2009-04-23 08:00:00 CEST
2009-04-23 08:01:59 CEST
REGULATED INFORMATION
Outokumpu Oyj - Interim report (Q1 and Q3)
Outokumpu's first quarter 2009 interim report - significant operating loss, very strong cash flow
INTERIM REPORT
April 23, 2009 at 9.00 am
First quarter 2009 highlights
- Operating profit EUR -249 million including raw material-related
inventory losses of some EUR 110 million, underlying operational
result some EUR -134 million (IV/2008: EUR -69 million)
- Stainless steel demand weak, deliveries at 247 000 tons
- Very strong cash flow at EUR 301 million, strong financial position
- Cost-saving actions proceeding according to plan, additional
actions taken
Group key figures
I/09 IV/08 I/08 2008
Sales EUR million 679 966 1 689 5 474
Operating profit EUR million -249 -271 100 -63
Non-recurring items
in operating profit EUR million -5 -17 - -83
Profit before taxes EUR million -252 -298 80 -134
Non-recurring items
in financial income
and expenses EUR million - -9 -12 -21
Net profit for the period
from continuing
operations EUR million -188 -228 61 -110
Net profit for the period EUR million -187 -233 63 -189
Earnings per share
from continuing
operations EUR -1.04 -1.27 0.34 -0.61
Earnings per share EUR -1.04 -1.30 0.35 -1.05
Return on capital
employed % -27.5 -26.8 10.0 -1.6
Net cash generated from
operating activities EUR million 301 205 107 656
Capital expenditure,
continuing operations EUR million 62 129 41 544
Net interest-bearing debt
at end of period EUR million 825 1 072 737 1 072
Debt-to-equity ratio at
end of period % 32.3 38.4 23.3 38.4
Stainless steel
deliveries 1 000 tons 247 261 449 1 423
Stainless steel
base price 1) EUR/ton 925 1 045 1 243 1 185
Personnel at the
end of period,
continuing operations 8 253 8 471 8 137 8 471
1) Stainless steel: CRU - German base price (2 mm cold rolled 304
sheet).
SHORT-TERM OUTLOOK
Visibility concerning the stainless steel market continues to be
short. Both distributors and end-users of stainless steel are still
running down their inventories. The reduction of inventories is
taking place throughout the value chain. Current very low order
volumes are not therefore representative of the underlying trend in
demand. Distributor inventories for standard grades are estimated to
be at or below normal levels.
Outokumpu is currently selling for deliveries in June. Delivery
volumes in the second quarter are expected to be around the same
level as in the first quarter. Base prices appear to have bottomed
out in March and are expected to rise gradually by some 100 EUR/ton
by the end of the second quarter.
Decided cost savings and price increases are expected to gradually
improve the underlying profitability. Thus the underlying operational
loss is expected to be at the same level or slightly smaller in the
second quarter compared to the first quarter. Assuming that metal
prices remain at current levels, no major raw material-related gains
or losses are expected. The reduction in working capital is expected
to diminish and cash flow is expected to weaken accordingly.
CEO Juha Rantanen:"The stainless markets were exceptionally weak and this is reflected
in our loss-making first quarter. This market weakness is a result of
both lower end-user demand and heavy de-stocking in the long value
chain to end consumers. The de-stocking will certainly come to an end
at some point.
In management, our main focus is now on maximizing cash flow by
generating profitable sales, by cutting costs, limiting capital
expenditure as well as reducing working capital. It is encouraging
that these efforts resulted in strong cash flow generation during the
first quarter. As the potential for further reductions in working
capital is rather limited, increased effort is going into identifying
additional cost-saving actions on top of those already being
implemented."
The attachments present Management analysis for the first quarter
operating result and the Interim review by the Board of Directors for
January-March 2009, the accounts and notes to the interim accounts.
This report is unaudited.
For further information, please contact:
Päivi Lindqvist, SVP - Communications and IR
tel. +358 9 421 2432, mobile +358 40 708 5351
paivi.lindqvist@outokumpu.com
Ingela Ulfves, VP - Investor Relations and Financial Communications
tel. +358 9 421 2438, mobile +358 40 515 1531
ingela.ulfves@outokumpu.com
Esa Lager, CFO
tel. + 358 9 421 2516
esa.lager@outokumpu.com
News conference and live webcast today at 12.00 pm
A combined news conference, conference call and live webcast
concerning the first-quarter 2009 results will be held on April 23,
2009 at 12.00 pm Finnish time (11.00 am CET, 10.00 am UK time, 5.00
am US EST) at Hotel Kämp, conference room Akseli Gallen-Kallela,
Pohjoisesplanadi 29, 00100 Helsinki, Finland.
To participate via a conference call, please dial in 5-10 minutes
before the beginning of the event:
UK +44 20 3043 2436
US & Canada +1 866 458 4087
Sweden +46 8 505 598 53
Password Outokumpu
The news conference can be viewed live via the Internet at
www.outokumpu.com. A stock exchange release and presentation material
will be available before the news conference at
www.outokumpu.com/Investors
An on-demand webcast of the news conference will be available at
www.outokumpu.com as of April 23, 2009 at around 6.00 pm.
OUTOKUMPU OYJ
Corporate Management
Ingela Ulfves
Vice President - Investor Relations & Financial Communications
tel. + 358 9 421 2438, mobile +358 40 515 1531
ingela.ulfves@outokumpu.com
www.outokumpu.com
Management analysis - first quarter operating result
Group key figures
EUR million I/08 II/08 III/08 IV/08 2008
Sales
General Stainless 1 304 1 222 933 687 4 147
Specialty Stainless 786 778 630 512 2 705
Other operations 64 63 69 62 258
Intra-group sales -465 -514 -362 -295 -1 636
The Group 1 689 1 549 1 270 966 5 474
Operating profit
General Stainless 81 125 -35 -177 -6
Specialty Stainless 42 44 -63 -123 -101
Other operations -20 4 29 25 38
Intra-group items -3 1 3 4 6
The Group 100 174 -66 -271 -63
EUR million I/09
Sales
General Stainless 476
Specialty Stainless 371
Other operations 66
Intra-group sales -233
The Group 679
Operating profit
General Stainless -157
Specialty Stainless -82
Other operations -12
Intra-group items 2
The Group -249
Stainless steel
deliveries
1 000 tons I/08 II/08 III/08 IV/08 2008
Cold rolled 228 192 177 141 739
White hot strip 120 94 64 51 330
Quarto plate 33 35 27 25 120
Tubular products 19 19 16 16 70
Long products 15 15 15 11 55
Semi-finished
products 34 35 25 16 109
Total deliveries 449 391 323 261 1 423
1 000 tons I/09
Cold rolled 133
White hot strip 59
Quarto plate 19
Tubular products 16
Long products 10
Semi-finished
products 10
Total deliveries 247
Market prices and
exchange rates
I/08 II/08 III/08 IV/08 2008
Market prices 1)
Stainless steel
Base price EUR/t 1 243 1 307 1 143 1 045 1 185
Alloy surcharge EUR/t 1 702 1 888 1 582 1 293 1 616
Transaction price EUR/t 2 945 3 195 2 725 2 338 2 801
Nickel USD/t 28 957 25 682 18 961 10 843 21 111
EUR/t 19 335 16 440 12 599 8 227 14 353
Ferrochrome
(Cr-content) USD/lb 1.21 1.92 2.05 1.85 1.76
EUR/kg 1.78 2.71 3.00 3.09 2.63
Molybdenum USD/lb 33.81 33.40 33.75 17.29 29.56
EUR/kg 49.77 47.14 49.45 28.92 44.31
Recycled steel USD/t 393 565 465 181 401
EUR/t 262 361 309 138 273
Exchange rates
EUR/USD 1.498 1.562 1.505 1.318 1.471
EUR/SEK 9.400 9.352 9.474 10.234 9.615
EUR/GBP 0.757 0.793 0.795 0.839 0.796
I/09
Market prices 1)
Stainless steel
Base price EUR/t 925
Alloy surcharge EUR/t 893
Transaction price EUR/t 1 818
Nickel USD/t 10 471
EUR/t 8 036
Ferrochrome
(Cr-content) USD/lb 0.79
EUR/kg 1.34
Molybdenum USD/lb 9.15
EUR/kg 15.49
Recycled steel USD/t 207
EUR/t 159
Exchange rates
EUR/USD 1.303
EUR/SEK 10.941
EUR/GBP 0.909
1) Sources of market prices:
Stainless steel: CRU - German base price, alloy surcharge and
transaction price (2 mm cold rolled 304 sheet), estimates for
deliveries during the period.
