2012-04-27 08:00:02 CEST
2012-04-27 08:00:08 CEST
REGULATED INFORMATION
Outokumpu Oyj - Interim report (Q1 and Q3)
Outokumpu’s first quarter 2012 – Improved demand and profitability
INTERIM REPORT
27 April 2012 at 9.00 am EET
First-quarter 2012 highlights
- Underlying operational result improved to some EUR 2 million (IV/2011: EUR
-34 million)
- Operating profit was EUR 3 million (IV/2011: EUR -71 million) including raw
material-related inventory gains of some EUR 14 million (IV/2011: EUR -24
million) and net non-recurring items of EUR -13 million (IV/2011: EUR -13
million)
- Strong operating cash flow of EUR 116 million (IV/2011: EUR 132 million)
- Total external deliveries at 418 000 tonnes (IV/2011: 334 000 tonnes)
- Acquisition of Inoxum, ThyssenKrupp's stainless business, announced
- EUR 1 billion rights offering successfully implemented
- Plans for new Outokumpu Leadership Team
- Plans for further personnel reductions in General Stainless
Group key figures
I/12 IV/11 I/11 2011
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Sales EUR million 1 304 1 125 1 371 5 009
EBITDA EUR million 60 -13 93 80
Adjusted EBITDA 1) EUR million 59 24 48 169
Operating result EUR million 3 -71 33 -260
- excluding non-recurring
items EUR million 15 -58 33 -109
- underlying operational
result 2) EUR million 2 -34 -12 -66
Result before taxes EUR million 6 -134 17 -253
- excluding non-recurring
items EUR million 19 -108 17 -318
Net result for the period EUR million 12 -118 16 -186
- excluding non-recurring
items EUR million 24 -92 16 -244
Earnings per share EUR 0.06 -0.62 0.09 -0.99
- excluding non-recurring
items EUR 0.13 -0.48 0.09 -1.31
Return on capital employed % 0.3 -7.4 3.1 -6.5
- excluding non-recurring
items % 1.6 -6.1 3.1 -2.7
Net cash generated from
operating activities EUR million 116 132 -10 338
Capital expenditure EUR million 79 95 42 255
Net interest-bearing debt
at the end of period EUR million 1 495 1 720 1 873 1 720
Debt-to-equity ratio at
the end of period 3) % 78.4 82.5 80.4 82.5
External deliveries 1 000 tonnes 418 334 395 1 449
Stainless steel external deliveries 1 000 tonnes 399 323 380 1 391
Stainless steel
base price 4) EUR/tonne 1 185 1 137 1 215 1 181
Personnel at the
end of period 7 968 8 253 8 452 8 253
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1) EBITDA excluding raw-material related inventory gains/losses
and non-recurring items, unaudited.
2) Operating result excluding raw material-related inventory gains/losses
and non-recurring items, unaudited.
3) 31 March 2012 adjusted to exclude the effect of the rights issue.
4) Stainless steel: CRU - German base price (2 mm cold rolled 304 sheet).
Raw-material related inventory gains or losses
The realised timing gain or loss per tonne of stainless steel is estimated
based on the difference between the purchase price and invoice price of each
metal in EUR per tonne times the average metal content in stainless steel. The
unrealised timing impact consists of the change in net realisable value ─ NRV
during each quarter. If there is a significant negative change in metal prices
during the quarter, inventories are written down to NRV at the end of the
period to reflect lower expected transaction prices for stainless steel in the
future. As this timing impact is expected to be realised in the cash flow of
Outokumpu only after the raw material has been sold, it is referred to as being
unrealised at the time of the booking.
Outokumpu's underlying operational result in the first quarter improved from
the fourth quarter and was EUR 2 million. The improvement in profitability was
primarily a result of higher delivery volumes but a somewhat weaker mix had an
adverse effect. Outokumpu's operating profit in the first quarter totalled EUR
3 million and includes some EUR 14 million of raw material-related inventory
gains as a result of higher metal prices and EUR 13 million of non-recurring
costs. The non-recurring costs in the first quarter relate to the Inoxum
transaction. Excluding non-recurring items, operating profit totalled EUR 15
million. Net cash from operating activities in the first quarter remained
strong and totalled EUR 116 million. The main contributor to the good cash flow
was further reductions in levels of working capital. EUR 87 million was
released from working capital in the first quarter. Outokumpu's gearing at the
end of the first quarter decreased to 78.4%, slightly above Outokumpu's maximum
target level of 75%. Net interest-bearing debt declined by EUR 225 million to
EUR 1 495 million at the end of the quarter.
