2013-02-07 08:00:00 CET
2013-02-07 08:02:48 CET
REGULATED INFORMATION
Outotec Oyj - Financial Statement Release
Outotec's Financial Statements Review 2012
OUTOTEC OYJ FINANCIAL STATEMENTS REVIEW FEBRUARY 7, 2013 AT 9.00
AM
FINANCIAL STATEMENTS REVIEW JANUARY-DECEMBER 2012
Strong profitable growth, sales exceeded EUR 2 billion, profit up by 60%
Board of Directors dividend proposal: EUR 1.20 per share
Reporting period January-December 2012 in brief (2011)
* Order intake: EUR 2,084.4 million (EUR 2,005.4 million), +4%
* Sales: EUR 2,087.4 million (EUR 1,385.6 million), +51%
* Operating profit from business operations*): EUR 193.8 million, 9.3% of
sales (EUR 121.5 million, 8.8%), +60%
* Earnings per share: EUR 2.82 (EUR 1.75), +61%
October-December 2012 in brief (2011)
* Order intake: EUR 471.2 million (EUR 327.0 million), +44%
* Sales: EUR 649.8 million (EUR 496.8 million), +31%
* Operating profit from business operations*): EUR 74.0 million, 11.4% of
sales (EUR 54.9 million, 11.0%), +35%
Revised financial guidance for 2013 (earlier guidance in parenthesis)
Based on the strong order backlog, current market outlook and the customer
tendering activity, the management expects that in 2013:
* Sales will be approximately EUR 2.1-2.3 billion (grow from 2012), and
* Operating profit margin from business operations*) will be approximately
9.5-10.5% (further improve from 2012)
*) excluding one-time items and purchase price allocations (PPA) amortizations
President and CEO Pertti Korhonen:"The year 2012 was very successful for Outotec and an important milestone in our
strategy implementation. For the first time, our sales exceeded two billioneuros. We also managed to improve our profitability in line with our long term
targets.
Despite the sluggish world economy, the demand for our technologies and services
continued solid throughout the year and our sales grew faster than the market.
Our customers' investment decisions are increasingly driven by environmental and
energy efficiency factors, which boosted the demand for our advanced
technologies. Environmental Goods and Services accounted for approximately 89%
of our 2012 order intake (by OECD criteria), consisting of sustainable solutions
for minerals and metals processing and environmental solutions including gas
cleaning, sulfuric acid, alternative and renewable energy.
The growth in our minerals and metals processing solutions continued strong with
new breakthroughs. The most significant and the largest single order in
Outotec's history was the turn-key ilmenite smelter delivery to Cristal Global
in Saudi Arabia. Our non-ferrous solutions business progressed strongly on all
fronts. In the environmental solutions business, we made very good progress
especially in waste-to-energy and industrial water treatment business and
received several orders. We successfully continued to grow our services business
both organically and through acquisitions, and we expanded our life cycle
services offering. I am especially delighted with the long term operation and
maintenance contract with the Russian Copper Company's Mikheevsky concentrator
(published in January 2013), and I strongly believe that this type of service
solutions leveraging our unique competence in process technology offers
considerable growth opportunities for us in the future.
We launched our current operational model and strategy in 2010 as a platform for
sustainable growth. These initiatives have been very successful, delivering
strong profitable growth even beyond our own expectations. I would like to thank
our employees for their great spirit, dedication, and the great results. In
addition to a good financial result, their commitment was demonstrated in the
high participation rate of 34% in Outotec's Employee Share Savings Plan launched
in the fourth quarter of 2012.
The mood in the world economy has somewhat improved during the past few months
but the positive trend is still fragile. Uncertainty in the market may delay our
customers' decisions to invest in new production capacity, impacting our order
intake development going forward. We believe that environmental investments will
further increase as governments are paying more and more attention to the
necessity of sustainable development, also in developing markets.
Our strong order backlog gives us a good start in 2013, and we believe that
there are plenty of growth opportunities for all our business areas. Sales
growth in 2013 is forecasted to be moderate due to only slightly higher order
intake in 2012 compared to previous year. We plan to continue to boost our
growth through acquisitions, in addition to organic development. Since 2010 we
have acquired and successfully integrated 12 companies, four of these in 2012.
Besides growth, we plan to improve further our profitability and develop our
operations in line with our strategy. Our mission is "Sustainable use of Earth's
natural resources" and we will continue our work towards this also in 2013."
Summary of key figures Q4 Q4 Q1-Q4 Q1-Q4
2012 2011 2012 2011
--------------------------------------------------------------------------------
Sales, EUR million 649.8 496.8 2,087.4 1,385.6
Gross margin, % 21.8 23.9 20.8 24.0
Operating profit from business operations, EUR 74.0 54.9 193.8 121.5
million
Operating profit from business operations, % 11.4 11.0 9.3 8.8
Operating profit, EUR million 74.9 48.9 184.3 111.9
Operating profit margin, % 11.5 9.9 8.8 8.1
Profit before taxes, EUR million 72.3 50.8 179.7 113.3
Net cash from operating activities, EUR million -3.2 21.2 77.1 247.0
Net interest-bearing debt at the end of period, -264.7 -339.1 -264.7 -339.1
EUR million
Gearing at the end of period, % -54.9 -84.9 -54.9 -84.9
Working capital at the end of period, EUR -177.8 -270.3 -177.8 -270.3
million
Return on investment, % 58.5 44.4 36.5 26.4
Return on equity, % 45.8 39.4 29.0 20.9
Order backlog at the end of period, EUR million 1,947.1 1,985.1 1,947.1 1,985.1
Order intake, EUR million 471.2 327.0 2,084.4 2,005.4
Personnel, average for the period 4,755 3,806 4,456 3,516
Earnings per share, EUR 1.16 0.81 2.82 1.75
Dividend per share, EUR - - 1.20*) 0.85
--------------------------------------------------------------------------------
*) Board of Directors proposal for dividend per
share
FINANCIAL STATEMENTS REVIEW JANUARY-DECEMBER 2012
OPERATING ENVIRONMENT
Despite the adverse global macroeconomic environment, in 2012 the demand for
Outotec's solutions continued at a good level because of the company's
competitive offering and good market position. The long term outlook for metals
demand continued to be positive, driving investments to new capacity especially
in non-ferrous metals value chain. Some mining companies announced revised
investment plans mainly in the areas of iron ore and coal. Towards year-end base
metal prices in particular strengthened and strong recovery was seen also in
iron ore prices. In addition to greenfield investments, customers continued to
seek additional operational improvements through the expansion and modernization
of existing processing capacity. Market activity continued to be high in copper,
gold, sulfuric acid, and aluminum markets but zinc, nickel, and platinum group
metals markets were more subdued. In general, Outotec's project deliveries
progressed well. Customers' production capacity utilization rates stayed high,
supporting Outotec's spare parts and services sales. In addition, there was
strong demand for operation and maintenance as well as shut down services due to
Outotec's special capabilities in these areas. The competitive landscape
remained relatively unchanged with some industry consolidation.
Despite continued macro-economic uncertainties, investment financing for solid
projects continued to be available. However, local legislation, tighter
environmental permitting and the complexity of financing packages slowed sales
negotiations in some projects. In alternative energy solutions, low energy
prices and uncertainties in political regulation impacted investment decisions
in some countries.
ORDER INTAKE
Order intake in 2012 totaled EUR 2,084.4 million (2011: EUR 2,005.4 million), a
4% increase from the comparison period. The largest order in 2012, and in
Outotec's history, over EUR 350 million, was received in the second quarter.
Orders received also included new breakthroughs in renewable energy as well as
industrial water and environmental solutions. Foreign exchange rates did not
have material effect on order intake growth. Orders from EMEA (Europe including
the CIS, Middle East and Africa) represented 59%, Americas 26%, and Asia Pacific
15% of the total order intake. Orders received in the fourth quarter of 2012
totaled EUR 471.2 million (Q4/2011: EUR 327.0 million), which was 44% higher
than in the comparison period.
Published orders in the fourth quarter:
* The world's largest and most advanced sewage sludge thermal treatment plant
for the City of Zürich, Switzerland (value nearly EUR 50 million, of which
the first phase engineering was included in Outotec's 2012 order intake, and
the main delivery contract will be included in the Q2/2013 order intake)
* Sustainable biomass power plant for Eren Holding, Turkey (value approx. EUR
55 million will be booked in Outotec's in Q1/2013 order intake)
* An integrated solution consisting of gas cleaning, sulfuric acid, and
effluent treatment technologies for Namibia Custom Smelters, Namibia (value
approx. EUR 130 million) to reduce the emissions and improve working
conditions of the existing copper smelter
Published orders in the third quarter:
* Technology, proprietary equipment and services for National Iranian Copper
Industries' copper and molybdenum projects, Iran (total value EUR 265
million with 58 million booked in Q3/2012 order intake)
* Technology for Orbite Aluminae's new high purity alumina plant, Canada
(value not disclosed)
* Modernization of Mexicana de Cobre's flash smelter including shutdown
services and latest proprietary equipment, Mexico (value approx. EUR 30
million)
* Advanced technology and proprietary equipment for a new nickel matte
treatment facility for Enerchem, South Korea (value over EUR 10 million)
* Technology and proprietary equipment for aluminum smelters and related
industry, China (value approx. EUR 24 million)
* Flotation technology including the world's largest flotation cells with
energy saving features for copper concentrator expansion, South America
(value over EUR 30 million)
Published orders in the second quarter:
* Technology, key process equipment and advisory services for pelletizing iron
ores and magnetites for Gol-E-Gohar Mining & Industrial, Iran (value approx.
EUR 80-85 million with EUR 25 million booked in Q2/2012 order intake)
* Flotation and automation technology, proprietary equipment and new Virtual
Experience Training program for Kennecott Utah Copper concentrator, U.S.
