Lemminkäinen Annual Report 2001
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annual report 2001 lemminkäinen corporation lemminkäinen corporation annu LEMMINKÄINEN CORPORATION esterinportti 2, 00240 helsinki al report P.O.BOX 23, 00241 helsinki telephone +358358 9 15 991 fax +358358 9 140 672 www.lemminkainen.fi 2001 contents year 2001 ............................................................................................... 1 lemminkäinen group...................................................................... 2 strategy ................................................................................................. 4 review by the managing director............................................ 5 paving and mineral aggregates division............................. 6 building materials division........................................................ 10 lemminkäinen construction ltd.............................................. 14 oy alfred a. palmberg ab ............................................................... 18 tekmanni oy......................................................................................... 22 risk management.............................................................................. 26 environment....................................................................................... 27 research and development ......................................................... 28 personnel............................................................................................. 30 board of directors’ report for the accounting period 1st jan. 2001 – 31st dec. 2001 ......................................... 32 consolidated income statement .............................................. 34 consolidated balance sheet ....................................................... 35 consolidated statement of source and application of funds ........................................................ 36 parent company income statement ......................................... 37 parent company balance sheet.................................................. 38 parent company statement of source and application of funds ........................................................ 39 accounting principles ................................................................... 40 notes to the financial statements........................................... 41 economic trends and financial indicators ....................... 52 shares and shareholders............................................................ 54 board of directors’ proposal for appropriation of retained earnings ....................................................................... 57 auditors’ report ................................................................................ 57 parent company board of directors ...................................... 58 corporate governance .................................................................. 59 information for shareholders ................................................ 60 contact information ..................................................................... 61 2 lemminkäinen oyj vuosikertomus 2001 year 2001 Lemminkäinen has about 17 % share of the Norwegian asphalt paving market. Paving work in progress on Highway E6 near Oslo. YEAR OF GROWTH of the Norwegian market, and the for a number of years came to an end, The net sales of the Lemminkäinen Company employees over 500 people dropping to less than 1 % in 2001. Group rose 16 % and were EUR in these countries. About 50 % of The construction market is expected 1 116.5 million (964.6). The net sales Lemminkäinen’s asphalt paving oper- to develop moderately, though future growth was mainly attributable to the ations are now located outside growth is now subject to more uncer- acquisition of Tekmanni Oy in Finland. tainty than in past years. October 2000 and the purchase of Several years of steady growth and Icopal a/s’s asphalt and mineral aggre- IMPROVED EARNINGS favourable earnings development gate operations in Denmark and Lemminkäinen’s result before taxes have left Lemminkäinen reasonably Norway. The later transaction affect- improved 33 % and was EUR 61.7 well placed to meet the challenges of ed Lemminkäinen’s net sales and million (46.4). The Group’s operat- the current year. Lemminkäinen’s net result from April 2001. ing profit rose 39 % to EUR 69.7 sales may not grow at last year’s rate, million (50.2). The improvement in but the Company still has every INTERNATIONALISED ASPHALT earnings was due to the performance chance of turning in another good PAVING BUSINESS of the Paving and Mineral Aggregates result this year. The acquisition of Icopal Roads in Division, Lemminkäinen Construc- Denmark and Norway significantly tion Ltd and Tekmanni Oy. DIVIDEND strengthened