Nickel: London Metal Exchange (LME) cash quotation
Ferrochrome: Metal Bulletin - Quarterly contract price,
Ferrochrome lumpy chrome charge, basis 52% chrome
Molybdenum: Metal Bulletin - Molybdenum oxide - Europe
Recycled steel: Metal Bulletin - Steel scrap HMS 1&2 fob Rotterdam
Weak demand and low prices during the first quarter
Global market conditions for stainless steel remained very poor
during the first quarter of 2009. Apparent consumption of stainless
flat products increased however by 8% in Europe and by 17% globally
compared to the even weaker fourth quarter of 2008. Compared to the
first quarter of 2008, apparent consumption is estimated to have
declined by 24% in Europe and 25% globally. Low investment and
construction activity and cautious consumer spending have reduced
underlying demand for stainless steel. Heavy de-stocking continued as
both distributors and end-users continued to run down existing
inventories due to low consumption and the still-declining prices of
alloying materials. Stainless markets remained oversupplied and
producers continued to make heavy cuts in production. Compared to the
fourth quarter of 2008, production of stainless steel was almost flat
in Europe but increased by some 9% globally and fell by 38% in Europe
and by 29% globally compared to the first quarter 2008.
The average base price for 2mm cold rolled 304 stainless steel sheet
in Germany in the first quarter declined to 925 EUR/ton (IV/2008: 1
045 EUR/ton). At the end of March, the base price was 985 EUR/ton. As
a result of declining metal prices, especially ferrochrome, the alloy
surcharge fell to the very low level of 893 EUR/ton (IV/2008: 1 293
EUR/ton). The average transaction price during the first quarter was
1 818 EUR/ton (IV/2008: 2 338 EUR/ton). Currently, there is no major
price difference between Europe and Asia. (CRU)
Among the alloying elements, nickel markets remained oversupplied
and, production was cut back further, declining by 12% compared to
the fourth quarter of 2008. The nickel price fell marginally during
the first quarter and averaged 10 471 USD/ton (IV/2008: 10 843
USD/ton). Nickel traded in the range 9 400 - 13 400 USD/ton during
the quarter. Since the end of March, the price of nickel has
increased from around 9 400 USD/ton to the level of 12 000 USD/ton.
Ferrochrome markets also remained very weak and globally
oversupplied, and producers continued to cut back production. The
quarterly contract price for ferrochrome in the first quarter was
0.79 USD/lb (IV/2008: 1.85 USD/lb) and has preliminary been settled
at 0.69 USD/lb for the second quarter. The price of molybdenum
remained at the low level reached in November 2008 and averaged 9.15
USD/lb (IV/2008: 17.29 USD/lb) in the first quarter of 2009. The
price of recycled steel increased to 207 USD/ton in the first quarter
(IV/2008: 181 USD/ton).
Significant operating loss in very weak stainless steel markets,
strong cash flow
Group sales in the first quarter declined by 30% to EUR 679 million
(IV/2008: EUR 966 million) mainly as a result of declining metal
prices. Deliveries of stainless steel were down by 5% and totalled
247 000 tons (IV/2008: 261 000 tons). As a result of very weak
demand, Outokumpu cut back production at all the Group's production
units. Capacity utilization was approximately 55% in the first
quarter.
Operating loss was EUR 249 million (IV/2008: EUR 271 million loss)
including EUR 110 million of raw material-related losses (IV/2008:
EUR 185 million losses), mainly as a result of the decline in the
ferrochrome price. Underlying operational result was EUR -134 million
(IV/2008: EUR -69 million). The main reasons for the further decline
in the result were lower base prices and low delivery volumes.
Outokumpu's cost saving programs launched in December 2008 are
proceeding according to plan. A variety of measures have been
initiated to cut fixed costs: a general Group-wide cost-saving
program was initiated in December, both permanent and temporary
personnel reductions have been implemented and the Group's Excellence
Programs have been refocused to cut costs. Including actions taken
most recently, Outokumpu estimates that total fixed-cost savings in
2009 will be in excess of EUR 100 million with the majority of these
savings being achieved during the second half of the year.
Return on capital employed was -27.5% (IV/2008: -26.8%). Earnings per
share totalled EUR -1.04 (IV/2008: EUR -1.30).
Outokumpu's gearing continued to improve and was at the very good
level of 32.3% at the end of the first quarter (Dec 31, 2008: 38.4%),
well below the target of being below 75%. At the end of the quarter,
net interest-bearing debt totalled EUR 825 million (Dec 31, 2008: EUR
1 072 million).
Net working capital declined by EUR 555 million to EUR 880 million.
Net cash from operating activities was strong at EUR 301 million
(IV/2008: EUR 205 million). To a large extent, the decline in working
capital is a result of lower metal prices and an efficient reduction
in inventory levels throughout the supply chain. The current
non-interest bearing payables include the dividend payout of EUR 90
million.
Sales by General Stainless totalled EUR 476 million (IV/2008: EUR 687
million) in the first quarter, and deliveries totalled 210 000 tons
(IV/2008: 223 000 tons). Operating loss totalled EUR 157 million
(IV/2008: EUR -177 million) of which the Tornio Works posted a loss
of EUR 129 million (IV/2008: EUR -93 million). The majority of the
raw material-related inventory losses were related to General
Stainless.
Sales by Specialty Stainless in the first quarter totalled EUR 371
million (IV/2008: EUR 512 million), and deliveries totalled 92 000
tons (IV/2008: 106 000 tons). Operating loss was EUR 82 million
(IV/2008: EUR -123 million).
Operating loss in Other operations in the first quarter totalled EUR
12 million (IV/2008: EUR 25 million profit). This was mainly
attributable to unrealised hedging losses.
