Outotec Oyj - Interim report (Q1 and Q3)

Outotec's Interim Report January-March 2014

OUTOTEC OYJ                         INTERIM REPORT                    APRIL
29, 2014 AT 9.00 AM

INTERIM REPORT JANUARY-MARCH 2014

Weak Capex order intake and sales, good progress in services

January-March 2014 (comparison period in 2013):

  * Order intake: EUR 210.3 (491.1) million, -57% (in comparable currencies
    -51%)
  * Order backlog: EUR 1,215.8 (1,938.9) million, -37%
  * Sales: EUR 343.9 (502.9) million, -32% (in comparable currencies -26%)
  * Service sales: EUR 107.5 (103.8) million, +4% (in comparable currencies
    +16%)
  * Operating profit from business operations(1)): EUR 12.4 (35.0) million, -65%
Financial guidance for 2014 reiterated

Based on the year-end order backlog, current market outlook, customer tendering
activity, and volatility in exchange rates, the management expects that in 2014:

  * Sales will be approximately EUR 1.5-1.8 billion, and
  * Operating profit from business operations(1)) will be approximately 5-8%.

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

Summary of key figures                                Q1      Q1 Last 12   Q1-Q4

                                                    2014    2013  months    2013
--------------------------------------------------------------------------------
Sales, EUR million                                 343.9   502.9 1,752.5 1,911.5
--------------------------------------------------------------------------------
Gross margin, %                                     19.5    19.1    20.9    20.7
--------------------------------------------------------------------------------
Operating profit from business operations, EUR                             162.9
million                                             12.4    35.0   140.3
--------------------------------------------------------------------------------
Operating profit from business operations, %         3.6     7.0     8.0     8.5
--------------------------------------------------------------------------------
Operating profit, EUR million                        8.7    31.7   119.0   141.9
--------------------------------------------------------------------------------
Operating profit margin, %                           2.5     6.3     6.8     7.4
--------------------------------------------------------------------------------
Profit before taxes, EUR million                     6.4    29.9   108.7   132.2
--------------------------------------------------------------------------------
Net cash from operating activities, EUR million      4.7   -33.6    -3.8   -42.1
--------------------------------------------------------------------------------
Net interest-bearing debt at the end of period,                            -87.1
EUR million                                        -82.7  -218.4   -82.7
--------------------------------------------------------------------------------
Gearing at the end of period, %                    -18.7   -49.4   -18.7   -18.2
--------------------------------------------------------------------------------
Working capital at the end of period, EUR                                  -14.0
million                                            -24.6  -148.7   -24.6
--------------------------------------------------------------------------------
Return on investment, %, LTM                        21.6    35.0    21.6    25.7
--------------------------------------------------------------------------------
Return on equity, %, LTM                            17.0    31.7    17.0    19.4
--------------------------------------------------------------------------------
Order backlog at the end of period, EUR million  1,215.8 1,938.9 1,215.8 1,371.7
--------------------------------------------------------------------------------
Order intake, EUR million                          210.3   491.1 1,231.6 1,512.4
--------------------------------------------------------------------------------
Personnel, average for the period                  4,830   4,825   4,929   4,927
--------------------------------------------------------------------------------
Earnings per share, EUR                             0.03    0.12    0.42    0.51
--------------------------------------------------------------------------------


President and CEO Pertti Korhonen:

 "Weak investment sentiment in the mining and metals industry continued during
the start of the year, resulting in low order intake. Customers continued to
focus on brownfield capacity upgrades and modernizations rather than large
greenfield projects where typically Engineering, Procurement, and Construction
Management (EPCM) companies are employed as the main contractors. Our low level
of unannounced orders in the first quarter was largely due to subdued equipment
demand of the EPCM channel. As a process technology company, Outotec is
addressing this shift in the market dynamics by offering the mining and metals
companies solutions that enable them to better leverage their existing assets.
The customer traction for this approach is good and we have a strong funnel of
larger solution sales cases. However, decision-making takes time, and we
continue to see large volatility in the quarterly Capex order intake.

The market for services continued solid, driven by reasonably good production
levels in the industry. I am delighted that we were able to grow the service
business with our new service concepts, further penetration into our installed
base and expanded geographical coverage. Our service order intake was flat in
the first quarter, with comparable currencies the growth was 15%. Service sales
grew by 4% and with comparable currencies the growth was 16%. Service margins
continued to be solid.

The main reasons for the reduced sales in the first quarter of 2014 were the
weak Capex order intake in 2013, and devaluation of emerging market currencies.
Profitability was weak due to reduced sales and high fixed costs in relation to
sales. In addition, three large projects of the Metals, Energy & Water business
area had weaker than planned profitability.

Weakened economy in emerging markets, further amplified by significant
devaluation of currencies, political instability in some key markets, and
concerns about the sustainability of China's growth, are dragging the market
down despite some recovery in US and European economies. We maintain our view
that the mining and metals industries' capital expenditure will continue to
contract in 2014, however, we are seeing some early signs that the market may
have reached the bottom. Although we have a good number of promising larger
sales cases, we have been preparing ourselves for continued market slowness. The
EUR 50 million efficiency improvement program is progressing according to plan
and as part of that plan, we have also triggered temporary lay-offs as a
response to the weak order intake in the beginning of the year. We are prepared
to take further actions to adjust our costs in line with possibly continuing
weak order intake and subsequent lower sales. In a cyclical industry we need to
balance our actions to be well positioned for the eventual upward turn of the
cycle."

CHANGE IN REPORTING OF SERVICE CONTRACTS FROM JANUARY 1, 2014

Outotec's long-term service contracts, which have production based volume
dependent variable portion, are recognized in the order intake with the
estimated sales value of the next 12 months. The fixed value contracts are
recognized as full value when the order becomes effective. Following the
previous recognition principles, the current calendar year's portion of the
long-term service contract was booked once per year into order intake. The
change in the reporting principles did not have any material impact in the 2014
first quarter order intake compared to the comparison period.



This text is a summary of Outotec's January-March 2014 Interim Report. The full
report is available as an attachment.

FURTHER INFORMATION

Outotec Oyj

Pertti Korhonen, President and CEO
tel. +358 20 529 211

Mikko Puolakka, CFO
tel. +358 20 529 2002

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

Date: Tuesday, April 29, 2014

Time: 2.00 pm (Finnish time)

Venue: Bank, Unioninkatu 20, Helsinki

Joining via webcast

You may follow the briefing via a live webcast at www.outotec.com. The webcast
will be recorded and published on Outotec's website for on-demand viewing.

Joining via teleconference

You may also join the briefing by telephone. To register as a participant in the
teleconference and Q&A session, please dial 5 to 10 minutes before the start of
the event:

FI: +358 9 8171 0467
SE: +46 8 5199 9370
UK: +44 20 7660 2078
US: +1 855 2692 606 (only US)

Contact information is gathered for registration purposes only and is not used
for commercial purposes.

FINANCIAL REPORTING SCHEDULE IN 2014

  * Interim Report for January-June: July 31, 2014
  * Interim Report for January-September: October 30, 2014
  * Capital Markets Day, Outotec headquarters Espoo, Finland: December 4, 2014

DISTRIBUTION

NASDAQ OMX Helsinki Ltd
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 metals and mining industry. We also provide
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 over 4,800 experts, Outotec
generated annual sales of approximately EUR 1.9 billion in 2013. Outotec shares
are listed on NASDAQ OMX Helsinki.


[HUG#1780805]

Attachments:

Outotec s Interim Report January-March 2014.pdf