(value not disclosed, booked in Q1 order intake)
* Filtration technology for lithium processing pilot plant for Corporación
Minera de Bolivia, Bolivia (some millions of EUR)
* Filtration technology including the world's largest and most advanced filters for MMX Mineração e Metálicos' iron ore processing facility, Brazil
(value some tens of millions of EUR)
* Innovative Emission Optimized Sintering technology for BPSL's new iron ore
sintering plant, India (value approx. EUR 20 million)
* Technology, proprietary and key process equipment and services for the
world's largest solvent extraction and electrowinning plant for Grupo
México, Mexico (value approx. EUR 22 million)
* One of the world's largest ilmenite smelters as a turn-key delivery for
Cristal Global, Saudi Arabia (value over EUR 350 million)
Published orders in the first quarter:
* Integrated advanced solution including grinding, flotation and filtration as
well as various services for a slag treatment plant for Codelco, Chile
(value some EUR 10 million)
* The world's largest metallurgical sulfuric acid plant and gas cleaning
system for Kansanshi Mining, Zambia (value over EUR 80 million)
* Feasibility study for Indonesia's first smelter-grade alumina refinery
including comprehensive mineralogical investigations, laboratory-scale
hydrometallurgical tests and basic engineering for PT ANTAM (Persero),
Indonesia
* Eco-efficient process technology, proprietary equipment and services for
Grupo México's new copper concentrator, Mexico (value nearly EUR 28
million)
ORDER BACKLOG
The order backlog at the end of 2012 was EUR 1,947.1 million (December
31, 2011: EUR 1,985.1 million), a 2% decrease from the previous year-end. At the
end of 2012, Outotec had 38 projects with an order backlog value in excess of
EUR 10 million, accounting for 70% of the total backlog. Based on the 2012 year-
end project evaluation, management estimates that roughly 77% (approximately EUR
1,500 million) of the year-end order backlog value will be delivered in 2013 and
the rest in 2014 and beyond.
SALES AND FINANCIAL RESULT
Outotec's sales in 2012 totaled EUR 2,087.4 million (2011: EUR 1,385.6 million),
up 51% from the comparison period. The sales growth resulted from successful
customer project deliveries from the strong opening order backlog and growth of
services business. Recent acquisitions (Kiln Services, Energy Products of Idaho,
Numcore, Demil, TME Group, and Backfill Specialists) accounted for approximately
5% of the total growth (2011: no impact). Foreign exchange rates did not have
material effect on sales growth. Sales in the fourth quarter of 2012 totaled EUR
649.8 million (Q4/2011: EUR 496.8 million), up 31% from the comparison period.
Sales in the Services business area, which is included in the sales figures of
the three reporting segments, totaled EUR 476.0 million in 2012 (2011: EUR
343.5 million), up 39% from the comparison period and accounting for 23% of
Outotec's sales (2011: 25%). Recent acquisitions (Kiln Services, TME Group and
Demil) accounted for approximately 9% of the Services business area sales growth
(2011: no impact). Services growth was achieved by further penetrating the old
installed base and services delivered to the new installed base. In addition,
demand for operation and maintenance as well as shutdown services grew in 2012.
Sales in the Services business area in the fourth quarter of 2012 totaled EUR
184.1 million (Q4/2011: EUR 109.1 million), up 69% from the comparison period
and accounting for 28% of Outotec's sales (Q4/2011: 22%).
Operating profit from business operations in 2012 was EUR 193.8 million (2011:
EUR 121.5 million), up 60% from the comparison period and representing 9.3% of
sales (2011: 8.8%). The operating profit in 2012 was positively impacted by
higher sales as well as successful project and service deliveries. The operating
profit was negatively impacted by increased risk provisions in two customer
projects. In 2012, the company also received less license fee income than in
2011. Unrealized and realized exchange gains related to currency forward
contracts totaled EUR 2.1 million (2011: gain of EUR 1.7 million). Operating
profit in 2012 was EUR 184.3 million (2011: EUR 111.9 million), representing
8.8% of sales (2011: 8.1% of sales). The total impact of PPA amortizations in
2012 was EUR 12.5 million (2011: EUR 4.9 million). The increase in the PPA
amortizations resulted primarily from the Energy Products of Idaho (EPI)
acquisition in December 2011. One-time items in 2012 totaled a gain of EUR 3.0
million (2011: cost of EUR 4.7 million) including acquisition related costs of
EUR 2.7 million (2011: costs of EUR 2.0 million), restructuring related costs of
EUR 0.6 million (2011: costs of EUR 2.6 million) and the positive impact of EUR
6.3 million reduction from EPI earn-out payment liability of EUR 8.8 million.
Operating profit from business operations in the fourth quarter of 2012 was EUR
74.0 million (Q4/2011: EUR 54.9 million), representing 11.4% of sales (Q4/2011:
11.0%), and operating profit was EUR 74.9 million (Q4/2011: EUR 48.9 million),
representing 11.5% of sales (Q4/2011: 9.9%). Unrealized and realized exchange
gains related to currency forward contracts in the fourth quarter of 2012 were
EUR 2.3 million (Q4/2011: loss of 0.6 EUR million). The impact of PPA
amortizations in the fourth quarter of 2012 operating profit was EUR 3.3 million
(Q4/2011: EUR 1.3 million).
Fixed costs in 2012 were EUR 254.7 million (2011: EUR 217.7 million) equivalent
to 12% (2011: 16%) of sales. The cost increase was primarily due to expanding of
the sales and marketing network, acquisitions, R&D activities as well as
investments in developing and deploying the global operational model in line
with the strategy. Profit before taxes in 2012 was EUR 179.7 million (2011: EUR
113.3 million). It included net finance expenses of EUR 4.6 million (2011: net
finance income EUR 1.4 million) of which EUR 1.2 million was related to
impairment of loan receivables from available-for-sale investments and EUR 2.6
million related to valuation of financial items and related hedges. Net profit
for the reporting period was EUR 127.8 million (2011: EUR 79.3 million). Taxes
totaled EUR 51.9 million (2011: EUR 34.0 million). Earnings per share were EUR
2.82 (2011: EUR 1.75), up 61% from the comparison period.
Outotec's return on equity in 2012 was 29.0% (2011: 20.9%), and the return on
investment was 36.5% (2011: 26.4%).
Sales and Operating Profit by Segment Q4 Q4 Q1-Q4 Q1-Q4
EUR million 2012 2011 2012 2011
----------------------------------------------------------------------------
Sales
Non-ferrous Solutions 396.5 358.8 1,305.5 947.6
Ferrous Solutions 126.4 74.8 371.2 221.1
Energy, Light Metals and Environmental Solutions 134.1 70.9 427.0 236.1
Unallocated items*) and intra-group sales -7.3 -7.7 -16.3 -19.2
----------------------------------------------------------------------------
Total 649.8 496.8 2,087.4 1,385.6
Operating profit
Non-ferrous Solutions 63.4 52.4 157.5 107.7
Ferrous Solutions 12.5 -0.6 30.0 6.7
Energy, Light Metals and Environmental Solutions 8.6 3.6 20.3 23.8
Unallocated**) and intra-group items -9.5 -6.5 -23.5 -26.3
----------------------------------------------------------------------------
Total 74.9 48.9 184.3 111.9
*) Unallocated items primarily include invoicing of group management and
administrative services.
**) Unallocated items primarily include group management and administrative
services
Non-ferrous Solutions
Sales in the Non-ferrous Solutions business area in 2012 totaled EUR 1,305.5
million (2011: EUR 947.6 million), up 38% from the comparison period. The
increase was due to good progress in customer deliveries from the order backlog,
continued strong order intake, and growth in Services sales. The operating
profit from business operations in 2012 was EUR 163.2 million, 12.5% of sales
(2011: EUR 113.1 million, 11.9% of sales), and operating profit was EUR 157.5
million, 12.1% of sales (2011: EUR 107.7 million, 11.4% of sales). Operating
profit was improved due to operating leverage resulting from higher sales and
good performance in project deliveries. The unrealized and realized exchange
gains related to currency forward contracts increased profitability in 2012 by
EUR 1.8 million (2011: loss of EUR 1.3 million).
In the fourth quarter of 2012, sales were EUR 396.5 million (Q4/2011: EUR 358.8
million), the operating profit from business operations was EUR 66.1 million,
16.7% of sales (Q4/2011: EUR 54.5 million, 15.2% of sales), and operating profit
EUR 63.4 million, 16.0% of sales (Q4/2011: EUR 52.4 million, 14.6% of sales).
The unrealized and realized exchange gains related to currency forward contracts
increased profitability in the fourth quarter of 2012 by EUR 0.8 million
(Q4/2011: loss of EUR 2.4 million).
Ferrous Solutions
Sales in the Ferrous Solutions business area in 2012 totaled EUR 371.2 million
(2011: EUR 221.1 million), up 68% from the comparison period. The increase was
due to the successful execution of long term projects from the order backlog and
growth in Services sales especially related to Demil acquisition. The operating
profit from business operations in 2012 was EUR 31.4 million, 8.5% of sales
(2011: EUR 9.8 million, 4.4% of sales) and operating profit was EUR 30.0
million, 8.1% of sales (2011: EUR 6.7 million, 3.1% of sales). The unrealized
and realized exchange gains related to currency forward contracts increased
profitability in 2012 by EUR 0.6 million (2011: loss of EUR 0.0 million).
In the fourth quarter of 2012, sales were EUR 126.4 million (Q4/2011: EUR 74.8
million). The operating profit from business operations was EUR 13.0 million,
10.3% of sales (Q4/2011: EUR 2.5 million, 3.3% sales), and operating profit EUR
12.5 million, 9.9% of sales (Q4/2011: EUR -0.6 million, -0.7% of sales). The
unrealized and realized exchange gains related to currency forward contracts
increased profitability in the fourth quarter of 2012 by EUR 0.8 million
(Q4/2011: loss of EUR 0.2 million).
