2015-02-06 08:00:00 CET
2015-02-06 08:01:36 CET
REGULATED INFORMATION
Outotec Oyj - Financial Statement Release
Outotec's Financial Statements Review January-December 2014
OUTOTEC OYJ FINANCIAL STATEMENTS REVIEW FEBRUARY 6, 2015 AT 9.00 AM
FINANCIAL STATEMENTS REVIEW JANUARY-DECEMBER 2014
Challenging Capex market, growth in service sales
January-December 2014 in brief (2013 comparison period):
* Order intake(1)): EUR 1,177.9 (1,512.4) million, -22%, in comparable
currencies -18%
* Service order intake(1)): EUR 555.0 (552.5) million, 0%, in comparable
currencies 7%
* Order backlog: EUR 1,138.0 (1,371.7) million, -17%
* Sales: EUR 1,402.6 (1,911.5) million, -27%, in comparable currencies -23%
* Service sales: EUR 519.0 (505.9) million, 3%, in comparable currencies 9%
* Operating profit from business operations(2)): EUR 56.0 (162.9) million,
-66%
* Earnings per share: EUR 0.00 (0.51)
* Dividend proposal EUR 0.10
October-December 2014 in brief (2013 comparison period)
* Order intake(1)): EUR 322.4 (426.1) million, -24%, in comparable currencies
-24%
* Service order intake(1)): EUR 159.1 (165.4) million, -4%, in comparable
currencies -4%
* Sales: EUR 403.2 (457.2) million, -12%, in comparable currencies -11%
* Service sales: EUR 166.1 (150.7) million, 10%, in comparable currencies 13%
* Operating profit from business operations(2)): EUR 25.5 (40.5) million, -37%
* Earnings per share: EUR 0.00 (0.07)
(1)) The change of service order intake reporting principles as of January
1, 2014 increased the total order intake in 2014 by approximately EUR 42.3
million (Q4 2014: approximately EUR 3.9 million). With comparable currencies the
increase for 2014 was EUR 47.9 million.
(2)) Excluding one-time items and purchase price allocations (PPA) amortizations
Financial guidance for 2015
Based on the 2014 year-end backlog and current operating environment, the
management estimates that in 2015:
* Sales will be approximately EUR 1.2-1.4 billion, and
* EBITA (excluding one-time items) will be approximately 5-7%.
Summary of key figures Q4 Q4 Q1-Q4 Q1-Q4
2014 2013 2014 2013
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Order intake, EUR million 322.4 426.1 1,177.9 1,521.4
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Service order intake, EUR million 159.1 165.4 555.0 552.5
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Share of service in order intake, % 49.4 38.8 47.1 36.3
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Order backlog at the end of period, EUR
million 1,138.0 1,371.7 1,138.0 1,371.7
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Sales, EUR million 403.2 457.2 1,402.6 1,911.5
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Service sales, EUR million 166.1 150.7 519.0 505.9
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Share of service in sales, % 41.2 33.0 37.0 26.5
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Gross margin, % 21.7 20.5 21.0 20.7
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Operating profit from business operations,
EUR million 25.5 40.5 56.0 162.9
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Operating profit from business operations, % 6.3 8.9 4.0 8.5
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Operating profit, EUR million 2.3 25.4 10.4 141.9
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Operating profit, % 0.6 5.6 0.7 7.4
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Profit before taxes, EUR million -1.1 21.4 0.2 132.2
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Net cash from operating activities, EUR
million 37.9 -2.5 19.9 -42.1
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Net interest-bearing debt at the end of
period, EUR million -5.8 -87.1 -5.8 -87.1
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Gearing at the end of period, % -1.3 -18.2 -1.3 -18.2
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Working capital at the end of period, EUR
million -28.2 -14.0 -28.2 -14.0
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Return on investment, %, LTM 1.7 25.7 1.7 25.7
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Return on equity, %, LTM 0.0 19.4 0.0 19.4
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Personnel, average for the period 4,776 4,921 4,845 4,927
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Earnings per share, EUR 0.00 0.07 0.00 0.51
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Dividend per share, EUR - - 0.10(1)) 0.20
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(1)) Board of Directors' proposal for the AGM
President and CEO Pertti Korhonen:"Continued uncertainties in the global economy, geopolitical conflicts, China's
lower growth projections and sharp decline in metal and energy prices pressed
the markets in 2014. Mining and metals companies focused on maximizing their
free cash flow by minimizing investments and operating costs. We estimate that
our addressable Capex market reduced by some 30% in 2014. The modest investments
were focused on brownfield projects, and greenfield investments were rare. As
there were few large investment projects, the equipment sales to EPCM
contractors was very low, resulting to reduced level of our unannounced orders.
