A successful 2011 for Implenia

The disproportionately large improvement in profit is due to the growth in high-margin Project Development business, better project results in General Contracting thanks to optimised project management as well as to the strict cost and risk management. In addition to the outstanding operating results at Industrial Construction, the settlement between Consorzio TAT and ATG (AlpTransit Gotthard) made further positive contribution to earnings.

The order book at group level was maintained at previous year’s high level. Incoming orders improved considerably, especially in the final quarter of 2011, partly because of the more intense customer and market orientation.

High cash flow and a solid capital base
Free cash flow is at the healthy level of CHF 67.3 million (2010: CHF 39.9 million). This is due to the good business performance and a strict management of net working capital and liquidity. Implenia funded the acquisition of the Norwegian company Betonmast Anlegg and investments in the Group’s Project Development portfolio entirely from current cash flow.

As at 31 December 2011, the company held net cash of CHF 193.5 million, compared to CHF 149.5 million at the end of 2010. As a result of the expansion of foreign business and net working capital as well as investments made in the Project Development business, total assets increased to CHF 1887 million (2010: CHF 1677 million). Consequently, the equity ratio moved down slightly from 29.5% at the end of 2010 to 28.8%. Nevertheless, Implenia maintains a very solid equity base by industry standards.

Implenia creates sustainable value
During the year under review, Implenia increased its return on invested capital (ROIC) to 26.8% (2009: 22.4%). With capital costs remaining unchanged on average at approximately 9.5%, Implenia once again created substantial value in 2011.

Real Estate Division
The Real Estate division (General Contracting/Services, Engineering, Project Development) recorded an excellent business performance in 2011, increasing EBIT disproportionately by 23.2% to CHF 45.0 million (2010: CHF 36.3 million). Revenue increased by 8.0% to CHF 1415 million (2010: CHF 1311 million). The order book was maintained on previous year’s high level at CHF 1616 million. General Contracting enjoyed a record year thanks to more effective project and risk management. Implenia again won a series of important General Contracting orders, thanks in particular to its outstanding acquisition work in Western Switzerland. Reuss Engineering, which specialises in engineering and sustainability issues, continued to expand its business. The real estate segment (Project Development) exceeded previous year's good performance. A broad-based Project Development portfolio ensures the unit will achieve good operating results in the future while simultaneously increasing the proportion of internally generated general contracting and construction orders. Implenia invested in several major development projects in 2011, including “Wrighthouse” in Opfikon, “The Metropolitans” in Zurich, and “Unterfeld” in Zug/Baar. Implenia is also building the "schorenstadt" housing estate in Basel – a beacon project for the 2000-Watt Society.

Infrastructure Construction Division
In 2011 the Infrastructure Construction division generated EBIT of CHF 18.1 million, which is 27.9% lower than the 2010 result (CHF 25.1 million). Revenue came to CHF 1148 million, 4.4% lower than previous year’s result (2010: CHF 1201 million). The order book was 4.5% higher at CHF 744.2 million (2010: CHF 712.3 million). During the first half-year, the tight price situation in Building Construction and a series of projects that turned out not to be as profitable as expected led to a disappointing result. Implenia initiated immediate corrective measures which – combined with favourable weather conditions in autumn – helped produce a very good second half-year. As expected, however, this was not enough to make up for the weaker first semester. A good result was achieved in French-speaking Switzerland, showing the positive effect of Implenia’s Swiss-wide portfolio of projects. With the creation of the new business unit “Building Construction German-Speaking Switzerland” within the Infrastructure Construction Division, Implenia created the basis to establish itself as the leading company in the building construction sector and in regards to customer and market orientation. Against this background and thanks to the solid order book, Infrastructure Construction is looking to the future with confidence.

Industrial Construction Division
The Industrial Construction Division achieved an outstanding result, almost doubling its EBIT to CHF 30.5 million (2010: CHF 15.6 million). Production output went up 7.6% to CHF 376.1 million (2010: CHF 349.6 million). Revenue increased by 58.2% to CHF 262.6 million (2010: CHF 166.0 million), which is attributable mainly to additional sales from the acquisition of Betonmast Anlegg (CHF 81.4 million). The order book stood at CHF 793.6 million at the end of the year, 14.2% higher than at the end of 2010 (CHF 694.8 million). Industrial Construction also benefited from an excellent performance of its Tunnelling business in Switzerland in 2011. A settlement reached between Consorzio TAT and ATG (Alp Transit Gotthard) on additional payments for the Gotthard project produced a positive contribution of around CHF 10 million. The settlement concerns approved additional payments for work done, as well as compensation for the extension of the construction installation and project logistics.

One highlight of the 2011 financial year was the acquisition of the Norwegian company Betonmast Anlegg, which has operated on the Norwegian market since October 2011 under the name “Implenia Norge”. This acquisition marked a further milestone in Implenia’s international strategy. Together with its proven expertise in Switzerland, Implenia laid the foundations for the Group in order to participate in the growth potential of the Norwegian tunnel and infrastructure market. In the Middle East, Implenia started operational work on two microtunnelling projects in Abu Dhabi and Bahrain.

Changes in the Board of Directors
The members of the Board of Directors, Toni Wicki und Philippe Zoelly, are no longer standing for reelection at the General Meeting of 4 April 2012.

Proposal to increase dividend significantly
Against the background of the very good result and the continuing positive outlook, the Board of Directors is asking the General Meeting of 4 April 2012 to approve a distribution from capital contribution of CHF 1.10 per share (2010: CHF 0.90 par value reduction).

Positive outlook for 2012
With the order volumes up 2.7% to CHF 3154 million, the Implenia Group has had a good start to the 2012 financial year (2010: CHF 3070 million). Full order books, a focused strategy and continuing stable construction market activity lead the company to expect a good performance for 2011. An improved customer and market orientation as well as a striking sense of fresh energy within the Group are contributing further to the positive outlook.

Contact
Implenia AG Philipp Bircher Leiter Kommunikation Industriestrasse 24 8305 Dietlikon Tel. 044 805 45 23 Fax 044 805 45 20

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