Energy, Light Metals and Environmental Solutions
Sales in the Energy, Light Metals and Environmental Solutions business area in
2012 totaled EUR 427.0 million (2011: EUR 236.1 million), up 81% from the
comparison period. The increase was due to the good progress in the execution of
long term projects, acquisitions, and growth in Services sales. The operating
profit from business operations in 2012 was EUR 22.6 million, 5.3% of sales
(2011: EUR 25.8 million, 10.9% of sales) and operating profit was EUR 20.3
million, 4.8% of sales (2011: EUR 23.8 million, 10.1% of sales). Operating
profit from business operations in 2012 decreased due to higher than planned
project costs and increased risk provisions in two customer projects in the
third and fourth quarter as well as fewer project completions compared to the
comparison period. In addition, unrealized and realized exchange losses of EUR
0.6 million (2011: gain of EUR 2.9 million) related to currency forward
contracts impacted the profitability in 2012.
In the fourth quarter of 2012, sales were EUR 134.1 million (Q4/2011: EUR 70.9
million), the operating profit from business operations was EUR 4.4 million,
3.3% of sales (Q4/2011: EUR 5.2 million, 7.4% of sales), and operating profit
EUR 8.6 million, 6.4% of sales (Q4/2011: EUR 3.6 million, 5.0% of sales). The
unrealized and realized exchange gains related to currency forward contracts
increased profitability in the fourth quarter of 2012 by EUR 0.4 million
(Q4/2011: gain of EUR 1.5 million).
Sales by destination, % 2012 2011
---------------------------------
EMEA (incl. CIS) 46 44
Asia Pacific 19 25
Americas 36 31
---------------------------------
Total 100 100
Sales by materials, % 2012 2011
--------------------------------------------------------------------------------
Copper 33 33
Iron 14 15
Aluminum 6 5
Ferroalloys 7 4
Precious metals 13 10
Zinc 2 3
Nickel 4 6
Other metals 4 9
Energy & environmental solutions (incl. water, sulfuric acid and off- 14 11
gas)
Others 2 4
--------------------------------------------------------------------------------
Total 100 100
BALANCE SHEET, FINANCING, AND CASH FLOW
The consolidated balance sheet total was EUR 1,629.0 million at the end of 2012
(December 31, 2011: EUR 1,421.4 million). The equity to shareholders of the
parent company was EUR 481.0 million (December 31, 2011: EUR 398.4 million),
representing EUR 10.66 (December 31, 2011: EUR 8.75) per share.
The net cash flow from operating activities in 2012 was EUR 77.1 million (2011:
EUR 247.0 million). The reporting period's net cash flow from operating
activities was decreased from the comparison period due to increased work in
progress due to higher sales, fewer large advance payments, and increased
inventory levels related to business growth as well as paid taxes. Gearing for
the reporting period was -54.9% (December 31, 2011: -84.9%).
The working capital amounted to EUR -177.8 million at the end of 2012 (December
31, 2011: EUR -270.3 million). The advance and milestone payments received at
the end of 2012 were EUR 358.8 million (December 31, 2011: EUR 399.0 million),
representing a decrease of 10% from the comparison period. The advance and
milestone payments paid to subcontractors at the end of 2012 were EUR 46.4
million (December 31, 2011: EUR 43.5 million).
Cash and cash equivalents totaled EUR 358.6 million at the end of 2012 (December
31, 2011: EUR 402.5 million). Cash and cash equivalents was affected by the
dividend payment of EUR 38.9 million (EUR 0.85 per share) on April 11, 2012
(April 2011: EUR 34.3 million), acquisitions EUR 34.6 million (2011: EUR 34.5
million), and purchases of own shares EUR 19.3 million (2011: no purchases). The
company invests excess cash in short-term money market instruments such as bank
deposits and corporate commercial certificates of deposit.
In September 2012, the European Investment Bank granted a EUR 45 million loan to
Outotec to finance research and development programs in sustainable minerals and
metallurgical processing technologies as well as industrial water treatment and
energy-related applications. The repayment period is up to 11 years. At the end
of 2012, Outotec had EUR 155 million of committed undrawn credit facilities
available.
Outotec's financing structure and liquidity was good. The net interest-bearing
debt at the end of 2012 was EUR -264.7 million (December 31, 2011: EUR -339.1
million). The equity-to-assets ratio was 38.0% (December 31, 2011: 39.1%). The
company's capital expenditure in 2012 was EUR 76.2 million (2011: EUR 98.3
million) including acquisitions of EUR 43.2 million (2011: EUR 58.4 million) as
well as investments in IT systems, R&D-related equipment, and intellectual
property rights.
At the end of the reporting period, guarantees for commercial commitments,
including advance payment guarantees issued by the parent and other Group
companies, were EUR 570.6 million (December 31, 2011: EUR 477.1 million).
CORPORATE STRUCTURE
On October 3, 2012, Outotec completed the acquisition of Backfill Specialists
Pty Ltd (Australia) which is a technical consulting and engineering company
specialized in mine backfilling solutions.
On August 31, 2012, Outotec completed the acquisition of Australian-owned TME
Group. TME is a mining services company and provides grinding mill relining and
mineral processing plant maintenance services to customers mainly in Australia,
Africa, and South East Asia.
On June 1, 2012, Outotec completed the acquisition of Demil Manutenção
Industrial Ltda. The Brazilian company provides industrial maintenance services
mainly for iron ore agglomeration plants, and is located in Guarapari, Espírito
Santo.
On March 12, 2012, Outotec acquired all of the shares in Numcore Ltd, which is a
Finnish technology company that develops and markets innovative online process
control solutions based on 3D imaging.
In 2013, the total impact for PPA amortizations from completed acquisitions is
estimated to be approximately EUR 13 million.
RESEARCH AND TECHNOLOGY DEVELOPMENT
In 2012, Outotec's research and technology development expenses totaled EUR
41.6 million (2011: EUR 33.5 million), increasing 24% from the comparison period
and representing 2.0% of sales (2011: 2.4%). Outotec filed 70 new priority
patent applications (2011: 41), which is record high number showing excellent
innovation activity of Outotec's personnel. Further, 286 new national patents
were granted (2011: 326). At the end of 2012, Outotec had 630 patent families,
including a total of 5,745 national patents or patent applications.
In October, Outotec and Central South University, China agreed on Sustainable
Development Creative Award which aims at building active R&D relationships
between Central South University and Outotec. Furthermore, Outotec's expert Dr.
Markus Reuter was appointed as Visiting Professor of Central South University.
In April-June, based on the cooperation agreement with the Ministry of Minerals
Resources and Energy of Mongolia, Outotec and Aalto University organized
together a training course in Finland in Minerals Engineering and Metallurgy for
Mongolian Bachelor of Science Graduates and professors.
Outotec's new product launches in 2012:
Non-ferrous Solutions
Outotec agreed with Korea Zinc Company on the global marketing rights for the
Ausmelt Top Submerged Lance (TSL) technology for the fuming of zinc bearing
residues. The TSL zinc fuming technology is able to maximize the recovery of
valuable metals from zinc residues and produce an environmentally-friendly slag
product which is clean and safe as a substitute for aggregates and various
construction materials (press release on Dec 12).
Outotec delivered the world's first university-based minipilot concentrator to
the Department of Process and Environmental Engineering of the University of
Oulu, Finland. The small research and minerals processing plant is designed for
a learning environment and represents the concentrating process of the Pyhäsalmi
mine in Finland on the scale of 1:5000. It offers an innovative environment for
education and research of minerals processing unit operations (press release on
Dec 11).
Outotec launched the world's largest semi-autogenous (SAG) grinding mill to the
market in response to growing metals demand and declining ore grades. The mill
is driven by a 28 MW Gearless Motor Drive, which is the largest grinding mill
power ever used. The SAG mill offers increased efficiency and up to 15% larger
mill capacity with low energy consumption.
Outotec and Sandvik Mining announced closer cooperation in minerals processing
solutions. This enables Outotec to offer an entire processing plant, including
crushing, grinding, and concentrating as well as process testing, design, basic
engineering, and process guarantees (press release on Sep 24).
Outotec received exclusive rights from Swiss Tower Mills Minerals Ltd to
distribute and sell its Tower Mills (STM) grinding technology. High-intensity
grinding mills marketed as Outotec® HIGmill bring a new option to the market,
enabling Outotec to compete for the position of market leader in fine and ultra-
fine grinding (press release on April 5).
Outotec launched the world's largest flotation cell, the Outotec TankCell® e500.
It has been designed for plants with high material throughputs, such as large
copper and gold concentrators. Outotec offers the broadest size range of
flotation cells on the market (from 5 m³ to 500 m³), which allows for a flexible
layout with symmetrical design. The benefits include lower equipment costs and
energy consumption, less installation work, and a smaller plant footprint. Fewer
units per installation result in fewer components, spare parts, and less
maintenance.
Outotec launched the Outotec® Larox PF 180, the world's largest pressure filter.
The PF 180 series are 50% larger than the previous model and lowering operating
cost per ton.
Ferrous Solutions
Outotec has developed a new Outotec® EOS - Emission Optimized Sintering process
for iron ore sintering. Besides iron ores, it can also be applied for sintering
of manganese ore fines. The process reduces the substantial off-gas volume by
50-60% by re-circulating the off-gas and using its CO content as an energy
source. As there are less off-gases, the off-gas cleaning investment and
operational costs will be lower, and the consumption of coke used as energy can
be cut by up to 20%, which significantly reduces dust and emissions.
Outotec introduced an automated pallet car changer for iron ore sintering and
pelletizing plants. The new solution increases plant productivity since no
stoppage is necessary during the changing procedure. The automated process
allows continuous change of multiple pallet cars. The solution can be applied
both in new and brownfield sintering and pelletizing plants.
