2015-07-23 08:00:02 CEST
2015-07-23 08:00:10 CEST
BIRTINGARSKYLDAR UPPLÝSNINGAR
Outokumpu Oyj - Interim report (Q1 and Q3)
Outokumpu reports EUR -25 million underlying EBIT for the second quarter of 2015: Improvement in Coil EMEA not enough to cover losses in Coil Americas
OUTOKUMPU OYJ
INTERIM REPORT
July 23, 2015 at 9.00 am EET
Underlying EBIT of EUR -25 million. Improvement in Coil EMEA not enough to
cover losses in Coil Americas
Highlights in the second quarter 2015
Outokumpu's underlying EBIT was EUR -25 million compared to EUR 2 million in
the first quarter of 2015. While European restructuring progressed and
performance in Coil EMEA improved, a decline in financial performance was
driven by low delivery volumes and weak performance in Coil Americas. Coil
Americas' underlying EBIT loss increased to EUR 50 million. Operating cash flow
was EUR -41 million.
-- Stainless steel deliveries were 616,000 tonnes1 (I 2015: 620,000 tonnes).
-- Underlying EBITDA2 was EUR 57 million (I 2015: EUR 77 million) and
underlying EBIT2 was EUR -25 million (I 2015: EUR 2 million). The decline
was driven by weak performance in Coil Americas.
-- EBIT was EUR -26 million (I 2015: EUR -10 million). The net effect of raw
material-related inventory and metal derivative gains/losses was EUR -1
million (I 2015: EUR 7 million). There were no non-recurring items in the
second quarter (I 2015 EUR -19 million).
-- Operating cash flow was EUR -41 million (I 2015: EUR -62 million).
-- Net debt increased to EUR 2,116 million (March 31, 2015: EUR 2,034 million)
and gearing was 96.4% (March 31, 2015: 91.5%).
1) Metric ton = 1,000 kg
2) EBIT/EBITDA excluding non-recurring items, raw material-related inventory
gains/losses and metal derivative gains/losses
Group key figures
II/15 I/15 II/14 2014
--------------------------------------------------------------------------------
Sales EUR 1,694 1,768 1,753 6,844
million
EBITDA EUR 55 65 70 104
million
EBITDA excl. non-recurring items EUR 55 83 78 263
million
Underlying EBITDA 1) EUR 57 77 75 232
million
EBIT EUR -26 -10 -10 -243
million
EBIT excl. non-recurring items EUR -26 8 -3 -57
million
Underlying EBIT 2) EUR -25 2 -6 -88
million
Result before taxes EUR -65 -46 -48 -459
million
Net result for the period EUR -62 -45 -49 -439
million
Earnings per share 3) EUR -0.14 -0.10 -0.14 -1.24
Return on capital employed % -2.5 -1.0 -1.0 -5.8
Net cash generated from operating EUR -41 -62 -257 -126
activities million
Net debt at the end of period EUR 2,116 2,034 2,068 1,974
million
Debt-to-equity ratio at the end of % 96.4 91.5 92.5 92.6
period
Capital expenditure EUR 35 26 33 127
million
Stainless steel deliveries 4) 1,000 616 620 675 2,554
tonnes
Stainless steel base price 5) EUR/tonne 1,057 1,050 1,093 1,082
Personnel at the end of period, excluding summer 11,665 11,824 12,365 12,125
trainees 6)
--------------------------------------------------------------------------------
1) EBITDA excluding non-recurring items, other than impairments; raw
material-related inventory gains/losses and metal derivative
gains/losses, unaudited.
2) EBIT excluding non-recurring items, raw material-related inventory
gains/losses and metal derivative gains/losses, unaudited.
3) 2014 figures calculated based on the
rights-issue-adjusted weighted average number of
shares.
4) Excludes ferrochrome deliveries.
5) Stainless steel: CRU - German base price (2
mm cold rolled 304 sheet).
6) On June 30, 2015 Group employed in addition some 800 summer
trainees (June 30, 2014: some 800).
Business and financial outlook for the third quarter of 2015
Outokumpu estimates stainless steel end-user demand to remain relatively
healthy in the third quarter. However, the European markets will be seasonally
slow during the summer months, and in Americas, the pressure from Asian imports
continues and low nickel price puts constraints on distributor sector buying,
pricing and rebound of the market. In APAC region stainless steel market
remains difficult.