The market for services leveled off as customers sought to cut their operating
costs. The demand for various environmental and water treatment solutions
remained solid, but due to the collapse of fossil energy prices the market for
sustainable energy solutions was very weak.
Despite the tough market environment, we were able to close several
modernization deals in the fourth quarter. Our full year order intake declined
some 20% as a result of the very weak Capex market. There were no order
cancellations, and the margins in new orders were healthy. Our sales contracted
from 2013 due to a low opening order backlog for 2014 and a weak order intake in
the plant and equipment businesses. I am pleased that in the challenging market
environment our service sales increased 9% from 2013 in comparable currencies
and represented 37% of sales.
Our profitability in 2014 was weak due to lower sales and execution issues in
some large customer projects. The profitability improved sequentially in the
third and fourth quarters due to increased share of services in sales, project
completions and improved execution, and reduced fixed operating costs. The
Minerals Processing business area continued to deliver good profitability from
business operations despite lower sales. The Metals, Energy & Water business
area returned to profitability during the second half of the year due to
improved project execution and growth of the service business. As a result of
cost saving actions, our fixed operating costs were reduced by EUR 65 million
from the comparison period. In addition, our cash flow improved significantly,
supported by the stabilizing working capital. Our balance sheet remained solid.
All in all, I am pleased about our organization's capability to counteract the
contraction of sales stemming from the extremely difficult market. As a result
of all actions taken, we were able to deliver 4% profit from business operations
and slightly positive net profit despite 27% lower sales and significant one
time restructuring costs.
The market outlook for 2015 is highly uncertain due to volatile metal prices,
continued global macroeconomic uncertainty and geopolitical instability.
Investments in the mining and metals sector are estimated to be somewhat lower
than in 2014. Outotec's market is, however, heterogenous and there is demand for
sustainable solutions in specific markets and segments. Our sales funnel is
solid with good prospects in several geographies and we expect that investments
in base metals, sulfuric acid, and alumina will gradually start to revitalize to
compensate for reducing capacity. We expect that investments in the iron ore
value chain will continue on a low level. We see good demand for environmental
solutions including industrial water treatment due to continuously tightening
regulation. The short-term outlook for alternative and waste-to-energy solutions
is weak due to low fossil energy prices and uncertainties in subsidy regulation.
The timing of new orders continues to be the biggest source of uncertainty in
our order intake, especially if the metals prices continue on a deflationary
trend.
Despite the challenging market outlook, our number one goal in 2015 is to
improve profitability. The planned cost savings under the ongoing EUR 45 million
program aim at counterbalancing inflation and lower sales, as well as improving
profitability. Furthermore, in order to reduce our exposure to mining and metals
Capex market volatility, we will continue to grow our service business in line
with our long-term targets, and continue to further strengthen our business
portfolio through acquisitions."
CHANGE IN REPORTING OF SERVICE CONTRACTS FROM JANUARY 1, 2014
In order to improve the transparency of Outotec's service business, the long-
term service contracts, which have a 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. According to old principles, the current calendar
year's portion of the long-term service contract was booked once per year into
the order intake. The change of service order intake reporting principles as of
January 1, 2014 increased the total order intake in 2014 by approximately EUR
42.3 million (Q4 2014: approximately EUR 3.9 million). With comparable
currencies the increase for 2014 was EUR 47.9 million. Excluding the reporting
principle change and calculating with comparable rates, the full year service
order intake declined by 1%.
This text is a summary of Outotec's January-December 2014 Financial Statements.
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
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: Friday, February 6, 2015
Time: 2.00 p.m. (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 9 817 10495
SE: +46 8 566 42702
UK: +44 203 194 0552
US: +1 855 716 1597
Contact information is gathered for registration purposes only and is not used
for commercial purposes.
FINANCIAL REPORTING SCHEDULE IN 2015
* Annual General Meeting 2015 will be held on March 30, 2015
* January-March 2015 Interim Report will be published on April 27, 2015
* January-June 2015 Interim Report will be published on July 30, 2015
* January-September 2015 Interim Report will be published on October 29, 2015
The Financial Statements for 2014 will be published in week 9 at the latest.
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 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 some 4,600 experts, Outotec
generated annual sales of approximately EUR 1.4 billion in 2014. Outotec shares
are listed on Nasdaq Helsinki.
[HUG#1892395]
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