Statutory negotiations on personnel adjustments concluded
The statutory personnel negotiations initiated in February at Tornio
Works in Finland were concluded in March and resulted in temporary
lay-offs for most employees. Due to the low order load, production at
the Group's Kemi Mine, at the Ferrochrome Works and in one of the
melt-shops was temporarily halted in April, with some 330 employees
being laid off for a fixed period. The plan is to restart production
in the autumn depending on the market situation. Until further
notice, approximately 1 500 employees working on other steel
production lines, maintenance and support functions are temporarily
laid off in sequences with a minimum duration of two weeks per
quarter.
In December 2008, Outokumpu announced its intention to eliminate some
450 jobs in Sweden. Negotiations resulted in a total of 171 job
reductions at Degerfors, Nyby, Långshyttan and in Group functions in
Sweden. Negotiations are still ongoing in Avesta. In accordance with
actions announced in February 2009, some 120 jobs have also been cut
and some 35 people have been temporary laid off at Outokumpu
Stainless Tubular Products in a number of countries.
Events after the review period
Due to the very weak demand for stainless steel, Outokumpu intends to
reduce the annual production capacity at the melt shop in Sheffield
in the UK to some 200 000 tons from some 350 000 tons of annual
operational production capacity today. This will also lead to some
110 job reductions. Once implemented, these cuts will mean that the
number of Outokumpu employees in the UK will total approximately 450.
Interim review by the board of directors - january-march 2009
(Unaudited)
Weak stainless steel markets with significantly lower prices for
stainless steel
Global market conditions for stainless steel continued to be very
poor during the first quarter of 2009. Compared to 2008, apparent
consumption is estimated to have declined by 24% in Europe and 25%
globally. Stainless markets remained oversupplied and producers
continued to make heavy cuts in production. The average base price
for 2mm cold rolled 304 stainless steel sheet in Germany in the first
quarter fell by 26% to 925 EUR/ton (I/2008: 1 243 EUR/ton). The
average transaction price during the quarter was 1 818 EUR/ton
(I/2008: 2 945 EUR/ton), a decline by 38%. (CRU)
Prices of most alloying materials declined during the first quarter.
The nickel price averaged 10 471 USD/ton (I/2008: 28 957 USD/ton) and
fluctuated in a range 9 400 - 13 400 USD/ton. Ferrochrome markets
continued to be very weak. The quarterly contract price of
ferrochrome in the first quarter was 0.79 USD/lb (I/2008: 1.21
USD/lb). The average price of molybdenum was 9.15 USD/lb (I/2008:
33.81 USD/lb). The price of recycled steel averaged 207 USD/ton in
the first quarter (I/2008: 393 USD/ton).
Significant operating loss but strong cash flow
Group sales in the first quarter totalled EUR 679 million (I/2008:
EUR 1 689 million), 60% lower than in the first quarter 2008.
Deliveries of stainless steel were down by 45% to 247 000 tons
(I/2008: 449 000 tons). The causes of these lower sales figures
included significantly reduced delivery volumes and clearly lower
transaction prices. Outokumpu posted an operating loss of EUR 249
million (I/2008: EUR 100 million profit) including some EUR 110
million (I/2008: some EUR 60 million losses) of raw material-related
inventory losses, most of which resulted from the decline in the
ferrochrome price. Underlying operational result was EUR -134 million
(I/2008: EUR 160 million profit). The main reasons for the negative
result were very low delivery volumes, very low base prices and raw
material-related inventory losses. Net financial income and expenses
totalled EUR 0 million (I/2008: EUR -20 million). Net loss for the
period from continuing operations totalled EUR 188 million (I/2008:
EUR 61 million profit). Earnings per share totalled EUR -1.04
(I/2008: EUR 0.35) and earnings per share from continuing operationstotalled EUR -1.04 (I/2008: 0.34). Return on capital employed in the
first quarter was -27.5% (I/2008: 10.0%).
Net cash generated from operating activities was very strong and
totalled EUR 301 million (I/2008: EUR 107 million). Some EUR 555
million was released from working capital during the first quarter.
For the most part the decline in working capital is a result of lower
metal prices and an efficient decrease in inventory levels throughout
the supply chain. Net interest-bearing debt decreased by EUR 247
million compared to the end of the fourth quarter of 2008 and
amounted to EUR 825 million at the end of March (March 31, 2008: EUR
737 million). Outokumpu's gearing is at the good level of 32.3%
(March 31, 2008: 23.3%), well below the target of below 75%.
Risks and uncertainties
Outokumpu operates in accordance with the risk management policy
approved by its Board of Directors. This policy defines the
objectives, approaches and areas of responsibility in risk
management. Risks and uncertainties may, if they materialize, have a
substantial impact on earnings and cash flows. Key risks are assessed
and updated on a regular basis.
Important strategic and business risks include structural
overcapacity in stainless steel production, competition in stainless
steel markets and Euro-centricity. During the first quarter,
strategic risks related to the continuing weak market situation were
added to Group's list of key risks. To mitigate risks related to
structural overcapacity and fierce competition in stainless steel
markets, Outokumpu aims to maintain the cost efficiency of its
operations, broaden the Group's product offering and increase sales
to end-users by, for example, developing distribution channels. This
strategy is supported by the Group Sales and Marketing function,
which ensures that customers are served in an optimal way. To
mitigate any possible impacts of Euro-centricity, Outokumpu is also
aiming at growth outside Europe.
During first quarter of 2009, the global financial crisis weakened
stainless steel markets even further and Outokumpu responded with
production cuts and personnel adjustments. Outokumpu is monitoring
the situation continuously and has taken some short-term actions to
mitigate the further impact of weak markets.
Operational risks arise as a consequence of inadequate or failed
internal processes, employee actions, systematic or other events such
as natural catastrophes, misconduct or crime. Key operational risks
include a major fire or accident, variations in production
performance, failures in project implementation and the inability to
work according to a one-company approach. These risks are mitigated
through insurances, a variety of preventive and corrective actions
and initiatives. To minimize damage to property and business
interruptions that could result from fire at some of the Group's
major production sites, Outokumpu has instituted systematic fire and
security audit programs. During the first quarter, the Group's crisis
management procedures were implemented by the Group Executive
Committee and training of crisis management teams began. The annual
renewal for most of the Group's insurances is by the end of March.
Renewals were completed successfully during the first quarter.
Financial risks include exposure to market prices and the risk of
default as well as preserving the ability to maintain adequate
liquidity and keeping refinancing risks at a low level. The regular
wider analysis and review of financial risks was carried out during
the first quarter. The most important financial risks are variations
in the price of nickel, variations in the exchange rate between the
Swedish krona and the euro, the value of the US dollar, credit risk
related to loan receivables and capability to preserve adequate
liquidity and keeping refinancing risks at a low level. Outokumpu is
also exposed to changes in prices for equities and debt security. A
proportion of the market risks is mitigated through the use of
financial derivative contracts. Liquidity and refinancing risks are
taken into account in capital management decisions and, when
necessary, in making investment and other business decisions.
