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VALUE-ADDED SYNERGETIC SERVICES IN ENGINEERING, PROJECT MANAGEMENT AND MANAGEMENT CONSULTING
CARNEGIE SMALL & MID CAP SEMINAR 8-9 SEPTEMBER 2010 Stockholm 9 September 2010Heikki Malinen, President and CEO, Pöyry
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PRESENTATION CONTENTS
Pöyry in briefService offeringFinancial position and short-term outlookAppendices
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PÖYRY IN BRIEF
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Project management, design, supervision and management consulting -7000 experts in about 50 countries
Project experience in more than 100 countries across all the continents – about 17 000 projects annually
Net sales in 2009 EUR 674 million
Market cap EUR 650+ million (September 2010)
GLOBALLY LOCAL CONSULTING ENGINEERING SERVICES
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WHAT ONCE STARTED AS ‘A ONE MAN’S DREAM’ HAS LED TO STRONG POSITION IN SELECTED VERTICALS
Source: ENR Sourcebook 2009/ranking based on revenue outside home country
Sector / Rank International design firms Rank
EnergyEnergy
IndustryIndustry
Urban &Urban &MobilityMobility
Water &EnvironmentWater &Water &EnvironmentEnvironment
Nuclear plantsTransmission lines and cablingCogenerationHydropower plants 1
432
3Power
Pulp and paper mills 17Industrial processes
Mass transit 719Transportation
Wastewater treatment 9
Leading position globally in various forest industry sectorsOne of the leading energy consultants in Europe
Management ConsultingManagement Consulting
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GROUP’S NET SALES FY2009: EUR 673.5 MILLION (FY2008: 821.7)
South America7 %
North America3 %Asia8 %
Other5 %
The Nordic countries
29 %
Europe48 %
Industry24 %
Energy26 %
Urban & Mobility27 %
Water & Environment
13 %
Management Consulting
10 %(24)
(33)(22)
(11)
(11)
(29)
(44)
(9)
(3)
(11)(4)
Net sales by business group Net sales by region
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CorbisProcurator-Holding OyNominee registeredPrivate and public institutions (domestic)Households (domestic)Other
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THE LARGEST SHAREHOLDERS (31 August 2010)
(1
Henrik Ehrnrooth, Chairman of the BoD of Pöyry, holds indirectly with his brothers Georg Ehrnrooth, member of the BoD of Pöyry and Carl-Gustaf Ehrnrooth a controlling interest in Corbis S.A.
1)
Total number of shares: 59,330,954
– Number of treasury shares: 383,308
Listing: NASDAQ OMX Helsinki, since 1997Trading code: POY1VSegment: Large capSector: Industrials/Research & Consulting Services
31.18 %
5.80 %
14.36 %
32.81 %
9.15 %
6.71 %
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SERVICE OFFERING
Vision statement:”By 2020 Pöyry is the global thoughtleader in engineering balancedsustainability for a complex world.”
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MEGATRENDS CREATE OPPORTUNITIES
POPULATIONPOPULATIONGROWTH ANDGROWTH ANDURBANISATIONURBANISATION
SHIFT INSHIFT INECONOMICECONOMICBALANCEBALANCE
ENVIRONMENTALENVIRONMENTALDEGRATIONDEGRATION
REDIRECTION OFREDIRECTION OFTECHNOLOGICALTECHNOLOGICALINNOVATIONINNOVATION
• Multibillion dollar needfor infrastructure investments globally• Weight of sustainability increasing
• Business focus is moving to emerging markets • Tight competition requires careful resource allocation
• New solutions needed for resource efficiency• Innovative ”green” solutions for various needs
• Huge opportunities for those who anticipate new developments and understand new technologies
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PROJECTMANAGEMENT
SERVICE OFFERING WITHIN THE FOUR SELECTED VERTICALS IS BASED ON…
DESIGN AND SUPERVISION
INDUSTRYINDUSTRY
URBAN &URBAN &MOBILITYMOBILITY
WATER &WATER &ENVIRONMENTENVIRONMENT
ENERGYENERGY
Long history in design and supervision
Strong references in project management
Excellent sector knowledge in management consulting
MANAGEMENTCONSULTING
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PROJECT LIFECYCLE
Investmentproposal
Take-overdate
Businessidea
Exploration
Feasibilitystudy
Pre-engineering
Basicengineering
EPCM
Finalgo-ahead
Development Implementation Production
Operational excellence
