Outotec Oyj - Interim report (Q1 and Q3)

Outotec's interim report January-June 2016

OUTOTEC OYJ                         INTERIM REPORT                    JULY
27, 2016 AT 1:00 PM


INTERIM REPORT JANUARY-JUNE 2016

Minerals Processing stabilizing; Metals, Energy & Water remains challenging

Profitability guidance range narrowed

January-June 2016 in brief (comparison period January-June 2015):

  * Order intake: EUR 451 (654) million, -31% (in comparable currencies -26%)
  * Service order intake: EUR 214 (249) million, -14% (in comparable currencies
    -5%)
  * Order backlog: EUR 1,017 (1,207) million, -16%
  * Sales: EUR 507 (588) million, -14% (in comparable currencies -9%)
  * Service sales: EUR 214 (244) million, -12% (in comparable currencies -4%)
  * EBIT: EUR -13 (12) million
  * Adjusted EBIT*: EUR 0 (24) million
  * Adjusted EBIT*: 0 (4)%
  * Net cash flow from operating activities: EUR -50 (-43) million
  * Earnings per share: EUR -0.09 (0.03)


April-June 2016 in brief (comparison period April-June 2015):

  * Order intake: EUR 281 (395) million, -29% (in comparable currencies -23%)
  * Service order intake: EUR 112 (118) million, -5% (in comparable currencies
    +5%)
  * Sales: EUR 268 (311) million, -14% (in comparable currencies -9%)
  * Service sales: EUR 100 (126) million, -20% (in comparable currencies -13%)
  * EBIT: EUR -1 (8) million
  * Adjusted EBIT*: EUR 5 (16) million
  * Adjusted EBIT*: 2 (5)%


Financial guidance for 2016: sales reiterated, profitability guidance range
narrowed

Based on the continued challenges of the Metals, Energy & Water segment, current
order backlog and uncertain market condition, the management narrows its
profitability guidance range and expects that in 2016:

  * Sales will be approximately EUR 1.0-1.2 billion, and
  * Adjusted EBIT* will be approximately 2-4% (previously 2-5%)
The wide guidance range reflects the current volatility of the market.

* Excluding restructuring and acquisition-related costs as well as purchase
price allocation amortizations.




Summary of the Group's key           Q2      Q2    Q1-Q2   Q1-Q2 Last 12   Q1-Q4
figures

                                   2016    2015     2016    2015  months    2015
--------------------------------------------------------------------------------
Order intake, EUR million         280.7   394.7    450.9   654.3   986.5 1,189.9
--------------------------------------------------------------------------------
Service order intake, EUR         112.2   117.8    214.1   249.0   461.7   496.6
million
--------------------------------------------------------------------------------
Share of services in order         40.0    29.9     47.5    38.1    46.8    41.7
intake, %
--------------------------------------------------------------------------------
Order backlog at the end of     1,017.3 1,207.2  1,017.3 1,207.2 1,017.3 1,102.8
the period, EUR million
--------------------------------------------------------------------------------
Sales, EUR million                267.6   310.8    507.4   588.3 1,120.3 1,201.2
--------------------------------------------------------------------------------
Service sales, EUR million        100.2   125.8    214.3   244.1   481.5   511.3
--------------------------------------------------------------------------------
Share of services in sales, %      37.5    40.5     42.2    41.5    43.0    42.6
--------------------------------------------------------------------------------
Gross margin, %                    26.1    28.8     25.2    28.6    26.3    27.9
--------------------------------------------------------------------------------
Adjusted EBIT(1), EUR million       4.9    16.1      0.1    23.7    32.4    56.0
--------------------------------------------------------------------------------
Adjusted EBIT(1), %                 1.8     5.2      0.0     4.0     2.9     4.7
--------------------------------------------------------------------------------
EBIT, EUR million                  -0.8     8.0    -13.0    11.6   -36.9   -12.3
--------------------------------------------------------------------------------
EBIT, %                            -0.3     2.6     -2.6     2.0    -3.3    -1.0
--------------------------------------------------------------------------------
Profit before taxes, EUR           -3.1     5.8    -17.6     6.7   -47.3   -22.9
million
--------------------------------------------------------------------------------
Net cash from operating           -16.1    -7.6    -49.7   -42.9    62.8    69.5
activities, EUR million
--------------------------------------------------------------------------------
Net interest-bearing debt at
the end of the period, EUR     -49.8(2)   105.0 -49.8(2)   105.0   -49.8    39.9
million
--------------------------------------------------------------------------------
Equity at the end of the       539.7(2)   444.1 539.7(2)   444.1   539.7   404.7
period, EUR million
--------------------------------------------------------------------------------
Equity-to-assets ratio at the   41.7(2)    33.4  41.7(2)    33.4    41.7    31.1
end of the period, %
--------------------------------------------------------------------------------
Gearing at the end of the       -9.2(2)    23.7  -9.2(2)    23.7    -9.2     9.9
period, %
--------------------------------------------------------------------------------
Working capital at the end of     -36.5    38.7    -36.5    38.7   -36.5   -89.4
the period, EUR million
--------------------------------------------------------------------------------
Return on investment, %, LTM       -3.9     1.8     -3.9     1.8    -3.9    -1.5
--------------------------------------------------------------------------------
Return on equity, %, LTM           -7.3     0.4     -7.3     0.4    -7.3    -4.0
--------------------------------------------------------------------------------
Personnel at the end of the       4,298   4,948    4,298   4,948   4,298   4,859
period
--------------------------------------------------------------------------------
Earnings per share, EUR           -0.03    0.02    -0.09    0.03   -0.21   -0.10
--------------------------------------------------------------------------------
(1 )Excluding restructuring and acquisition-related costs and PPA amortizations.
(2) If the hybrid bond were treated as a liability: the equity-to-assets ratio
would be 30.1%, gearing 25.7%, and net interest-bearing debt EUR 100.2 million.