Outokumpu's aim is to mitigate credit risk related to sales
receivables through insurance and other arrangements. In the first
quarter, some currency hedging was carried out in relation to local
costs in Sweden.
Outokumpu is closely monitoring the turbulence in the global
financial markets. If the market situation continues to be difficult,
Outokumpu is prepared to take additional action to improve the
Group's profitability. While increases in credit margins have not yet
had any major impact on Outokumpu's funding costs, higher margins
during 2009 are expected to have such an impact.
Environment, health and safety
Emissions to air and discharges to water remained within permitted
limits and the breaches that occurred were temporary, were identified
and caused only minimal environmental impact. Outokumpu is not a
party in any significant juridical or administrative proceeding
concerning environmental issues, nor is it aware of any realized
environmental risks that could have a material adverse effect on the
Group's financial position.
Occupational safety continues to be a major focus area within the
Group and Outokumpu has now established a separate safety function
responsible for safety management and development. In I/2009, the
lost-time injury rate (i.e. lost-time accidents per million working
hours) was six (I/2008: 13). In 2009, the target is less than five.
No severe accidents were reported during the review period.
Corporate Responsibility
Year 2008 was Outokumpu's Corporate Responsibility Theme Year. The
aim was to highlight the importance of environmental and social
responsibility. Plants and offices were given measurable targets to
reduce energy consumption, landfill waste and the number of
accidents. Improving well-being at work was another target.
Energy consumption at production plants fell by 0.3%/ton processed
(target: 2% reduction). The target of a reduction of 5% of energy
consumption was not achieved in all of the Group's offices. The
quantity of waste taken to landfill fell by a remarkable 40%/ton
processed (target: 10%), mainly as a result of successful efforts
over several years to commercialize by-products. In offices,
reductions taken to landfill fell short of the 5% target. The injury
rate fell from 11 to nine accidents per million working hours
(target: eight). Well-being among personnel improved slightly
compared to 2007. In our employee survey the response rate increased
by 11 percentage units and the work satisfaction index was 4% higher
than in 2007.
In March 2009, Outokumpu was selected to be a member of the
Kempen/SNS Smaller Europe SRI Universe, a concept launched by Kempen
Capital Management. Membership is only offered to companies with the
very highest standards and codes of practice in the three areas of
business ethics, human resources and the environment.
Personnel
The Group's continuing operations employed an average of 8 336 people
during January-March 2009 (I/2008: 8 145). At the end of March,
Outokumpu had 8 253 employees (March 31, 2008: 8 137).
Class actions regarding the sold fabricated copper products business
The fabricated copper products business sold in 2005, comprised,
among others, Outokumpu Copper (USA), Inc. This company has been
served with one individual damage claim for ACR Tubes under US
antitrust laws. Outokumpu believes that the allegations in this case
are groundless and will defend itself in any proceedings. In
connection with the transaction to sell the fabricated copper
products business to Nordic Capital, Outokumpu has agreed to
indemnify and hold harmless Nordic Capital with respect to this
claim.
Customs investigation of exports to Russia by Outokumpu Tornio Works
In March 2007, Finnish Customs authorities initiated a criminal
investigation into the Group's Tornio Works' export practices to
Russia. The preliminary investigation is connected with another
preliminary investigation concerning a forwarding agency based in
south-eastern Finland. It is suspected that defective and/or forged
invoices have been prepared at the forwarding agency as regards the
export of stainless steel to Russia. The preliminary investigation is
focusing on possible complicity by Outokumpu Tornio Works in the
preparation of defective and/or forged invoices by the forwarding
agency in question. Directly after the Finnish Customs authorities
started their investigations, Outokumpu initiated its own
investigation into the trade practices connected with stainless steel
exports from Tornio to Russia. In June 2007, after carrying out its
investigation, a leading Finnish law firm Roschier Attorneys Ltd.,
concluded that it had not found evidence that any employees of Tornio
Works or the Group had committed any of the crimes alleged by the
Finnish Customs.
Organizational change and appointments
Mr Andrea Gatti former EVP - Group Sales and Marketing at Outokumpu
has assumed the role of Corporate Vice President outside the
Executive Committee from February 24, 2009. He will work with
strategic corporate projects and report to Karri Kaitue, Deputy CEO.
Bo Annvik, EVP - Specialty Stainless, has assumed Mr. Gatti's duties
for an interim period.
Shares and shareholders
According to the Nordic Central Securities Depository, Outokumpu's
largest shareholders by group at the end of the first quarter were
Finnish corporations (33.57%), foreign investors (32.49%), Finnish
public sector institutions (15.52%), Finnish private households
(9.65%), Finnish financial and insurance institutions (6.09%), and
Finnish non-profit organizations (2.69%). The list of largest
shareholders is updated regularly on Outokumpu's Internet pages:
www.outokumpu.com
Shareholders that have more than 5% of the shares and votes in
Outokumpu Oyj are Solidium Oy (owned by the State of Finland)
(31.01%) and the Finnish Social Insurance Institution (8.05%).
At the end of March, Outokumpu's closing share price was EUR 8.16
(I/2008: EUR 28.81). The average share price during the first quarter
was EUR 8.94 (I/2008: EUR 23.45) with EUR 11.18 (I/2008: EUR 29.80)
as the highest price and EUR 7.72 (I/2008: EUR 17.20) as the lowest
price during the quarter. At the end of March, the market
capitalization of Outokumpu Oyj shares totaled EUR 1 485 million
(I/2008: EUR 5 225 million). Share turnover on the Nasdaq OMX
Helsinki exchange during the quarter totalled 108.2 million (I/2008:
141.6 million) shares. The total value of shares traded during the
first quarter was EUR 967.4 million (I/2008: EUR 3 320.8 million).
Outokumpu's fully paid-up share capital at the end of March totalled
EUR 309.4 million and consisted of 181 994 266 shares. The average
number of shares outstanding during the first quarter was 180 413 041
excluding treasury shares.
Annual General Meeting 2009
The Annual General Meeting (AGM) approved a dividend of EUR 0.50 per
share for 2008. Dividends totalling EUR 90 million were paid on April
3, 2009.
The AGM authorized the Board of Directors to decide to repurchase the
Group's own shares. The maximum number of shares to be repurchased is
18 000 000, currently representing 9.92% of total number of
registered shares. Based on earlier authorizations Outokumpu
currently holds 1 040 888 of its own shares. The AGM authorized the
Board of Directors to decide to issue shares and to grant special
rights entitling to shares. The maximum number of new shares to be
issued through the share issue and/or by granting special rights
entitling to shares is 18 000 000, and, in addition, the maximum
number of treasury shares to be transferred is 18 000 000. The
authorization includes the right to resolve upon directed share
issues. These authorizations are valid 12 months or until the next
AGM, however no longer than May 31, 2010. To date the authorizations
have not been used.
The AGM decided on the number of the Board members, including the
Chairman and Vice Chairman, to be eight. Evert Henkes, Ole Johansson,
Jarmo Kilpelä, Victoire de Margerie, Anna Nilsson-Ehle, Leena
Saarinen and Anssi Soila were re-elected as members of the Board of
Directors, and Jussi Pesonen was elected as a new member. The AGM
re-elected Ole Johansson as Chairman and Anssi Soila as Vice Chairman
of the Board. The AGM also resolved to form a Shareholders'
Nomination Committee to prepare proposals on the composition and
remuneration of the Board of Directors for presentation to the next
AGM.
