Pöyry PLC Business Review 1 January-30 September 2018, 24 October 2018 at 8:30 a.m. EET
85% improvement in adjusted operating result and strong cash flow
Key figures for January-September 2018
(Figures in brackets, unless otherwise stated, refer to the same period of the previous year.)
Key figures for July-September 2018
(Figures in brackets, unless otherwise stated, refer to the same period of the previous year.)
| 7-9/ | 7-9/ | Change, | 1-9/ | 1-9/ | Change, | 1-12/ | |||
| Pöyry Group | 2018 | 2017 | % | 2018 | 2017 | % | 2017 | ||
| Order stock at the end of period, EUR million | 580.5 | 460.4 | 26.1 | 580.5 | 460.4 | 26.1 | 448.5 | ||
| Net sales total, EUR million | 136.0 | 120.5 | 12.9 | 418.6 | 387.7 | 8.0 | 522.3 | ||
| Operating result, EUR million | 11.7 | 6.5 | 79.8 | 44.6 | 10.2 | 337.8 | 15.1 | ||
| Operating margin, % | 8.6 | 5.4 | 10.7 | 2.6 | 2.9 | ||||
| Adjusted operating result, EUR million | 11.0 | 6.3 | 74.2 | 30.1 | 16.2 | 85.4 | 26.0 | ||
| Adjusted operating margin, % | 8.1 | 5.2 | 7.2 | 4.2 | 5.0 | ||||
| Result before taxes, EUR million | 11.1 | 5.8 | 92.3 | 49.0 | 8.0 | 512.4 | 11.8 | ||
| Net cash flow from operating activities, EUR million | 36.0 | 9.1 | 294.9 | 73.3 | 7.2 | 915.3 | 38.2 | ||
| Earnings per share, basic, EUR | 0.19 | 0.07 | 153.3 | 0.65 | 0.06 | 943.8 | 0.07 | ||
| Earnings per share, diluted, EUR | 0.19 | 0.07 | 153.3 | 0.65 | 0.06 | 943.8 | 0.07 | ||
| Earnings per share, adjusted, EUR | 0.18 | 0.07 | 148.6 | 0.41 | 0.16 | 151.3 | 0.25 | ||
| Gearing, % | -38.6 | 25.6 | 4.7 | ||||||
| Return on investment, % | 37.6 | 8.0 | 8.8 | ||||||
| Average number of personnel, full time equivalents (FTE) | 4,650 | 4,539 | 2.5 | 4,551 | |||||
All figures in the accounts have been rounded and consequently, the totals of individual figures can deviate from the presented total figure. Figures in this business review release are not audited.
Martin à Porta, President and CEO:
The third quarter of 2018 continued the streak of improvement and we have now improved quarterly results for 9 quarters in a row. Adjusted operating profit increased by 74% compared to the corresponding quarter in the previous year. Despite the summer period in most of our key markets, order stock increased by 26% compared to the corresponding quarter in the previous year and we are confident that in the fourth quarter order intake will be strong. Cash flow was strong and pushed our net debt to negative EUR 65 million highlighting the strength of our turnaround. Our next key step is to continue revenue growth, which was at 13% in the third quarter compared with the corresponding period in the previous year.
Demand for our Industry Business Group services continued to be strong especially in Northern Europe and we saw also modest improvement in Latin America though presidential elections in Brazil have created uncertainties in the market. Demand for our energy services were increasing especially in the Middle East and our hydro offering has generated interest in various markets. The Infra, Water and Environment Business Group continues to see strong demand across the markets and we continue to see a steady performance increase especially in Northern Europe. The market for management consulting services remains solid and has led to an improvement in this year, we project this trend to continue.
Our transformation and empowerment programs continue to receive positive engagement and we are now gearing ourselves for next generation Pöyry whilst reinforcing the solid foundation we have laid during the first phase of transformation.
Market outlook 2018
In general market conditions are expected to continue with similar trends to the last 12 months. Growth in the Eurozone has continued, but current volatility in equity markets may impact investment decisions. In Asia the markets relevant to our operations continue to be active and offer opportunities, especially to our energy offering. The Middle East shows continued high demand for desalination and new power capacity. Latin America is mixed, Brazil is waiting for the outcome of the elections and the economy is delicate. We continue to notice an increase in investment activity, however these are yet to materialize as bigger projects. The North American market demand continues to be good but trade barriers set by the USA and potential counter measures to them create uncertainties in global markets.
Our industry business sector has continued to be strong especially in Europe where the activity is expected to remain strong. The outlook for other regions remains mixed. The energy market in Europe continues to provide a few selected opportunities and remains strong for our management consulting services for market design, modelling and due diligence work. Infra, water and environment markets are stable and we see steady flow of projects in our core markets.
Financial outlook for 2018
The Group's adjusted operating result for 2018 is expected to improve clearly (2017: 26.0 MEUR)
Pöyry is an international consulting and engineering company. We serve clients across power generation, transmission & distribution, forest industry, biorefining & chemicals, mining & metals, infrastructure and water & environment. Together, we deliver smart solutions and work with the latest digital innovations. Pöyry's net sales in 2017 were EUR 522 million. The company's shares are quoted on Nasdaq Helsinki. Approximately 5500 experts. 40 countries. 115 offices.
In 2018 Pöyry is proud to be celebrating its 60th Anniversary, together with employees, clients and partners.