------------------------------------------------------------------------
| International | 15.4 | -19.2 | -26.5 | -49.9 |
--------------------------------------------------------------------------------
| Group, total | 6.1 | 2.7 | 0.6 | -1.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | IFRS | IFRS | change, | change, |
--------------------------------------------------------------------------------
| (EUR million) | 31.12.08 | 31.12.07 | MEUR | % |
--------------------------------------------------------------------------------
| Business Premises | 265.7 | 302.8 | -37.0 | -12.2 |
--------------------------------------------------------------------------------
| Housing | 154.0 | 174.6 | -20.6 | -11.8 |
--------------------------------------------------------------------------------
| International | 35.6 | 51.3 | -15.7 | -30.6 |
--------------------------------------------------------------------------------
| Group, total | 455.3 | 528.7 | -73.3 | -13.9 |
--------------------------------------------------------------------------------
Earnings trends of the Segments
--------------------------------------------------------------------------------
| Business Premises | IFRS | IFRS | | | IFRS | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 1-12/ | 1-12/ | change, | change, | 10-12/ | 10-12/ |
| | 2008 | 2007 | MEUR | % | 2008 | 2007 |
--------------------------------------------------------------------------------
| Revenue | 349.1 | 345.4 | 3.7 | 1.1 | 77.9 | 103.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 27.8 | 18.0 | 9.8 | 54.2 | 6.0 | 4.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | 265.7 | 302.8 | -37.0 | -12.2 | | |
--------------------------------------------------------------------------------
The Business Premises business area comprises SRV Toimitilat Oy's commercial,
business, logistics and rock construction operations and property development.
Revenue in the Business Premises business area grew by 1.1 per cent during the
financial year, totalling EUR 349.1 million (EUR 345.4 million). Operating
profit was EUR 27.4 million (EUR 18.0). The positive trend in the operating
profit was mostly a result of successful implementation of development
projects.. The order backlog was EUR 292.9 million (EUR 302.8 million). Profit
margin of the order backlog has stayed on a good level.
Fourth-quarter revenue amounted to EUR 77.9 million (EUR 103.2 million) and
operating profit to EUR 6.0 million (EUR 4.7 million). The market situation
clearly deteriorated during the latter half of the year. During the final
quarter, Meag Munich Ergo's office building in Keilaniemi, a developer
contracting project carried out in line with the HTC concept, was completed.
Among the projects completed during the financial year were the Tuupakka
logistics centre in Vantaa, office buildings implemented under the HTC concept
and new headquarters for Neste Oil in the Keilaniemi district of Espoo, the
Biomedicum II project in Helsinki for the Hospital District of Helsinki and
Uusimaa, a logistics centre for Itella in the Voutila district in Vantaa, the
Kara Mid Point research and development and office building for Nokia in the
Karaportti district in Espoo as well as numerous rock construction projects. The
King's Gate business district in Porvoo was complemented in September with the
completion of commercial buildings for Vepsäläinen and Koti-Idea.
The second phase of the TRIO shopping centre in the heart of Lahti was handed
over to the client, Citycon, in November. This second phase was a direct
follow-up to the first phase, which was also constructed by SRV.
SRV handed over the Flamingo recreational centre in Vantaa to the client, Varma
Mutual Pension Insurance Company, in August, two months ahead of the original
schedule.
During the financial year, construction commenced on the Plantagen garden store
and the retail centre of the northern wing in King's Gate, Porvoo. Construction
work on STC King's Gate, the office premises in the King's Gate area, was also
started. The pre-construction of L&T Kerca in Kerava and the construction of a
car dealership for Autosalpa in Lahti and a logistics warehouse for Codel in
Vantaa also began. Repair works on the second stage of the University of
Helsinki's Metsätalo Building in Helsinki were started, and an agreement was
reached with the university's Property Services Department for a renovation
project that is to be carried out in stages at the Institute of Dentistry
building in the Ruskeasuo district of Helsinki. In addition, the construction
work on the new central laboratory at Neste Oil's Kilpilahti refinery in Porvoo
was started in November. Senaatti-kiinteistöt selected SRV as the main
contractor for the new civil defence shelter in the Viikki district of Helsinki
and as the project management contractor for the new construction and renovation
work on the University of Helsinki's Svenska Social & Kommunal Högskolan.
SRV and Kiinteistöosakeyhtiö Helsingin Musiikkitalo signed a contract for the
construction of the Helsinki Music Centre. Construction began in September.
SRV's main contract is valued at EUR 90.5 million. The total cost of the
Helsinki Music Centre is estimated at EUR 140 million, and it is scheduled for
completion at the end of April 2011.
In March 2008, the Keravanportti property was sold to the real-estate investment
trust REFF I Ky, which is managed by Pohjola Kiinteistösijoitus Oy, a property
investment company. SRV constructed two retail buildings in Keravanportti.
In October, Stockmann and SRV agreed that the project management and
implementation of the extension and alteration works of Stockmann's Helsinki
department store will be transferred to SRV. The agreement covers both the works
now in progress and the completion of the entire extension project. SRV's share
of the project is estimated at EUR 80 million. The works will be completed by
the end of 2010.
In December, SRV and Suomi Mutual Life Assurance Company signed an agreement for
STC Meiramitie, a logistics project, to be carried out in the district of
Koivuhaka in Vantaa. The project encompasses the construction of a complex of
four logistics properties with a total of about 10,700 square metres of floor
area. SRV's STC (Smart Tech Center) concept has been developed specifically to
enable small and medium-sized companies to utilise their warehousing, production
and office premises efficiently.
On 6 March 2008, the Helsinki Court of Appeal announced its decision on the
dispute between SRV Business Premises Ltd and F-Secure Corporation. The dispute
was about interior works done during the construction and whether they are
covered by the original rental agreement. The Court of Appeal did not revise the
decision of the Helsinki District Court, which stated that the construction work
is not covered by the original rental agreement. According to the Court's
decision, F-Secure must pay the additional work costs, and the costs of the
trial plus interest. The financial impact pursuant to the decision on SRV's
operating profit was about EUR 0.7 million and about EUR 1.2 million on profit
before taxes. The Supreme Court did not grant leave to appeal for F-Secure.
--------------------------------------------------------------------------------
| Housing | IFRS | IFRS | | | IFRS | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 1-12/ | 1-12/ | change, | change, | 10-12/ | 10-12/ |
| | 2008 | 2007 | MEUR | % | 2008 | 2007 |
--------------------------------------------------------------------------------
| Revenue | 127.9 | 163.1 | -35.2 | -21.6 | 33.3 | 43.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 0.7 | 10.7 | -10.0 | -93.4 | -1.2 | 2.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | 154.0 | 174.6 | -20.6 | -11.8 | | |
--------------------------------------------------------------------------------
The Housing business area comprises housing construction in the Helsinki
Metropolitan Area and the neighbouring municipalities as well as the operations
of the regional subsidiaries. The regional subsidiaries are engaged in housing,
commercial, business premises and logistics construction projects.
Revenue in the Housing business area amounted to EUR 127.9 million (EUR 163.1
million) in the financial year and operating profit was EUR 0.7 million (EUR
10.7 million). The decline in both revenue and operating profit was attributable
to the sharp slowdown in housing sales. The order backlog was EUR 154.0 million
(EUR 174.6 million).
Fourth-quarter revenue amounted to EUR 33.3 million (EUR 43.5 million) and
operating loss to EUR 1.2 million (operating profit of EUR 0.4). The decline in
both revenue and operating profit was attributable to the general situation in
housing sales. Operating profit in the fourth quarter was reduced by cost
entries of EUR 1 million, mostly made in conjunction with a reassessment of the
profitability of remaining developer contracting projects.
Besides housing production, resources were allocated to contracting and, during
the financial year contracts worth EUR 76.9 million were concluded with external
clients. Of these, the most important in the Helsinki metropolitan area were a
58-unit apartment building for HOAS (Foundation for Student Housing in the
Helsinki Region) in Viikki and the renovation of a 62-unit apartment building
for KY Kiinteistö Oy in the Töölö district of Helsinki. The construction of a
total of 76 residential units was started up in Tampere for AVO-Asunnot Oy and
AVO-Asumisoikeus Oy. Other contracts that were concluded included the renovation
of an ice stadium for the City of Jyväskylä, the construction of Tietotie upper
secondary school for the City of Valkeakoski, the construction of a wind turbine
production plant for The Switch in Lappeenranta and the construction of a
logistics centre and covering the parking hall for Turku University Hospital.
During the financial year, the construction of 110 (363) developer contracting
housing units was started. SRV bought an area in the Saunalahti district of
Espoo during the review period and will build more than 100 low-rise units
there. The construction of the first stage, comprising 16 units, commenced in
late summer.
A total of 141 (288) developer contracting housing units were sold during the
financial year. Sales focused on units that were completed or close to
completion. Although sales of residences picked up during the second quarter,
they weakened in the third and particularly in the fourth quarter.
At the end of the financial year, 265 (415) residential units were under
construction, of which 266 units were unsold. There were 133 (80) completed but
unsold residential units. Of the completed residential units, 20 had been leased
out by the close of the period. A total of 260 (519) developer contracting
residential units were completed during the review period. Start-ups of new
developer contracting housing projects have been decreased further due to the
market situation.
--------------------------------------------------------------------------------
| Developer contracting | 1-9/ | 1-9/ | change, | 7-9/ | 7-9/ |
| housing production in | 2008 | 2007 | units | 2008 | 2007 |
| Finland | | | | | |
--------------------------------------------------------------------------------
| Start-ups | 110 | 363 | -253 | 0 | 155 |
--------------------------------------------------------------------------------
| Sold | 141 | 288 | -148 | 13 | 40 |
--------------------------------------------------------------------------------
| Completed | 260 | 519 | -259 | 260 | 519 |
--------------------------------------------------------------------------------
| Completed and unsold 1) | 133 | 80 | 53 | | |
--------------------------------------------------------------------------------
| Under construction 1) | 265 | 415 | -150 | | |
--------------------------------------------------------------------------------
1) at the end of the period
Major projects under construction included the Helsingin Oscar condominium,
where 65 units will be completed, Vallikallion Helmi in Espoo (67 units) and
Ulrikanhuippu in Vantaa (46 units), which will be realised jointly with
Asuntosäätiö (Housing Foundation).