At its first meeting, the Board of Directors of Outokumpu appointed
two permanent committees consisting of Board members. Anssi Soila
(Chairman), Jarmo Kilpelä and Leena Saarinen were elected as members
of the Board Audit Committee. Ole Johansson (Chairman), Evert Henkes,
Anna Nilsson-Ehle and Jussi Pesonen were elected as members of the
Board Nomination and Compensation Committee.
KPMG Oy Ab, Authorized Public Accountants, was re-elected as the
Company's auditor for the term ending at the close of the next AGM.
Events after the review period
Due to the very weak demand for stainless steel, Outokumpu intends to
reduce the annual production capacity at the melt shop in Sheffield
in the UK to some 200 000 tons from some 350 000 tons of annual
operational production capacity today. This would also lead to some
110 job reductions. The proposed job reductions will take the number
of Outokumpu employees to approximately 450 in the UK.
Short-term outlook
Visibility concerning the stainless steel market continues to be
short. Both distributors and end-users of stainless steel are still
running down their inventories. The reduction of inventories is
taking place throughout the value chain. Current very low order
volumes are not therefore representative of the underlying trend in
demand. Distributor inventories for standard grades are estimated to
be at or below normal levels.
Outokumpu is currently selling for deliveries in June. Delivery
volumes in the second quarter are expected to be around the same
level as in the first quarter. Base prices appear to have bottomed
out in March and are expected to rise gradually by some 100 EUR/ton
by the end of the second quarter.
Decided cost savings and price increases are expected to gradually
improve the underlying profitability. Thus the underlying operational
loss is expected to be at the same level or slightly smaller in the
second quarter compared to the first quarter. Assuming that metal
prices remain at current levels, no major raw material related gains
or losses are expected. The reduction in working capital is expected
to diminish and cash flow is expected to weaken accordingly.
In Espoo, April 23, 2009
Board of Directors
CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)
Income statement
Jan- Jan- Jan-
March March Dec
EUR million 2009 2008 2008
Continuing operations:
Sales 679 1 689 5 474
Other operating income 10 1 57
Costs and expenses -924 -1 583 -5 552
Other operating expenses -15 -7 -42
Operating profit -249 100 -63
Share of results in
associated companies -3 0 -2
Financial income and expenses
Interest income 5 5 20
Interest expenses -13 -16 -74
Market price gains and losses 5 -7 -2
Other financial income 3 10 11
Other financial expenses 0 -13 -24
Profit before taxes -252 80 -134
Income taxes 64 -19 24
Net profit for the period
from continuing operations -188 61 -110
Discontinued operations:
Net profit for the period
from discontinued operations 0 2 -79
Net profit for the period -187 63 -189
Attributable to:
Owners of the parent -187 63 -189
Non-controlling interests -0 - -0
Earnings per share for profit attributable
to the owners of the parent:
Earnings per share, EUR -1.04 0.35 -1.05
Diluted earnings per share, EUR -1.04 0.35 -1.04
Earnings per share from continuing operations
attributable to the owners of the parent:
Earnings per share, EUR -1.04 0.34 -0.61
Earnings per share from discontinued operations
attributable to the owners of the parent:
Earnings per share, EUR 0.00 0.01 -0.44
Statement of other comprehensive income
Jan- Jan- Jan-
March March Dec
EUR million 2009 2008 2008
Net profit for the period -187 63 -189
Other comprehensive income:
Exchange differences on translating foreign
operations 17 -37 -74
Available-for-sale financial assets
Fair value changes during the financial period -1 16 -38
Reclassification adjustments from equity to
profit - 5 5
Income tax relating to available-for-sale
financial assets -3 -2 8
Cash flow hedges
Fair value changes during the financial period -4 -5 -76
Reclassification adjustments from equity to
profit - -0 6
Income tax relating to cash flow hedges 1 1 18
Net investment hedges
Fair value changes during the financial period 1 -1 13
Income tax relating to net investment hedges -0 0 -3
Share of other comprehensive income of associated
companies 18 - -
Other comprehensive income for the period, net of
tax 29 -22 -140
Total comprehensive income for the period -158 41 -329
Attributable to:
Owners of the parent -158 41 -329
Non-controlling interests -0 - -0
Statement of financial position
March 31 March 31 Dec 31
EUR million 2009 2008 2008
ASSETS
Non-current assets
Intangible assets 580 472 584
Property, plant and equipment 2 043 1 966 2 027
Investments in associated companies 1) 177 164 156
Available-for-sale financial assets 1) 72 135 67
Derivative financial instruments 1) 9 16 9
Deferred tax assets 34 27 37
Trade and other receivables
Interest-bearing 1) 139 121 132
Non interest-bearing 57 51 55
Total non-current assets 3 111 2 953 3 067
Current assets
Inventories 878 1 511 1 204
Available-for-sale financial assets 1) 7 9 8
Derivative financial instruments 1) 34 31 92
Trade and other receivables
Interest-bearing 1) 28 12 25
Non interest-bearing 521 1 126 701
Cash and cash equivalents 1) 381 107 224
Total current assets 1 849 2 796 2 252
Receivables related to assets held for sale
1) 16 198 22
TOTAL ASSETS 4 976 5 947 5 341
EQUITY AND LIABILITIES
Equity attributable to the
equity holders of the Company
Share capital 309 308 308
Premium fund 705 702 702
Other reserves 3 84 -13
Retained earnings 1 719 2 006 1 984
Net profit for the financial year -187 63 -189
2 550 3 162 2 794
Non-controlling interests 1 -0 1
Total equity 2 551 3 162 2 795
Non-current liabilities
Long-term debt 1) 1 152 1 025 1 170
Derivative financial instruments 1) 55 5 48
Deferred tax liabilities 161 242 216
Pension obligations 66 57 64
Provisions 28 35 28
Trade and other payables 2 2 2
Total non-current liabilities 1 464 1 366 1 529
Current liabilities
Current debt 1) 422 381 501
Derivative financial instruments 1) 27 25 54
Income tax liabilities 5 31 5
Provisions 44 38 48
Trade and other payables
Interest-bearing 1) 26 27 26
Non interest-bearing 2) 432 850 378
Total current liabilities 955 1 353 1 012
Liabilities related to assets held for sale
1) 6 66 6
TOTAL EQUITY AND LIABILITIES 4 976 5 947 5 341
1) Included in net interest-bearing debt.
2) Dividend of EUR 90 million, which was paid out on April 3, 2009,
is included in current non interest-bearing debt on March 31, 2009.
