2016-04-27 08:00:33 CEST
2016-04-27 08:00:33 CEST
REGULATED INFORMATION
Outotec Oyj - Interim report (Q1 and Q3)
Outotec's interim report January-March 2016
OUTOTEC OYJ INTERIM REPORT APRIL
27, 2016 AT 9:00 AM
INTERIM REPORT JANUARY-MARCH 2016
Order intake declined due to challenging market and timing of capex orders
January-March 2016 in brief (comparison period January-March 2015):
* Order intake: EUR 170 (260) million, -34% (in comparable currencies -29%)
* Service order intake: EUR 102 (131) million, -22% (in comparable currencies
-14%)
* Order backlog: EUR 1,004 (1,132) million, -11%
* Sales: EUR 240 (277) million, -14% (in comparable currencies -8%)
* Service sales: EUR 114 (118) million, -4% (in comparable currencies +5%)
* EBIT: EUR -12 (4) million
* Adjusted EBIT*: EUR -5 (8) million
* Adjusted EBIT*: -2 (3)%
* Net cash flow from operating activities: EUR -34 (-35) million
* Earnings per share: EUR -0.07 (0.00)
Financial guidance for 2016 reiterated
Based on the current market outlook, customer business activity and order
backlog, management expects that in 2016:
* Sales will be approximately EUR 1.0-1.2 billion, and
* Adjusted EBIT* will be approximately 2-5%
The market weakened last year and this weakening accelerated towards the end of
the year. The wide guidance range reflects the current volatility and limited
visibility of the market.
We expect the profits to be weighted towards the second half of the year. Normal
seasonality, the expected timing of project deliveries from the order backlog
and the timing of savings from the restructuring program are expected to drive
the annual phasing of the profit.
* Excluding restructuring and acquisition-related costs as well as purchase
price allocation amortizations.
Q1 Q1 Last 12 Q1-Q4
Summary of the Group's key figures
2016 2015 months 2015
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Order intake, EUR million 170.2 259.7 1,100.5 1,189.9
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Service order intake, EUR million 101.9 131.2 467.3 496.6
--------------------------------------------------------------------------------
Share of services in order intake, % 59.9 50.5 42.5 41.7
--------------------------------------------------------------------------------
Order backlog at the end of the period, EUR 1,004.5 1,132.2 1,102.8
million 1,004.5
--------------------------------------------------------------------------------
Sales, EUR million 239.8 277.5 1,163.6 1,201.2
--------------------------------------------------------------------------------
Service sales, EUR million 114.1 118.3 507.0 511.3
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Share of services in sales, % 47.6 42.6 43.6 42.6
--------------------------------------------------------------------------------
Gross margin, % 24.3 28.4 27.0 27.9
--------------------------------------------------------------------------------
Adjusted EBIT(1), EUR million -4.8 7.7 43.5 56.0
--------------------------------------------------------------------------------
Adjusted EBIT(1), % -2.0 2.8 3.7 4.7
--------------------------------------------------------------------------------
EBIT, EUR million -12.3 3.6 -28.2 -12.3
--------------------------------------------------------------------------------
EBIT, % -5.1 1.3 -2.4 -1.0
--------------------------------------------------------------------------------
Profit before taxes, EUR million -14.6 1.0 -38.4 -22.9
--------------------------------------------------------------------------------
Net cash from operating activities, EUR -33.6 -35.3 69.5
million 71.2
--------------------------------------------------------------------------------
Net interest-bearing debt at the end of the -69.5(2) 51.2 39.9
period, EUR million -69.5(2)
--------------------------------------------------------------------------------
Equity at the end of the period 538.4 448.0 538.4 404.7
--------------------------------------------------------------------------------
Equity-to-assets ratio at the end of the 34.0 40.6(2) 31.1
period, % 40.6(2)
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Gearing at the end of the period, % -12.9(2) 11.4 -12.9(2) 9.9
--------------------------------------------------------------------------------
Working capital at the end of the period, EUR -58.3 -2.0 -89.4
million -58.3
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Return on investment, %, LTM -2.4 0.2 -2.4 -1.5
--------------------------------------------------------------------------------
Return on equity, %, LTM -5.9 -0.8 -5.9 -4.0
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Personnel at the end of the period 4,552 4,966 4,552 4,859
--------------------------------------------------------------------------------
Earnings per share, EUR -0.07 0.00 -0.17 -0.10
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(1 )Excluding restructuring and acquisition-related costs and PPA amortizations.