Codetermination negotiations were started and completed in the Greater Helsinki
area during the financial year The codetermination negotiations led to the
termination of the contracts of four salaried employees, the laying-off of five
salaried employees and the conditional termination of the contracts of 10
employees for production and financial reasons.
SRV continued its participation as the only construction company in the 24Living
development project, which is being partly funded by TEKES (the Finnish Funding
Agency for Technology and Innovation). Begun in
2006, the 3-year project is headed by the University of Art and Design in
Helsinki, in cooperation with Finpro, the Massachusetts Institute of Technology
(MIT) and TEKES, with a number of Finnish companies also participating.
--------------------------------------------------------------------------------
| | IFRS | IFRS | | | IFRS | IFRS |
--------------------------------------------------------------------------------
| International | 1-12/ | 1-12/ | change, | change, | 10-12/ | 10-12/ |
| Operations | 2008 | 2007 | MEUR | % | 2008 | 2007 |
| (EUR million) | | | | | | |
--------------------------------------------------------------------------------
| Revenue | 60.1 | 53.2 | 6.9 | 12.9 | 10.2 | 18.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 9.2 | -10.2 | 19.5 | | -2.7 | -9.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | 35.6 | 51.3 | -15.7 | -30.6 | | |
--------------------------------------------------------------------------------
International Operations comprises the business activities of the SRV
International subgroup in Russia and the Baltic countries.
International Operations posted revenue of EUR 60.1 million (EUR 53.2 million).
Operating profit amounted to EUR 9.2 million (operating loss of EUR 10.2
million). Revenue of EUR 14.2 million and operating profit of EUR 13.5 million
were recorded on the sale of the hotel in Ekaterinburg. The order backlog was
EUR 35.6 million (EUR 51.3 million).
Fourth-quarter revenue was EUR 10.2 million (EUR 18.8. million) and operating
loss EUR 2.7 million (loss of EUR 9.4 million). Following an adjustment to the
price of the hotel sold in July, EUR 0.9 million was booked to revenue and
operating profit. Operating profit was burdened by EUR 1.8 million in
development expenses for the property development project in St Petersburg and
the slowing down of activities in the Baltic countries.
Russia
The renovation works of the Pulkovskaya and Pribaltiskaya hotels operated by the
Rezidor Group in St Petersburg were completed in April. In June, SRV signed
contracts valued at around EUR 15 million for further renovation works at the
hotels. Ahlström's glass fibre
plant in Tver was completed in March.
The construction of the Etmia II office and parking facility in the heart of
Moscow continued. Acquisition of lessees for the site began during the autumn.
The site will have shell & core readiness at the start of 2009, after which
interior works will commence. SRV's role in the project is to act as the project
management contractor and as co-owner with a 50 per cent stake. SRV's objective
is to sell the project to investors after completion.
Construction of the Papula residential area in the city of Vyborg continued. In
the first phase, 38 units are to be built, and are slated for completion during
the first quarter of 2009. All of the first-phase units have been sold. The sale
of 30 units, valued at EUR 4.6 million, will be recognised after the buyer has
finalised the financing.
The development of the Eurograd logistics area in St Petersburg continued during
the review period. On 11 February 2008, SRV acquired a 32 per cent share in the
Russian enterprise OOO ”Olgino-4”, which owns a plot of 24.9 hectares located
north of St Petersburg, in the close vicinity of the Ring Road. SRV raised its
ownership in the enterprise to 49 per cent during the review period and will
acquire the majority stockholding the first half of 2009. Over 100,000 square
metres of logistics facilities are planned for the site, in several stages
during the next few years. The zoning of the area for logistics was completed in
August and site planning has begun.
In the financial year, SRV continued the design, preparations for the
construction and the search for tenants of the Mytichi shopping centre project
developed by SRV, to be realised in the Moscow area. The ensemble will have
about 120,000 square metres of floor area. The majority owner of the project is
the Finnish real estate investment company Vicus with a 75 per cent stake. Due
to the global financial crisis, the project will be split into two phases, to
facilitate external financing. The scope of construction works during the first
phase will be about 52,000 m2, including an underground car park and commercial
premises. The final investment decision will be made in 2009. In July, SRV
signed a project management contract, valued at EUR 107 million, with the
project company for the planning and construction of the project. The contract
agreement will be amended in line with the new scope of the project. The project
will not be included in the order backlog until the final investment decision is
made. Preparations for construction and work for the transfer of the plot's
infrastructure have started in accordance with the project management contract.
Negotiations with the anchor tenants are underway. The aim is to finalise the
negotiations by the end of the year. SRV owns 25 per cent of the project and has
invested EUR 6.4 million in it.
SRV concluded a contract with the International Banking Institute (IBI), St
Petersburg, and a local partner concerning the development of an 8.5 hectare
land area in St Petersburg. SRV is developing zoning for the area. 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. SRV has made agreements with three international
architecture firms to develop the overall concept of the project on the basis of
a pre-study carried out by the British firm Locum Consulting. The aim is to
conclude the development of the overall concept in 2009, which would enable
starting up the construction of the first phase during 2010. SRV has established
a development company named OOO IBI Invest to implement the project, and
acquired a land area for said company. SRV had invested about EUR 50 million in
land and properties as of 31 December 2008. Further investment in the project by
SRV is estimated at EUR 10 million. It is further estimated that SRV's ownership
will total 77.5 per cent of the project when IBI Invest has acquired all the
land areas included in the cooperation contract. SRV's partner and future
minority shareholder in the joint venture is Mr. Boris Kholmyansky through the
companies that he owns. Mr. Kholmyansky is the main owner and chairman of the
board of the St Petersburg-based company NPO Znamia Truda.
During the period, SRV continued negotiations with a Russian banking partner
with a view to developing property fund cooperation, which would focus on
developing commercial and business premises projects and financing construction
in Russia. The investors would be SRV together with a group of international
investors as well as a local partner, who would also administer the fund. Should
the plan be carried out, SRV intends to make a fund investment of around EUR 20
million.
In July, SRV signed a contract for the sale of shares in ZAO Nordrus Hotel with
Wenaas Hotel Russia A/S, which belongs to the Norwegian Wenaas Group. ZAO
Nordrus Hotel owns the 160-room Park Inn hotel in Ekaterinburg, Russia. The
selling price of the shares was EUR 22.5 million. The transaction was completed
on 24 September 2008, when the Russian competition authorities had given their
consent.
Baltic countries
A partnership project with Facio Ehitus continued in Tartu, Estonia. SRV owns a
plot for 7 high-rise apartment buildings. The construction of one of these
buildings (42 units) was begun in the summer of 2007. The project was completed
in October. No start-ups of new developer contracting projects are planned in
the present market situation. 6 (17) residential units were sold during the
period and, all in all, 41 (46), were up for sale at the end of the period, 41
(4) of which were in already-completed projects. The sale of the logistics
centre leased to Oriola KD in Estonia was completed in January 2008. Revenue of
EUR 5 million was recorded on the sale. The vehicle dealership for Inchcape
Motors was handed over to the client in November. Design work for the Mercantile
logistics centre was completed but the construction start-up was put on hold.
The HRX logistics centre was handed over to the client in Latvia in March 2008.
--------------------------------------------------------------------------------
| | IFRS | IFRS | | | IFRS | IFRS |
--------------------------------------------------------------------------------
| Other Operations | 1-12/ | 1-12/ | change, | change, | 10-12/ | 10-12/ |
| (EUR million) | 2008 | 2007 | MEUR | % | 2008 | 2007 |
--------------------------------------------------------------------------------
| Revenue | 11.5 | 11.2 | 0.3 | 2.6 | 3.0 | 2.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | -4.9 | -3.1 | -1.9 | | -1.4 | -1.1 |
--------------------------------------------------------------------------------
Other Operations comprise mainly the SRV Group Plc and SRV Kalusto Oy
businesses.
The revenue of Other Operations during the financial year was EUR11.5 million
(EUR 11.2 million) and operating loss EUR 4.9 million (loss of EUR 3.1
million).Operating profit was burdened with the increase of depreciation, fixed
costs and project development costs.
Fourth-quarter revenue was EUR 3.0 million (EUR 2.7 million) and operating loss
was EUR 1.4 million (loss of EUR 1.1 million). Operating profit was impacted by
the increase of depreciation to EUR 0.7 million (EUR 0.4 million).
Financing and financial position
The Group's equity amounted to 166.6 million (EUR 158.3 million) and the group's
inventories were EUR 294.8 million (EUR 196.4 million), the share of land areas
and plot-owning companies being EUR 142.1 million (EUR 64.3 million).
The Group's invested capital amounted to EUR 339.4 million (EUR 222.9 million).
Investments in SRV's developer contracting projects total around EUR 160
million. Investments in unsold housing production in Finland amount to EUR 89
million. The company estimates that completion of these projects demands another
EUR 20 million, which is financed mainly using the undrawn housing corporate
loans. Investments in uncompleted developer contracting business premise
projects in Finland amount to EUR 30 million. To complete the projects another
EUR 10 million is estimated to be invested. Investments in international
developer contracting projects amount to EUR 38 million, of which EUR 3.3
million is in unsold residential projects in Estonia, EUR 3.4 million in housing
project under construction in Vyborg and around EUR 31 million in Etmia II
office and Mytischi shopping centre projects under construction.
The Group's net interest-bearing liabilities were EUR 169.4 million on
31.12.2008 (EUR 43,2 million). Net financial expenses totalled EUR 9.2 million
(EUR 3.5 million). The Group's cash assets at the end of the financial year
amounted to EUR3.4 million (EUR 21.4 million). Cash assets in the reference
period were increased through the share issue in June 2007. At the change of the
year, share of the Group's undrawn financing reserves was EUR 107.0 million (EUR
130.0 million)., Undrawn project specific loans amounted to EUR 25 million and
financing commitments amounted to EUR 10 million.
The return on investment was 12.9 per cent (9.7 %) and the return on equity 9.4
per cent (6.9 %). The equity ratio was 41.3 per cent (55,4 %). The change in the
equity ratio was impacted by land investments and other increase in inventories.
Investments
The Group's investments totalled EUR 16.8 million (EUR 5,4 million), of which
EUR 10 million were investments related to buildings in the IBI project.