Baseline studies & Permitting
MANAGEMENT CONSULTING MANAGEMENT CONSULTING
DESIGN - SUPERVISION - PROJECT MANAGEMENT
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PÖYRY APPROACHES PROJECTS FROM TWO ANGLES
KEY FINANCIAL OBJECTIVESProject is implemented within budget and scheduleOperation has progressive start-upPlant meets the quality requirements cost efficientlyPositive cash flow from the operation is achieved rapidlyOperation is environmentally sound and complies with health and safety regulations
BALANCED SUSTAINABILITYEngineering balanced sustainability is about improving resource efficiency (energy, water, materials, supply chain) while improving the economic return on investments
Production
Time
CapacitySchedule
Start-up CurveStart-up Curve
Cost
Time
BudgetSchedule
Cost AccumulationCost Accumulation
start
start
Good budget control and start-up curve
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RECENT EPCM REFERENCES
ERCO Worldwide, USAChloralkali plantEPCM project
Fortum Power &Heat Oy, Finland234MW combinedcycle power plantEPCM project
VCP Horizonte project, BrazilGreenfield pulp millPMC and EPCM project
Kemira Uruguay S.A., Uruguay Chemical IslandEPCM project
San Carlos Bioenergy, Inc., PhilippinesSugar cane bioethanolplant EPC BoP / PMC project
Mondi, Republic of South Africa Recovery island, fibre line and drying machinein pulp mill EPCM project
BASF / Dow / Solvay, BelgiumHydrogen peroxide plantEPCM project
EPC = Engineering, Procurement, ConstructionPMC = Project Management ConsultancyBoP = Balance of Plant
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RECENT OTHER MAJOR PROJECTS
EUR 6.1 million hydropower project in Sri LankaA total of EUR 9.2 million pumped storage plant project in AustriaEUR 2.2 million cogeneration plant project in ThailandEUR 3 million waste-to-energy project in China
EUR 5 million board mill project in the UKEUR 7.5 million pulp mill project in BrazilEUR 7.3 million pulp mill project in BrazilAround EUR 5 million mining project in FinlandEUR 5 million aluminium rolling mill project in Brazil
EUR 8.7 million high-speed railway project in ChinaEUR 3.2 million high-speed railway project in ChinaEUR 2.1 million high-speed railway project in ChinaEUR 6.1 million tunnel project in MexicoEUR 3.5 million metropolitan railway project in Brazil
EUR 3 million wastewater treatment project in ColombiaEUR 1.4 million flood protection project in Czech Rep.Environmental and Social Impact Assessment for an aluminium factory project in Cameroon (’09)
Nuclear and renewable energy strategy project in Saudi ArabiaA study on the effect of windpowergeneration on gas markets in Britain and IrelandEIAs for nuclearpower plants in FinlandStrategic advisory in a major acquisition in pulp and paper industry Next generation technologies for future plantations and harvesting for a Latin American operator
INDUSTRYENERGYURBAN & MOBILITY
WATER &ENVIRONMENT
MANAGEMENT CONSULTING
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MANAGEMENT AGENDA
Short-term priorities
Boost top lineBuild capabilities for large projectsIntegrated management consulting servicesTurn around underperforming unitsIncrease organisational effectiveness
Medium-term priorities
Strong focus on organic growth (EPCM & emerging markets)Targeted M&As(Europe, Latin America)Increase portfolio & geographical focusMore efficient design/engineering
Financial targets
Net sales growth 15 % p.a.Operating margin per BG 8-10 %Return on investment 20 % or higherGearing not to exceed 30 %
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FINANCIAL POSITION
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334,4361,8
0
100
200
300
400
500
600
700
800
900
1-12/05 1-12/06 1-12/07 1-12/08 1-12/09 1-6/09 1-6/10
GROUP’S NET SALES 1-6/2010 (1-6/2009)
MEUR
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GROUP’S OPERATING PROFIT AND MARGIN, 1-6/2010 (1-6/2009)
-0,4
9,83,8
17,5
-0,1 %2,7 %
4,8 %
1,1 %
-10
0
10
20
30
40
50
60
70
80
90
100
110
1-12/0
5
1-12/0
6
1-12/0
7
1-12/0
8
1-12/0
91-6
/091-6
/101-6
/091-6
/10
-5 %
0 %
5 %
10 %
15 %
20 %
25 %
30 %
35 %
40 %
45 %
50 %
55 %
Operating profit Operating margin
MEUR
Excl. one-offs Incl. one-offs
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0