Outotec has added Direct Current Furnaces to its ferroalloy smelting technology
portfolio, and in partnership with Allied Furnace Consultants (AFC) based in
South Africa, has developed and patented a new conductive anode design which
will be installed in all new Outotec® Direct Current Smelting furnaces
worldwide.
Outotec has developed an ilmenite smelting process which applies Outotec's
ferroalloy smelting technology. The new technology will be implemented in
Cristal Global's mega size ilmenite smelter project in the Kingdom of Saudi
Arabia (stock exchange release on May 31). The initial annual capacity of one of
the world's largest ilmenite plants will be 500,000 tonnes of titanium dioxide
slag, and 235,000 tonnes of high purity pig iron.
Energy, Light Metals and Environmental Solutions
Outotec has developed a patented clay calcination process to activate different
clay minerals in a fluidized bed furnace. Depending on the quality requirements,
solid fuels can also be used as an energy source for the reaction. In Outotec's
trial plants, diverse samples can be produced for verification of the product
quality. Clay calcination offers a significant reduction in carbon dioxide
compared to the traditional clinker production process.
The acquisition of Energy Products of Idaho has significantly improved Outotec's
capabilities to offer biomass and waste-to-energy systems which can operate on
over 200 different biomass fuels and fuel mixes. Covering the entire chain of
converting different biomass materials into energy, our circulating and
stationary fluidized bed systems allow utilization of a variety of fuel
substances - from waste wood up to biomass sludge such as lignin sludge from
bio-ethanol production. The new energy systems will be applied, for example, in
the Karton 90 MW biomass power plant in Turkey (press release on Nov 16) and in
the advanced sewage sludge thermal treatment plant in Zürich, Switzerland (press
release on Nov 9).
SUSTAINABILITY
In October, Outotec was recognized for the fourth consecutive year in Carbon
Disclosure Leadership Index.
In September, Outotec hosted a seminar in Indonesia for customers, partners,
ministries, industry associations, and academics on the implementation of a
framework for sustainability in the Indonesian mining and metals processing
industries. The seminar was organized jointly with the Indonesian Ministry of
Environment. Outotec presented sustainable solutions and environmental
considerations in minerals and metals processing as well as trends in
environmental legislation in Europe.
Outotec published its sustainability report for 2011 in April. The report is
based on the Global Reporting Initiative (GRI) guidelines and conforms to
Application Level B+ and is third-party assured by Ecobio Ltd. In November, the
report was awarded Readers' Choice in the competition evaluating the corporate
responsibility reporting of the Finnish companies.
PERSONNEL
At the end of the reporting period, Outotec had a total of 4,805 employees
(December 31, 2011: 3,883). New employees were primarily recruited for project
deliveries and for the service business. Acquisitions increased personnel from
the comparison period by 450. In 2012, Outotec had on average 4,456 employees
(2011: 3,516). The average number of personnel grew by 940 compared to the
previous year, which supports overall business growth objectives. Temporary
personnel accounted for approximately 9% (2011: 9%) of the total number of
employees.
Distribution of personnel by region Dec 31, Dec 31, change
2012 2011 %
----------------------------------------------------------
EMEA (including CIS) 2,642 2,327 13.5
Americas 1,400 972 44.0
Asia Pacific 763 584 30.7
----------------------------------------------------------
Total 4,805 3,883 23.7
At the end of the reporting period, the company had, in addition to its own
personnel, approximately 660 (December 31, 2011: 620) full-time equivalent,
contracted professionals working in project execution. The number of contracted
workers at any given time changes with the active project mix and project
commissioning, local legislation, and regulations as well as seasonal
fluctuations.
In 2012, salaries and other employee benefits totaled EUR 362.6 million (2011:
EUR 284.4 million). The increase from the comparison period was due to the
increase in personnel, wage inflation, and wage increases.
CHANGES IN TOP MANAGEMENT
In November, Outotec appointed Ms. Kirsi Nuotto, M.A., as Senior Vice President
- Human Capital and member of the Executive Board as of January 9, 2013.
Outotec's former SVP - Human Capital, Mr. Ari Jokilaakso, Ph.D. (Tech.), took up
a new position in Outotec as Head of Research and Technology Development in the
Non-ferrous Solutions business area.
NOMINATION BOARD
The Annual General Meeting 2012 of Outotec Oyj decided to establish a Nomination
Board to prepare proposals for the election and remuneration of the members of
the Board of Directors to the Annual General Meeting 2013. The Nomination Board
comprises three members nominated by the largest shareholders, and the Chairman
and Vice Chairman of the Board of Directors. The largest shareholders of the
company were determined on the basis of the shareholdings registered in the
Finnish book-entry systems on October 1, 2012. On October 16, 2012, Outotec
announced that the following persons have been nominated as members of the
Nomination Board:
* Kari A.J. Järvinen, Chairman (Solidium Oy)
* Harri Sailas (Ilmarinen Mutual Pension Insurance Company)
* Poju Zabludowicz (Tamares Nordic Investments B.V.)
* Carl-Gustaf Bergström
* Karri Kaitue
The Nomination Board's proposals were announced on January 10, 2013.
SHARE-BASED INCENTIVE PROGRAM AND SHARE SAVINGS PLAN
Share-based incentive program
Outotec's Board of Directors decided on April 23, 2010, to adopt a share-based
incentive program 2010-2012 for the company's key personnel.
Earning period 2010
A total of 138,144 Outotec shares were allocated for the 2010 earning period
with a cost of approximately EUR 9.6 million, which was booked for the financial
periods 2010-2012.
Earning period 2011
A total of 130,063 Outotec shares were allocated for the 2011 earning period
with a cost of approximately EUR 9.5 million, which is booked for the financial
periods 2011-2013.
Earning period 2012
The Board of Directors approved (March 28, 2012) 148 individuals for the
program's 2012 earning period and set targets for order intake, earnings per
share and sales growth. At the end of 2012, there were 146 participants with
right to earn, on the basis of achievement of set targets, a maximum number of
194,375 shares and cash to cover income taxes.
Employee share savings plan
Outotec's Board of Directors decided on September 25, 2012, to launch an
employee share savings plan for Outotec employees globally. The plan will
commence from January 1, 2013, with the first savings period being one calendar
year. The following savings periods are subject to a separate board decision.
Approximately 34% of employees in 22 countries have signed up. Participation in
Finland, Sweden and five other countries exceeds 50% of the employees.
SHARES AND SHARE CAPITAL
Outotec's shares are listed on the NASDAQ OMX Helsinki (OTE1V). At the end of
the reporting period, Outotec's share capital was EUR 17,186,442.52, consisting
of 45,780,373 shares. Each share entitles its holder to one vote at the
company's general shareholders' meetings. At the end of 2012, the company holds
a total of 564,327 Outotec shares, which represents a relative share of 1.23% of
Outotec Oyj's shares and votes.
Third-party share-based incentive program agreement
Outotec has an agreement with a third-party service provider concerning the
administration of the share-based incentive program for key personnel. These
shares are accounted for as treasury shares on Outotec's consolidated balance
sheet. At the end of 2012, the amount of these treasury shares was 64,327.
BOARD AUTHORIZATIONS
The Annual General Meeting for 2012 authorized Outotec's Board of Directors to
determine the repurchase of the company's own shares, and to issue new shares.
The maximum number of shares related to both authorizations is 4,578,037. The
authorizations are valid until the next Annual General Meeting. On September
10, Outotec announced that the Board of Directors has decided to exercise its
authorization. During the period September 18-24, 2012, Outotec purchased a
total of 500,000 of the company's own shares through public trading at an
average price of approximately EUR 38.55 per share. The total purchase price
paid for the shares was EUR 19,274,589.43. The acquired shares will be used for
the company's share based incentive programs.
The Annual General Meeting gave the Board of Directors the authority to donate
an aggregate amount of EUR 100,000 for non-profit purposes or to universities.
In accordance with the given authorization, the Board of Directors has approved
donations to various causes, totaling EUR 94,000. The biggest individual
donation was made to Baltic Sea Action Group (EUR 40,000).
TRADING, MARKET CAPITALIZATION, AND SHAREHOLDERS
In 2012, the volume-weighted average price for a share in the company was EUR
38.08, the highest quotation for a share was EUR 46.67, and the lowest EUR
30.31. The trading of Outotec shares in 2012 exceeded 88 million shares, with a
total value of over EUR 3,357 million. At the end of the reporting period,
Outotec's market capitalization was EUR 1,940 million and the last quotation for
a share was EUR 42.37. At the end of 2012, the company did not hold any treasury
shares for trading purposes.
At the end of 2012, Outotec had 15,312 shareholders. Shares held in 16 nominee
registers accounted for 44.39% and Finnish households held 10.74% of all Outotec
shares.
Outotec has consolidated Outotec Management Oy into the Group's balance sheet.
At the end of 2012, Outotec Management Oy held 203,434 or 0.44% (February
7, 2013: 203,434) of Outotec shares, which have been accounted for as treasury
shares on Outotec's balance sheet. An announcement to dissolve Outotec
Management Oy in accordance with its terms and conditions was made on October
25, 2012. The share ownership plan shall be dissolved after the publication of
Outotec Oyj's Interim Report Q1/2013 through a share exchange so that all the
shares in Outotec Management Oy will be transferred to Outotec Oyj against
Outotec shares. Outotec Oyj will receive 203,434 own Outotec shares as well as
the company's loan receivable and accrued interest in full from Outotec
Management Oy. The number of new shares to be given in the share exchange shall
be determined on the basis of Outotec Management Oy's net assets as of the date
of dissolution of the plan. With the share exchange the Executive Board members'
previously indirect share ownership will become a direct ownership in Outotec.
