jaakko pöyry group company presentation 2006 · 7 company presentation 2006 energy – q3...

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Pöyry Company presentation 2006

Company presentation 20062

Pöyry – global consulting and engineering

• Core operations based on three know-how clusters

• Consulting and engineering services

• Global market leader in Forest Industry

• Strong international position in Energy and Infrastructure & Environment

• Net sales about EUR 600 million• Global coverage with 6000

experts in their fields• Extensive local office network in

45 countries

Business review


DevelopmentDevelopment ImplementationImplementation ProductionProduction RationalisationRationalisation

Business idea

Approval ofinvestment proposal

Planttake-over

Plantdevelopment

Feedback

Strategy and way of operating

• Focus on three core sectors: Energy, Forest Industry, Infrastructure & Environment

• Business concept based on providing innovative and value-added products and solutions, and a full range of services

• Pöyry is the preferred supplier for its clients• Lifecycle concept: consulting, engineering, PM/CM, maintenance

engineering, O&M• Best available technology combined with local know-how• Strong market position and growth


Energy business group

Business trends

• Liberalisation of energy markets

• Environmental legislation and Kyoto CO2 targets

• Increase in oil prices causing energy mix changes

• Energy demand growth in China, India and Southeast Asia

• Rehabilitation and re-powering of aging facilities

Business areas

• Management Consulting• Hydropower• Renewable Energy• Power and Heat• Oil and Gas


Energy – Q3 net sales and operating profit

0

40

80

120

160

2004 2005 2006

1-3 4-6 7-9 10-12

0

2

4

6

8

10

12

2004 2005 2006 1-3 4-6 7-9 10-12

Net sales Operating profitEUR millionEUR million


Energy – Q3 highlights

• Profitability and market share improvement

• Acquisition of an international oil and gas company

• Order stock is good and was EUR 222.6 million

• New orders– Verbund’s hydro power project in Austria

EUR 13 million– EGL Group’s power plant engineering in

Italy EUR 7.3 million– SouthEast Asia Energy’s hydropower

plant in Laos EUR 8.9 million– Hochtief Glendoe Joint Venture’s

hydropower plant in the UK EUR 5 million– Qatar Petroleum’s sea water cooling

project in Abu Dhabi EUR 17 million0

50

100

150

200

250

3/05 6/05 9/05 12/05 3/06 6/06 9/06

EUR million Order stock


Forest Industry business group

Business trends

• New investments in emerging markets (Latin America, China)

• Low investment level in North America, Western Europe and Japan

• Consolidation• Outsourcing

Business areas

• Management Consulting• New Investment Projects• Rebuild Projects• Local Services


Forest Industry – Q3 net sales and operating profit

0

40

80

120

160

200

2004 2005 2006

1-3 4-6 7-9 10-12

0

4

8

12

16

20

2004 2005 2006

1-3 4-6 7-9 10-12



Forest Industry – Q3 highlights

• Good development of activities despite pulp & paper market situation

• Strengthening of position in China by JV

• Bolt-on acquisition of two structural engineering companies

• Order stock remained stable and was EUR 111.0 million

• New orders– Solvay’s hydrogen peroxide plant in

Belgium– UPM- Kymmene’s Kymi pulp mill

rebuild in Finland EUR 10 million– Klabin’s board machine and Aracruz

pulp mill projects in Brazil EUR 20 million 0

20

40

60

80

100

120

3/05 6/05 9/05 12/05 3/06 6/06 9/06



Infrastructure & Environment business group

Business trends

• Climate change• Rail traffic displacing road and

flight traffic• EU expansion• Increased funding by IFIs• High growth in Russia and in

