The Jaakko Pöyry Group's net sales for the period under review were EUR 123.3 (115.5 in the same period 2004) million. Profit before taxes was EUR 7.5 (6.6) million.
The Group's consolidated balance sheet is healthy. The equity ratio was 48.9 (48.7) per cent and the net debt/equity ratio (gearing) -28.3 (-30.1) per cent.
Earnings per share were EUR 0.33 (0.30) and the return on investment 21.3 (19.2) per cent.
The order stock was EUR 376.9 million. It increased by EUR 3.7 million during the period under review.
Consolidated net sales will increase during 2005. Profit before taxes is estimated to improve in 2005.
Adoption of IFRS standards
The Jaakko Pöyry Group reports its accounts according to the International Financial Reporting Standards (IFRS) from the beginning of 2005. All comparable figures for 2004 in this Interim Report are also in accordance with IFRS. The main adjustments to the statement of income and balance sheet relate to calculation and recording of pension arrangements, deferred tax receivables and goodwill. As the Group's accounting and reporting principles already have been largely in line with the IFRS standards, the adoption of IFRS standards does not have any other significant effects on the Group's profit, balance sheet and equity.
Jaakko Pöyry Group published a separate stock exchange notice on February 3, 2005 regarding the impact of the IFRS changes. The same information is included in the Financial Statements part of the Annual Report 2004.
Business groups
Forest Industry
Net sales for the period under review were EUR 50.0 (47.1) million. Operating profit amounted to EUR 4.1 (3.5) million.
Investment activity in the forest industry has remained low. Demand has focused on rebuilding and maintenance investments. Demand for consulting services increased slightly during the review period.
Taking into account the market situation, the business group's order stock has remained good. New orders received have mainly been concerned with rebuilding and maintenance investments, and consulting services. The order stock, EUR 82.5 million, has remained at the same level as at the end of last year (EUR 82.5 million, end of 2004).
Energy
Net sales for the period under review were EUR 37.8 (33.0) million. Operating profit was EUR 2.0 (1.8) million.
Demand for energy-related services has remained good and the business group has strengthened its market position. The integration of Verbundplan GmbH, which was acquired in 2004, has proceeded according to plan and the integration process has now been completed.
The order stock has remained good, amounting to EUR 167.1 (171.8) million. New projects entered into the order stock consisted of numerous small and medium-size projects in Europe and Asia.
Infrastructure & Environment
Net sales for the period under review were EUR 35.7 (35.5) million. Operating profit was EUR 1.3 (1.3) million.
Demand for the business group's services has remained basically stable. In Western Europe, especially in Germany, investments in traffic systems have remained low. In Eastern Europe, including Russia, demand and investments are growing.
The order stock amounted to EUR 127.0 (118.8) million. The order stock remained good and the increase consisted mostly of numerous small and medium-size projects in all of the business group's areas of operation in Europe and Asia.
Group structure
There were no changes in the group structure during the period under review.
Order stock
The Group's order stock is good. It increased by EUR 3.7 million during the period under review, totalling EUR 376.9 million at the end of March. At the end of 2004 the order stock was EUR 373.2 million.
Capital expenditure
The Group's capital expenditure for the period under review totalled EUR 3.1 (2.2) million, of which EUR 1.9 (2.2) million consisted of computer software, hardware and systems and EUR 1.2 (0.0) million were capital expenditure due to share investments.
Share capital and shares
The total number of shares at the end of 2004 was 14 109 851. During the period under review 183 650 new shares were subscribed based on warrants pursuant to the Bond Loan with Warrants issued in 1998. After the period under review 176 850 new shares have been subscribed. Following the registration of the subscribed shares, the number of shares totals 14 470 351.
The warrants related to the Bond Loan with Warrants issued by Jaakko Pöyry Group Oyj in 1998 carry subscription rights for a total of 1.3 million of the company's shares. The subscription period ends on April 30, 2005. A total of 1 272 065 shares have been subscribed based on the warrants.
Jaakko Pöyry Group Oyj issued in 2004 stock options to the management of the Group as well as to a wholly-owned subsidiary of Jaakko Pöyry Group Oyj. The stock options entitle to subscription of a maximum of 550 000 shares in Jaakko Pöyry Group Oyj. Each stock option entitles the holder to subscribe one share in the company. The share subscription periods are the following: for 165 000 shares between March 1, 2007 and March 31, 2010, for 165 000 shares between March 1, 2008 and March 31, 2011, and for 220 000 shares between March 1, 2009 and March 31, 2012. All stock options have been issued and their receipt confirmed.
The Annual General Meeting on March 3, 2005 authorised the Board of Directors to decide on an increase in the share capital by a new issue and/or by taking a convertible loan and/or by issuing option rights so that based on the new issue, the convertible bonds and the option rights the share capital can be increased by a maximum of EUR 1.0 million by issuing for subscription a maximum of 1.0 million new shares. The authorisation is in force until March 3, 2006.
The Annual General Meeting authorised the Board of Directors to acquire and convey the company's own shares to a maximum of 700 000 shares, which equals less than 5 per cent of the company's share capital. The authorisations are in force until March 3, 2006.
The Annual General Meeting decided that a dividend of EUR 1.20 be distributed per outstanding share for 2004 (for 2003 1.00 and additional dividend 0.50), totalling EUR 16.9 million. The dividend was paid on March 15, 2005.
The company's shares are quoted on the Helsinki Exchanges. The average trading price during the period under review was EUR 25.18, with a high of EUR 26.99 and a low of EUR 22.20. A total of 1.1 million of the company's shares were traded, equalling 7.8 per cent of the total number of shares and corresponding to a turnover of EUR 27.8 million.
Prospects
Recently, prospects in the forest industry have improved slightly. The number of new investments in Europe and North America is, however, expected to remain low during 2005, focusing primarily on modernisations. Large new investments are expected to go ahead during this and next year mainly in South America. Demand for consulting and investment banking services is growing in industrialised countries as well as in emerging markets. The Forest Industry business group's operating profit will improve somewhat in 2005.
Good opportunities for growth in demand for energy-related services are emerging in East Asia, China and, as the EU expands, to some degree also in Europe. This applies in particular to renewable energy, plant modernisations and management consulting services. The market position of the Energy business group has improved and the order stock is good. The business group's operating profit will improve in 2005.
Demand for the Infrastructure & Environment business group's traffic systems expertise has remained good in emerging markets. In Western Europe, demand for traffic systems expertise remains slack. In the water and environment sector, demand is expected to remain unchanged. Demand for building services has picked up in all of the business group's main markets, i.e. in Finland, the Baltic countries and Russia. The business group's order stock is good, having increased by EUR 8.2 million during the period under review. Its operating profit will remain stable in 2005.
The Group has a solid market position in all of its business groups. The order stock increased during the period under review. The Group's balance sheet structure and liquidity are good. Consolidated net sales will increase in 2005. Profit before taxes is estimated to improve in 2005.
Vantaa, April 26, 2005
JAAKKO PÖYRY GROUP OYJ
Board of Directors
JAAKKO PÖYRY GROUP OYJ
Erkki Pehu-Lehtonen Teuvo Salminen
President and CEO Deputy to President and CEO
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