CFO and acting CEO Jari Ålgars:

"Low metal prices, China's uncertain growth outlook and the profitability
challenges of the industry continue to put pressure on producers to cut
production and postpone investments. There was slight recovery from the
particularly weak first quarter especially in the Minerals Processing segment's
market. The Metals, Energy & Water segment's market was slow, translating into
lower order intake.

In the second quarter, our order intake declined 23% and sales declined 9% from
the comparison period in comparable currencies. We were able to reduce our fixed
costs and the adjusted EBIT was EUR 5 million. The net profit was EUR -3 million
due to restructuring costs. Outotec repaid EUR 30 million debt and the company's
liquidity and equity remained solid. Improving our free cash flow and ensuring a
solid balance sheet continue to be our key priorities.

We continued to invest in R&D with a focus on cost competitive solutions to
better meet our customers' demanding environment. We are currently delivering
the first demo cells of one of our achievements, the new modular cPlant
Flotation, which is enabling fast track to production.

The market outlook in the mining and metals industry remains weak, and therefore
the timing of projects is difficult to predict. Service demand is expected to be
weaker due to postponements in maintenance and modernization projects and
customers' focus on reducing their production costs. In the current environment,
it is increasingly difficult to finalize projects and collect overdue
receivables, and we have increased our efforts in both of these areas.

While we have made significant progress in right-sizing our fixed costs, we were
not able to fully compensate for the lower sales and the continued challenges of
the Metals, Energy & Water segment. Thus, we will continue our saving efforts."



This text is a summary of Outotec's January-June 2016 Interim Report. The full
report is available as an attachment to this report.

FURTHER INFORMATION

Outotec Oyj

Jari Ålgars, CFO, acting CEO
Tel. +358 20 529 2007

Rita Uotila, Vice President - Investor Relations
Tel. +358 20 529 2003, mobile +358 400 954 141

Format for e-mail addresses: firstname.lastname@outotec.com


BRIEFING/TELECONFERENCE

Date: Wednesday, July 27, 2016

Time: 3:00 PM

Venue: Outotec House, Rauhalanpuisto 9, Espoo, Finland

Joining teleconference

To register as a participant for the teleconference and Q&A session, please dial
in 5 to 10 minutes before the beginning of the event using the confirmation code
and numbers below.

Conference ID: 6488177
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Sweden: +46(0)8 5065 3936
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The contact information is gathered for registration purposes only and it is not
used for commercial purposes.

FINANCIAL REPORTING SCHEDULE IN 2016

  * Interim Report for January-September: October 28, 2016


DISTRIBUTION

Nasdaq Helsinki
Main media
www.outotec.com



Outotec provides leading technologies and services for the Sustainable use of
Earth's natural resources. As the global leader in minerals and metals
processing technology, we have developed many breakthrough technologies over the
decades for our customers in the metals and mining industry. We also provide
innovative solutions for the treatment of industrial water, the utilization of
alternative energy sources and the chemical industry. Outotec shares are listed
on Nasdaq Helsinki.


[HUG#2030965]

Attachments:

Outotec s interim report January-June 2016.pdf