Baltic states

Business areas

• Transportation• Water and Environment• Real Estate and

Telecommunications


Infrastructure & Environment – Q3 net sales and operating profit

0

20

40

60

80

100

120

140

160

180

2004 2005 2006

1-3 4-6 7-9 10-12

0

1

2

3

4

5

6

7

8

9

10

2004 2005 2006

1-3 4-6 7-9 10-12



Infrastructure & Environment – Q3 highlights

• Good financial performance• Bolt-on acquisition of geotechnical

engineering company in Finland• Order stock is good and was EUR

183.7 million• New projects

– Metro de Maracaibo’s light rail transport system in Venezuela EUR 13.1 million

– Zhengzhou-Xian Passenger Dedicated Line’s high-speed railway construction supervision in China EUR 2.6 million

– C.A. Metro de Valencia’s light rail system in Venezuela EUR 12.6 million 0

20

40

60

80

100

120

140

160

180

200

3/05 6/05 9/05 12/05 3/06 6/06 9/06


Financials


0

100

200

300

400

500

600

2001 2002 2003 2004 2005Consulting and engineering EPC

Net sales

EUR million


0

5

10

15

20

25

30

35

40

2001 2002 2003* 2004 2005

Profit before taxes Net profit

Profit before taxes and net profit

EUR million

IFRS IFRS

* sale of headquarter office building


Return on investment

0

5

10

15

20

25

30

2001 2002 2003 2004 2005

%

IFRS IFRS


Net debt/equity ratio (gearing)

-50-40-30-20-10

01020304050

2001 2002 2003 2004 2005

%

Target below 30%IFRS IFRS


0,00

0,40

0,80

1,20

1,60

2,00

2001 2002 2003 2004 2005

EUR

Earnings per share

IFRS IFRS


Dividend/share and pay-out ratio

0,00

0,40

0,80

1,20

1,60

2,00

2001 2002 2003 2004 20050

20

40

60

80

100

Dividend/share Pay-out ratio, %IFRS IFRS

%EUR


Financial targets and performance 2002-2006

2002 2003 2004 2005 1-9/05 1-9/06 TargetProfitability FAS FAS IFRS IFRS on average

PBT, EUR million 18.1 35.8 30.9 38.6 26.9 34.1ROI, % 14.5 27.7 21.4 25.8 24.4 28.1 ≥ 20.0

Earnings

EPS, EUR *) 0.225 0.45 0.335 0.45 0.32 0.38EPS, annual growth, % -30.8 100.0 26.8 21.0 18.8 ≥ 15.0

Balance sheet

Gearing,% -5.6 -40.7 -37.4 -36.1 -23.6 -22.3 < 30.0

Dividend Policy

Dividend, EUR *) 0.15 0.375 0.30 0.325Pay-out ratio, % 66.7 83.3 84.5 72.2 ≥ 50.0

*) share split


Targets with Pöyry brand

• Strengthen the Global Network Company strategy

• Unite all efforts to gain more strength

• Build equity into one brand

• Ensure further growth and profitability


Business focus 2006

• Targeted acquisitions: local service, market position, technology know-how

• Growth in emerging markets

• Global Network Company enhancement

• Continued profitability improvement


Order stock

0

100

200

300

400

500

600

12/2004 3/2005 6/2005 9/2005 12/2005 3/2006 6/2006 9/2006

Consulting and engineering EPC

EUR million


Prospects

• Energy: Operating profit will improve clearly in 2006.

• Forest Industry: Operating profit will improve somewhat during 2006.

• Infrastructure & Environment: Operating profit will improve clearly in 2006.

• Pöyry group: Net sales will increase in 2006. Profit before taxes will improve clearly in 2006.

Growth


0

100

200

300

400

500

600

1985 1991 1997 2003 2004 2005 1-9/2006

Other

Infrastructure &Environment

Energy

Forest Industry

Forest Industry, newinvestments

12% annual growth

EUR million

Net sales


0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

2001 2002 2003 2004 2005

Infrastructure &Environment

Forest Industry

Energy

Division of sales by business group


Polarisation of technical consulting sector

limited

Employees

Global,diversifiedproducts

Local,

number ofproducts

50001000

Price competition

Scale of

economies

Consolidation


Pöyry’s position within the sectorsM

arke

t sha

re

Size of the market

Energy

ForestIndustry

Infrastructure& Environment


Growth through acquisitions

• Consolidation trend in the consulting and engineering sector• Experience in acquiring tens of companies• Acquisition track record e.g.

