2017-02-02 11:00:02 CET
2017-02-02 11:00:02 CET
REGULATED INFORMATION
Outokumpu Oyj - Financial Statement Release
Outokumpu returned to profitability in 2016: full-year underlying EBIT at EUR 45 million
Outokumpu Oyj
Annual Accounts Bulletin
February 2, 2017 at 12.00
Highlights of the fourth quarter 2016
Outokumpu’s underlying EBIT was EUR 38 million compared to EUR 32 million in
the third quarter. Business area Europe delivered a strong quarter driven by
higher base prices and continued cost reductions. The Americas’ performance was
negatively impacted by seasonality and a cost of EUR 9 million related to
supplier invoicing correction.
-- Stainless steel deliveries were 596,000 tonnes1 (608,000 tonnes)2.
-- Underlying EBITDA3 was EUR 98 million (EUR 110 million).
-- Underlying EBIT4 was EUR 38 million (EUR 32 million). Underlying EBIT
includes net adjustments of EUR 30 million in the fourth quarter (EUR 8
million), including the net effect of raw material-related inventory and
metal derivative gains/losses of EUR -0 million (EUR 6 million).
-- EBIT was EUR 69 million (EUR 40 million).
-- Operating cash flow was EUR 199 million (EUR 61 million).
-- Net debt decreased to EUR 1,242 million (EUR 1,396 million).
-- Gearing was 51.4 % (65.3%).
-- Return on capital employed (ROCE) was 2.6% (9.3%).
Highlights of 2016
Outokumpu’s profitability for the full year 2016 improved significantly with
positive underlying EBIT of EUR 45 million compared to EUR -101 million in
2015. This was driven by significant reduction in costs, as well as higher
delivery volumes particularly in the Americas. The recognition of deferred tax
income of EUR 189 million related to losses from prior years turned the
full-year net result EUR 144 million positive.
-- Stainless steel deliveries were 2,444,000 tonnes (2,381,000 tonnes).
-- Underlying EBITDA was EUR 298 million (EUR 196 million).
-- Underlying EBIT was EUR 45 million (EUR -101 million)5.
-- EBIT was EUR 103 million (EUR 228 million)5.
-- Net result was EUR 144 million (EUR 86 million).
-- Operating cash flow was EUR 389 million (EUR -34 million).
-- The Board of Directors is proposing a dividend of EUR 0.10 per share for
2016.
1 Metric ton = 1,000 kg
2 Figures in parentheses refer to the previous quarter for quarterly figures
and previous year for full-year figures, unless otherwise stated.
3 EBITDA excluding items classified as adjustments. Adjustments are material
income and expense items such as restructuring costs, impairments, and gains or
losses on sale of assets or businesses, as well as raw material related
inventory gains/losses and metal derivative gains/losses.
4 EBIT excluding items classified as adjustments.
5 The comparability between the periods is impacted by the change in estimated
useful lives of property, plant and equipment in the fourth quarter of 2015.
Group key figures
IV/16 III/16 IV/15 2016 2015
--------------------------------------------------------------------------------
Sales EUR 1,506 1,419 1,435 5,690 6,384
million
EBITDA EUR 128 119 408 355 531
million
Adjusted EBITDA 1) EUR 98 116 21 309 165
million
Underlying EBITDA 2) EUR 98 110 50 298 196
million
EBIT EUR 69 40 341 103 228
million
Adjusted EBIT 3) EUR 38 38 -40 57 -132
million
Underlying EBIT 4) EUR 38 32 -11 45 -101
million
Result before taxes EUR 43 13 352 -13 127
million
Net result for the period EUR 192 13 308 144 86
million
Earnings per share EUR 0.46 0.03 0.74 0.35 0.23
Return on capital employed % 2.6 9.3 5.3 2.6 5.3
Net cash generated from EUR 199 61 2 389 -34
operating activities million
Net debt at the end of period EUR 1,242 1,396 1,610 1,242 1,610
million
Debt-to-equity ratio at the % 51.4 65.3 69.1 51.4 69.1
end of period
Capital expenditure EUR 61 43 65 164 154
million
Stainless steel deliveries 5) 1,000 596 608 574 2,444 2,381
tonnes
Personnel at the end of 10,600 10,785 11,002 10,600 11,002
period
--------------------------------------------------------------------------------
1) Adjusted EBITDA = EBITDA – Items classified as adjustments. Net of raw
material-related inventory and metal derivative gains/losses not classified as
an adjustment.
2) Underlying EBITDA = EBITDA – Items classified as adjustments. Net of raw
material-related inventory and metal derivative gains/losses classified as an
adjustment.
