Outotec: January-March 2013 Interim Report

outotecINTERIM REPORT JANUARY-MARCH 2013

Continued growth in order intake and sales

January-March 2013 in brief (2012 corresponding period):

  • Order intake: EUR 491.1 (425.4) million, +15%
  • Order backlog: EUR 1,938.9 (1,991.8) million, -3%
  • Sales: EUR 502.9 (410.4) million, +23%
  • Services sales: EUR 103.8 (89.5) million, +16%
  • Operating profit from business operations1): EUR 35.0 (30.6) million, +14%

Financial guidance for 2013 reiterated

Based on the strong order backlog, current market outlook and customer tendering activity, the management expects that in 2013:

  • Sales will be approximately EUR 2.1-2.3 billion, and
  • Operating profit margin from business operations1) will be approximately 9.5-10.5%

1) Excluding one-time items and purchase price allocations (PPA) amortizations

Summary of key figures Q1

2013

 Q1

2012

 Last 12 months Q1-Q4 2012
Sales, EUR million 502.9 410.4 2,179.9 2,087.4
Gross margin, % 19.1 21.4 20.3 20.8
Operating profit from business operations, EUR million 35.0 30.6 198.1 193.8
Operating profit from business operations, % 7.0 7.5 9.1 9.3
Operating profit, EUR million 31.7 27.6 188.4 184.3
Operating profit, % 6.3 6.7 8.6 8.8
Profit before taxes, EUR million 29.9 27.7 181.9 179.7
Net cash from operating activities, EUR million -33.6 9.9 33.6 77.1
Net interest-bearing debt at the end of the period, EUR million -218.4 -334.2 -218.4 -264.7
Gearing at the end of period, % -49.4 -89.1 -49.4 -56.0
Working capital at the end of the period, EUR million -148.7 -257.0 -148.7 -191.3
Return on investment, % 19.9 25.3 35.0 37.0
Return on equity, % 18.6 20.1 31.7 29.4
Order backlog at the end of the period, EUR million 1,938.9 1,991.8 1,938.9 1,947.1
Order intake, EUR million 491.1 425.4 2,150.2 2,084.4
Personnel, average for the period 4,825 4,020 4,657 4,456
Earnings per share, EUR 0.12 0.11 0.72 0.70

President and CEO Pertti Korhonen:

“The overall market activity and the demand for Outotec’s technologies and services continued solid during the first quarter. Thanks to our competitive offering, global market reach and solid project execution, we succeeded in growing both our order intake and sales from the comparison period. The total value of unannounced orders, which generally are less than EUR 10 million, was at all time high and services sales grew in line with our strategy. Operating profit increased from the comparison period, the slightly lower operating profit percentage is mainly attributable to normal quarterly profit recognition fluctuations of project business. Our strong order backlog gave us a good start to the year.

Highlights in the first quarter included the long term operation and maintenance contract with Russian Copper Company’s Mikheevsky concentrator, the order for a renewable energy solution for a bio-ethanol facility in the USA, the contract for the delivery of iron ore pelletizing technology in China and the acquisition of Scanalyse, a software technology company providing process equipment condition and performance monitoring services.

After the recovery since mid 2012, uncertainties regarding global macro economy have increased again during recent weeks. This with the recent years’ cost overruns in large greenfield mining projects is driving the mining and metal companies to reduce their investment risks and to focus on increasing capacity and efficiency of their existing operations. As a result, investments are currently shifting from large greenfield projects to brownfield modernization and capacity enhancements. These trends are likely to slow down the CAPEX market and large greenfield projects in short term – but at the same time – customers’ changed purchasing criteria create new opportunities for Outotec.

Outotec’s business outlook for 2013 is solid, despite the macroeconomic uncertainties and the changes in the market dynamics. We have a large and active sales funnel, including also a healthy number of large prospects. Our research centers continue to operate at full capacity making tests, feasibility studies and process development for our customers’ new investments. Predictability of investment costs and time schedules together with performance guarantees are becoming increasingly important for our customers – resonating well with Outotec’s value proposition. In addition, we believe that environmental investments will further increase as governments are paying more and more attention to the necessity of sustainable development, also in developing markets.

AMENDMENT IN REPORTING STANDARD AND FREE SHARE ISSUE (SPLIT)

From January 1, 2013, Outotec adopted the amendments to IAS 19 (revised) Employee benefits. The most significant changes relate to the accounting for defined benefit obligations and plan assets. The amendments require the recognition of changes in benefit obligations and in fair value of plan assets when they occur. The restated comparison period’s figures are presented in this Interim Report’s notes section.

The shares issued in the free share issue (split) approved by Outotec’s AGM on March 26, 2013, were entered in the share register on April 2, 2013. The total amount of Outotec’s shares increased to 183,121,492 as shareholders were issued with three new shares for each old share. The new shares became subject to public trading as of April 3, 2013. Share based key figures have been restated to reflect the increased number of shares.

CHANGES IN DISCLOSURE PROCEDURE

Outotec Oyj is adopting a new disclosure procedure in accordance with the Standard 5.2b of the Finnish Financial Supervision Authority (valid from January 1, 2011). This is a summary of Outotec’s January-March 2013 Interim Report and the complete report with tables is available as a pdf file attachment to this stock exchange release. > The complete report as pdf

 

FINANCIAL REPORTING SCHEDULE IN 2013

  • Interim Report for January-June 2013: July 31
  • Interim Report for January-September 2013: October 30 (according to the new segment reporting structure published on April 9, 2013)

 

Outotec provides leading technologies and services for the sustainable use of Earth’s natural resources. As the global leader in minerals and metals processing technology, Outotec has developed over decades many breakthrough technologies. The company also provides innovative solutions for industrial water treatment, the utilization of alternative energy sources and the chemical industry. With a global network of sales and service centers, research facilities and approximately 5,000 experts, Outotec generated annual sales of approximately EUR 2 billion in 2012. Outotec shares are listed on NASDAQ OMX Helsinki. www.outotec.com

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