Consolidated
statement
of changes in
equity
Attributable to the owners of the parent
Share Unregister- Share Other Fair
value
capital ed share premium reserves reserves
EUR million capital fund
Equity on December
31, 2007 308 - 701 16 57
Total
comprehensive
income for the
period - - - - 11
Dividends - - - - -
Share-based
payments - - - - -
Share options
exercised 0 - 0 - -
Equity on March
31, 2008 308 - 702 16 68
Equity on December
31, 2008 308 - 702 15 -28
Total
comprehensive
income for the
period - - - - 16
Dividends - - - - -
Share-based
payments - - - - -
Share options
exercised 1 - 3 - -
Equity on March
31, 2009 309 - 705 15 -12
Attributable to the owners of
the parent
Treasury Cumulative Retained Non- Total
shares translation earnings controlling equity
EUR million differences interests
Equity on December
31, 2007 -27 -82 2 364 - 3 337
Total
comprehensive
income for the
period - -33 63 - 41
Dividends - - -216 - -216
Share-based
payments - - 0 - 0
Share options
exercised - - - - 0
Equity on March31, 2008 -27 -115 2 211 - 3 162
Equity on December
31, 2008 -27 -138 1 961 1 2 795
Total
comprehensive
income for the
period - 13 -187 0 -158
Dividends - - -90 - -90
Share-based
payments - - 0 - 0
Share options
exercised - - - - 4
Equity on March
31, 2009 -27 -125 1 684 1 2 551
Condensed statement of cash flows
Jan-March Jan-March Jan-Dec
EUR million 2009 2008 2008
Net profit for the period -187 63 -189
Adjustments
Depreciation and amortization 52 50 206
Impairments 0 16 36
Other adjustments -69 1 321
Change in working capital 494 -21 370
Dividends received 3 10 12
Interests received 1 2 5
Interests paid -13 -15 -76
Income taxes paid 20 2 -30
Net cash from
operating activities 301 107 656
Purchases of assets -72 -47 -325
Purchase of subsidiaries - - -204
Proceeds from the sale of subsidiaries - - 49
Proceeds from the sale
of other assets 6 1 31
Net cash from other
investing activities -0 -0 0
Net cash from
investing activities -66 -46 -449
Cash flow before
financing activities 236 61 207
Borrowings of long-term debt 9 - 341
Repayment of long-term debt -9 -8 -236
Change in current debt -79 -30 47
Dividends paid - - -216
Proceeds from the sale
of other financial assets 0 - 0
Other financing cash flow 1 -0 -1
Net cash from
financing activities -78 -38 -64
Net change in cash
and cash equivalents 157 22 143
Cash and cash equivalents at
the beginning of the period 224 86 86
Foreign exchange rate effect 0 -1 -5
Net change in cash
and cash equivalents 157 22 143
Cash and cash equivalents
at the end of the period 381 107 224
Key figures
Jan-March Jan-March Jan-Dec
EUR million 2009 2008 2008
Operating profit margin, % -36.7 5.9 -1.2
Return on capital employed, % -27.5 10.0 -1.6
Return on equity, % -28.1 7.7 -6.2
Return on equity, continuing operations,
% -28.0 7.5 -3.6
Capital employed at end of period 3 376 3 899 3 867
Net interest-bearing
debt at end of period 825 737 1 072
Equity-to-assets ratio
at end of period, % 51.3 53.2 52.4
Debt-to-equity ratio at end of period, % 32.3 23.3 38.4
Earnings per share, EUR -1.04 0.35 -1.05
Earnings per share from
continuing operations, EUR -1.04 0.34 -0.61
Earnings per share from
discontinued operations, EUR 0.00 0.01 -0.44
Average number of shares
outstanding, in thousands 1) 180 413 180 112 180 185
Fully diluted earnings per share, EUR -1.04 0.35 -1.04
Fully diluted average number
of shares, in thousands 1) 180 248 181 050 180 995
Equity per share at end
of period, EUR 14.09 17.56 15.50
Number of shares outstanding
at end of period,in thousands 1) 180 953 180 127 180 233
Capital expenditure,
continuing operations 62 41 544
Depreciation,
continuing operations 52 50 206
Average personnel for the
period, continuing operations 8 336 8 145 8 552
1) The number of own shares repurchased is
excluded.
NOTES TO THE INCOME STATEMENT AND BALANCE SHEET
This interim financial report is prepared in accordance with IAS 34
(Interim Financial Reporting). Mainly the same accounting policies
and methods of computation have been followed in the interim
financial statements as in the annual financial statements for 2008.
Outokumpu has applied the IFRS 8 - Operating segments as of January
1, 2009. According to IFRS 8, segment information should be based on
management's internal reporting structure and accounting principles.
As disclosed in financial statement for 2008, Outokumpu's segment
information has already been based on management reporting structure
and therefore the operating segments are the same as they were
previously, General Stainless and Specialty Stainless. Outokumpu has
also applied amended standard IAS 1 - Presentation of financial
statements as of January 1, 2009, which has changed the presentation
of income statement and statement of changes in equity. These changes
have impacted the presentation of financial statements.
Use of estimates
The preparation of the financial statements in accordance with IFRS
requires management to make estimates and assumptions that 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
realizability of certain assets, the useful lives of tangible and
intangible assets, income taxes, provisions, pension obligations,
impairment of goodwill and other items. Although these estimates are
based on management's best knowledge of current events and actions,
actual results may differ from the estimates.
Shares and share capital
The total number of Outokumpu Oyj shares was 181 994 266 and the
share capital amounted to EUR 309.4 million on March 31, 2009.
Outokumpu Oyj held 1 040 888 treasury shares on March 31, 2009. This
corresponded to 0.6% of the share capital and the total voting rights
of the Company on March 31, 2009.
Outokumpu has a stock option program for management (2003 option
program). The stock options have been allocated as part of the
Group's incentive programs to key personnel of Outokumpu. The option
program has three parts 2003A, 2003B and 2003C. On March 31, 2009 a
total of 650 881 Outokumpu Oyj shares had been subscribed for on the
basis of 2003A stock option program, a total of 82 830 Outokumpu Oyj
shares on the basis of 2003B stock option program and a total of 10
000 Outokumpu Oyj shares on the basis of 2003C stock option program.
Share subscription period with the Outokumpu stock options 2003A
ended on March 1, 2009. An aggregate maximum of 945 990 shares can be
subscribed with the remaining 2003B stock options and 90 500 shares
with the remaining 2003C stock options. In accordance with the terms
and conditions of the option program, the dividend adjusted share
price for a stock option 2003B was EUR 10.31 and for stock option
2003C EUR 10.94 on March 31, 2009. As a result of the share
subscriptions with the 2003 stock options, Outokumpu Oyj's share
capital may be increased by a maximum of EUR 1 762 033 and the number
of shares by a maximum of 1 036 490 shares. This corresponds to 0.6%
of the Company's shares and voting rights.
Outokumpu has also two share-based incentive programs for years
2006-2010 and 2009-2013 as part of the key employee incentive and
commitment system of the Company.
The first earning period for 2006-2010 incentive program was ended on
December 31, 2008. Based on the achievement of the targets, the Board
confirmed that the participants would receive 50% of the maximum
number of shares. Altogether 177 715 shares were distributed to 125
persons in March 2009. Outokumpu used its treasury shares for the
reward payment, which meant that the total number of shares of the
company did not change.