3) Adjusted EBIT = EBIT – Items classified as adjustments. Net of raw
material-related inventory and metal derivative gains/losses not classified as
an adjustment.
4) Underlying EBIT = EBIT – Items classified as adjustments. Net of raw
material-related inventory and metal derivative gains/losses classified as an
adjustment.
5) Excludes ferrochrome deliveries.
Business and financial outlook for the first quarter of 2017
In line with typical seasonality, the stainless steel market is expected to be
strong in the first quarter with healthy underlying demand in both Europe and
the US. Consequently, the first-quarter delivery volumes are expected to be
higher in Europe, and significantly higher in the Americas compared to the
fourth quarter of 2016. Furthermore, the cost saving initiatives are expected
to continue according to plans and contribute positively in the first quarter.
In addition, the higher ferrochrome contract price will have a significant
positive impact on business area Europe’s profitability.
Therefore, Outokumpu’s adjusted EBITDA is expected to be over EUR 250 million
in the first quarter of 2017.
Given the achievements with debt reduction, Outokumpu updates its 2017 net debt
target and expects the net debt to be below EUR 1.1 billion at the end of 2017.
CEO Roeland Baan:
“The positive momentum and progress of 2016 culminated in a solid fourth
quarter underlying EBIT of EUR 38 million and strong operating cash flow of EUR
199 million. For the full year, we recorded an underlying EBIT of 45 million –
our first positive one in eight years.
Europe continued its strong performance. Despite flat delivery volumes, it grew
its underlying EBIT to 74 million from the third-quarter EUR 45 million. For
the full year, Europe delivered an underlying EBIT profit of EUR 191 million,
compared to EUR 85 million in 2015.
As expected, deliveries in the Americas declined in the fourth quarter due to
typical seasonality. However, the full year delivery volume growth from 533,000
to 690,000 tonnes is a testimony to the determination and hard work of the
Americas team. While we still record a loss for the full year, the 25 percent
reduction in variable costs per tonne and EUR 72 million improvement in
financial performance show that the Americas is solidly on track to
profitability.
Our relentless focus on working capital and net debt reduction also paid off.
We overachieved our target of EUR 200 million net working capital reduction by
releasing EUR 307 million in 2016. Our gearing dropped from 65.3 percent to
51.4 percent. We finished the year with a net debt of EUR 1,242 million.
Encouraged by the progress, we have updated our target, and aiming for a net
debt of below EUR 1.1 billion by the end of the year.
We have now turned the company back to profitability but we are still far from
our target of EUR 500 million EBIT in 2020. However, the progress we made in
2016 puts us firmly on the right trajectory to fulfil our vision to become the
best value creator in stainless steel by 2020 through customer orientation and
efficiency.
The turnaround secured in 2016, combined with the progress made in debt
reduction and the positive outlook that starts the year 2017, presents also the
right time to start paying dividends.”
Conference call today at 3.00 pm EET
A conference call for investors and analysts will be held on Thursday, February
2, 2017 at 3.00 pm EET (8.00 am US EST, 1.00 pm UK, 2.00 pm CET). The results
will be introduced by Outokumpu’s CEO Roeland Baan and CFO Christoph de la
Camp. To participate in the conference call, please dial in 5-10 minutes before
the beginning of the event:
UK/Europe: +44 20 3427 1911
US & Canada: +1 646 254 3388
Confirmation code: 7987500
The event can be viewed live online at
http://edge.media-server.com/m/p/g98ge53a. The stock exchange release and the
presentation material will be available before the event at
www.outokumpu.com/en/investors.
A recording of the event will be available at
www.outokumpu.com/en/investors/IR-events/webcasts as of February 2, 2017 at
around 6.00 pm EET.
For more information:
Investors: Tommi Järvenpää, tel. +358 9 421 3466, mobile +358 40 576 0288
Media: Saara Tahvanainen, tel. +358 40 589 0223
Outokumpu Group
Outokumpu is a global leader in stainless steel. We create advanced materials
that are efficient, long lasting and recyclable – thus building a world that
lasts forever. Stainless steel, invented a century ago, is an ideal material to
create lasting solutions in demanding applications from cutlery to bridges,
energy and medical equipment: it is 100% recyclable, corrosion-resistant,
maintenance-free, durable and hygienic. Outokumpu employs some 10,000
professionals in more than 30 countries, with headquarters in Helsinki, Finland
and shares listed in Nasdaq Helsinki.
www.outokumpu.com outokumpu.com/stainless-news
choosestainless.outokumpu.com
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