Leading Swiss construction services group Implenia has once again published a good set of annual results.
D i e t l i k o n, 11 March 2010 – With consolidated turnover practically unchanged at CHF 2.3 billion, the group reported a 22% increase in EBIT before special charges (like-for-like) to CHF 75.5 million (previous year CHF 62.1 million). The group result was also significantly higher than the previous year's CHF 40.0 million at CHF 47.1 million. Implenia's net cash position was more than doubled to CHF 85.9 million (previous year CHF 36.7 million). Having begun the 2010 financial year with a record high order book worth over CHF 3.4 billion (+16.4 %), the group is looking forward to the future with confidence. The Board of Directors is proposing to the General Meeting that it approve a 40% increase in the dividend to CHF 0.70 in the form of a nominal value reduction.In 2009, Implenia significantly strengthened its earnings power for the fourth year in a row. The good result is the product of closer cooperation across all the divisions and profit centres, and can be attributed to strict cost management throughout the operating business, as well as a reduction in administrative costs at group level. It should also be noted that exceptional costs of CHF 7.9 million were incurred during the year under review. The EBIT margin (like-for-like) increased significantly from 2.7% to 3.3%. Thanks to rigorous cash management, the balance sheet was once again made appreciably stronger.
Significant improvement in operating earnings and net profit
Turnover was almost the same as in 2008 at CHF 2280 million (previous year CHF 2299 million). EBIT before special charges (like-for-like) went up 21.6% to CHF 75.5 million (previous year CHF 62.1 million), while the operating result before net financial costs went up 14.6% to CHF 67.6 million (previous year CHF 59.0 million). This improvement is all the more impressive considering that the 2008 results included a one-off profit of CHF 11.4 million from the sale of Privera. EBITDA reached CHF 104.6 million (previous year CHF 98.5 million), giving a margin of 4.6% (previous year 4.2%). The group result was 17.7% higher than the previous year's CHF 40.0 million at CHF 47.1 million.
Stronger balance sheet
At the end of 2009, cash and cash equivalents came to CHF 128.7 million (previous year CHF 118.4 million), and the Group had a net cash position of CHF 85.9 million (previous year CHF 36.7 million). This further increase in financial strength was made possible by rigorous cash management and continuous optimisation of the balance sheet. At the end of the period under review, equity came to CHF 426.3 million (previous year CHF 423.2 million), giving an equity ratio of 30.9% (previous year 31.1%). If the purchase of more than CHF 30 million of treasury shares were excluded, the equity ratio would have reached 32.3%.
Backlog of orders tops CHF 3 billion
Group-wide order books reached a peak of CHF 3457 million (+13%) at the end of February 2010. Approximately CHF 1.9 billion of this backlog will be converted into actual turnover in 2010, with the rest spread over several years from 2011.
Real Estate Division
The Real Estate Division, which provides a comprehensive range of services covering the entire life cycle of a property from planning to operational optimisation, achieved a substantial improvement in its operating EBIT result, from CHF 25.8 million in 2008 to CHF 38.9 million during the year under review. CHF 17.5 million came from general contracting and CHF 21.4 million from real estate services (project development). Turnover was slightly higher than in the previous year (CHF 1230 million). Orders on hand increased to a very healthy CHF 1799 million (previous year CHF 1293 million), mainly because of continued lively residential construction activity. The fundamentally volatile project development business also performed well. Several projects that had been in the pipeline were realised in 2009, and several more attractive new projects were added to the portfolio. Reuss Engineering, which provides building technology services, continued to focus on sustainable construction.
Infrastructure and Tunnel + Total Contracting Divisions (construction work)
The two construction divisions together achieved excellent EBIT operating earnings of CHF 49.0 million (previous year: CHF 50.8 million), with each division contributing half to the total. The good results produced by the tunnelling business were pleasing. Production output – which covers all activities including work partnerships – came to CHF 1618 million, which is a significant improvement on the previous year's CHF 1509 million. At the end of the year, outstanding orders, including work partnerships, totalled CHF 1641 million spread over several years (2008: CHF 1666 million).
Global Solutions Division
In view of the problems in the target markets of Russia and the Middle East, it was decided to stop the activities of the «Russian Land Implenia» joint venture, and in the Middle East to focus in the short to medium term on infrastructure projects, mainly in Abu Dhabi and Qatar. Despite the difficult market environment, the Division was able to win various contracts for prestigious major projects (stadium for the opening ceremony of the 2014 Winter Olympics in Sochi, bid for the 2018/22 football World Cup, Swiss Village in Masdar City, Abu Dhabi). The Division is sticking closely to its deliberately low-risk entry strategy.
Proposal to increase dividend by 40%
Based on 2009's healthy results and the positive outlook for 2010, the Board of Directors is asking the General Meeting of 14 April 2010 to increase the dividend – in the form of a nominal value reduction – to CHF 0.70 per share (previous year CHF 0.50 per share). This puts the company on course for a long-term distribution ratio of 30%.
Board of Directors streamlined
Implenia Ltd's Board of Directors will be reduced in size. James Lionel Cohen and Ian Andrew Goldin are stepping down from Board as per the forthcoming General Meeting of 14 April 2010. Claudio Generali and Urs Häner are not making themselves available for re-election. The Board of Directors proposes that the General Meeting of 14 April 2010 elects Hans-Beat Gürtler as a new Member of the Board (CV in appendix) and re-elects Anton Affentranger, Markus Dennler, Patrick Hünerwadel, Toni Wicki and Phillippe Zoelly.
Implenia Industrial Construction – a new division
Following the redefinition of the group's vision, its organisational structure was adjusted at the start of 2010, and the new Industrial Construction Division was created. This combines the activities of the former Tunnel + Total Contracting and Global Solutions Divisions, and its aim is to become the preferred partner internationally for sustainable and complex infrastructure and real estate contracts.
Dispute with Laxey resolved
After more than two years of conflict with the hedge fund Laxey, the shares it held in Implenia were finally placed with private and institutional investors in Switzerland and elsewhere in November 2009. This has cleared the way for Implenia's further development as an independent, publicly traded company with a diverse group of shareholders.
Outlook for 2010
Though the economic environment remains challenging, Implenia's large backlog of orders makes it confident about the months to come. Thanks to its very healthy order book, the Real Estate Division is practically certain to meet its budgeted turnover figures for 2010. General Contracting has started the new financial year with a high level of orders. In traditional construction, Implenia can also build on a substantial backlog of orders that includes major projects as well as numerous medium-sized and small contracts. In tunnel construction the company has an orders cushion covering several years. Nevertheless, tough competition means that price pressure will continue in the construction business. In the international arena, the numerous attractive contracts won in 2009 vindicate the company's strategy of concentrating on infrastructure and prime buildings.
Contacts:
Investor Relations
Tel. 044 805 45 00
Corporate Communications
Tel. 044 805 45 43
Implenia Group key figures