100
200
300
400
500
600
12/20
07
12/20
081-3
/094-6
/097-9
/09
10-12
/091-3
/104-6
/10
Management ConsultingWater & EnvironmentUrban & MobilityIndustryEnergy
GROUP’S ORDER STOCK BY BUSINESS GROUP
569.6534.1
485.7
MEUR
562.8539.1
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RETURN ON INVESTMENT, %
0,4 %0 %
5 %
10 %
15 %
20 %
25 %
30 %
35 %
40 %
45 %
50 %
2005 2006 2007 2008 2009 end Q2/10
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CASH FLOW
-35,5-46,9
-60
-40
-20
0
20
40
60
80
100
2005 2006 2007 2008 2009 1-6/10
From operationsBefore financing
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NET DEBT, EQUITY & GEARING
184,0
26,3
14,3 %
-120-100
-80-60-40-20
020406080
100120140160180200220
2005 2006 2007 2008 2009 end Q2/10-50 %
-40 %-30 %
-20 %
-10 %
0 %10 %
20 %30 %
40 %50 %
60 %70 %
80 %90 %
EquityNet debtGearing-%
Gearing-%MEUR
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OUTLOOK FOR 2010 (UNCHANGED SINCE 21 APRIL 2010)
The positive development in order intake is expected to continue and the Group’s order stock to grow further.It takes a certain time to convert orders into sales, and therefore, Group sales for the full year 2010 are expected to remain stable or grow from 2009. The Group’s operating profit is expected to remain stable compared with 2009, excluding restructuring costs.
– The impact of increasing customer activity on Pöyry’s sales and activity levels will only become visible towards the end of the year.
Operating profit (excluding restructuring costs) outlook by business group:– In all other business groups the operating profit is expected to remain stable except in
Management Consulting, where it is expected to improve.
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THANK YOU!
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APPENDICES
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STATEMENT OF INCOME
11.69.8-0.4Operating profit
12.410.4-1.3Profit before taxes
-90.68.1-43.4-46.9External charges, sub-consulting
8.06.6-2.6Net profit for the period-4.4-65.8-3.8-1.3Income taxes
0.80.6-0.9Net financial items
-171.1-4.0-89.4-85.8Other operating expenses
-401.5-7.8-219.9-202.8Personnel expenses
0.5-50.00.40.2Share of associated companies’ results
0.866.70.30.5Other operating income673.5-7.6361.8334.4Sales
2009CHANGE, %1-6/20091-6/2010
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BALANCE SHEET
531.3
91.094.0Interest bearing non-current liabilities47.351.7
Other non-current assets
TOTAL EQUITY AND LIABILITIES
Other current liabilities
Interest bearing current liabilities
Other non-current
Equity
EQUITY ANDLIABILITIES
20.420.5160.4167.6Other current assets
510.9531.3510.9TOTAL ASSETS
202.8220.7123.688.2Cash and cash equivalents
16.012.179.8109.5Work in progress
180.7184.099.8114.3Goodwill
30 June 2009
30 June 2010
30 June 2009
30 June 2010ASSETS
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CASH FLOW
203.7-30.3203.7142.0Cash and cash equivalents and other liquid assets at the beginning of the period
4.24.29.1Impact of translation differences in exchange rates
-40.3-68.4-50.7-16.0Net cash from financing-25.639.6-33.6-46.9Net cash before financing
-10.6-21.8-11.0-8.6Investments in shares in subsidiaries deducted with cash acquired
-10.476.6-20.1-35.5Total from operating activities
-65.9-25.4-84.3-62.9Change in cash and cash equivalents and in other liquid assets
-12.3-82.1-7.8-1.4Financial items and taxes
142.0-28.6123.688.2Cash and cash equivalents and other liquid assets at the end of the period
-4.6-12.0-2.5-2.8Other capital expenditure
-14.555.1-22.7-35.2Change in net working capital
16.4-89.410.41.1Operating income before change in net working capital
2009CHANGE,
%1-6/
20091-6/
2010
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KEY FIGURES
4.82.92.9Capital expenditure, operating, EUR million
-19.3-12.226.3Net debt, EUR million5.04.29.9Capital expenditure in acquisitions, EUR million
40.940.039.7Equity ratio-%, p.a.35.735.434.6Equity/Assets ratio-%
-10.5-6.814.3Gearing-%
705274466481Personnel on average
0.110.10-0.04Earnings per share, EUR (diluted)2.982.932.98Equity per share, EUR5.39.20.4ROI-%, p.a.4.16.9-2.8ROE-%
653069466609Personnel at the end of the period
20091-6/20091-6/2010