Unbuilt land areas, land acquisition commitments and land development agreements
--------------------------------------------------------------------------------
| Land reserve | Business | Housing | International | Total |
| 31.12.2008 | Operations | | Operations | |
--------------------------------------------------------------------------------
| Unbuilt land areas and land acquisition commitments |
--------------------------------------------------------------------------------
| Building rights*, | 238 000 | 268 000 | 859 000 | 1 365 000 |
| m2 | | | | |
--------------------------------------------------------------------------------
| Capital invested | 45 | 60 | 104 | 209 |
| incl. | | | | |
| commitments, EUR | | | | |
| million | | | | |
--------------------------------------------------------------------------------
| Land development | | | | |
| agreements | | | | |
--------------------------------------------------------------------------------
| Building rights*, | 466 000 | 221 000 | 100 000 | 787 000 |
| 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 |
--------------------------------------------------------------------------------
In January, SRV signed a preliminary property purchase agreement for the old
Government Building designed by Alvar Aalto, and the adjacent plot, on which a
new building of 12,000 square metres of floor area is being developed. The
listed Government Building will partly be returned to its original use. During
the financial year SRV bought 14,700 square metres of floor area in residential
building rights in the Saunalahdenranta district of Espoo. Single-family,
terraced and semidetached houses will be built in the area. In the Aviapolis
business district in the Viinikkala logistics area in Vantaa, SRV bought a 4.5
hectare piece of land, where it plans to build logistics facilities measuring
around 26,000 square metres of floor area.
In June, SRV concluded a preliminary property purchase agreement for the roughly
4.5 hectare land area in the Vantaankoski district of Vantaa. The land area
borders the 6.3 hectare property SRV purchased earlier in the area.
On 14 January 2008, Espoo City Board accepted SRV's planning reservation
application for housing towers above Karhusaarentie road. The plan includes four
27-28 storey buildings and an underground car park on four levels. According to
initial plans, the area includes about 50,000 square metres of residential
building volume, and the total number of apartments would be around 370. The
project would be connected with the implementation of the Keilaniemi metro
station. Plans include a deck that would span over Karhusaarentie road,
connecting the residential site to Tapiola and thereby adding to its supply of
high-quality housing.
New names for SRV's subsidiaries as part of renewed brand
As part of SRV's renewed brand the company renamed its subsidiaries. The name of
SRV Viitoset, which specialises in business premises, was changed to SRV
Business Premises Ltd as of 1 March 2008. The name of SRV Westerlund, which
operates in residential construction, was changed to SRV Housing Ltd. The
renewed brand will bring the Group's business areas more clearly under one SRV
brand.
SRV's Group structure
SRV is Finland's leading project management contractor. The Group builds and
develops retail and commercial 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 is the Group's parent company,
and it is responsible for the Group's management, treasury, finance and
administrative functions. The Property Development and Building Systems
Engineering units support and serve all the Group's business operations.
SRV's business areas are Business Premises, Housing and International as well as
Other Operations. The Business Premises business area comprises the operations
of SRV Toimitilat Oy. Housing comprises the operations of SRV Asunnot Oy and the
regional subsidiaries. The SRV International subgroup carries on international
operations in Russia and the Baltic countries. Other Operations consist
primarily of the SRV Group Plc and SRV Kalusto Oy businesses.
Changes in Group structure
SRV Group Plc acquired 100 per cent ownership of SRV Keski-Suomi Oy in April
2008 and Rkl Erkki Huhdanpää Oy in June 2008. In order to strengthen the
business structure and operations, SRV started the procedure to merge SRV
Kaakkois-Suomi Oy, SRV Keski-Suomi Oy, SRV Lounais-Suomi Oy and Rkl Erkki
Huhdanpää Oy into SRV Housing Ltd at the end of June 2008. The companies were
merged with SRV Housing Ltd on 31 December 2008 and continue their operations as
SRV Housing Ltd's regional businesses under the brands SRV Kaakkois-Suomi, SRV
Keski-Suomi, SRV Lounais-Suomi and SRV Pirkanmaa.
Changes in Group management
Executive Vice President Veli-Matti Kullas, who is in charge of SRV's operations
in Russia, was nominated member of SRV's Corporate Executive Team on 12 February
2008. Katri Innanen, LL.M, was appointed Chief Legal Counsel and member of the
Corporate Executive Team of SRV Group, when the current Chief Legal Counsel,
Marja Sarnela retires. Mrs Innanen started in her new position on 29 September
2008. Valtteri Palin, M.Sc. (Econ.), was appointed Senior Vice President,
Financial Administration, and member of the Corporate Executive Team of SRV
Group Plc as from 1 August 2008 when his predecessor and Corporate Executive
Team Member Anu Hämäläinen left the company.
SRV reorganised its international operations on 15 September 2008. The Executive
Vice President in charge of Russian operations, Veli-Matti Kullas, now reports
directly to President and CEO Eero Heliövaara and the Baltic country managers to
the Executive Vice President in charge of Business Premises, Juha Pekka Ojala.
In connection with the organisational rearrangements, Ari Beilinson, Executive
Vice President in charge of the SRV International business area and member of
the Corporate Executive Team, left the company.
Personnel
SRV had an average payroll of 871 (761) employees, of whom 614 (537) were
white-collar. The parent company had an average staff of 66 (62) white-collar
employees. At the close of the financial year, the Group had 870 (752)
employees, of whom 66 (59). were employed by the parent company. An average of
15 per cent (9%) of the employees work at subsidiaries and representative
offices abroad.
SRV is developing its cooperation with universities and colleges as part of its
effort to cover staffing needs for recruitment and the holiday seasons. At the
end of the financial year, SRV had a total of 25 (27) 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).
--------------------------------------------------------------------------------
| Personnel by business area | 31.12.2008 | 31.12.2007 | Share of Group |
| | | | personnel, |
| | | | 31.12.2008, % |
--------------------------------------------------------------------------------
| Business Premises | 296 | 295 | 34.0 |
--------------------------------------------------------------------------------
| Housing | 285 | 257 | 32.8 |
--------------------------------------------------------------------------------
| International | 191 | 114 | 22.0 |
--------------------------------------------------------------------------------
| Other Operations | 98 | 86 | 11.3 |
--------------------------------------------------------------------------------
| Group, total | 870 | 752 | 100.0 |
--------------------------------------------------------------------------------
On 11 February 2008, the Board of Directors of SRV Group Plc approved a new
share-based incentive plan for the Group's key personnel. The Plan includes
three earning periods - the calendar years 2008, 2009 and 2010. The potential
reward from earning period 2008 will be paid in 2009, partly as shares in the
company and partly as cash. The proportion to be paid in cash will cover taxes
and tax-related costs arising from the reward. The shares may not be transferred
during the two-year restriction period. If a key person's employment or service
ends during said restriction period, he/she must return the shares rewarded
under the Plan to the company without compensation. The earnings target for the
2008 earning period was not met, and thus no rewards will be paid for 2008 under
the system.
On 10 February 2009, SRV's Board of Directors decided on the target group and
performance targets for the 2009 earning period. The target group includes about
70 employees, and the reward is based mainly on consolidated and partly on
business area performance. The rewards to be paid for earning period 2009
correspond to the approximate value of a total maximum of 350 000 SRV Group Plc
shares and equal amount of money, at the most, for taxes.
Outlook for construction
Due to the uncertainty in the global financial markets, the world economy will
continue to weaken. Growth in the Finnish economy has come to a halt, and growth
in 2008 is estimated to have settled at around 2 per cent. Uncertainties
concerning the length and impacts of the financial crisis are hampering the
assessment of the construction market outlook. The business cycles of the real
estate market and construction have weakened significantly.
The total number of building permits has decreased across the board, except for
public buildings. After a prolonged rise, construction costs have begun to
decrease. The availability of subcontracting and materials has developed
favourably after the dip in the construction business cycle.
The housing market has taken a sharp turn for the worse due to slower economic
growth. The number of unsold residences has grown. The number of residential
start-ups has decreased, and due to the challenging situation, the lull in the
housing market may continue into 2010.
In 2009, the construction of commercial premises and offices is expected to
decline. Vacancy rates in office premises will increase due to the completion of
new premises in 2009. Warehouse construction volumes depend on decisions to
implement projects to improve logistics.
Economic growth in the Baltic countries has deteriorated quickly. Estonia and
Latvia are
sliding towards recession. The housing market has clearly cooled down and
private
consumption is on the wane due to rapid inflation. The short-term outlook for
the Baltic economies is highly challenging.
Russian economic growth will decelerate rapidly. The financial crisis has made
it more difficult to grant loans and construction volumes have dropped.
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 actual cash flow from
operating activities and financing costs. The general economic situation has
deteriorated considerably. Interest rates fell sharply during the latter part of
2008, but the availability of credit from banks has weakened, and loan margins
have risen significantly. The international financial crisis will make it more
difficult also for SRV's customers to obtain financing and will hamper the
functioning of property markets. Property values face pressures and the number
of property transactions in decreased due to difficulties in getting 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.
The recognition date of the developer contracting projects also depends on the
percentage of sold premises in projects. Postponed residential start-ups
increase the amount of development expense, which are recorded as costs.
Housing sales have taken a steep fall in Finland, while in Estonia, in
particular, they have come almost to a complete halt. The slowdown in housing
sales will increase sales and marketing costs and interest expenses in developer
contracting housing production.
Construction is subject to significant cost risks relating to subcontracting and
deliveries, and their control underlines the need for long-term planning. SRV's
contracting model requires skilled and competent personnel. Warranty and
liability obligations related to construction can span up to ten years.
Currently the upward trend in construction costs has ceased and turned into a
downward one.
Besides land acquisition risks, property projects face, among other things,
risks relating to outcome of zoning, financing, commercialisation of projects,
geographical location and type of project. In accordance with its strategy, SRV
focuses on developer contracting projects and has increased its land acquisition
in Finland and in 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 2008 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 (EUR 100 million),
which shall fall due in 2012. 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 2007 Annual Report and Financial Statements.
SRV estimates that no other essential changes have occurred in company's risks
in the financial year.
Environmental matters
In its operations, the Group's aim is to follow the principles of sustainable
development and to minimise harmful environmental effects related to the life
cycle of buildings. The activities are focused on management of environmental
matters during both the design and construction phases. The group employs a
waste reporting system on Finnish construction sites. SRV has upgraded the
resources in the management of environmental matters as of the beginning of
2008.
Corporate governance and resolutions of general meetings
The Annual General Meeting was held on 14 April 2008. The AGM adopted the
financial statements for 2007 and granted release from liability to the members
of the Board of Directors and the president and CEO. A dividend of EUR 0.12 per
share was declared.