However, the Outotec Management Oy share ownership plan will be continued by one
year at a time, in case the Outotec share price during five trading days after
the publication of the Interim Report Q1/2013, Q1/2014, Q1/2015 or Q1/2016 is
lower than the average share price which Outotec Management Oy paid for its
Outotec shares. The dissolution of the plan and possible delay in such
dissolution will be announced separately.
Changes in share holdings
On April 18, 2012, the holdings of BlackRock, Inc (voting right held by
BlackRock Investment Management (UK) Limited) in shares of Outotec Oyj exceeded
5% (2,311,857 shares), representing 5.05% of the shares and votes.
On March 6, 2012, the holdings of Solidium Oy in shares of Outotec Oyj exceeded
5% (2,314,000 shares), representing 5.05% of the shares and votes.
On March 1, 2012, the group holdings of Goldman Sachs Group, Inc. in shares of
Outotec Oyj exceeded 5% (2,458,638 shares), representing 5.37% of the shares and
votes and fell below 5% on March 2, 2012 (191,499 shares), representing 0.42% of
the shares and votes.
EVENTS AFTER THE REPORTING PERIOD
On January 30, 2013, Outotec announced it had agreed with a major cellulosic
ethanol producer on the design and delivery of a renewable energy solution for a
bio-ethanol facility in the USA. The order has been included in Outotec's Q4
2012 order intake and its value will not be disclosed.
On January 14, 2013, Outotec announced it had agreed on the operation and
maintenance of a copper concentrator (6 years plus) with ZAO Mikheevsky GOK,
Russia. The contract value exceeds EUR 140 million, which will be gradually
booked in Outotec's order intake starting in 2013, with only a small amount in
the first year.
On January 10, 2013, Outotec announced it had agreed on the design and turnkey
delivery of a gas cleaning plant to Luossavaara-Kiirunavaara AB's (LKAB) iron
ore pellet plant, Sweden. The order value is approximately EUR 38 million and it
has been booked in Outotec's order intake in the fourth quarter of 2012.
On January 25, 2013, Outotec announced that it has been ranked 12th in the
Corporate Knights' Global 100 list of the world's most sustainable companies.
This is the first time Outotec was included in the index. Overall, the Global
100 drew companies from 22 countries on six continents. Outotec was also
recognized in another sustainability index, the RobecoSAM 2013 Sustainability
Yearbook as the company that achieved the largest proportional improvement in
the sustainability performance within its sector.
On January 24, 2013, Outotec submitted an application for summons against
Outokumpu Oyj in a patent dispute regarding a new invention in ferroalloys
technology.
On January 24, 2013, Outotec announced the appointment of Ms Nina Kiviranta,
Master of Laws, as General Counsel and member of the Executive Board as of March
18, 2013.
On January 16, 2013, Outotec announced that the Board of Directors has decided
to adopt a new share-based incentive program for the company's key personnel.
The program comprises three earning periods: calendar years 2013, 2014 and
2015. The Board of Directors determines on an annual basis the maximum amount of
shares to be allocated in each calendar year, participants of the program,
amount of the maximum reward for each individual, the earning criteria and the
targets established for them.
On January 10, 2013, Outotec's Nomination Board announced its proposal for
composition and remuneration of the Board of Directors as follows:
Composition of the Board of Directors
Outotec's Nomination Board proposes to the Annual General Meeting on March
26, 2013, that the current members of the Board of Directors Eija Ailasmaa,
Tapani Järvinen, Hannu Linnoinen, Timo Ritakallio and Poju Zabludowicz be re-
elected as members of the Board for the term ending at the closure of the Annual
General Meeting of 2014. The Nomination Board also proposes that Matti Alahuhta
and Anja Korhonen be elected as new members of the Board. The current Chairman
of the Board of Directors Carl-Gustaf Bergström and Vice Chairman Karri Kaitue
have given notification that they are no longer available for re-election at the
Annual General Meeting of 2013. The Nomination Board proposes that the Annual
General Meeting resolves to elect Matti Alahuhta as the Chairman of the Board of
Directors for the term ending at the closure of the Annual General Meeting of
2014. All candidates have given their consent to the election.
Remuneration of the Board of Directors
Outotec's Nomination Board proposes further to the Annual General Meeting on
March 26, 2013 that the members of the Board of Directors be paid the following
annual remuneration: EUR 72,000 for the Chairman of the Board of Directors and
EUR 36,000 for the other members of the Board of Directors each, as well as an
additional EUR 12,000 for both the Vice Chairman of the Board, and the Chairman
of the Audit Committee; and that the members of the Board each be paid EUR 600
for attendance at each board and committee meeting and are reimbursed for direct
costs arising from board work. Of the annual remuneration, 60% would be paid in
cash and 40% in the form of Outotec Oyj shares, which would be acquired to the
members from the stock exchange, within one week upon the AGM 2013 date, in
amounts corresponding to EUR 28,800 for the Chairman, EUR 19,200 for the Vice
Chairman and Chairman of the Audit Committee each, and EUR 14,400 for each of
the other members. The part of the annual fee payable in cash corresponds to the
approximate sum necessary for the payment of the income taxes on the
remunerations and would be paid no later than April 30, 2013. The annual fees
shall encompass the full term of office of the Board of Directors. The
attendance fee shall be paid in cash.
SHORT-TERM RISKS AND UNCERTAINTIES
Risks related to the global operating environment
Outotec's global business operations are subject to various political, economic,
and social conditions. In the current economic environment, conditions may
rapidly change and have a negative impact on the availability and conditions of
financing for Outotec's customers as well as create delays and changes in order
placement and execution. Outotec may operate in politically unstable countries
where potential economic sanctions or trade restrictions may cause project
delays or even prevent project execution and Outotec's business operations.
As part of its overall project delivery, Outotec often gives performance
guarantees and takes liabilities for the warranty period defects. Projects in
Outotec's order backlog may contain risks related to delivery, quality,
functionality or costs. Large turnkey projects may involve more risks, for
example, due to their complex scope, long delivery times, and contractual
liabilities. Operation and maintenance service contracts may include
performance, personnel, and working capital related risks. In order to manage
these business risks, Outotec has developed close management of both the project
itself but in particular, the supply chain. Outotec aims to mitigate project
risks through contract management, advance and milestone payments as well as
gradual booking of orders in the backlog according to actual project progress in
some cases. According to standard practice, all unfinished projects are
evaluated quarterly and provisions for performance guarantees and warranty
period guarantees are updated.
Outotec follows the percentage of completion method for project revenue
recognition. Based on project time schedules, management estimates the revenues
to be recognized from the order backlog for the calendar year. As a result,
deviations in project time schedules may have an impact on the company's
financial projections. Financial result may also fluctuate due to the sales mix
and relative share of Services, changes in foreign exchange rates, timing of new
orders, license fee income, and project completions. The nature of international
business, different interpretations of international and local tax rules and
regulations may cause additional direct or indirect taxes for Outotec, thus
reducing the company's net result.
Acquisitions are an integral part of Outotec's strategy. Goodwill may be
generated from acquisitions and if estimated synergy benefits do not materialize
it may lead to goodwill impairment.
Outotec's business model is primarily based on customer advance and milestone
payments as well as on-demand guarantees issued by Outotec's relationship banks.
Securing the continuity of Outotec's business operations and supporting the
strategic objectives requires that the company has sufficient funding available
under all circumstances. Cash held by the company is primarily invested in short
term bank deposits and in Finnish corporate short term certificates of deposit.
Outotec's customers and subcontractors may experience financial difficulties and
lack of financing may result in project and payment delays or credit losses.
More than 50% of Outotec's total cash flow is denominated in euros. The rest is
divided among various currencies, including the US dollar, Australian dollar,
Brazilian real, Canadian dollar, and South African rand. The weight of any given
currency in new projects can substantially fluctuate, but most cash-flow-related
risks are hedged over the short term and long term. In the short term, currency
fluctuations may create volatility in profitability. The forecasted and probable
cash flows are selectively hedged and are always subject to separate decisions
and risk analysis. Natural hedging is used as widely as possible and the
remaining open foreign exchange exposures related to committed cash flows are
fully hedged using primarily forward agreements.
The most relevant risks related to Outotec's business are presented in more
detail at the company's website www.outotec.com.
MARKET OUTLOOK
Many global macroeconomic indicators including metals prices have been
strengthening during recent months due to the more positive GDP growth outlook
in the BRIC countries, Africa, the USA, and Europe. The overall market outlook
for minerals and metals as well as alternative energy and industrial water
treatment is positive due to the favorable megatrends. In addition, project
financing is available and interest rate levels are expected to stay low.
In minerals and metals processing, new investments are needed as current
production capacity and ongoing investments in new capacity are not sufficient
to fulfill the long term demand of metals. The main drivers for increasing
metals demand are global GDP growth and the growing middle class in emerging
economies. In addition, declining ore grades and more complex ores require
investments in capacity and advanced technology to enable sufficient recovery of
metals. In addition to these production capacity drivers, tightening
environmental regulations, increasing energy efficiency requirements, and
reducing of energy costs, carbon dioxide and other emissions as well as scarcity
of fresh water increase investments in sustainable technology. Additionally,
many developing countries, which in the past have been exporting raw materials
with low value, are now investing in domestic capacity in order to capture more
value from their natural resources. All in all, the industry is increasingly
focusing on the social and environmental impacts of their operations and this is
increasing the demand for sustainable processing technologies.
There are still uncertainties in the world economy. However, metal prices are
currently at a good level, and therefore, mining and metal companies are seeking
ways to increase the capacity of their existing operations, which is often the
fastest route to a return on investment. As a result, the industry CAPEX has
been somewhat shifting from large greenfield projects requiring significant
infrastructure investments to brownfield modernization and capacity
enhancements. Outotec believes that the market continues to be solid in
brownfield and mid-tier projects as well as services. New projects are
developed, especially in the CIS, Middle East, Africa, and South-East Asia.
