2013-02-06 07:27:22 -
Pöyry PLC Company announcement 6 February 2013 at 8.25 a.m.
* To strengthen long-term profitability Pöyry improves its organisation and
increases its focus on domestic markets.
* Actions taken to address low-performing units, outsource elements of support
operations and streamline administrative processes - EUR 40-50 million combined
run-rate cost savings targeted by the end of 2014.
* Pöyry's strategic evolution aims at reaching net sales amounting to EUR 1,000
million with corresponding operating profit margin of 8-9% by the end of 2017.
Addressing low-performing units
By the end of 2013, business units representing net sales of approximately EUR
100 million will have been addressed. As part of these actions in late 2012
Pöyry divested a unit carrying out engineering services in the water,
environment, waste and energy sectors in France and a
unit in Spain carrying out
engineering and consultancy services in the local rail sector representing net
sales of approximately EUR 22 million. Moreover, restructuring actions have
already commenced on several units. Profit improvements in the range of EUR
15-20 million are expected to be achieved by the end of 2013. Related
restructuring costs of EUR 7.2 million have been recognised in the fourth
quarter 2012 result.
Streamlining administrative processes
During late 2012 Pöyry simplified its business area/unit structure and
streamlined its administrative processes. Administrative support function
savings will be achieved through a globally controlled operating mode.
Outsourcing of parts of the IT and Financial Accounting functions commenced
during December 2012. These measures will lead to group-wide head-count
reductions of approximately 300 persons and annualised cost savings in the range
of EUR 25-30 million by the end of 2014. Related restructuring cost provisions
of EUR 4.5 million have been recorded in the fourth quarter 2012 results.
Evolving business concept
Pöyry's competitive differentiation results from its ability to serve its
clients across their entire business lifecycle. Pöyry has established global
leadership positions in the industrial and energy sectors and it continues to
build these global competence lines. At the same time, a major portion of
Pöyry's business originates from a large number of medium and small-sized
domestic projects, which contribute to a continuous order stream across multiple
In order to strengthen Pöyry's long-term profitability the company is increasing
its focus on developing the local business model. Going forward, Pöyry will
adopt a clear dual approach to serving clients - a global competence-based model
and in addition, a local business model focused on key geographies. As such,
Pöyry is improving its organisation by introducing Regional Business Lines with
the objective of strengthening its domestic engineering business in its main
Pöyry will continue to develop its large projects competence capabilities and
its share in corresponding orders will be increasing. Large Projects are
performed exclusively within the areas of Pöyry's Global Competence Lines, being
Industry and Energy. Development of comprehensive strategic advisory services
will be continued under Management Consulting.
During the first quarter of 2013, Pöyry will split its Urban Business Group
operations into three distinct Regional Operations: Northern Europe, Central
Europe and Alpine Arc.
Martin Bachmann, currently Executive Vice President (EVP) and President of the
Urban Business Group, is appointed, Chairman, Regional Operations and President,
Regional Operations Alpine Arc. Martin Bachmann will, as Chairman, Regional
Operations, oversee the alignment of common business processes and systems
between the 3 Regions and prepare the establishment of further Regional
Operations covering Pöyry's activities in Asia, Latin and North America.
Martin Kuzaj, EVP and President of the Industry Business Group, is in addition
appointed President, Regional Operations Central Europe.
Pasi Tolppanen, Senior Vice President, Operations is in addition appointed
President, Regional Operations Northern Europe.
All three Regional Operations report to Alexis Fries, President and CEO.
Financial reporting structure
From the beginning of the first quarter 2013, Pöyry's financial reporting will
be based on the following four Business Segments: Management Consulting business
group; Industry business group; Energy business group; and Regional Operations.
Regional Operations are based on the regional operations of the former Urban
Business Group. In addition, the Local Project Services business unit will be
transferred from Industry business group to Regional Operations. The pro forma
figures reflecting these changes will be communicated along the first quarter
2013 interim report.
During the latter part of the year, Pöyry intends to transfer certain parts of
Energy segment to become part of its Regional Operations. Energy will thereby
increase its focus on further developing its Global Competence Lines, in Hydro
Power, Thermal Power, Nuclear Power, Renewable Energies and Electric
Transmission and Distribution.
Financial targets by the end of 2017
The Group's financial targets for net sales and operating profit have been
* The aim is to achieve net sales of EUR 1,000 million
- previous target: over-the-cycle average net sales growth 15%
* Targeted operating profit margin is 8-9% for the Group in average
- previous target: minimum 8% in medium term, 10% in long term for each business
Other financial targets remain unchanged
* return on investment: 20 % or higher
* earnings per share, growth: 15 % or higher
* gearing: below 50 %
* dividend/earnings ratio: 50 % or higher.
Rebecca Bleasdale, Public Relations
+358 10 33 26000
Sanna Päiväniemi, Director, Investor relations
+358 10 33 23002
Pöyry is an international consulting and engineering company. We serve clients
globally across the energy and industrial sectors and locally in our core
markets. We deliver strategic advisory and engineering services, underpinned by
strong project implementation capability and expertise. Our focus sectors are
power generation, transmission & distribution, forest industry, chemicals &
biorefining, mining & metals, transportation, water and real estate sectors.
Pöyry has an extensive local office network employing about 7,000 experts.
Pöyry's net sales in 2012 were EUR 775 million and the company's shares are
quoted on NASDAQ OMX Helsinki (Pöyry PLC: POY1V).
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Pöyry Oyj via Thomson Reuters ONE