SHORT-TERM OUTLOOK
Improved demand for standard grades of stainless steel in the first quarter was
supported by restocking among distributors. In the beginning of the second
quarter, underlying demand has remained relatively stable. Restocking appears
to have slowed as the nickel price declined and distributor inventories are
estimated to be at normal levels.
As a result of the recent decline in the nickel price and a weaker product and
geographic mix in the second quarter, Outokumpu's average base prices for
stainless steel in the second quarter are expected to be flat or slightly lower
than in the first quarter. Based on the current level of order intake,
Outokumpu's external delivery volumes (stainless and ferrochrome) in the second
quarter of 2012 are expected to be approximately at the same level as in the
first quarter.
Despite the higher quarterly contract price for ferrochrome in the second
quarter, the profitability of the Group's ferrochrome operations is expected to
weaken temporarily in the second quarter due to planned shut-downs at the
concentration plant in Kemi connected with the Group's ongoing ferrochrome
investment project.
Outokumpu's underlying operational result*) in the second quarter is expected
to be at breakeven or slightly negative. At current metal prices, marginal raw
material-related inventory losses are expected as a result of the decline in
the nickel price. Outokumpu's operating result in the second quarter could be
impacted by non-recurring items associated with the Inoxum acquisition and the
Group's ongoing cost-cutting and turnaround programmes.
*) Underlying operational result=operating result excluding raw
material-related inventory gains/losses and non-recurring items.
CEO Mika Seitovirta:
“We made significant progress in many important strategic areas in the first
quarter. Implementation of our short-term turnaround programmes to improve
profitability and cash flow continued. While profitability still remains
unsatisfactory, the breakeven result confirms that the Group is moving in the
right direction. I'm very pleased with our strong cash flow during the quarter.
The Inoxum acquisition is of enormous strategic importance as it positions
Outokumpu as a new global leader in stainless steel with a balanced production
structure and a broad product offering and customer base. The success of our
EUR 1 billion rights issue shows that Outokumpu shareholders share our view of
the significant potential offered by this acquisition. To protect the Group's
profitability and cash flow, implementation of the planned cost saving
programmes will continue in the second quarter. I am confident that we are in a
good strategic position to drive our business forward with solid results.”
The attachments present the Management analysis for the first quarter 2012
operating result and the Interim Review by the Board of Directors for
January-March 2012, the accounts and notes to the interim accounts. The report
is unaudited.
For further information, please contact:
Ingela Ulfves, Investor Relations
tel. +358 9 421 2438, mobile +358 40 515 1531
ingela.ulfves@outokumpu.com
Kari Tuutti, Communications, IR and Marketing
tel. +358 9 421 2432, mobile +358 40 717 0830
kari.tuutti@outokumpu.com
News conference and live webcast today at 1.00 pm EET
A combined news conference, conference call and live webcast concerning the
first-quarter 2012 financial results will be held on 27 April 2012 at 1.00 pm
EET (6.00 am US EST, 11.00 am UK time, 12.00 pm CET) at Restaurant Bank,
meeting rooms 12-14, address Unioninkatu 20, 00130 Helsinki, Finland.
To participate via a conference call, please dial in 5-10 minutes before the
beginning of the event:
UK +44 203 043 2436
USA & Canada +1 866 458 4087
Sweden +46 8 505 598 53
Password Outokumpu
The news conference can be viewed live via Internet. Please find a direct link
to the webcast at the end of this release. The stock exchange release and
presentation material will be available before the news conference at
www.outokumpu.com/Investors.
An on-demand webcast of the news conference will be available at
http://www.outokumpu.com/en/Investors/Pages/Webcasts.aspx as of 27 April 2012
at around 3.00 pm EET.
Link to the webcast
OUTOKUMPU OYJ
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