On February 3, 2009, the Board of Directors of Outokumpu approved the
second share-based incentive plan to be offered to the key management
of Outokumpu for years 2009-2013. The Program will last five years,
comprising three earning periods of three calendar years each. The
earning periods commence on January 1, 2009, January 1, 2010 and
January 1, 2011. The Board approves the number of participants, final
allocations and performance criteria separately for each earning
period. For earning period 2009-2011, the Board approved 139
employees to be in the scope of the Program. The amount of reward
will be determined and paid to the participants on the basis of the
achievement of performance targets after the financial statements of
the last year of earning period have been prepared. The rewards to be
paid on the basis of the program will correspond to a maximum of 1
500 000 Outokumpu shares. No new shares will be issued in connection
with the program and therefore the incentive plan will have no
diluting effect.
If persons covered by the programs were to receive the number of
shares in accordance with the maximum reward, currently a total of
911 430 shares, their shareholding obtained via the program would
amount to 0.5% of the Company's shares and voting rights.
The detailed information of the 2003 option program and of the
share-based incentive programs can be found in the annual report of
Outokumpu and from Outokumpu's Internet site www.outokumpu.com.
Non-current assets held for sale and discontinued operations
Outokumpu Brass produces brass rods for applications in the
construction, electrical and automotive industries. The brass rod
plant is located in Drünen in the Netherlands and the unit also has a
50% stake in a brass rod company in Gusum, Sweden. Outokumpu Brass
employs some 150 employees. The assets and liabilities of brass rod
business are presented as held for sale. Outokumpu intends to divest
the brass rod business.
Specification of non-current
assets held for sale
and discontinued operations
Income statement
Jan-March Jan-March Jan-Dec
EUR million 2009 2008 2008
Sales 8 145 267
Expenses -7 -138 -269
Operating profit 1 7 -2
Net financial items -0 -1 -4
Profit before taxes 1 6 -6
Taxes -0 -1 -0
Profit after taxes 1 5 -6
Impairment loss recognized
on the fair valuation of the
Outokumpu Copper Tube and Brass
division's assets and liabilities -0 -3 -6
Loss on the sale of copper tube
business - - -66
Taxes - - -
After-tax result from the
disposal and impairment loss -0 -3 -73
Non-controlling interests - - -
Net profit for the period
from discontinued operations 0 2 -79
Statement of financial position
March 31 March 31 Dec 31
EUR million 2009 2008 2008
Assets
Intangible and tangible assets 2 6 2
Other non-current assets 3 4 3
Inventories 7 97 9
Other current non
interest-bearing assets 5 92 8
16 198 22
Liabilities
Provisions 2 5 2
Other non-current non
interest-bearing liabilities 1 4 1
Trade payables 2 45 2
Other current non
interest-bearing liabilities 0 12 1
6 66 6
Cash flows
Jan-March Jan-March Jan-Dec
EUR million 2009 2008 2008
Operating cash flows 6 0 -8
Investing cash flows 0 -3 -16
Financing cash flows -6 6 19
Total cash flows 0 2 -5
Major non-recurring items
in operating profit
Jan-March Jan-March Jan-Dec
EUR million 2009 2008 2008
Redundancy provisions -5 - -17
Thin Strip restructuring in Britain - - -66
-5 - -83
Major non-recurring items in
financial income and expenses
Jan-March Jan-March Jan-Dec
EUR million 2009 2008 2008
Impairment of Belvedere shares - -12 -21
- -12 -21
Income taxes
Jan-March Jan-March Jan-Dec
EUR million 2009 2008 2008
Current taxes -0 -19 -6
Deferred taxes 64 0 30
64 -19 24
Property, plant and equipment
Jan 1 - Jan 1 - Jan 1 -
March 31 March 31 Dec 31
EUR million 2009 2008 2008
Historical cost at the
beginning of the period 4 021 3 984 3 984
Translation differences 2 -22 -190
Additions 64 40 301
Acquisition of subsidiaries - - 36
Disposals -2 -4 -108
Reclassifications -1 -1 -2
Historical cost at
the end of the period 4 083 3 997 4 021
Accumulated depreciation at
the beginning of the period -1 994 -2 004 -2 004
Translation differences -2 16 115
Disposals 1 4 83
Reclassifications 0 0 -0
Depreciation -45 -47 -188
Accumulated depreciation at
the end of the period -2 040 -2 030 -1 994
Carrying value at
the end of the period 2 043 1 966 2 027
Carrying value at the
beginning of the period 2 027 1 980 1 980
Commitments
March 31 March 31 Dec 31
EUR million 2009 2008 2008
Mortgages and pledges
Mortgages on land 189 121 189
Other pledges 5 0 5
Guarantees
On behalf of subsidiaries
for commercial commitments 37 36 55
On behalf of associated companies
for financing 5 4 5
Other commitments 57 63 59
Minimum future lease payments
on operating leases 55 53 52
Group's off-balance sheet investment commitments totaled
EUR 99 million on March 31, 2009 (March 31, 2008: EUR 48 million,
Dec 31, 2008: EUR 93 million).
Related party transactions
Transactions and balances
with associated companies
March 31 March 31 Dec 31
EUR million 2009 2008 2008
Sales 0 0 0
Purchases -2 -3 -13
Financial income and expenses 0 0 2
Loans and other receivables 7 9 7
Trade and other receivables 1 1 0
Fair values and nominal
amounts of
derivative
instruments
March
March 31 March 31 31 Dec 31 March 31 Dec 31
2009 2009 2009 2008 2009 2008
Positive Negative Net Net
fair fair fair fair Nominal Nominal
EUR million value value value value amounts amounts
Currency and interest
rate derivatives
Currency forwards 27 61 -33 0 1 757 1 920
Interest rate swaps - 2 -2 2 200 200
Cross-currency
swaps 8 - 8 7 106 46
Currency options,
bought 1 - 1 - 35 -
Currency options,
sold - 1 -1 - 36 -
Number Number
of of
shares, shares,
million million
Stock options
Belvedere Resources
Ltd. 0 - 0 0 3.7 3.7
Tons Tons
Metal derivatives
Forward and futures
nickel contracts 0 2 -2 -0 429 4 729
Nickel options,
bought 2 - 2 14 6 780 16 758
Nickel options,
sold - 0 -0 -14 5 460 11 478
Forward and futures
copper contracts 1 1 0 -0 3 625 4 925
Forward and futures
zinc contracts 0 0 0 -0 725 1 025
Emission allowance
derivatives 2 - 2 1 270 000 270 000
TWh TWh
Electricity
derivatives 1 16 -15 -11 1.1 1.3
43 82 -39 -1
Segment information
General Stainless
EUR million I/08 II/08 III/08 IV/08 2008
Sales 1 304 1 222 933 687 4 147
of which Tornio Works 905 833 567 396 2 701
Operating profit 81 125 -35 -177 -6
of which Tornio Works 67 114 -22 -93 66
Operating capital at
the end of period 2 722 2 671 2 820 2 663 2 663
Average personnel
for the period 3 583 4 000 4 163 3 989 3 934
Deliveries of main
products (1 000 tons)
Cold rolled 196 162 151 121 628
White hot strip 102 85 58 51 297
Semi-finished products 100 113 76 51 340
Total deliveries
of the division 398 359 285 223 1 265