Large turnkey projects are currently being developed more slowly as investment
costs have been increasing, environmental permitting has been getting stricter,
and industry's human resources continue to be scarce. These trends create
favorable opportunities for Outotec's life cycle solutions when the company can
provide the best return on the customer's investment with predictable investment
cost, time to market, and process performance, leveraging the company's unique
technologies and core competencies.
Demand for alternative energy solutions continues to be stable, but in many
countries current low energy prices and the lack of local regulations are
slowing down the growth of investments in this area. However, niche waste-to-
energy projects, where several raw materials can be used to create renewable
energy for solving a local waste problem, are identified globally.
REVISED FINANCIAL GUIDANCE FOR 2013 (EARLIER GUIDANCE IN PARENTHESIS)
Based on the strong order backlog, current market outlook and the customer
tendering activity, the management expects that in 2013:
* Sales will be approximately EUR 2.1-2.3 billion (grow from 2012), and
* Operating profit margin from business operations*) will be approximately
9.5-10.5% (further improve from 2012)
*) excluding one-time items and purchase price allocations (PPA) amortizations
Espoo, February 7, 2013
Outotec Oyj
Board of Directors
For further information, please contact:
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 954141
Format for e-mail addresses: firstname.lastname@outotec.com
FINANCIAL REPORTING SCHEDULE IN 2013* Interim Report for January-March 2013: April 26, 2013
* Interim Report for January-June 2013: July 31, 2013
* Interim Report for January-September 2013: October 30, 2013
ANNUAL GENERAL MEETING 2013
The Annual General Meeting in 2013 is scheduled for March 26, 2013. Detailed
information about the AGM is available at www.outotec.com. Outotec's Financial
Statements 2012 will be published in week 9, 2013.
INTERIM REPORT JANUARY-DECEMBER 2012 BRIEFING
Date: Thursday, February 7, 2013
Time: 2.00 pm (Finnish time)
Venue: Hotel Scandic Simonkenttä, Simonkatu 9, 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 for
the teleconference and Q&A session, please dial 5 to 10 minutes before the
beginning of the event:
FI/UK: +44 20 7162 0025
US/CANADA: +1 334 323 6201
Password: 927291
In addition, an instant replay service of the conference call will be available
until midnight on February 10, using the following numbers:
FI/UK: +44 20 7031 4064
US: +1 954 334 0342
Access code: 927291
Contact information is gathered for registration purposes only and is not used
for commercial purposes.
CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Consolidated Statement of Comprehensive Income Q4 Q4 Q1-Q4 Q1-Q4
EUR million 2012 2011 2012 2011
--------------------------------------------------------------------------------
Sales 649.8 496.8 2,087.4 1,385.6
Cost of sales -508.0 -378.0 -1,653.9 -1,053.1
--------------------------------------------------------------------------------
Gross profit 141.8 118.7 433.6 332.5
Other income 9.0 1.0 9.3 3.9
Selling and marketing expenses -30.1 -23.3 -103.1 -86.4
Administrative expenses -31.6 -30.5 -110.0 -97.7
Research and development expenses -12.3 -10.8 -41.6 -33.5
Other expenses -1.7 -6.3 -3.6 -6.7
Share of results of associated companies 0.0 0.1 -0.3 -0.0
--------------------------------------------------------------------------------
Operating profit 74.9 48.9 184.3 111.9
Finance income and expenses
Interest income and expenses 0.8 1.9 5.1 6.0
Market price gains and losses -1.1 1.1 -2.6 -0.3
Other finance income and expenses -2.4 -1.2 -7.0 -4.4
--------------------------------------------------------------------------------
Net finance income -2.6 1.9 -4.6 1.4
Profit before income taxes 72.3 50.8 179.7 113.3
Income tax expenses -20.0 -13.8 -51.9 -34.0
--------------------------------------------------------------------------------
Profit for the period 52.3 37.0 127.8 79.3
--------------------------------------------------------------------------------
Other comprehensive income
Exchange differences on translating foreign
operations -5.4 11.7 -0.6 -3.9
Cash flow hedges 2.6 -1.9 9.4 -4.3
Income tax relating to cash flow hedges 1.2 0.6 -0.5 1.3
Available for sale financial assets -0.1 -0.1 -0.1 -0.2
--------------------------------------------------------------------------------
Other comprehensive income for the period -1.7 10.3 8.2 -7.2
Total comprehensive income for the period 50.6 47.3 136.0 72.1
--------------------------------------------------------------------------------
Profit for the period attributable to:
Equity holders of the parent company 52.3 37.0 127.8 79.3
Non-controlling interest - - - -
Total comprehensive income for the period attributable to:
Equity holders of the parent company 50.6 47.3 136.0 72.1
Non-controlling interest - - - -
Earnings per share for profit attributable to the equity
holders of the parent company:
Basic earnings per share, EUR 1.16 0.81 2.82 1.75
Diluted earnings per share, EUR 1.16 0.81 2.82 1.75
All figures in the tables have been rounded and consequently the sum of
individual figures may deviate from the sum presented. Key figures have been
calculated using exact figures.
Condensed Consolidated Statement of Financial Position December 31, December 31,
EUR million 2012 2011
--------------------------------------------------------------------------------
ASSETS
Non-current assets
Intangible assets 335.0 286.8
Property, plant and equipment 75.3 62.5
Deferred tax asset 53.2 47.3
Non-current financial assets
Interest-bearing 3.8 2.4
Non interest-bearing 2.4 2.5
--------------------------------------------------------------------------------
Total non-current assets 469.7 401.5
Current assets
Inventories *) 180.8 148.6
Current financial assets
Interest-bearing 0.2 0.7
Non interest-bearing 619.7 468.1
Cash and cash equivalents 358.6 402.5
--------------------------------------------------------------------------------
Total current assets 1,159.3 1,019.9
TOTAL ASSETS 1,629.0 1,421.4
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity attributable to the equity holders of the
parent company 481.0 398.4
Non-controlling interest 1.2 1.1
--------------------------------------------------------------------------------
Total equity 482.2 399.5
Non-current liabilities
Interest-bearing 74.3 47.6
Non interest-bearing 104.8 107.0
--------------------------------------------------------------------------------
Total non-current liabilities 179.1 154.6
Current liabilities
Interest-bearing 23.6 18.9
Non interest-bearing
Advances received **) 358.8 399.0
Other non interest-bearing liabilities 585.1 449.4
--------------------------------------------------------------------------------
Total current liabilities 967.6 867.3
Total liabilities 1,146.7 1,021.9
TOTAL EQUITY AND LIABILITIES 1,629.0 1,421.4
--------------------------------------------------------------------------------
*) Of which advances paid for inventories amounted to EUR 46.4 million at
December 31, 2012 (December 31, 2011: EUR 43.5 million).
**) Gross advances received before percentage of completion revenue recognition
amounted to EUR 1,672.1 million at December 31, 2012 (December 31, 2011: EUR
1,462.3 million).
Condensed Consolidated Statement of Cash Flows Q1-Q4 Q1-Q4
EUR million 2012 2011
----------------------------------------------------------------------------
Cash flows from operating activities
Profit for the period 127.8 79.3
Adjustments for
Depreciation and amortization 31.4 19.4
Other adjustments 64.4 28.6
Decrease (+), increase (-) in working capital -93.0 134.4
Interest received 7.4 8.0
Interest paid -2.4 -2.0
Income tax paid -58.4 -20.8
----------------------------------------------------------------------------
Net cash from operating activities 77.1 247.0
Purchases of assets -47.5 -34.4
Acquisition of subsidiaries and business operations, net of cash -34.6 -34.5
Acquisition of shares in associated companies - -0.1
Proceeds from disposal of subsidiaries - 0.0
Proceeds from sale of assets 0.9 1.4
Cash flows from other investing activities -2.5 -0.1
----------------------------------------------------------------------------
Net cash used in investing activities -83.8 -67.7
Cash flow before financing activities -6.6 179.3
Repayments of non-current debt -8.7 -11.5
Borrowings of non-current debt 40.0 -
Decrease in current debt -9.2 -4.9
Increase in current debt 3.0 0.0
Purchase of treasury shares -19.3 -
Related party net investment to Outotec Oyj shares *) -0.2 -0.2
Dividends paid -38.9 -34.3
Cash flows from other financing activities -0.0 0.4
----------------------------------------------------------------------------
Net cash used in financing activities -33.2 -50.6
Net change in cash and cash equivalents -39.9 128.8
Cash and cash equivalents at the beginning of the period 402.5 280.3
Foreign exchange rate effect on cash and cash equivalents -4.0 -6.6
Net change in cash and cash equivalents -39.9 128.8
----------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 358.6 402.5
----------------------------------------------------------------------------
*) Consolidation of Outotec Management Oy (incentive plan for Outotec's
Executive Board members). At the end of the reporting period, Outotec Management
Oy held 203,434 (December 31, 2011: 199,747) Outotec shares which have been
accounted as treasury shares in Outotec's consolidated statement of financial
position.
