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Significant increase in Implenia's earning power

Confident about prospects for 2009

Dietlikon, 10 March 2009 - Implenia, Switzerland's leading construction services group, can report very good results for 2008. Turnover was practically the same as in the previous year at CHF 2.33 billion, while operating earnings before net funding costs and tax rose 60% to CHF 60.9 million. The Group's overall result increased to CHF 41.9 million (previous year: CHF 25.5 million). All the Divisions contributed to these good results. The Group reinforced its balance sheet by raising its equity ratio from 30.2% in the previous year to 31.2%, and by improving its net cash position to CHF 36.7 million by the end of 2008 (previous year: CHF -117.3 million). Thanks to an 18% rise in orders and its even stronger position as market leader, Implenia is confident about the 2009 financial year despite the difficult economic environment. At the Annual General Meeting the Board of Directors will propose paying a divided in the form of a CHF 0.50 per share partial reimbursement of par value.

Implenia is reporting a significant improvement in earnings power for the third year in a row. With sales of CHF 2.33 billion (CHF 2.38 billion), EBIT (before special charges) was maintained at CHF 62.1 million (CHF 62.0 million). However, thanks to the absence for the first time of merger-related exceptional costs, and to the proceeds of the sale of Privera AG, the operating result under IFRS increased by 60% to CHF 60.9 million (CHF 38.7 million). At CHF 41.9 million, the overall result was also substantially higher than the year-back figure (CHF 25.5 million).

Improved balance sheet

Implenia's increased earnings power also helped to improve the balance sheet. After the cash drain of CHF 113.3 million reported at the end of 2007, free cash flow improved to a positive CHF 169.1 million by the end of 2008. Cash and cash equivalents came to CHF 118.3 million at the end of the year under review (CHF 47.1 million), while the Group's net cash position came to CHF 36.7 million (previous year: net debt of CHF 117.3 million). With equity capital standing at CHF 425.1 million (CHF 404.9 million), the Group's equity ratio improved to 31.2% (30.2%).

Solid, high level of orders

At the end of the year under review, outstanding orders totalled an excellent CHF 2.96 billion, which is around 18% higher than the already very good figure achieved at the end of 2007. The Group intends to match the previous year's turnover, and with orders at the current level, 80% of this turnover is already assured.

Real Estate Division

The Real Estate Division (real estate, engineering, general contracting) achieved a slight rise in EBIT to CHF 25.8 million (CHF 25.6 million). Turnover came to CHF 1.23 billion (CHF 1.27 billion). Orders rose to CHF 1.29 billion (CHF 1.25 billion). The General Contracting unit was able to further expand its leading position in the Swiss market. The Project Development business did particularly well in the residential sector. After a difficult 2007, Reuss Engineering (services, building technology) was able to post good results for the year under review.

Infrastructure and Tunnel + Total Contracting Divisions (construction work)

The two divisions, Infrastructure Construction and Tunnel + Total Contracting (construction work), together generated a very good EBIT of CHF 50.8 million (CHF 43.6 million). Turnover came to CHF 1.27 billion (CHF 1.26 billion). As at 31 December 2008, outstanding orders including work partnerships had increased to CHF 1.67 billion (CHF 1.26 billion).

Global Solutions Division

The Global Solutions Divisions, created in 2007, manages and coordinates all of Implenia's activities outside Switzerland, with a particular focus on Russia and the Middle East. In 2008 it concentrated mainly on building up its market. Its operating loss for the year was caused mainly by start-up costs that should be seen as an investment in the future. Implenia reinforced its market presence in the Middle East by opening a representative office in Dubai in the autumn. Despite the slowdown in construction activity in Russia in the wake of the economic downturn, the market development strategy pursued by the Russian Land Implenia joint venture proved correct. As expected, this joint venture broke even in 2008. Dividend proposal and re-elections to the Board of Directors Based on the good results achieved and the confident outlook for 2009, the Board of Directors is proposing to the General Meeting of 16 April 2009 that a dividend of CHF 0.50 be paid per share in the form of a partialre imbursement of par value. It also proposes that Jim Cohen and Ian Goldin be re-elected as members of the Board of Directors for a further term of one year.

Change of generation within Group Management

The new financial year has also brought a change of generation at the highest level of Implenia's operational management. At the end of 2008, longstanding CFO Roger Merlo retired. The new Chief Financial Officer and Head of Corporate Centre is Beat Fellmann (44), who has been in his new post since 1 October. At the end of January, Implenia's longstanding CEO Christian Bubb also retired. His successor is Werner Karlen (42), formerly CEO of Phoenix Mecano AG. He took up his new post on 1 February of this year.

Dispute with Laxey

In March 2008, Switzerland's Federal Banking Commission confirmed that Laxey had acquired its stake in Implenia by illegal means. Several civil court cases are currently pending. All the decisions taken by the relevant authorities so far have been completely in Implenia's favour. The Board of Directors and Group Management believe that the course they have chosen is the right one for shareholders and employees, and this has been confirmed by the company's results. The Board of Directors and Group Management will continue to defend the company doggedly against any hostile takeover attempt.

Confident outlook for 2009

Having started 2009 with a healthy volume of good quality orders, Implenia expects turnover for the financial year as a whole to be around the same level as in 2008. Given Implenia's strong market position and healthy level of orders, Group Management feels confident, despite the difficult overall economic situation. It has, however, prepared appropriate action plans for various possible scenarios. In the current business climate, the company's managers are giving a high priority to permanent cost optimization and maintaining high levels of liquidity.

The current economic situation means there is some uncertainty about the volume of future incoming orders. In project development, which is always a volatile business, several projects are about to be signed and sealed, though the general economic downturn may cause some delays. Both of our construction-focused divisions (Infrastructure Construction and Tunnel + Total Contracting) can, however, build on healthy order books. The high proportion of orders we have from the public sector also provides stability, and the federal government's planned economic stimulus programme will also help the market. Nevertheless, tough competition means that the Infrastructure Construction Division will continue to face price pressure. At the Tunnel + Total Contracting Division, business is stabilizing at a sustainable level.

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