EUR million I/09
Sales 476
of which Tornio Works 270
Operating profit -157
of which Tornio Works -129
Operating capital at
the end of period 2 390
Average personnel
for the period 3 917
Deliveries of main
products (1 000 tons)
Cold rolled 114
White hot strip 57
Semi-finished products 39
Total deliveries
of the division 210
Specialty Stainless
EUR million I/08 II/08 III/08 IV/08 2008
Sales 786 778 630 512 2 705
Operating profit 42 44 -63 -123 -101
Operating capital at
the end of period 1 430 1 449 1 378 1 174 1 174
Average personnel
for the period 4 115 4 096 4 192 4 103 4 127
Deliveries of main
products (1 000 tons)
Cold rolled 46 44 35 29 154
White hot strip 45 40 31 27 142
Quarto plate 35 37 28 27 126
Tubular products 19 18 14 15 66
Long products 14 14 14 10 52
Total deliveries
of the division 161 153 121 106 541
EUR million I/09
Sales 371
Operating profit -82
Operating capital at
the end of period 1 007
Average personnel
for the period 3 892
Deliveries of main
products (1 000 tons)
Cold rolled 25
White hot strip 23
Quarto plate 20
Tubular products 14
Long products 9
Total deliveries
of the division 92
Other operations
EUR million I/08 II/08 III/08 IV/08 2008
Sales 64 63 69 62 258
Operating profit -20 4 29 25 38
Operating capital at
the end of period -20 283 266 214 214
Average personnel
for the period 447 487 507 525 492
EUR million I/09
Sales 66
Operating profit -12
Operating capital at
the end of period 108
Average personnel
for the period 527
Income statement by quarter
EUR million I/08 II/08 III/08 IV/08 2008
Continuing operations:
Sales
General Stainless 1 304 1 222 933 687 4 147
of which intersegment sales 284 337 216 157 993
Specialty Stainless 786 778 630 512 2 705
of which intersegment sales 124 120 85 78 407
Other operations 64 63 69 62 258
of which intersegment sales 57 57 61 61 235
Intra-group sales -465 -514 -362 -295 -1 636
Total sales 1 689 1 549 1 270 966 5 474
Operating profit
General Stainless 81 125 -35 -177 -6
Specialty Stainless 42 44 -63 -123 -101
Other operations -20 4 29 25 38
Intra-group items -3 1 3 4 6
Total operating profit 100 174 -66 -271 -63
Share of results
in associated companies 0 1 -2 -1 -2
Financial income and expenses -20 -8 -14 -26 -69
Profit before taxes 80 166 -82 -298 -134
Income taxes -19 -36 9 71 24
Net profit for the period
from continuing operations 61 130 -73 -228 -110
Net profit for the period
from discontinued
operations 2 -74 -1 -5 -79
Net profit for the period 63 56 -74 -233 -189
Attributable to:
The owners of the parent 63 56 -74 -233 -189
Non-controlling interests - - - -0 -0
EUR million I/09
Continuing operations:
Sales
General Stainless 476
of which intersegment sales 97
Specialty Stainless 371
of which intersegment sales 75
Other operations 66
of which intersegment sales 5
Intra-group sales -233
Total sales 679
Operating profit
General Stainless -157
Specialty Stainless -82
Other operations -12
Intra-group items 2
Total operating profit -249
Share of results
in associated companies -3
Financial income and expenses 0
Profit before taxes -252
Income taxes 64
Net profit for the period
from continuing operations -188
Net profit for the period
from discontinued
operations 0
Net profit for the period -187
Attributable to:
The owners of the parent -187
Non-controlling interests -0
Major non-recurring
items in operating profit
EUR million I/08 II/08 III/08 IV/08 2008
Specialty Stainless
Redundancy provisions - - - -17 -17
Thin Strip restructuring
in Britain - - -66 - -66
- - -66 -17 -83
EUR million I/09
Specialty Stainless
Redundancy provisions -5
Thin Strip restructuring
in Britain -
-5
Major non-recurring items in
financial income and expenses
EUR million I/08 II/08 III/08 IV/08 2008
Impairment of Belvedere shares -12 - - -9 -21
-12 - - -9 -21
EUR million I/09
Impairment of Belvedere shares -
-
Key figures by quarter
EUR million I/08 II/08 III/08 IV/08
Operating profit margin, % 5.9 11.2 -5.2 -28.1
Return on capital employed, % 10.0 17.2 -6.3 -26.8
Return on equity, % 7.7 7.0 -9.3 -31.5
Return on equity,
continuing operations, % 7.5 16.3 -9.2 -30.8
Capital employed at end of period 3 899 4 166 4 228 3 867
Net interest-bearing
debt at end of period 737 939 1 096 1 072
Equity-to-assets ratio
at end of period, % 53.2 54.8 52.3 52.4
Debt-to-equity ratio
at end of period, % 23.3 29.1 35.0 38.4
Earnings per share, EUR 0.35 0.31 -0.41 -1.30
Earnings per share from
continuing operations, EUR 0.34 0.72 -0.41 -1.27
Earnings per share from
discontinued operations, EUR 0.01 -0.41 -0.01 -0.03
Average number of shares
outstanding, in thousands 1) 180 112 180 172 180 223 180 231
Equity per share
at end of period, EUR 17.56 17.91 17.38 15.50
Number of shares outstanding
at end of period, in thousands 1) 180 127 180 222 180 228 180 233
Capital expenditure,
continuing operations 41 56 317 129
Depreciation, continuing operations 50 50 52 54
Average personnel for the period,
continuing operations 8 145 8 583 8 862 8 617
EUR million I/09
Operating profit margin, % -36.7
Return on capital employed, % -27.5
Return on equity, % -28.1
Return on equity,
continuing operations, % -28.0
Capital employed at end of period 3 376
Net interest-bearing
debt at end of period 825
Equity-to-assets ratio
at end of period, % 51.3
Debt-to-equity ratio
at end of period, % 32.3
Earnings per share, EUR -1.04
Earnings per share from
continuing operations, EUR -1.04
Earnings per share from
discontinued operations, EUR 0.00
Average number of shares
outstanding, in thousands 1) 180 413
Equity per share
at end of period, EUR 14.09
Number of shares outstanding
at end of period, in thousands 1) 180 953
Capital expenditure,
continuing operations 62
Depreciation, continuing operations 52
Average personnel for the period,
continuing operations 8 336
1) The number of own shares repurchased is excluded.
Definitions of key financial figures
Total equity + net interest-bearing
Capital employed = debt
Operating capital = Capital employed + net tax liability
Return on equity = Net profit for the financial period × 100
Total equity (average for the period)
Return on capital = Operating profit × 100
employed (ROCE) Capital employed (average for the period)
Net interest- Total interest-bearing debt
bearing debt = - total interest-bearing assets
Equity-to-assets ratio = Total equity × 100
Total assets - advances received
Debt-to-equity ratio = Net interest-bearing debt × 100
Total equity
Net profit for the financial period
attributable to the owners of the
Earnings per share = parent
Adjusted average number
of shares during the period
Equity attributable to
Equity per share = the owners of the parent
Adjusted number of shares
at the end of the period
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