Mr Ilpo Kokkila was elected chairman of the Board of Directors and Mr Jukka
Hienonen, Mr Lasse Kurkilahti, Mr Matti Mustaniemi and Mr Markku Sarkamies were
elected to seats on the Board. In its organisational meeting on 14 April 2008
the Board of Directors elected Lasse Kurkilahti vice chairman of the Board.
Matti Mustaniemi was elected chairman and Markku Sarkamies member of the Audit
Committee. Ilpo Kokkila was elected chairman and Jukka Hienonen and Lasse
Kurkilahti members of the Nomination and Remuneration Committee.
Mr Jarmo Lohi, Authorised Public Accountant, was elected as the company's
auditor, and the firm of public accountants Ernst & Young Oy was elected deputy
auditor, with Mr Mikko Rytilahti, Authorised Public Accountant, acting as
principal auditor.
The Annual General Meeting authorised the Board of Directors to resolve on the
acquisition of the company's own shares (treasury shares). The authorisation is
in force for 18 months from the decision of the Meeting. A maximum of 3,676,846
own shares, or a lower amount that, in addition to the shares already owned by
the company and its subsidiaries, is less than 10 per cent of all shares, may be
acquired on the basis of the authorization. The Annual General Meeting
authorised the Board of Directors to resolve on the transfer of treasury shares
against payment or without consideration. The authorisation is in force for 18
months from the decision of the Meeting.
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's shares were admitted to public trading on the OMX Nordic Exchange
Helsinki Pre List on 12 June 2007 and on the Main List on 15 June 2007. SRV had
a total of 5 764 shareholders at 31 December 2008. SRV did not receive any
flagging notifications during the financial year.
The closing rate at the end of the review period was EUR 3.47 (EUR 5.02 eur
31.12.2007). The highest share price in the review period was EUR 6.60 and the
lowest was EUR 2.82. The change in the all-share index of the Helsinki Stock
Exchange (OMX Helsinki) during the same period was 53.4 per cent negative and
the OMX Industrial and Services index 58,3 per cent negative.
At the end of the financial year, the company had a market capitalisation of EUR
125.7 million, excluding the Group's own shares. About 13.5 million shares were
traded on the Helsinki Stock Exchange in the financial year and the trade volume
was EUR 69.0 million.
At the end of the financial year, SRV Group Plc's subsidiary SRV Kalusto Oy had
150,241 of SRV Group Plc's shares. The shares were acquired in accordance with
the conditions of the merger plan of SRV Group Plc and SRV Henkilöstö Oy. On 30
May 2008, SRV Group Plc's Board of Directors decided to use the authorisation to
acquire the company's own shares. Share acquisition started on 9 June 2008. On
31 December 2008, SRV Group Plc and SRV Kalusto Oy had a total of 558 000 of SRV
Group Plc's shares, representing 1.5 per cent of the total number of the
company's shares and combined number of votes. On 10 February 2009, the Group
had a total of 551 064 shares (1.6 per cent of the total number of the company's
shares and combined number of votes).
Financial targets
The Board of Directors has set the aim of SRV in the medium term to achieve
annual average growth of approximately 15 per cent in Group revenue and annual
average growth of 30 per cent in revenue in 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. Also, the company aims to maintain an
equity ratio of 30 per cent.
The international economic and financing crisis has hindered the growth outlook
for business operations. The realisation of the sales of developer contracting
projects has an essential effect on the development of profitability. The set
financial targets cannot be met during in the present economic situation. The
company endeavours to maintain the profitability by rationalising operations and
cutting costs.
Events after the end of the financial year
SRV is preparing for a continued downturn in construction markets. Negotiations
were initiated in January 2009 within the Group companies for adapting its
operations. The Group's Finland-based companies will start codetermination
negotiations concerning senior salaried employees and salaried employees. At the
same time, SRV will start a similar process in the Group's foreign units. The
negotiations will deal with personnel layoffs, contract terminations and
adaptation measures. The aim is to get the negotiations completed by mid March.
The personnel reduction measures are estimated to affect about 130 employees.
Different needs and measures will be specified more accurately during the course
of the negotiations.
The construction of the Kerca logistics area in Kerava developed by SRV
proceeded in January. Kesko started the plans to locate Anttila's logistics
center in the Kerca logistics area.. Anttila's plans cover the construction of a
warehouse of about 19,000 gross square metres. The construction project will
carried out under project management contract. SRV and the city of Kerava agreed
on a contract package concerning the development of the Kerca logistics area and
concluded a contract for a real estate transaction of four hectares of land and
a preliminary contract for an area of 22 hectares. On the first plot, SRV plans
to build a GCC (Grand Cargo Center) logistics building with about 20,000 square
metres of floor space. Kerca occupies an area of 160 hectares on the
Kerava-Vantaa border.
In January, SRV and Varma Mutual Pension Insurance Company signed the project
management contract concerning the Vierumäki Congress & Resort Hotel project.
SRV acts as main contractor with overall responsibility and is in charge of
construction and planning. In addition to 191 hotel rooms, the four-storey hotel
building includes meeting facilities, six restaurants, fitness room, bowling
alley with 10-lanes, and a wellness-area. The hotel will be opened in spring
2010.
Outlook for 2008
The international financial crisis has complicated the financing of property
investments and weakened the economic outlook. Start-up decisions and housing
sales, in particular, face uncertainties.
The trend in revenue, operating profit and earnings in 2009 will be affected by
the sales volume of developer contracting sites and the volume of new works
orders. In order to improve profitability, SRV aims to reduce the Group's fixed
expenses by cutting costs.
Revenue and operating profit in 2009 are expected to be below the previous
year's figures, but profit before taxes is expected to be clearly positive.
Proposal for the distribution of profits
The parent company's distributable funds at 31 December 2007 are EUR
124,482,961.33
of which net profit for the financial year is EUR 3,007,280.62
The Board of Directors proposes to the Annual General Meeting that the
distributable equity be allocated as follows:
A dividend of EUR 0.12 per share be paid to shareholders,
thus
EUR 4,412,216.16
The remainder be transferred to retained earnings EUR 120,070,745.17
No material changes have taken place in the company's financial position after
the close of the financial year. The company's liquidity is good and, in the
view of the Board of Directors, the proposed dividend payout does not compromise
the company's solvency.
Espoo 10 February, 2009
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:
Eero Heliövaara, president and CEO, tel. +358 (0)20 1455 202
Hannu Linnoinen, CFO, +358 (201) 455 990, +358 (50) 523 5850
Jussi Ollila, SVP, Communications, +358 (201) 455 275, +358 (50) 372 5229
Distribution: Nasdaq OMX Helsinki, principal media, www.srv.fi
Key figures:
--------------------------------------------------------------------------------
| | | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| | | 1-12/ | 1-12/ | 10-12/ | 10-12/ |
| | | 2008 | 2007 | 2008 | 2007 |
--------------------------------------------------------------------------------
| Revenue | EUR | 537.0 | 561.4 | 121.4 | 165.5 |
| | million | | | | |
--------------------------------------------------------------------------------
| Operating profit | EUR | 32.9 | 15.1 | 14.8 | -2.9 |
| | million | | | | |
--------------------------------------------------------------------------------
| Operating profit, % of | % | 6.1 | 2.7 | 12.2 | -1.8 |
| revenue | | | | | |
--------------------------------------------------------------------------------
| Profit before taxes | EUR | 23.7 | 11.5 | -2.6 | -5.2 |
| | million | | | | |
--------------------------------------------------------------------------------
| Profit before taxes, % of | % | 4.4 | 2.1 | -2.1 | -3.2 |
| revenue | | | | | |
--------------------------------------------------------------------------------
| Net profit attributable to | EUR | 15.7 | 7.2 | -2.2 | -5.1 |
| equity holders of the | million | | | | |
| parent company | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity | % | 9.4 | 6.9 | | |
--------------------------------------------------------------------------------
| Return on investment | % | 12.9 | 9.7 | | |
--------------------------------------------------------------------------------
| Invested capital | EUR | 339.4 | 222.9 | | |
| | million | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio | % | 41.3 | 55.4 | | |
--------------------------------------------------------------------------------
| Net interest-bearing debt | EUR | 169.4 | 43.2 | | |
| | million | | | | |
--------------------------------------------------------------------------------
| Gearing ratio | % | 85.1 | 27.3 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | EUR | 455.3 | 528.7 | | |
| | million | | | | |
--------------------------------------------------------------------------------
| Personnel on average | | 873 | 761 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Property, plant and | EUR | 16.8 | 5.4 | 24.8 | 5.4 |
| equipment investments | million | | | | |
--------------------------------------------------------------------------------
| Property, plant and | % | 4.6 | 1.0 | 20.4 | 3.2 |
| equipment investments, % of | | | | | |
| revenue | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, share | EUR | 0.43 | 0.22 | -0.06 | -0.17 |
| issue adjusted 1) | | | | | |
--------------------------------------------------------------------------------
| Equity per share, share | EUR | 4.54 | 4.22 | - | - |
| issue adjusted 2 | | | | | |
--------------------------------------------------------------------------------
| Dividend per share, share | EUR | 0.12 | 0.12 | - | - |
| issue adjusted 2) | | | | | |
--------------------------------------------------------------------------------
| Dividend payout ratio | % | 27.9 | 54.6 | - | - |
--------------------------------------------------------------------------------
| Dividend yield | % | 3.5 | 2.4 | - | - |
--------------------------------------------------------------------------------
| Price per earnings ratio | | 8.1 | 22.8 | - | - |
--------------------------------------------------------------------------------
| Share price development | | | | | |
--------------------------------------------------------------------------------
| Share price at the end of | EUR | 3.47 | 5.02 | - | - |
| the period | | | | | |
--------------------------------------------------------------------------------
| Average share price | EUR | 5.05 | 8.40 | - | - |
--------------------------------------------------------------------------------
| Lowest share price | EUR | 2.82 | 4.72 | - | - |
--------------------------------------------------------------------------------
| Highest share price | EUR | 6.60 | 10.79 | - | - |
--------------------------------------------------------------------------------
| Market capitalisation at | EUR | 125.7 | 184.6 | - | - |
| the end of the period | million | | | | |
--------------------------------------------------------------------------------
| Trading volume | 1,000 | 13 543 | 22 514 | - | - |
--------------------------------------------------------------------------------
| Trading volume | % | 37.1 | 68.8 | - | - |
--------------------------------------------------------------------------------
| Weighted average number of | 1,000 | 36 526 | 32 703 | 36 268 | 36 768 |
| shares outstanding | | | | | |
--------------------------------------------------------------------------------
| Number of shares | 1,000 | 36 210 | 36 768 | 36 210 | 68 |
| outstanding at the end of | | | | | |
| the period | | | | | |
--------------------------------------------------------------------------------
1)Key figures per share have been adjusted to reflect the increase in the number
of shares, which came into effect on 11 April 2007 (split), the rights issue on
11 June 2007 and the rights issue and cancellation of treasury shares in
connection with the merger of SRV Henkilöstö Oy on 28 September 2007 and
purchases of own shares
2)Board of Directors' proposal for the distribution of profits of 2008
Calculation of key figures:
--------------------------------------------------------------------------------
| 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 Financial statements bulletin 1.1. - 31.12.2008: 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) Outlook after the financial year
1. Group financials 1.1. - 31.12.2008
IFRS standards and operating segments
SRV Group's consolidated financial statements have been prepared in accordance
with the International Financial Reporting Standards (IFRS) The figures in the
tables have been rounded which should be noted when counting the total sums. The
consolidated financial statement information has been prepared in accordance
with the accounting policies set out in the IAS 34 standard and information
disclosed is audited for the periods 1-12/2008 and 1-12/2007 and unaudited for
the periods 10-12/2008 and 10-12/2007.
