2015-04-29 08:00:00 CEST
2015-04-29 08:00:08 CEST
BIRTINGARSKYLDAR UPPLÝSNINGAR
Outokumpu Oyj - Interim report (Q1 and Q3)
Outokumpu reports EUR 2 million underlying EBIT for the first quarter of 2015
OUTOKUMPU OYJ
INTERIM REPORT
April 29, 2015 at 9.00 am EET
Underlying EBIT EUR 2 million: Coil EMEA continues on track but Coil Americas
disappoints
Highlights in the first quarter 2015
Outokumpu reported underlying EBIT of EUR 2 million versus EUR -9 million in
the fourth quarter of 2014. The improvement in profitability was driven by
higher volumes and steady performance in Coil EMEA, whereas Coil Americas'
performance was disappointing. Operating cash flow was negative EUR 62 million.
-- Stainless steel deliveries grew by 9.2% and were 620,000 tonnes1 (IV 2014:
568,000 tonnes).
-- Underlying EBITDA2 was EUR 77 million compared to EUR 72 million in the
fourth quarter and underlying EBIT2 was EUR 2 million (IV 2014: EUR -9
million). The improvement was mainly due to higher delivery volumes and
benefits from the profitability improvement programs.-- EBIT was EUR -10 million (IV 2014: EUR -36 million). EBIT includes
non-recurring items of EUR -19 million (IV 2014: EUR -27 million), as well
as the net effect of raw material-related inventory and metal derivative
gains of EUR 7 million (IV 2014: EUR 0 million).
-- Operating cash flow was EUR -62 million (IV 2014: EUR 122 million).
-- Net debt increased to EUR 2,034 million (Dec 31, 2014: EUR 1,974 million)
while gearing improved to 91.5% (Dec 31, 2014: 92.6%) mainly due to the
positive equity development.
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
I/15 IV/14 I/14 2014
--------------------------------------------------------------------------------
Sales EUR 1,768 1,674 1,617 6,844
million
EBITDA EUR 65 45 -78 104
million
EBITDA excl. non-recurring items EUR 83 73 34 263
million
Underlying EBITDA 1) EUR 77 72 37 232
million
EBIT EUR -10 -36 -188 -243
million
EBIT excl. non-recurring items EUR 8 -9 -48 -57
million
Underlying EBIT 2) EUR 2 -9 -45 -88
million
Result before taxes EUR -46 -75 -262 -459
million
Net result for the period EUR -45 -56 -248 -439
million
Earnings per share 3) EUR -0.10 -0.13 -1.66 -1.24
Return on capital employed % -1.0 -3.5 -18.3 -5.8
Net cash generated from operating EUR -62 122 -14 -126
activities million
Net debt at the end of period EUR 2,034 1,974 1,733 1,974
million
Debt-to-equity ratio at the end of % 91.5 92.6 75.9 92.6
period
Capital expenditure EUR 26 54 15 127
million
Stainless steel deliveries 4) 1,000 620 568 676 2,554
tonnes
Stainless steel base price 5) EUR/tonne 1,050 1,053 1,070 1,082
Personnel at the end of period 11,824 12,125 12,436 12,125
--------------------------------------------------------------------------------
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).
Business and financial outlook for the second quarter of 2015
The market outlook for stainless steel varies by region. In Europe, order
intake is improving with distributor stocks gradually normalizing and
underlying demand remaining healthy. In the Americas, pressure from Asian
imports continues and low nickel price puts constraints on distributor sector
buying. Chinese GDP growth is showing some weakness and the markets in the APAC
region for stainless steel are under pressure.
Outokumpu estimates flat delivery volumes quarter-on-quarter: deliveries are
expected to increase somewhat in Europe and decrease in Americas. Group's
underlying EBIT for the second quarter is estimated to be slightly negative
driven by weaker profitability in the business area Coil Americas. With current
prices, the net impact of raw material-related inventory and metal derivative
gains/losses on profitability is expected to be marginal if any.
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:
“In the first quarter, we reached a positive underlying EBIT of EUR 2 million
and our delivery volumes were sequentially up by 9%. However, due to very low
nickel price there was no typical seasonal uptake in demand. Especially
distributor sector remained subdued, and prices under pressure. When compared
to the underlying EBIT of EUR -45 million of the first quarter of 2014, we can
see the gradual improvement in our profitability.
Coil EMEA continued steady progress, improving its underlying EBIT to EUR 28
million. This was mainly driven by the higher deliveries and production
efficiency in Tornio and Avesta. The Bochum melt shop will be closed in June,
and its positive impact on the cost savings as well as the capacity utilization
will become visible on the second half of the year. We are also preparing to
seize the opportunities the antidumping measures against Chinese and Taiwanese
imports in Europe present, but before the final decision on the duties, the
impact on the market dynamics is likely to be limited. While we are confident
that Coil EMEA's continues on a positive trajectory, the second-quarter
performance will be burdened by the maintenance breaks in the Ferrochrome
production.
In Coil Americas, we have seen disappointing developments. The Asian imports
into Americas are on the rise, and the demand from distributors remains weak
due to low nickel price and elevated stock levels. Combined with the delivery
challenges that were caused by the technical issues in Calvert in the second
half of 2014, the Coil Americas' order intake has been clearly lagging even
though the technical issues have been resolved. Instead of growing our market
position, we have had to fight to hold our ground in the tough competitive
environment. The Coil Americas' underlying EBIT deteriorated to EUR -28 million
from the EUR 6 million in the previous quarter, and the full-year delivery
volume estimate has been revised down to around 540,000 tonnes.
In the second quarter, we expect the difficult market environment to continue
in Americas. In Europe, the order intake is improving as the stock levels are
gradually normalizing and the underlying demand continues to be healthy. Thus,
at the Group level we are estimating flat delivery volumes and slightly
negative underlying EBIT for the second quarter.
Our immediate focus is on turning Coil Americas back on track, while continuing
the profitability improvements in all business areas. Overall, we intend to
reach a clear improvement in profitability this year despite the set-back in
Coil Americas.”
Conference call today, Wednesday, April 29, 2015 at 3.00 pm EET
A conference call will be held today, on Wednesday, April 29, 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: 21998826
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 April 29, 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, phone +358 9 421 3804, mobile +358 40 5300 778
Media: Saara Tahvanainen, phone +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 in Nasdaq Helsinki. www.outokumpu.com
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