Consolidated Statement of Changes in Equity
A = Share capital
B = Share premium fund
C = Other reserves
D = Fair value reserves
E = Treasury shares
F = Reserve for invested non-restricted equity
G = Cumulative translation differences
H = Retained earnings
I = Non-controlling interest
J = Total equity
Consolidated Statement of Changes in Equity
--------------------------------------------------
Attributable to the equity holders of the parent company
--------------------------------------------------
EUR million A B C D E F G H I J
--------------------------------------------------------------------------------
Equity at
January 1, 2011 17.2 20.2 0.4 2.1 -9.7 87.7 29.0 210.0 1.0 357.7
--------------------------------------------------------------------------------
Dividends paid - - - - - - - -34.3 - -34.3
Management incentive
plan for Outotec EB*) - - - - -0.3 - - - 0.1 -0.2
Share-based
compensation - - - - 2.4 - - 0.9 - 3.3
Total comprehensive
income for the period - - - -3.2 - - -3.9 79.3 - 72.1
Other changes - - 0.0 - - - - 0.7 - 0.7
--------------------------------------------------------------------------------
Equity at
December 31, 2011 17.2 20.2 0.4 -1.2 -7.5 87.7 25.1 256.5 1.1 399.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity at
January 1, 2012 17.2 20.2 0.4 -1.2 -7.5 87.7 25.1 256.5 1.1 399.5
--------------------------------------------------------------------------------
Dividends - - - - - - - -38.9 - -38.9
Management incentive
plan for Outotec EB*) - - - - -0.2 - - - 0.1 -0.1
Purchase of treasury
shares - - - - -19.3 - - - - -19.3
Share-based
compensation - - - - 1.5 - - 3.1 - 4.6
Total comprehensive
income for the period - - - 8.8 - - -0.6 127.8 - 136.0
Other changes - - 0.0 - - - - 0.4 - 0.4
--------------------------------------------------------------------------------
Equity at
December 31, 2012 17.2 20.2 0.5 7.6 -25.5 87.7 24.5 348.9 1.2 482.2
--------------------------------------------------------------------------------
*) Consolidation of Outotec Management Oy (incentive plan for Outotec's
Executive Board members). At the end of the reporting period, Outotec Management
Oy held 203,434 (December 31, 2011: 199,747) Outotec shares which have been
accounted as treasury shares in Outotec's consolidated statement of financial
position.
Key figures Q4 Q4 Q1-Q4 Q1-Q4
2012 2011 2012 2011
--------------------------------------------------------------------------------
Sales, EUR million 649.8 496.8 2,087.4 1,385.6
Gross margin, % 21.8 23.9 20.8 24.0
Operating profit, EUR million 74.9 48.9 184.3 111.9
Operating profit margin, % 11.5 9.9 8.8 8.1
Profit before taxes, EUR million 72.3 50.8 179.7 113.3
Profit before taxes in relation to sales, % 11.1 10.2 8.6 8.2
Net cash from operating activities, EUR million -3.2 21.2 77.1 247.0
Net interest-bearing debt at the end of period, -264.7 -339.1 -264.7 -339.1
EUR million
Gearing at the end of period, % -54.9 -84.9 -54.9 -84.9
Equity-to-assets ratio at the end of period, % 38.0 39.1 38.0 39.1
Working capital at the end of period, EUR -177.8 -270.3 -177.8 -270.3
million
Capital expenditure, EUR million 27.8 75.0 76.2 98.3
Capital expenditure in relation to sales, % 4.3 15.1 3.7 7.1
Return on investment, % 58.5 44.4 36.5 26.4
Return on equity, % 45.8 39.4 29.0 20.9
Order backlog at the end of period, EUR million 1,947.1 1,985.1 1,947.1 1,985.1
Order intake, EUR million 471.2 327.0 2,084.4 2,005.4
Personnel, average for the period 4,755 3,806 4,456 3,516
Profit for the period in relation to sales, % 8.0 7.4 6.1 5.7
Research and development expenses, EUR million 12.3 10.8 41.6 33.5
Research and development expenses in relation to 1.9 2.2 2.0 2.4
sales, %
Earnings per share, EUR 1.16 0.81 2.82 1.75
Equity per share, EUR 10.66 8.75 10.66 8.75
Dividend per share, EUR - - 1.20*) 0.85
--------------------------------------------------------------------------------
*) Board of Directors proposal for dividend per
share
NOTES TO THE STATEMENT OF COMPREHENSIVE INCOME AND FINANCIAL POSITION
Outotec has applied the following revised or new standards and interpretations
since the beginning of 2012, which do not have material impact on the Group's
financial statements:
* IFRS 7 - Financial Instruments, Disclosures - Transfer of Financial Assets
(Amendment to IFRS 7). The amendment introduces new disclosure requirements
about transfer of financial assets in two cases; financial assets that are
not derecognized in their entirety and financial assets that are
derecognized in their entirety but for which the entity retains continuing
involvement. This amendment will promote transparency and improve
understanding of the risk exposures relating to transfers of financial
assets. Currently Outotec Group does not have such transferred financial
assets and thus the amendment does not impact on the published information.
* IAS 12 - Income taxes, Deferred tax. - Deferred tax accounting for
investment property at fair value (Amendment to IAS 12). The amendment
introduces an exception to the existing principle for the measurement of
deferred tax assets or liabilities arising on investment property measured
at fair value according to IAS 40 (Investment property). Outotec Group does
not have currently investment properties measured using the fair value model
in IAS 40 and thus the amendment does not impact on the published
information.
The following new standards and interpretations have been published, but they
are not effective in 2012, neither has Outotec early adapted them. These changes
are not expected to have material impact on Outotec's figures.
* IAS 1 - Financial statement presentation. The main change resulting from
these amendments is a requirement for entities to group items presented in
'other comprehensive income' (OCI) on the basis of whether they are
potentially reclassifiable to profit or loss subsequently (reclassification
adjustments). The amendments do not address which items are presented in
OCI. The standard is not expected to have material impact on Outotec's
financial statements. Standard will be applied for accounting periods
beginning on January 1, 2013.
* IAS 19 - Employee benefits. The amendment will eliminate the corridor
approach and will recognize all actuarial gains and losses in OCI as they
occur; to immediately recognize all past service costs; and to replace
interest cost and expected return on plan assets with a net interest amount
that is calculated by applying the discount rate to the net defined benefit
liability (asset). The standard is not expected to have material impact on
Outotec's financial statements. Standard will be applied for accounting
periods beginning on January 1, 2013.
* IAS 32 - Financial instruments: Presentation. These amendments are to the
application guidance to the standard and clarify some of the requirements
for offsetting financial assets and financial liabilities on the balance
sheet. Outotec estimates the impact of the change and intends to adopt
changes during the accounting period beginning on or after January 1, 2014.
* IFRS 9 - Financial instruments. The standard addresses the classification,
measurement and recognition of financial assets and financial liabilities.
The two parts of the IFRS 9 were issued in November 2009 and October 2010.
It replaces the parts of IAS 39 that relate to the classification and
measurement of financial instruments. IFRS 9 requires financial assets to be
classified into two measurement categories: those measured as at fair value
and those measured at amortized cost. The determination is made at initial
recognition. The classification depends on the entity's business model for
managing its financial instruments and the contractual cash flow
characteristics of the instrument. The main change regarding the financial
liabilities is that, in cases where the fair value option is taken for
financial liabilities, the part of a fair value change due to an entity's
own credit risk is recorded in other comprehensive income rather than the
income statement, unless this creates an accounting mismatch. Outotec is yet
to assess IFRS 9's full impact and intends to adopt IFRS 9 wholly no later
than the accounting period beginning on or after 1 January 2015.
* IFRS 10 - Consolidated financial statements. The new standard of
consolidated financial statements' builds on existing principles by
identifying the concept of control as the determining factor as to whether
an entity should be included within the consolidated financial statements of
the parent company. The standard provides additional guidance to assist in
the determination of control where this is difficult to assess. The standard
is not expected to have material impact on Outotec's financial statements.
Standard will be applied for accounting periods beginning on January
1, 2014.
* IFRS 11 - Joint arrangements. IFRS 11 is a more realistic reflection of
joint arrangements by focusing on the rights and obligations of the parties
to the arrangement rather than its legal form. There are two types of joint
arrangement: joint operations and joint ventures. Joint operations arise
where a joint operator has rights to the assets and obligations relating to
the arrangement and therefore accounts for its share of assets, liabilities,
revenue and expenses. Joint ventures arise where the joint venturer has
rights to the net assets of the arrangement and therefore equity accounts
for its interest. Proportional consolidation of joint ventures is no longer
allowed. The standard is not expected to have material impact on Outotec's
financial statements. Standard will be applied for accounting periods
beginning on January 1, 2014.
* IFRS 12 - Disclosures of interests in other entities. The standard includes
the disclosure requirements for all forms of interests in other entities,
including joint arrangements, associates, special purpose vehicles and other
off balance sheet vehicles. Outotec has yet to assess IFRS 12's full impact
and intends to adopt IFRS 12 no later than the accounting period beginning
on or after January 1, 2014.
* IFRS 13 - Fair value measurement. The standard provides a precise definition
of fair value and a single source of fair value measurement and disclosure
requirements for use across IFRSs. The standard is not expected to have
material impact on Outotec's financial statements. Standard will be applied
for accounting periods beginning on January 1, 2013.
Use of estimates
IFRS requires management to make estimates and assumptions which affect the
reported amounts of assets and liabilities as well as the disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of income and expenses during the reporting period.
Accounting estimates are employed in the financial statements to determine
reported amounts, including the realisability of certain assets, the useful
lives of tangible and intangible assets, income taxes, provisions, pension
obligations and impairment of goodwill. These estimates are based on the
management's best knowledge of current events and actions; however, it is
possible that the actual results may differ from the estimates used in the
financial statements.