(2) If the hybrid bond would be treated as liabilities: equity-to-assets ratio
would be 29.3%, gearing 20.7%, and net interest-bearing debt EUR 80.5 million.
President and CEO Pertti Korhonen:
"The market environment continued to be very challenging in the mining and
metals industry during the first quarter of 2016. Most commodity prices have
returned to pre-super-cycle levels. This, combined with uncertainty in China's
growth outlook and shrinking profitability of the industry, has caused producers
to cut production, postpone investments, and seek all possible measures to
maximize cash flow and reduce costs. As a result, both investment goods and
service markets have weakened.
The order intake, regarding plant, equipment and services, declined. The orders
for spare and wear parts increased compared to the fourth quarter of 2015.
However, the overall service order intake declined as the producers continued to
postpone their upgrade and modernization activities. The timing of large orders,
especially in the Metals, Energy, & Water segment, impacted capex order intake.
The sales contracted due to the timing of plant and equipment orders in 2015 and
customer induced slowdown in project deliveries, as well as lower demand for
upgrade and modernization services. The spare parts sales grew slightly.
The adjusted EBIT was negative. We were able to reduce our fixed costs in the
first quarter in line with our plans, however this was not enough to mitigate
the impact of the lower sales and particularly lower provision releases. The
profit before taxes was negative due to restructuring costs and risk provisions
related to an old litigation case.
During the reporting period, Outotec has issued a EUR 150 million hybrid bond.
The hybrid bond strengthens Outotec's capital structure and it is for the
refinancing of existing debt and for Outotec's general corporate purposes. In
addition, improving free cash flow and ensuring a solid balance sheet continue
to be key priorities for us.
The market outlook in the mining and metals industry is difficult to predict. We
expect the plant and equipment market to contract in 2016 and the service demand
to be weaker due to postponements of maintenance and modernization activities
and the general operating cost savings of producers. In response to the soft
outlook of the mining and metals markets, we will continue actions to adjust our
fixed costs to counter the lower sales. We see opportunities in the
environmental, waste to energy and water treatment solutions, and spare and wear
parts businesses."
This text is a summary of Outotec's January-March 2016 Interim Report. The full
report is available as an attachment to this report.
FURTHER INFORMATION
Outotec Oyj
Pertti Korhonen, President and CEO
tel. +358 20 529 211
Jari Ålgars, CFO
tel. +358 20 529 2007
Rita Uotila, Vice President - Investor Relations
tel. +358 20 529 2003, mobile +358 400 954 141
Format for e-mail addresses: firstname.lastname@outotec.com
BRIEFING/TELECONFERENCE
Date: Wednesday, April 27, 2016
Time: 2:00 PM
Venue: Outotec House, Rauhalanpuisto 9, Espoo, Finland
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FINANCIAL REPORTING SCHEDULE IN 2016
* January-June Interim Report will be published on July 27, 2016
* January-September Interim Report will be published on October 28, 2016
Outotec's Capital Makets Day will be held on June 7, 2016 at Outotec House,
Espoo, Finland.
DISTRIBUTION
Nasdaq Helsinki
Main media
www.outotec.com
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, we have developed many breakthrough technologies over the
decades for our customers in the metals and mining industry. We also provide
innovative solutions for the treatment of industrial water, the utilization of
alternative energy sources and the chemical industry. Outotec shares are listed
on Nasdaq Helsinki.
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