The following standards, amendments and interpretations have been applied as
from the accounting period beginning on 1 January 2008:
- IFRIC 11 IFRS 2 Group and Treasury Shares Transactions This interpretation
does not have an effect on the Group's financial position. It has effect to the
notes of the consolidated financial statements to some extent.
.
The following standard has been applied before the last effective date of the
standard
- IFRS 8 Operating Segments. This standard does not have an effect on the
Group's financial position. It has effect to the notes of the consolidated
financial statements to some extent.
The following standards, amendments and interpretations shall be applied as from
the accounting period beginning on 1 January 2009 or thereafter:
- IAS 23 Borrowing Costs. The Group will apply this amendment as from 1 January
2009.
- IAS 27 and IAS 1 Cost of and Investment in a Subsidiary, Jointly Controlled
Entities or Associates (effective for the annual period beginning 1 January
2009/EU has not approved) The Group will apply this amendment as from 1 January
2009
- IFRS 3 Business Combinations and IAS 27 Consolidated and Separate. Financial
Statements(effective for the annual period beginning 1 January 2010. The Group
will apply this amendment as from 1 January 2010)
- IFRIC 15 Agreements for the Construction of Real Estate (effective for the
annual period beginning 1 January 2010/EU has not approved). The Group will
apply this amendment as from 1 January 2010.
These standards, amendments have an effect on the Group's financial position and
they have effect to the notes of the consolidated financial statements to some
extent.
- 2008 Annual Improvements to IFRS. The Group will apply this amendment as from
1 January 2009
- IAS 1 Presentation of Financial Statements, amendments concerning presentation
of the income statement, the statement of changes in equity and the comparative
information in the balance sheet. The Group will apply this amendment as from 1
January 2009
- IAS 32 and IAS 1 Financial Instruments Puttable Financial Instruments and
Obligations Arising on Liquidation. The Group will apply this amendment as from
1 January 2009
- IFRS 2 Vesting conditions and Cancellations. The Group will apply this
amendment as from 1 January 2009
- IFRIC 16 Hedges of a Net Investment in a Foreign Operation. The Group will
apply this amendment as from 1 January 2009
- Based on the present information, these standards, amendments and
interpretations not have an effect on the Group's financial position. They have
effect to the notes of the consolidated financial statements to some extent.
SRV's reporting segments comprise Business Premises, Housing, International
Operations and Other operations. The segment figures are disclosed in accordance
with the IFRS 8 following the accounting principles applied to the consolidated
financial statements.
--------------------------------------------------------------------------------
| Consolidated income | IFRS | IFRS | | | IFRS | IFRS |
--------------------------------------------------------------------------------
| statement | 1-12/ | 1-12/ | change | change | 10-12/ | 10-12/ |
| (EUR million) | 2008 | 2007 | , MEUR | ,% | 2008 | 2007 |
--------------------------------------------------------------------------------
| Revenue | 537.0 | 561.4 | -24.5 | -4.4 | 121.4 | 165.5 |
--------------------------------------------------------------------------------
| Other operating | 1.4 | 1.1 | 0.3 | 23.4 | 0.4 | 0.4 |
| income | | | | | | |
--------------------------------------------------------------------------------
| Change in | 53.5 | 18.3 | 35.2 | 192.1 | 28.6 | 12.3 |
| inventories of | | | | | | |
| finished goods and | | | | | | |
| work in progress | | | | | | |
--------------------------------------------------------------------------------
| Use of materials and | -495.3 | -509.7 | 14.4 | -2.8 | -133.4 | -165.9 |
| services | | | | | | |
--------------------------------------------------------------------------------
| Employee benefit | -46.3 | -41.6 | -4.8 | 11.4 | -12.2 | -11.5 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Depreciation and | -3.2 | -1.9 | -1.3 | 65.3 | -1.1 | -0.5 |
| impairments | | | | | | |
--------------------------------------------------------------------------------
| Other operating | -14.1 | -12.6 | -1.6 | 12.3 | -3.1 | -3.1 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 32.9 | 15.1 | 17.9 | 118.6 | 0.7 | -2.9 |
--------------------------------------------------------------------------------
| Financial income | 4.2 | 2.6 | 1.5 | 58.5 | 0.8 | 1.3 |
--------------------------------------------------------------------------------
| Financial expenses | -13.4 | -6.1 | -7.2 | 117.4 | -4.1 | -3.7 |
--------------------------------------------------------------------------------
| Financial income and | -9.2 | -3.5 | -5.7 | 161.3 | -3.3 | -2.3 |
| expenses, total | | | | | | |
--------------------------------------------------------------------------------
| Profit before taxes | 23.7 | 11.5 | 12.2 | 105.5 | -2.6 | -5.2 |
--------------------------------------------------------------------------------
| Income taxes | -8.5 | -3.9 | -4.6 | 117.1 | -0.2 | 0.1 |
--------------------------------------------------------------------------------
| Net profit for the | 15.3 | 7.6 | 7.6 | 99.6 | -2.8 | -5.1 |
| financial year | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to | | | | | | |
--------------------------------------------------------------------------------
| Equity holders of | 15.7 | 7.2 | | | -2.2 | -5.1 |
| the parent company | | | | | | |
--------------------------------------------------------------------------------
| Minority interest | -0.4 | 0.5 | | | -0.5 | 0.0 |
--------------------------------------------------------------------------------
| Earnings per share | 0.43 | 0.22 | | 95.5 | -0.06 | -0.17 |
| calculated on the | | | | | | |
| profit attributable | | | | | | |
| to equity holders of | | | | | | |
| the parent company | | | | | | |
| (undiluted and | | | | | | |
| diluted) 1) | | | | | | |
--------------------------------------------------------------------------------
1)Key figures per share have been adjusted to reflect the increase in the number
of shares, which came into effect on 11 April 2007 (split), new issue of shares
on 11 June 2007 and the new issue of shares and the cancellation of treasury
shares in connection with the merger of SRV Henkilöstö Oy on 29 September 2007
and purchases of own shares
--------------------------------------------------------------------------------
| Consolidated balance sheet | IFRS | IFRS | change |
--------------------------------------------------------------------------------
| (EUR million) | 31.12.08 | 31.12.07 | % |
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | 19.0 | 8.0 | 137.0 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 1.7 | 0.7 | 138.9 |
--------------------------------------------------------------------------------
| Goodwill | 0.5 | 0.6 | -16.6 |
--------------------------------------------------------------------------------
| Other intangible assets | 4.3 | 2.9 | 45.6 |
--------------------------------------------------------------------------------
| Other financial assets | 6.6 | 2.7 | 143.6 |
--------------------------------------------------------------------------------
| Receivables | 1.7 | 1.1 | 51.5 |
--------------------------------------------------------------------------------
| Deferred tax assets | 33.8 | 16.1 | 109.5 |
--------------------------------------------------------------------------------
| Non-current assets, total | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | 294.8 | 196.4 | 50.1 |
--------------------------------------------------------------------------------
| Inventories | 86.7 | 94.2 | -7.9 |
--------------------------------------------------------------------------------
| Trade and other receivables | 5.1 | 3.4 | 49.4 |
--------------------------------------------------------------------------------
| Current tax receivables | 3.4 | 21.4 | -84.2 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 390.0 | 315.4 | 23.7 |
--------------------------------------------------------------------------------
| Current assets, total | 423.8 | 331.6 | 27.8 |
--------------------------------------------------------------------------------
| ASSETS, TOTAL | 19.0 | 8.0 | 137.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated balance sheet | IFRS | IFRS | change |
--------------------------------------------------------------------------------
| (EUR million) | 31.12.08 | 31.12.07 | % |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity attributable to equity | | | |
| holders of the parent company | | | |
--------------------------------------------------------------------------------
| Share capital | 3.1 | 3.1 | 0.0 |
--------------------------------------------------------------------------------
| Invested free equity fund | 87.3 | 87.3 | 0.0 |
--------------------------------------------------------------------------------
| Translation differences | -0.1 | 0.0 | -483.0 |
--------------------------------------------------------------------------------
| Fair value reserve | -0.1 | 0.0 | |
--------------------------------------------------------------------------------
| Retained earnings | 74.1 | 64.7 | 14.6 |
--------------------------------------------------------------------------------
| Equity attributable to equity | 164.3 | 155.1 | 6.0 |
| holders of the parent company, | | | |
| total | | | |
--------------------------------------------------------------------------------
| Minority interest | 2.3 | 3.2 | -30.0 |
--------------------------------------------------------------------------------
| Equity, total | 166.6 | 158.3 | 5.2 |
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 0.3 | 0.1 | 91.7 |
--------------------------------------------------------------------------------
| Provisions | 5.6 | 5.9 | -5.4 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 69.7 | 38.1 | 83.1 |
--------------------------------------------------------------------------------
| Other liabilities | | | |
--------------------------------------------------------------------------------
| Non-current liabilities, total | 75.6 | 44.1 | 71.3 |
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Trade and other payables | 66.8 | 96.9 | -31.1 |
--------------------------------------------------------------------------------
| Current tax payables | 8.0 | 1.6 | 399.2 |
--------------------------------------------------------------------------------
| Provisions | 3.8 | 4.1 | -6.4 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 103.1 | 26.5 | 288.7 |
--------------------------------------------------------------------------------
| Current liabilities, total | 181.6 | 129.1 | 40.7 |
--------------------------------------------------------------------------------
| Liabilities, total | 257.2 | 173.2 | 48.5 |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | 423.8 | 331.6 | 27.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated cash flow statement | IFRS | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 1-12/2008 | 1-12/2007 |
--------------------------------------------------------------------------------
| Cash flows from operating activities | | |
--------------------------------------------------------------------------------
| Net profit for the period | 15.3 | 7.6 |
--------------------------------------------------------------------------------