– 2006 IGL Consultants, UK– 2005 S.P.E. Servizi per l’Energia, Italy– 2005 GKW Holding, Germany– 2005 Scancontrol, Sweden– 2004 Verbundplan, Austria– 2004 AQUATIS, Czech Republic– 2004 CMC-Yhtiöt, Finland and the Baltic countries– 2003 NLK Consultants, Canada– 2003 ILEX Energy Consulting, UK– 2002 ABGS, Canada– 2002 Heusch-Boesefeldt, Germany– 2001 Rigel Konsult i Gävle , Sweden– 2000 Bridge business of VCE, Taiwan– 1999 Beture Environnement and Beture-Cerec, France– 1997-99 Electrowatt Engineering, Switzerland– 1997 Marathon Engineers/Architects/Planners, USAand several smaller acquisitions


Organic growth

• Mainly in emerging markets: China, Russia, Latin America, Eastern Europe

• Organic growth 7 percentage units in 2005• Use of global network to sell our services/products• Continuous new product development, e.g. river basin

management, document management services, laser scanning


M&A activities continued

• Acquisitions in 2006– TH Consulting Oy, Finland, structural engineering– Salminen & Sorasalmi, Finland, structural engineering operations in Russia– Savon Tekmi Oy, Finland, geotechnical services– JV with Shangdong Light Industry Design Institute, China, detail engineering

• IGL Consultants Ltd, UK, acquired in May 2006– Design, operations support and specialist consulting services to the oil & gas

sector– Net sales EUR 11 million, operating profit EUR 1.5 million, 120 employees– Following the transaction Pöyry provides multi-discipline services in North Sea

and Asia Pacific region and the Middle East• Convergence Utility Consultants Ltd, Switzerland, acquired in October 2006

– Business, strategy and economics consulting services– Net sales EUR 8 million, operating profit EUR 1.6 million, 70 employees– Acquisition strengthens Pöyry’s position as biggest management consultant in

Europe


Share price and market capitalisation

EUR Market capitalisationShare priceEUR million

0

100

200

300

400

500

600

2002 2003 2004 2005 9/20060,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

9,00

10,00

2.12

.97

2.12

.98

2.12

.99

2.12

.00

2.12

.01

2.12

.02

2.12

.03

2.12

.04

2.12

.05


0,00

0,40

0,80

1,20

1,60

1997 1998 1999 2000 2001 2002 2003 2004 2005

Dividend/share

EUR


Shareholders and shares

September 30, 2006Number of

shares

Per cent of shares and

voting rights

Corbis S.A. 17 861 200 30,7Procurator Oy 2 867 000 4,9Ilmarinen Mutual Pension Insurance Company 1 973 900 3,4Varma Mutual Pension Insurance Company 1 950 600 3,3Tapiola Mutual Pension Insurance Company 1 760 000 3,0Nordea Fund company Ab (FI) 1 454 564 2,5OP-Delta Sijoitusrahasto 1 329 780 2,3Placeringsfonden Aktia Capital 1 175 300 2,0Svenska Litteratursällskapet i Finland 892 100 1,5OP-Suomi Pienyhtiöt -sijoitusrahasto 597 600 1,0Shares nominee register 15 451 248 26,6Other owners 10 866 852 18,8

Total 58 180 144 100,0


Research coverage

• Carnegie, Helsinki• Enskilda Securities, Helsinki• Evli Bank, Helsinki• FIM Securities, Helsinki• Handelsbanken, Stockholm • Kaupthing Bank, Helsinki• Nordea, Helsinki• Opstock Securities, Helsinki• Öhman Fondkommission, Helsinki

jaakko pöyry group company presentation 2006 · 7 company presentation 2006 energy – q3...

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