Outokumpu estimates somewhat lower delivery volumes quarter-on-quarter with
seasonal decline in Europe and gradual increase in Americas. The Group's
underlying EBIT for the third quarter is estimated to improve from the second
quarter, but to remain negative mostly due to seasonal impacts. In addition to
the ongoing savings programs, special measures are taken to improve
profitability in Coil Americas. With current prices, the net impact of raw
material-related inventory and metal derivative gains/losses on profitability
is expected to be EUR 10-15 million negative.
Outokumpu's operating result may be impacted by non-recurring items associated
with the ongoing restructuring programs. This outlook reflects the current
scope of operations.
CEO Mika Seitovirta:
“As anticipated, headwinds in the United States continued to burden Outokumpu's
financial performance in the second quarter, and we reported an underlying EBIT
loss of EUR 25 million for the Group. Operating cash flow was EUR -41 million
and net debt rose to EUR 2.1 billion. The second quarter showed continued
progress in Coil EMEA, but another disappointing period for Coil Americas. We
are expecting our third-quarter underlying EBIT to improve compared to the
second quarter but to remain negative, mainly due to seasonal effects.
The stainless steel market has reflected the economic and political turbulence,
and for example nickel price has remained at very low levels. Despite this,
demand in Europe has been relatively healthy and the biggest import pressure
has eased off following the introduction of the antidumping measures. However,
the base price increase has been very modest, and prices remain historically at
a low level. The Asian import seems to have shifted to the US, where share of
imports rose to 32.2% during April-May and imports from China alone were 13.3%.
Coil EMEA, our biggest business area, improved its financial performance in the
second quarter and reported an underlying EBIT of EUR 42 million. The closure
of Bochum melt shop in June marked an important milestone which enables
significantly higher utilization of the melt shops in Tornio, Finland and
Avesta, Sweden. Around EUR 20 million of savings from the closure will be
visible already in the second half of 2015. The next steps will be the closure
of Benrath, made possible by the investments in Krefeld. Furthermore, we will
improve commercial efficiency in order to increase sales, as well as continue
strict cost control.
In Americas, the underlying demand for stainless steel remains stable. However,
distributors, our most important channel to the market, continue to have high
inventories, and stainless steel price has deteriorated. Coil Americas suffered
from weak order intake and low capacity utilization in Calvert, and the
business area reported an underlying EBIT loss of EUR 50 million. In the market
filled by imports and high inventories we have not been able to regain the
ground we lost last year due to the technical difficulties. With the new leader
in place, Coil Americas is now taking decisive measures to gain back market
share, improve operational efficiency and streamline costs.
While Outokumpu losses have further reduced year on year, we cannot be
satisfied with our progress in the past two quarters. In addition to the
ongoing programs, we are taking a number of additional measures to turn us back
to the right trajectory. The actions will address Coil Americas in particular,
but will deliver overall cost savings and operational improvements across the
company.”
Conference call today on Thursday, July 23, 2015 at 3.00 pm EET
A conference call will be held on Thursday, July 23, 2015 at 3.00 pm EET (8.00
am US EDT, 1.00 pm UK time, 2.00 pm CET). To participate, please dial in 5-10
minutes before the beginning of the event:
UK/Europe: +44 1452 560 304
US & Canada: +1 631 621 5256
Event code: 76546549
The event can be followed online: link to the audiocast
A recording of the event will be available at:
www.outokumpu.com/en/investors/webcasts as of July 23, 2015 at around 6.00 pm
EET.
Presentation material will be available before the event at
www.outokumpu.com/Investors.
For more information:
Investors: Johanna Henttonen, tel. +358 9 421 3804, mobile +358 40 530 0778
Media: Saara Tahvanainen, tel. +358 40 589 0223
Outokumpu Group
Outokumpu is a global leader in stainless steel. We create advanced materials
that are efficient, long lasting and recyclable - thus building a world that
lasts forever. Stainless steel, invented a century ago, is an ideal material to
create lasting solutions in demanding applications from cutlery to bridges,
energy and medical equipment: it is 100% recyclable, corrosion-resistant,
maintenance-free, durable and hygienic. Outokumpu employs more than 12 000
professionals in more than 30 countries, with headquarters in Espoo, Finland
and shares listed on the Nasdaq Helsinki. www.outokumpu.com
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