| Adjustments: | | |
--------------------------------------------------------------------------------
| Depreciation and impairments | 3.2 | 1.9 |
--------------------------------------------------------------------------------
| Non-cash transactions | -0.5 | 1.5 |
--------------------------------------------------------------------------------
| Financial income and expenses | 9.2 | 3.5 |
--------------------------------------------------------------------------------
| Capital gains on sales of tangible and | 0.0 | -0.1 |
| intangible assets | | |
--------------------------------------------------------------------------------
| Income taxes | 8.5 | 3.9 |
--------------------------------------------------------------------------------
| Adjustments, total | 20.3 | 10.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Changes in working capital: | | |
--------------------------------------------------------------------------------
| Change in loan receivables | -12.6 | -2.7 |
--------------------------------------------------------------------------------
| Change in trade and other receivables | 14.9 | -23.0 |
--------------------------------------------------------------------------------
| Change in inventories | -98.8 | -62.8 |
--------------------------------------------------------------------------------
| Change in trade and other payables | -31.9 | 16.4 |
--------------------------------------------------------------------------------
| Changes in working capital, total | -128.3 | -72.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest paid | -13.0 | -6.3 |
--------------------------------------------------------------------------------
| Interest received | 6.7 | 2.8 |
--------------------------------------------------------------------------------
| Dividends received | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Income taxes paid | -4.2 | -6.3 |
--------------------------------------------------------------------------------
| Net cash flow from operating activities | -103.2 | -63.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing activities | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries, net of cash | -1.3 | 0.0 |
--------------------------------------------------------------------------------
| Property, plant and equipment | -13.7 | -4.2 |
--------------------------------------------------------------------------------
| Intangible assets | -0.3 | -0.1 |
--------------------------------------------------------------------------------
| Other financial assets | -1.5 | -1.0 |
--------------------------------------------------------------------------------
| Sale of property, plant and equipment and | 0.1 | 0.7 |
| intangible assets | | |
--------------------------------------------------------------------------------
| Sale of financial assets | 0.0 | 0.3 |
--------------------------------------------------------------------------------
| Net cash used in investing activities | -16.7 | -4.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from financing activities | | |
--------------------------------------------------------------------------------
| Proceeds from share issue | 0.0 | 113.4 |
--------------------------------------------------------------------------------
| Proceeds from loans | 68.9 | 19.1 |
--------------------------------------------------------------------------------
| Repayments of loans | -10.1 | -13.5 |
--------------------------------------------------------------------------------
| Change in loan receivables | 0.0 | 0.2 |
--------------------------------------------------------------------------------
| Change in housing corporation loans | 30.6 | -21.8 |
--------------------------------------------------------------------------------
| Change in credit limits | 18.8 | 0.9 |
--------------------------------------------------------------------------------
| Purchase of treasury shares | -1.9 | -20.7 |
--------------------------------------------------------------------------------
| Dividends paid | -4.4 | -3.1 |
--------------------------------------------------------------------------------
| Net cash from financing activities | 101.8 | 74.5 |
--------------------------------------------------------------------------------
| Net change in cash and cash equivalents | -18.0 | 6.5 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the beginning of | 21.4 | 14.9 |
| period | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end of period | 3.4 | 21.4 |
--------------------------------------------------------------------------------
Statement of changes in Group equity 1.1. - 31.12.2008
--------------------------------------------------------------------------------
| | Equity attributable to | |
| | the equity holders of the parent company | |
--------------------------------------------------------------------------------
| IFRS | Sha | Sha | Inve | Trans | Fair | Reta | Tota | Minor | Total |
| (EUR | re | re | sted | -lati | valu | i-ne | l | ity | equit |
| million) | cap | pre | free | on | e | d | | inter | y |
| | ita | miu | equi | diffe | rese | earn | | est | |
| | l | m | ty | r-enc | rve | ings | | | |
| | | res | fund | es | | | | | |
| | | erv | | | | | | | |
| | | e | | | | | | | |
--------------------------------------------------------------------------------
| Equity on | 3.1 | 0.0 | 87.3 | 0.0 | 0.0 | 64.7 | 155. | 3.2 | 158.3 |
| 1.1.2008 | | | | | | | 1 | | |
--------------------------------------------------------------------------------
| Translation | | | | -0.1 | | 0.1 | 0.0 | | |
| differences | | | | | | | | | |
--------------------------------------------------------------------------------
| Net gains on | | | | | -0.1 | | -0.1 | | |
| available-fo | | | | | | | | | |
| r-sale | | | | | | | | | |
| financial | | | | | | | | | |
| assets | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | 0.0 | | | 0.0 | 0.0 | | |
| changes | | | | | | | | | |
--------------------------------------------------------------------------------
| Net income | 0.0 | 0.0 | 0.0 | -0.1 | -0.1 | 0.0 | -0.2 | | |
| recognised | | | | | | | | | |
| directly in | | | | | | | | | |
| equity | | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 15.7 | 15.7 | | |
| for the | | | | | | | | | |
| financial | | | | | | | | | |
| year | | | | | | | | | |
--------------------------------------------------------------------------------
| Total income | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 15.7 | 15.7 | | |
| and expenses | | | | | | | | | |
| for the | | | | | | | | | |
| financial | | | | | | | | | |
| year | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | | | -4.4 | -4.4 | | |
| paid | | | | | | | | | |
--------------------------------------------------------------------------------
| Purchase of | | | | | | -1.9 | -1.9 | | |
| treasury | | | | | | | | | |
| shares | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity on | 3.1 | 0.0 | 87.3 | -0.1 | -0.1 | 74.1 | 164. | 2.3 | 166.6 |
| 31.12.2008 | | | | | | | 3 | | |
--------------------------------------------------------------------------------
Statement of changes in Group equity 1.1. - 31.12.2007
--------------------------------------------------------------------------------
| | Equity attributable to | |
| | the equity holders of the parent company | |
--------------------------------------------------------------------------------
| IFRS | Sha | Sha | Inve | Trans | Fair | Reta | Tota | Minor | Total |
| (EUR | re | re | sted | -lati | valu | i-ne | l | ity | equit |
| million) | cap | pre | free | on | e | d | | inter | y |
| | ita | miu | equi | diffe | rese | earn | | est | |
| | l | m | ty | r-enc | rve | ings | | | |
| | | res | fund | es | | | | | |
| | | erv | | | | | | | |
| | | e | | | | | | | |
--------------------------------------------------------------------------------
| Equity on | 1.3 | 1.8 | 0.0 | 0.0 | 0.1 | 54.7 | 57.9 | 4.2 | 62.2 |
| 1.1.2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| Translation | | | | 0.0 | | | 0.0 | | |
| differences | | | | | | | | | |
--------------------------------------------------------------------------------
| Net gains on | | | | | -0.1 | | -0.1 | | |
| available-fo | | | | | | | | | |
| r-sale | | | | | | | | | |
| financial | | | | | | | | | |
| assets | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | 0.1 | 0.1 | | |
| changes | | | | | | | | | |
--------------------------------------------------------------------------------
| Net income | 0.0 | 0.0 | 0.0 | 0.0 | -0.1 | 0.1 | 0.0 | | |
| recognised | | | | | | | | | |
| directly in | | | | | | | | | |
| equity | | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 7.2 | 7.2 | | |
| for the | | | | | | | | | |
| financial | | | | | | | | | |
| year | | | | | | | | | |
--------------------------------------------------------------------------------
| Total income | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 7.2 | 7.2 | | |
| and expenses | | | | | | | | | |
| for the | | | | | | | | | |
| financial | | | | | | | | | |
| year | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | | | -3.1 | -3.1 | | |
| paid | | | | | | | | | |
--------------------------------------------------------------------------------
| Transfer | 1.8 | -1. | | | | | 0.0 | | |
| from share | | 8 | | | | | | | |
| premium | | | | | | | | | |
| reserve to | | | | | | | | | |
| share | | | | | | | | | |
| capital | | | | | | | | | |
--------------------------------------------------------------------------------
| Share issue | | | 116. | | | 0.4 | 117. | | |
| and employee | | | 6 | | | | 0 | | |
| offering | | | | | | | | | |
--------------------------------------------------------------------------------
| Share issue | | | | | | -3.2 | -3.2 | | |
| and employee | | | | | | | | | |
| offering | | | | | | | | | |
| deductions | | | | | | | | | |
--------------------------------------------------------------------------------
| Purchase and | | | -29. | | | 8.6 | -20. | | |
| cancellation | | | 3 | | | | 7 | | |
| of treasury | | | | | | | | | |
| shares | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 3.1 | 0.0 | 87.3 | 0.0 | 0.0 | 64.7 | 155. | 3.2 | 158.3 |
| 31.12.2007 | | | | | | | 1 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inventories | IFRS | IFRS | change, |
--------------------------------------------------------------------------------
| (EUR million) | 31.12.08 | 31.12.07 | % |
--------------------------------------------------------------------------------
| Raw materials and consumables | 0.0 | 0.0 | -97.1 |
--------------------------------------------------------------------------------
| Work in progress | 100.8 | 86.7 | 16.4 |
--------------------------------------------------------------------------------
| Land areas and plot-owning companies | 142.1 | 64.3 | 121.0 |
--------------------------------------------------------------------------------
| Shares in completed housing | 34.0 | 30.3 | 12.4 |
| corporations and real estate companies | | | |
--------------------------------------------------------------------------------
| Advance payments | 3.7 | 6.5 | -43.4 |
--------------------------------------------------------------------------------
| Other inventories | 14.2 | 8.7 | 64.2 |
--------------------------------------------------------------------------------
| Inventories, total | 294.8 | 196.4 | 50.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commitments and contingent liabilities | IFRS | IFRS | change, |