Major Non-Recurring Items in Operating Profit Q1-Q4 Q1-Q4
EUR million 2012 2011
-----------------------------------------------------------------------------
One-time costs related to reorganization of business -0.6 -3.7
One-time income related to reorganization of business - 1.1
Costs related to acquisitions -2.7 -2.0
Reduction of earn-out payment liability related to acquisition of
Energy Products of Idaho LP 6.3 -
-----------------------------------------------------------------------------
Income Tax Expenses Q1-Q4 Q1-Q4
EUR million 2012 2011
-------------------------------------
Current taxes -64.6 -33.5
Deferred taxes 12.6 -0.5
-------------------------------------
Total income tax expenses -51.9 -34.0
Property, Plant and Equipment December 31, December 31,
EUR million 2012 2011
--------------------------------------------------------------------------------
Historical cost at the beginning of the period 144,8 128,9
Translation differences -0.1 -0.5
Additions 21.2 17.9
Disposals -3.3 -4.5
Acquired subsidiaries 5.2 3.5
Reclassifications -1.0 -0.6
--------------------------------------------------------------------------------
Historical cost at the end of the period 166.7 144.8
Accumulated depreciation and impairment at the -82.2 -76.2
beginning of the period
Translation differences -0.0 0.2
Disposals 2.6 3.4
Reclassifications 0.1 -0.3
Depreciation during the period -11.9 -9.5
--------------------------------------------------------------------------------
Accumulated depreciation and impairment at the end of -91.4 -82.2
the period
Carrying value at the end of the period 75.3 62.5
--------------------------------------------------------------------------------
Commitments and Contingent Liabilities December 31, December 31,
EUR million 2012 2011
---------------------------------------------------------------------------
Pledges and mortgages 0.0 0.0
Guarantees for commercial commitments 273.5 209.1
Minimum future lease payments on operating leases 157.8 161.3
---------------------------------------------------------------------------
No securities or collateral have been pledged. Commercial guarantees are related
to performance obligations of project and equipment deliveries. These are issued
by financial institutions or Outotec Oyj on behalf of group companies. The total
value of commercial guarantees above does not include advance payment guarantees
issued by the parent or other group companies or guarantees for financial
obligations. The total amount of guarantees for financing issued by group
companies amounted to EUR 22.4 million at December 31, 2012 (at December
31, 2011: EUR 25.8 million) and for commercial guarantees including advance
payment guarantees EUR 570.6 million at December 31, 2012 (at December
31, 2011: EUR 477.1 million). High exposure of on-demand guarantees may increase
the risk of claims that may have an impact on the liquidity of Outotec.
Derivative Instruments
Currency and Interest Derivatives December 31, December 31,
EUR million 2012 2011
-----------------------------------------------------------
Fair values, net 11.6 *) -9.6 **)
Nominal values 871.3 545.4
-----------------------------------------------------------
*) of which EUR 10.1 million designated as cash flow hedges (EUR 10.0 million
from currency derivates, EUR 0.0 million from interest derivates).
**) of which EUR -3.6 million designated as cash flow hedges.
Related Party Transactions
Balances with Key Management
----------------------------
Outotec's board of directors granted to Outotec Management Oy an interest-
bearing loan at the maximum amount of EUR 5.0 million to finance the acquisition
of the Outotec shares. The amount of the outstanding loan was EUR 4.4 million at
December 31, 2012 (December 31, 2011: EUR 4.3 million).
Outotec Oyj paid dividends to Outotec Management Oy EUR 0.2 million in April
2012 (EUR 0.1 million in April 2011).
Transactions and Balances with Associated Companies Q1-Q4 Q1-Q4
EUR million 2012 2011
---------------------------------------------------------------
Sales 0.2 0.0
Other income 0.0 0.6
Purchases -0.4 -0.3
Trade and other receivables 0.3 0.3
Current liabilities 2.5 0.6
Loan receivables 2.5 0.6
---------------------------------------------------------------
Business Combinations
---------------------
Outotec has acquired the following entities during 2012. The purchase price
allocation specification is combined for all acquired entities.
Numcore Ltd
Outotec has acquired Numcore Ltd in Kuopio, Finland. The acquisition was
completed on March, 2012. Numcore is a company developing and marketing
innovative online process control solutions based on 3D imaging. This
acquisition supports Outotec's growth strategy and strengthens Outotec's
competitive edge in providing advanced technology solutions. Numcore's
technology is already proven in flotation and thickener applications.
Furthermore, EIT technology can be utilized in Outotec's other business
segments.
The purchase price has been allocated to technologies. The remaining goodwill
EUR 4.5 million is mainly based on experienced personnel of Numcore and synergy
benefits.
Demil Manutenção Industrial Ltda
Outotec has acquired Demil Manutenção Industrial Ltda in Brazil. The acquisition
was completed on June, 2012. Demil provides industrial maintenance services for
iron ore pelletizing plants and is located in Guarapari, Espírito Santo in
Brazil.
Demil has approximately 300 employees and its annual sales are at the level of
EUR 10 million. The acquisition will provide a platform for further developing
Outotec's service business and capabilities in Brazil. Demil's services can be
offered to Outotec's Brazilian customers, pelletizing technology users in
particular.
The purchase price has been allocated mainly to customer relationships. The
remaining goodwill EUR 4.6 million is mainly based on the synergy benefits of
the customer relationship.
TME Group
Outotec has acquired Australian-owned TME Group. The acquisition was completed
on August, 2012. TME is a mining services company with offices throughout
Australia and in South Africa. TME provides grinding mill relining and mineral
processing plant maintenance services to customers mainly in Australia, Africa
and South East Asia.
With annual sales of approximately EUR 35 million, TME has 130 permanent
employees and a large casual labor workforce.
The purchase price has been allocated mainly to customer relationships. The
remaining goodwill EUR 14.9 million is mainly based on experienced personnel of
TME and synergy benefits. Purchase price allocation is preliminary and will be
finalized during 2013.
Backfill Specialists Pty Ltd
Outotec has acquired all the shares of Australian-based Backfill Specialists Pty
Ltd. The acquisition was completed on October, 2012. The acquisition complements
Outotec's expertise in paste plants and enables the company to offer more
comprehensive tailings treatment solutions to the mining industry worldwide.
Backfill Specialists is a technical consulting and engineering company
specialized in mine backfilling solutions mostly in Australia. Its annual sales
have been roughly EUR 18 million.
The purchase price has been allocated to fixed assets and order backlog. The
remaining goodwill EUR 8.6 million is mainly based on experienced personnel and
synergy benefits. Purchase price allocation is preliminary and will be finalized
during 2013.
EUR million Fair values recorded on Carrying amounts prior to
acquisition acquisition
--------------------------------------------------------------------------------
Customer contracts and 4.8 -
customer relationships
Intangible assets 2.1 0.8
Property, plant and 5.2 4.5
equipment
Inventories 1.6 1.4
Trade and other receivables 5.1 4.5
Cash and cash equivalents 3.0 3.0
--------------------------------------------------------------------------------
Total assets 21.7 14.1
Interest-bearing liabilities 1.3 1.3
Deferred tax liabilities 2.0 -
Trade and other payables 7.8 7.8
--------------------------------------------------------------------------------
Total liabilities 11.1 9.1
Net assets 10.6 5.0
Acquisition cost 43.0
Exchange differences 0.2
-------------------------------------------------------
Goodwill 32.6
Acquisition cost paid in 35.7
cash at December 31, 2012
Cash and cash equivalents in 3.0
subsidiary acquired
Exchange differences 1.8
-------------------------------------------------------
Cash flow effect at December 34.6
31, 2012
Acquisition cost as 7.3
liability December 31, 2012
Effect of acquired business combinations on Outotec Group's sales and profit for
the period in 2012
Outotec's sales for January 1, 2012- December 31, 2012 would have been EUR
2,121.1 million and profit for the period EUR 128.2 million if the acquisitions
of Numcore Ltd, Demil Manutenção Industrial Ltda, TME Group and Backfill
Specialists Pty Ltd would have been completed on January 1, 2012.
Segments' Sales and Operating Profit by Quarters
EUR million Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12
--------------------------------------------------------------------------------
Sales
Non-ferrous Solutions 223.9 162.0 191.4 235.5 358.8 260.7 335.9 312.5 396.5
Ferrous Solutions 43.2 43.6 42.6 60.0 74.8 70.0 81.8 92.9 126.4
Energy, Light Metals and
Environmental Solutions 65.3 46.1 57.7 61.4 70.9 85.9 106.8 100.1 134.1
Unallocated items *) and
intra-group sales -2.2 -4.1 -3.4 -4.1 -7.7 -6.2 0.0 -2.7 -7.3
--------------------------------------------------------------------------------
Total 330.3 247.5 288.4 352.8 496.8 410.4 524.4 502.8 649.8
Operating profit
Non-ferrous Solutions 23.2 18.1 12.6 24.6 52.4 25.4 35.0 33.7 63.4
Ferrous Solutions 8.2 3.2 -1.9 6.0 -0.6 5.5 2.2 9.9 12.5
Energy, Light Metals and
Environmental Solutions 11.4 3.3 5.2 11.7 3.6 3.8 7.3 0.6 8.6
Unallocated **) and intra-
group items -14.7 -5.7 -5.0 -9.1 -6.5 -7.2 -3.6 -3.2 -9.5
--------------------------------------------------------------------------------
Total 28.1 19.0 10.9 33.2 48.9 27.6 40.8 41.0 74.9
*) Unallocated items primarily include invoicing of group management and
administrative services.
**) Unallocated items primarily include group management and administrative
services.
Definitions for Key Financial Figures
--------------------------------------------------------------------------------
Net interest-bearing debt = Interest-bearing debt - interest-
bearing assets
Gearing = Net interest-bearing debt × 100
----------------------------------------
Total equity
Equity-to-assets ratio = Total equity × 100
----------------------------------------
Total assets - advances received
Return on investment = Operating profit + finance income × 100
----------------------------------------
Total assets - non interest-bearing
debt (average for the period)
Return on equity = Profit for the period × 100
----------------------------------------
Total equity (average for the period)
Research and development expenses = Research and development expenses in
the statement of comprehensive income
(including expenses covered by grants
received)
Earnings per share = Profit for the period attributable to
the equity holders of the parent
company
----------------------------------------
Average number of shares during the
period, as adjusted for stock split
Dividend per share = Dividend for the financial year
----------------------------------------
Number of shares at the end of the
period, as adjusted for stock split
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