VALUE-ADDED SYNERGETIC SERVICES IN … · value-added synergetic services in engineering, project management and management consulting carnegie small & mid cap seminar 8-9 september

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

09.09.2010CARNEGIE SMALL/MID-CAP SEMINAR SEP 2010/Malinen 2

PRESENTATION CONTENTS

Pöyry in briefService offeringFinancial position and short-term outlookAppendices


PÖYRY IN BRIEF



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



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


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


CorbisProcurator-Holding OyNominee registeredPrivate and public institutions (domestic)Households (domestic)Other


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 %


SERVICE OFFERING

Vision statement:”By 2020 Pöyry is the global thoughtleader in engineering balancedsustainability for a complex world.”



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



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



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



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


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


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



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 %


FINANCIAL POSITION


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


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


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


RETURN ON INVESTMENT, %

0,4 %0 %

5 %

10 %

15 %

20 %

25 %

30 %

35 %

40 %

45 %

50 %

2005 2006 2007 2008 2009 end Q2/10


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


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


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.


THANK YOU!


APPENDICES


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


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


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


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

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VALUE-ADDED SYNERGETIC SERVICES IN … · value-added synergetic services in engineering, project management and management consulting carnegie small & mid cap seminar 8-9 september