--------------------------------------------------------------------------------
| EUR million | 31.12.08 | 31.12.07 | % |
--------------------------------------------------------------------------------
| Collateral given for own liabilities | | | |
--------------------------------------------------------------------------------
| Real estate mortgages given | 114.7 | 69.9 | 64.1 |
--------------------------------------------------------------------------------
| Pledges given | 0.0 | 5.2 | -100.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other commitments | | | |
--------------------------------------------------------------------------------
| Guarantees given for liabilities on | 0.4 | 71.4 | -99.4 |
| uncompleted projects | | | |
--------------------------------------------------------------------------------
| Investment commitments given | 2.7 | 4.7 | -42.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fair and nominal values of | IFRS | IFRS |
| derivative instruments | 31.12.08 | 30.12.07 |
--------------------------------------------------------------------------------
| (EUR million) | Fair Values | Fair Values |
--------------------------------------------------------------------------------
| | Positive | Negative | Positive | Positive |
--------------------------------------------------------------------------------
| Hedge accounting not | | | | |
| applied | | | | |
--------------------------------------------------------------------------------
| Foreign exchange forward | 0 | 0 | 0 | 0 |
| contracts | | | | |
--------------------------------------------------------------------------------
| Interest rate swaps | 0 | 0 | 0 | 0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Nominal values of | | IFRS | | IFRS |
| derivative instruments | | | | |
--------------------------------------------------------------------------------
| | | 31.12.08 | | 31.12.07 |
--------------------------------------------------------------------------------
| Foreign exchange forward | | 0 | | 8.5 |
| contracts | | | | |
--------------------------------------------------------------------------------
| Interest rate swaps | | 18.8 | | 0 |
--------------------------------------------------------------------------------
| 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 | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 10-12 | 7-9/ | 4-6/ | 1-3/0 | 10-12 | 7-9/0 | 4-6/0 | 1-3/0 |
| | /08 | 08 | 08 | 8 | /07 | 7 | 7 | 7 |
--------------------------------------------------------------------------------
| Revenue | 121.4 | 126. | 142. | 146.4 | 165.5 | 134.6 | 140.0 | 121.4 |
| | | 7 | 4 | | | | | |
--------------------------------------------------------------------------------
| Operating | 0.7 | 14.1 | 9.2 | 8.9 | -2.9 | 7.6 | 6.8 | 3.6 |
| profit | | | | | | | | |
--------------------------------------------------------------------------------
| Financial | -3.3 | -2.9 | -2.4 | -0.6 | -2.3 | 0.2 | -0.8 | -0.6 |
| income and | | | | | | | | |
| expenses, | | | | | | | | |
| total | | | | | | | | |
--------------------------------------------------------------------------------
| Profit before | -2.6 | 11.2 | 6.8 | 8.3 | -5.2 | 7.8 | 6.0 | 3.0 |
| taxes | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Order backlog | 455.3 | 455. | 521. | 451.3 | 528.7 | 546.3 | 517.4 | 507.0 |
| 1) | | 2 | 1 | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | -0.06 | 0.21 | 0.12 | 0.16 | -0.17 | 0.14 | 0.18 | 0.07 |
| share, eur | | | | | | | | |
--------------------------------------------------------------------------------
| Equity per | 4.54 | 4.61 | 4.40 | 4.38 | 4.22 | 4.33 | 4.46 | 2.29 |
| share, eur 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Share price, | 3.47 | 4.19 | 5.28 | 5.55 | 5.02 | 8.10 | 10.10 | 0.00 |
| eur 1) | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Equity ratio, | 41.3 | 45.9 | 44.9 | 52.1 | 55.4 | 60.9 | 59.4 | 33.2 |
| % 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Net interest | 169.4 | 127. | 122. | 76.1 | 43.2 | 19.8 | -10.4 | 52.5 |
| bearing debt | | 9 | 4 | | | | | |
| 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Gearing, % 1) | 85.1 | 74.1 | 74.8 | 46.3 | 27.3 | 12.2 | -5.8 | 82.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 10-12 | 7-9/ | 4-6/ | 1-3/0 | 10-12 | 7-9/0 | 4-6/0 | 1-3/0 |
| | /08 | 08 | 08 | 8 | /07 | 7 | 7 | 7 |
--------------------------------------------------------------------------------
| Business | 77.9 | 74.3 | 92.2 | 104.8 | 103.2 | 90.6 | 82.2 | 69.4 |
| Premises | | | | | | | | |
--------------------------------------------------------------------------------
| Housing | 33.3 | 31.4 | 37.1 | 26.0 | 43.5 | 35.5 | 43.9 | 40.1 |
--------------------------------------------------------------------------------
| International | 10.2 | 21.0 | 13.1 | 15.7 | 18.8 | 8.5 | 14.0 | 11.9 |
--------------------------------------------------------------------------------
| Other | 3.0 | 2.7 | 2.8 | 2.9 | 2.7 | 2.5 | 4.0 | 1.9 |
| Operations | | | | | | | | |
--------------------------------------------------------------------------------
| Eliminations | -3.1 | -2.7 | -2.9 | -2.9 | -2.7 | -2.6 | -4.2 | -1.9 |
--------------------------------------------------------------------------------
| Group, total | 121.4 | 126. | 142. | 146.4 | 165.5 | 134.6 | 140.0 | 121.4 |
| | | 7 | 4 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS |
| profit | | | | | | | | |
--------------------------------------------------------------------------------
| (EUR million) | 10-12 | 7-9/ | 4-6/ | 1-3/0 | 10-12 | 7-9/0 | 4-6/0 | 1-3/0 |
| | /08 | 08 | 08 | 8 | /07 | 7 | 7 | 7 |
--------------------------------------------------------------------------------
| Business | 6.0 | 3.7 | 9.9 | 8.2 | 4.7 | 6.8 | 3.6 | 2.9 |
| Premises | | | | | | | | |
--------------------------------------------------------------------------------
| Housing | -1.2 | 0.5 | 0.9 | 0.4 | 2.8 | 3.0 | 2.9 | 2.0 |
--------------------------------------------------------------------------------
| International | -2.7 | 10.8 | -0.1 | 1.2 | -9.4 | -1.7 | 1.8 | -0.9 |
--------------------------------------------------------------------------------
| Other | -1.4 | -1.0 | -1.6 | -0.9 | -1.1 | -0.5 | -1.1 | -0.4 |
| Operations | | | | | | | | |
--------------------------------------------------------------------------------
| Eliminations | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -0.4 | 0.0 |
--------------------------------------------------------------------------------
| Group, total | 0.7 | 14.1 | 9.2 | 8.9 | -2.9 | 7.6 | 6.8 | 3.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS |
| profit | | | | | | | | |
--------------------------------------------------------------------------------
| (%) | 10-12 | 7-9/ | 4-6/ | 1-3/0 | 10-12 | 7-9/0 | 4-6/0 | 1-3/0 |
| | /08 | 08 | 08 | 8 | /07 | 7 | 7 | 7 |
--------------------------------------------------------------------------------
| Business | 7.8 | 4.9 | 10.8 | 7.8 | 4.5 | 7.5 | 4.4 | 4.2 |
| Premises | | | | | | | | |
--------------------------------------------------------------------------------
| Housing | -3.6 | 1.7 | 2.5 | 1.6 | 6.5 | 8.5 | 6.5 | 4.9 |
--------------------------------------------------------------------------------
| International | -26.5 | 51.5 | -0.9 | 7.9 | -49.9 | -19.9 | 12.7 | -7.8 |
--------------------------------------------------------------------------------
| Group, total | 0.6 | 11.1 | 6.4 | 6.1 | -1.8 | 5.7 | 4.8 | 2.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| (EUR million) | 31.12 | 31.1 | 30.6 | 31.3. | 31.12 | 30.9. | 30.6. | 31.3. |
| | .08 | 2.08 | .08 | 08 | .07 | 07 | 07 | 07 |
--------------------------------------------------------------------------------
| Business | 265.7 | 228. | 291. | 235.2 | 302.8 | 360.2 | 323.4 | 326.0 |
| Premises | | 8 | 1 | | | | | |
--------------------------------------------------------------------------------
| Housing | 154.0 | 186. | 186. | 182.4 | 174.6 | 128.2 | 129.7 | 143.0 |
| | | 3 | 8 | | | | | |
--------------------------------------------------------------------------------
| International | 35.6 | 40.2 | 43.2 | 33.7 | 51.3 | 57.9 | 64.4 | 38.0 |
--------------------------------------------------------------------------------
| Group, total | 455.3 | 455. | 521. | 451.3 | 528.7 | 546.3 | 517.4 | 507.0 |
| | | 2 | 1 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Invested | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS |
| capital | | | | | | | | |
--------------------------------------------------------------------------------
| (EUR million) | 31.12 | 30.9 | 30.6 | 31.3. | 31.12 | 30.9. | 30.6. | 31.3. |
| | .08 | .08 | .08 | 08 | .07 | 07 | 07 | 07 |
--------------------------------------------------------------------------------
| Business | 63.9 | 63.5 | 51.2 | 43.7 | 33.4 | 44.4 | 60.7 | 40.1 |
| Premises | | | | | | | | |
--------------------------------------------------------------------------------
| Housing | 138.9 | 115. | 105. | 97.0 | 81.5 | 72.2 | 60.6 | 39.5 |
| | | 9 | 3 | | | | | |
--------------------------------------------------------------------------------
| International | 138.6 | 143. | 145. | 115.1 | 101.3 | 65.3 | 58.6 | 29.9 |
| | | 9 | 1 | | | | | |
--------------------------------------------------------------------------------
| Other and | -2.0 | -16. | -5.4 | 4.0 | 6.7 | 25.3 | 58.5 | 23.0 |
| eliminations | | 6 | | | | | | |
--------------------------------------------------------------------------------
| Group, total | 339.4 | 306. | 296. | 259.8 | 222.9 | 207.3 | 238.3 | 132.6 |
| | | 6 | 2 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Residential | | | | | | | | |
| production | | | | | | | | |
--------------------------------------------------------------------------------
| in Finland | 10-12 | 7-9/ | 4-6/ | 1-3/0 | 10-12 | 7-9/0 | 4-6/0 | 1-3/0 |
| (units) | /08 | 08 | 08 | 8 | /07 | 7 | 7 | 7 |
--------------------------------------------------------------------------------
| Start-ups | 0 | 49 | 53 | 8 | 155 | 31 | 77 | 100 |
--------------------------------------------------------------------------------
| Sold | 13 | 32 | 63 | 33 | 40 | 62 | 83 | 103 |
--------------------------------------------------------------------------------
| Completed | 260 | 260 | 229 | 125 | 519 | 389 | 132 | 81 |
--------------------------------------------------------------------------------
| Completed and | 133 | 140 | 128 | 105 | 80 | 71 | 30 | 18 |
| unsold 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Under | 265 | 251 | 247 | 298 | 415 | 382 | 593 | 613 |
| construction | | | | | | | | |
| 1) | | | | | | | | |
--------------------------------------------------------------------------------
1) at the end of the period
3. Segment information
--------------------------------------------------------------------------------
| Assets | IFRS | IFRS | change, | change, |
--------------------------------------------------------------------------------
| (EUR million) | 31.12.08 | 31.12.07 | MEUR | % |
--------------------------------------------------------------------------------
| Business Premises | 116.9 | 117.2 | -0.3 | -0.3 |
--------------------------------------------------------------------------------
| Housing | 158.4 | 113.4 | 44.9 | 39.6 |
--------------------------------------------------------------------------------
| International | 158.6 | 114.3 | 44.4 | 38.8 |
--------------------------------------------------------------------------------
| Other Operations | 185.1 | 162.0 | 23.1 | 14.3 |
--------------------------------------------------------------------------------