Lemminkäinen’s posi- The Company’s Board of Directors tion in the asphalt paving markets of CHANGING BUSINESS will propose to the Annual General the Baltic Rim region, making it the ENVIRONMENT Meeting that a dividend of EUR 1.10 second biggest paving contractor in The strong growth of the Finnish (0.84) per share be paid for the 2001 the Nordic countries. Lemminkäinen construction market that had lasted accounting period. now has a 20 % share of the Danish paving market and about 17 % share KEY FIGURES 2001 2000 Change, % Net sales EUR million 1 117 965 16 Profit before taxes EUR million 62 46 33 Return on investment % 23.0 20.7 Equity ratio % 41.7 36.9 Earnings per share EUR 3.23 1.72 88 Dividend per share EUR 1.101) 0.84 31 Gross investments EUR million 94 72 30 Order book EUR million 441 451 -2 Average number of employees 6 311 4 487 41 1) Board of Directors’ proposal to the AGM lemminkäinen corporation annual report 2001 1 lemminkäinen group The Lemminkäinen Group operates in all sectors of the construc- tion industry: civil engineering, building contracting, technical LEMMINKÄINEN CORPORATION building services and the manufacture of building materials and PAVING AND MINERAL AGGREGATES DIVISION related contracting. The Group’s main markets are in the Baltic Rim region. The Division produces asphalt, recycled asphalt macadam and specialist paving. It carries out con- Lemminkäinen is the second biggest asphalt paving contractor tracting in the fields of road paving, milling and road in the Nordic countries and operates in selected project export marking as well as quarrying and crushing. The markets worldwide. Division also produces ready-mix concrete and min- The Lemminkäinen Group’s net sales in 2001 were EUR 1 116.5 eral aggregates as well as environmental geotechnol- ogy products and services. million, of which exports and operations abroad accounted for 18 %. Profit before taxes was EUR 61.7 million. The average BUILDING MATERIALS DIVISION number of employees in the Group was 6 311. Lemminkäinen The Division manufactures and imports a range of building products, and carries out contracting relat- was founded in 1910 and its share has been listed on Helsinki ed to these materials. The main product groups are Exchanges since 1991. bituminous roofing materials, pre-cast concrete and natural stone products, and materials used in the construction of sports facilities. GROUP STRUCTURE lemminkäinen corporation LEMMINKÄINEN CONSTRUCTION LTD Lemminkäinen Construction Ltd is an internation- paving and mine- building al building project and telecommunications network ral aggregates materials division division contractor. In Finland the company is a leading civ- il engineering contractor specialising in rock engi- neering, foundation construction and major infra- structure projects. The company is also well known as a builder of production plants, office buildings lemminkäinen oy alfred a. tekmanni oy construction ltd palmberg ab and sports facilities. OY ALFRED A. PALMBERG AB The Palmberg Group is a building contractor oper- OTHER LARGER GROUP COMPANIES ating nationwide in Finland. Palmberg’s business Oka Oy, Kouvola areas include competitive tender contracting of both Lemminkäinen Norge AS, Fjellhamar, Norway new and refurbishment work as well as private-sec- Oy Konte Ab, Vaasa tor housing, commercial and industrial develop- Lemminkäinen A/S, Silkeborg, Denmark ments. Rakennustoimisto Palmberg Oy, Tampere Palmberg-Urakoitsijat Oy, Hyvinkää Palmberg-Rakennus Oy, Oulu TEKMANNI OY Palmberg TKU Oy, Turku Tekmanni Oy operates in the fields of technical Kvalitetsasfalt i Mellansverige Ab, Sala, Sweden building and facility services, industrial installations Rakennus-Otava Oy, Jyväskylä and maintenance, and telecommunications network Byggnads Ab Forsström Rakennus Oy, Kokkola construction. Commercial, industrial, public and Savocon Oy, Kuopio residential apartment buildings are typical construc- Omni-Sica Oy, Helsinki tion and maintenance sites. The company’s telecom- Lemcon Networks Ltd, Helsinki munications network contracting services include Forssan Betonituote Oy, Forssa the construction of base stations and city networks. Tielinja Oy, Janakkala 2 lemminkäinen corporation annual report 2001 % of Group net sales EUR million 2001 2000 Change, % 28.6 % Net sales 326.7 233.0 40.2 Operating profit 36.6 25.6 43.0 Net investments 64.8 23.6 174.6 Order book 47.0 42.9 9.6 EUR million 7.9 % 2001 2000 Change, % Net sales 89.9 87.2 3.1 Operating profit 5.4 5.2 3.8 Net investments 2.0 1.7 17.6 Order book 13.1 12.3 6.5 EUR million 2001 2000 Change, % 14.0 % Net sales 160.3 165.0 -2.8 Operating profit 10.5 4.9 114.3 Net investments 0.8 2.4 -66.7 Order book 124.7 107.1 16.4 EUR million 2001 2000 Change, % 33.9 % Net sales 387.5 452.8 -14.4 Operating profit 12.4 14.7 -15.6