Lemminkäinen Interim Report 1 January - 30 June 2016

LEMMINKÄINEN CORPORATION    STOCK EXCHANGE RELEASE 29 JULY 2016 AT 8:00 A.M. Lemminkäinen Interim Report 1 January - 30 June 2016 April–June 2016 (4–6/2015) • Order inflow was EUR 382.8 million (423.0). • Order book at the end of the period amounted to EUR 1,495.7 million (1,667.1). The comparable order book for 30 June 2015 was EUR 1,351.7 million 1). • Net sales totalled EUR 457.1 million (492.1). • Operating profit amounted to EUR 21.2 million (15.6), or 4.6% (3.2) of net sales. • Profit for the period was EUR 12.3 million (5.0). • Earnings per share were EUR 0.48 (0.05). • Cash flow from operating activities totalled EUR 25.6 million (23.5). • Equity ratio at the end of the review period was 33.8% (33.1) and gearing 52.2% (57.2). • Interest-bearing net debt at the end of the review period was EUR 165.2 million (211.7). 1) The company divested the building construction business in Sweden as well as the road maintenance business in Norway during Q3/2015. In addition according to its strategy, the company has not started any new residential development projects in Russia. January–June 2016 (1–6/2015) • Order inflow was EUR 783.3 million (809.2). • Net sales totalled EUR 673.8 million (781.8). • Operating profit amounted to EUR -10.2 million (-2.4), or -1.5% (-0.3) of net sales. • Profit for the period was EUR -15.6 million (-14.7). • Earnings per share were EUR -0.83 (-0.90). • Cash flow from operating activities totalled EUR 7.2 million (26.0). Profit guidance for 2016 The profit guidance for 2016 remains intact. Lemminkäinen estimates that its net sales in 2016 will be on the level of EUR 1.8 billion. Operating profit (IFRS) in 2016 is expected to improve as compared to 2015 (EUR 37.3 million). Key figures, 4-6/ 4-6/ Change  1-6/ 1-6/ Change  1-12/ IFRS  2016  2015  2016  2015  2015 Net sales M€ 457.1 492.1 -35.0 673.8 781.8 -108.0 1,879.0    Paving M€ 225.4 239.7 -14.3 261.2 295.9 -34.7 796.2    Infra projects M€ 89.6 84.8 4.8 150.7 151.9 -1.2 341.4    Building construction,    Finland M€ 141.0 127.0 14.0 254.1 258.3 -4.2 537.8    Russian operations M€ 12.1 17.4 -5.3 17.9 36.0 -18.1 136.7    Other operations and Group eliminations M€ -10.9 23.3 -34.2 -10.1    39.7 -49.8 66.8 Operating profit M€ 21.2 15.6 5.6 -10.2 -2.4 -7.8 37.3    Paving M€ 17.9 15.0 2.9 -10.4 -9.7 -0.7 19.8    Infra projects M€ 1.5 4.6 -3.1 1.0 3.1 -2.1 8.9    Building construction,    Finland M€ 3.7 -3.4 7.1 3.0 3.8 -0.8 12.9    Russian operations M€ -0.6 1.4 -2.0 -1.2 2.5 -3.7 2.9    Other operations M€ -1.3 -1.9 0.6 -2.5 -2.1 -0.4 -7.2 Operating margin  % 4.6 3.2 -1.5 -0.3 2.0    Paving  % 7.9 6.2 -4.0 -3.3 2.5    Infra projects  % 1.7 5.4 0.7 2.0 2.6    Building construction,    Finland  % 2.6 -2.7 1.2 1.5 2.4    Russian operations  % -5.3 8.1 -6.8 7.0 2.1 Pre-tax profit M€ 16.4 10.2 6.2 -18.9 -13.7 -5.2 16.7 Profit for the period M€ 12.3 5.0 7.3 -15.6 -14.7 -0.9 7.2 Earnings per share for the period € 0.48 0.05 0.43 -0.83 -0.90 0.07 -0.15 Cash flow from operating activities M€ 25.6 23.5 2.1 7.2 26.0 -18.8 106.6 Key figures, 30 June 30 June Change 31 Change 31 Dec 2015 IFRS 2016 2015 6/16 March 6/16 4) vs 2016 vs 6/15 3/16 Order book M€ 1,495.7 1,667.1 -171.4 1,449.0 46.7 1,180.3 1) Operating capital M€ 446.4 547.0 -100.6 450.4 -4.0 474.8 Balance sheet total M€ 1,055.5 1,292.3 -236.8 949.6 105.9 1,035.5 Interest -bearing net debt M€ 165.2 211.7 -46.5 186.6 -21.4 126.8 Equity ratio 2) % 33.8 33.1 36.0 40.6 Gearing 3) % 52.2 57.2 61.8 33.6 Return on capital employed, rolling 12 months % 4.6 4.6 3.6 5.3 1) The figures for the comparison year include the building construction business in Sweden and the road maintenance business in Norway, both of which the company divested in Q3/2015. In addition according to its strategy, the company has not started any new residential development projects in Russia. The comparable order book for 30 June 2015 was EUR 1,351.7 million. 