| Eliminations | -195.2 | -175.4 | | |
--------------------------------------------------------------------------------
| Group, total | 423.8 | 331.6 | 92.3 | 27.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | IFRS | IFRS | change, | change, |
--------------------------------------------------------------------------------
| (EUR million) | 31.12.08 | 31.12.07 | MEUR | % |
--------------------------------------------------------------------------------
| Business Premises | 81.7 | 83.9 | -2.2 | -2.6 |
--------------------------------------------------------------------------------
| Housing | 141.5 | 93.8 | 47.7 | 50.8 |
--------------------------------------------------------------------------------
| International | 147.2 | 104.9 | 42.3 | 40.4 |
--------------------------------------------------------------------------------
| Other Operations | 65.7 | 31.5 | 34.1 | 108.2 |
--------------------------------------------------------------------------------
| Eliminations | -178.9 | -140.9 | | |
--------------------------------------------------------------------------------
| Group, total | 257.2 | 173.2 | 84.0 | 48.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Invested capital | IFRS | IFRS | change, | change, |
--------------------------------------------------------------------------------
| (EUR million) | 31.12.08 | 31.12.07 | MEUR | % |
--------------------------------------------------------------------------------
| Business Premises | 63.9 | 33.4 | 30.5 | 91.2 |
--------------------------------------------------------------------------------
| Housing | 138.9 | 81.5 | 57.4 | 70.4 |
--------------------------------------------------------------------------------
| International | 138.6 | 101.3 | 37.3 | 36.8 |
--------------------------------------------------------------------------------
| Other operations and | -2.0 | 6.7 | | |
| eliminations | | | | |
--------------------------------------------------------------------------------
| Group, total | 339.4 | 222.9 | 116.5 | 52.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inventories | IFRS | IFRS | change, |
--------------------------------------------------------------------------------
| (MEUR) | 31.12.08 | 31.12.07 | MEUR |
--------------------------------------------------------------------------------
| Land areas and plot-owning companies | 142,1 | 64,3 | 77,8 |
--------------------------------------------------------------------------------
| Business Premises | 24.6 | 16.4 | 8.2 |
--------------------------------------------------------------------------------
| Housing | 41.6 | 26.5 | 15.1 |
--------------------------------------------------------------------------------
| International | 68.0 | 20.8 | 47.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Work in progress | 100.8 | 86.7 | 14.2 |
--------------------------------------------------------------------------------
| Business Premises | 30.0 | 27.6 | 2.4 |
--------------------------------------------------------------------------------
| Housing | 57.3 | 41.9 | 15.4 |
--------------------------------------------------------------------------------
| International | 13.6 | 17.2 | -3.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shares in completed housing | 34.0 | 30.3 | 3.8 |
| corporations and real estate companies | | | |
--------------------------------------------------------------------------------
| Business Premises | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Housing | 30.6 | 20.8 | 9.8 |
--------------------------------------------------------------------------------
| International | 3.3 | 9.5 | -6.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other inventories | 17.9 | 15.2 | 2.7 |
--------------------------------------------------------------------------------
| Business Premises | 5.0 | 5.0 | 0.0 |
--------------------------------------------------------------------------------
| Housing | 4.6 | 4.8 | -0.2 |
--------------------------------------------------------------------------------
| International | 9.3 | 6.1 | 3.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inventories. total | 294.8 | 196.4 | 98.4 |
--------------------------------------------------------------------------------
| Business Premises | 59.6 | 49.1 | 10.5 |
--------------------------------------------------------------------------------
| Housing | 134.0 | 93.9 | 40.1 |
--------------------------------------------------------------------------------
| International | 94.1 | 53.6 | 40.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Business Premises | IFRS | IFRS | change. | change. |
--------------------------------------------------------------------------------
| (EUR million) | 1-12/2008 | 1-12/2007 | MEUR | % |
--------------------------------------------------------------------------------
| Revenue | 349.1 | 345.4 | 3.7 | 1.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 27.8 | 18.0 | 9.8 | 54.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment's assets | | | | |
--------------------------------------------------------------------------------
| Non-current assets | 0.9 | 1.0 | -0.1 | -5.8 |
--------------------------------------------------------------------------------
| Current assets | 116.0 | 116.2 | -0.3 | -0.2 |
--------------------------------------------------------------------------------
| Total assets | 116.9 | 117.2 | -0.3 | -0.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment's liabilities | | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | 1.1 | 1.2 | -0.1 | -6.7 |
--------------------------------------------------------------------------------
| Current liabilities | 80.6 | 82.7 | -2.1 | -2.6 |
--------------------------------------------------------------------------------
| Total liabilities | 81.7 | 83.9 | -2.2 | -2.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Invested capital at end of | 63.9 | 33.4 | 30.5 | 91.2 |
| period | | | | |
--------------------------------------------------------------------------------
| Return on investment. % | 60.8 | 52.4 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog at end of | 265.7 | 302.8 | -37.0 | -12.2 |
| period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Housing | IFRS | IFRS | change. | change. |
--------------------------------------------------------------------------------
| (EUR million) | 1-12/2008 | 1-12/2007 | MEUR | % |
--------------------------------------------------------------------------------
| Revenue | 127.9 | 163.1 | -35.2 | -21.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 0.7 | 10.7 | -10.0 | -93.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment's assets | | | | |
--------------------------------------------------------------------------------
| Non-current assets | 1.9 | 2.6 | -0.7 | -25.2 |
--------------------------------------------------------------------------------
| Current assets | 156.5 | 110.9 | 45.6 | 41.1 |
--------------------------------------------------------------------------------
| Total assets | 158.4 | 113.4 | 44.9 | 39.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment's liabilities | | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | 58.3 | 28.1 | 30.1 | 107.1 |
--------------------------------------------------------------------------------
| Current liabilities | 83.2 | 65.7 | 17.5 | 26.7 |
--------------------------------------------------------------------------------
| Total liabilities | 141.5 | 93.8 | 47.7 | 50.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Invested capital at end of | 138.9 | 81.5 | 57.4 | 70.4 |
| period | | | | |
--------------------------------------------------------------------------------
| Return on investment. % | 0.7 | 16.7 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog at end of | 154.0 | 174.6 | -20.6 | -11.8 |
| period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| International Operations | IFRS | IFRS | change. | change. |
--------------------------------------------------------------------------------
| (EUR million) | 1-12/2008 | 1-12/2007 | MEUR | % |
--------------------------------------------------------------------------------
| Revenue | 60.1 | 53.2 | 6.9 | 12.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 9.2 | -10.2 | 19.5 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment's assets | | | | |
--------------------------------------------------------------------------------
| Non-current assets | 24.2 | 2.4 | 21.8 | 893.5 |
--------------------------------------------------------------------------------
| Current assets | 134.4 | 111.8 | 22.6 | 20.2 |
--------------------------------------------------------------------------------
| Total assets | 158.6 | 114.3 | 44.4 | 38.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment's liabilities | | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | 12.7 | 14.8 | -2.1 | -14.3 |
--------------------------------------------------------------------------------
| Current liabilities | 134.6 | 90.1 | 44.5 | 49.3 |
--------------------------------------------------------------------------------
| Total liabilities | 147.2 | 104.9 | 42.3 | 40.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Invested capital at end of | 138.6 | 101.3 | 37.3 | 36.8 |
| period | | | | |
--------------------------------------------------------------------------------
| Return on investment. % | 9.3 | -11.3 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order backlog at end of | 35.6 | 51.3 | -15.7 | -30.6 |
| period | | | | |
--------------------------------------------------------------------------------
4) Events after the end of the financial year
SRV is preparing for a continued downturn in construction markets. Negotiations
were initiated in January 2009 within the Group companies for adapting its
operations. The Group's Finland-based companies will start codetermination
negotiations concerning senior salaried employees and salaried employees. At the
same time, SRV will start a similar process in the Group's foreign units. The
negotiations will deal with personnel layoffs. contract terminations and
adaptation measures. The personnel reduction measures are estimated to affect
about 130 employees. Detailed needs and measures will be specified more
accurately during the course of the negotiations.
The construction of the Kerca logistics area in Kerava developed by SRV
proceeded in January. SRV signed a project management contract for the
construction of Anttila's logistics centre in January 2009. Anttila's plans
cover the construction of a warehouse of about 19.000 gross square metres. SRV
and the city of Kerava agreed on a contract package concerning the development
of the Kerca logistics area and concluded a contract for a real estate
transaction of four hectares of land and a preliminary contract for an area of
22 hectares. On the first plot SRV plans to build a GCC (Grand Cargo Center)
logistics building with about 20.000 square metres of floor space. Kerca
occupies an area of 160 hectares on the Kerava-Vantaa border.
In January, SRV and Varma Mutual Pension Insurance Company signed the project
management contract concerning the Vierumäki Congress & Resort Hotel project.
SRV acts as main contractor with overall responsibility and is in charge of
construction and planning. In addition to 191 hotel rooms, the four-storey hotel
building includes meeting facilities, six restaurants, fitness room, bowling
alley with 10-lanes, and a wellness-area. The hotel will be opened in spring
2010.