2) Equity ratio, if hybrid bonds were treated as debt: 6/2016: 26.4%, 6/2015: 23.1% and 12/2015: 28.6%.1) The figures for the comparison year include the building construction business in Sweden and the road maintenance business in Norway, both of which the company divested in Q3/2015. In addition according to its strategy, the company has not started any new residential development projects in Russia. The comparable order book for 30 June 2015 was EUR 1,351.7 million. 3) Gearing, if hybrid bonds were treated as debt: 6/2016: 95.0%, 6/2015: 125.2% and 12/2015: 89.6%. 4) The figures include the effect of non-current assets classified as held for sale. President and CEO Casimir Lindholm: “Our second quarter operating profit improved year-on-year,” says Casimir Lindholm, President and CEO. “Our operating profit improved in Paving and Building construction, Finland. In Paving, we have ongoing measures to improve our operations in Norway. In Building construction Finland, four residential development projects were completed during Q2. However, the majority of our residential development projects will be completed during the last quarter.” “Our financial position continued to develop favourably. Compared to June last year, our operating capital has decreased from EUR 547 million to EUR 446 million, a decline of EUR 100 million. Simultaneously, our interest-bearing net debt has decreased from EUR 212 million to EUR 165 million despite the redemption of the outstanding share of the first hybrid bond during the first quarter this year. Our financial position has improved significantly during the past two years.” “Our comparable order book improved compared to last year. Order inflow for paving has been good in all market areas, including Russia. In Infra projects, we won two new projects in Sweden. In Building construction, Finland, we have a strong order book. We seek profitable growth in complex infrastructure construction in Sweden and Norway. Especially in Sweden the competition is intense and we have strengthened the local organisation to support the growth.” “Going forward, our focus remains on improving our operational result and competitiveness in all operations. The second quarter of 2016 went as planned and we are in a good position to reach our financial targets for this year.” Briefing A Finnish-language briefing for analysts and the media will be held at 12:00 noon on Thursday 28 July at Lemminkäinen’s head office. The street address is Salmisaarenaukio 2, Helsinki, Finland. Lemminkäinen's President and CEO Casimir Lindholm will present the Interim Report. The presentation material can be found in Finnish and English at the company’s website, www.lemminkainen.com/investors. Financial reporting in 2016 In 2016, financial reports are published as follows: 4 February 2016  Financial Statements Bulletin 2015 Week 9  Annual Report 2015 28 April 2016  Interim Report 1 Jan – 31 March 2016 28 July 2016        Interim Report 1 Jan – 30 June 27 October 2016  Interim Report 1 Jan – 30 Sep 2016 LEMMINKÄINEN CORPORATION Corporate Communications Additional information: Casimir Lindholm, President and CEO, tel. +358 2071 53304 Ilkka Salonen, CFO, tel. +358 2071 53304 DISTRIBUTION: Nasdaq Helsinki Ltd Key media www.lemminkainen.com Lemminkäinen is an expert in complex infrastructure construction and building construction in Northern Europe and one of the largest paving companies in its market. Together with our customers and 4,800 professionals we employ, we build a sustainable society. In 2015, our net sales were EUR 1.9 billion. Lemminkäinen Corporation’s share is quoted on Nasdaq Helsinki Ltd. www.lemminkainen.com ATTACHMENT: Interim Report Q2/2016