Outotec Oyj - Interim report (Q1 and Q3)

Outotec's interim report January-September 2016

OUTOTEC OYJ                         INTERIM REPORT                    OCTOBER
28, 2016 AT 1:00 PM

INTERIM REPORT JANUARY-SEPTEMBER 2016

Minerals Processing recovering, continued challenges in Metals, Energy & Water

Financial guidance narrowed

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

  * Order intake: EUR 725 (923) million, -21% (in comparable currencies -17%)
  * Service order intake: EUR 336 (387) million, -13% (in comparable currencies
    -7%)
  * Order backlog: EUR 1,030 (1,117) million, -8%
  * Sales: EUR 753 (895) million, -16% (in comparable currencies -12%)
  * Service sales: EUR 320 (373) million, -14% (in comparable currencies -8%)
  * EBIT: EUR -14 (18) million
  * Adjusted EBIT*: EUR 2 (38) million
  * Adjusted EBIT*: 0 (4)%
  * Net cash flow from operating activities: EUR -73 (22) million
  * Earnings per share: EUR -0.12 (0.03)


July-September 2016 in brief (comparison period July-September 2015):

  * Order intake: EUR 274 (268) million, 2% (in comparable currencies 4%)
  * Service order intake: EUR 121 (138) million, -12% (in comparable currencies
    -10%)
  * Sales: EUR 245 (307) million, -20% (in comparable currencies -20%)
  * Service sales: EUR 105 (129) million, -18% (in comparable currencies -17%)
  * EBIT: EUR -1 (7) million
  * Adjusted EBIT*: EUR 2 (15) million
  * Adjusted EBIT*: 1 (5)%


Financial guidance for 2016 narrowed

Sales guidance is narrowed and due to the continued challenges in the Metals,
Energy & Water segment adjusted EBIT is expected to be at the lower end of the
guidance range:

  * Sales will be approximately EUR 1.0-1.1 billion (previously 1.0-1.2), and
  * Adjusted EBIT* will be approximately 2-3% (previously 2-4%)
 * Excluding restructuring and acquisition-related costs as well as purchase
price allocation amortizations.




Summary of the Group's key           Q3      Q3    Q1-Q3   Q1-Q3 Last 12   Q1-Q4
figures

                                   2016    2015     2016    2015  months    2015
--------------------------------------------------------------------------------
Order intake, EUR million         274.1   268.4    725.0   922.7   992.2 1,189.9
--------------------------------------------------------------------------------
Service order intake, EUR                                                  496.6
million                           121.4   138.3    335.5   387.4   444.8
--------------------------------------------------------------------------------
Share of services in order                                                  41.7
intake, %                          44.3    51.5     46.3    42.0    44.8
--------------------------------------------------------------------------------
Order backlog at the end of                                              1,102.8
the period, EUR million         1,029.7 1,116.7  1,029.7 1,116.7 1,029.7
--------------------------------------------------------------------------------
Sales, EUR million                245.2   307.2    752.5   895.5 1,058.3 1,201.2
--------------------------------------------------------------------------------
Service sales, EUR million        105.3   129.2    319.6   373.3   457.6   511.3
--------------------------------------------------------------------------------
Share of services in sales, %      43.0    42.1     42.5    41.7    43.2    42.6
--------------------------------------------------------------------------------
Gross margin, %                    23.5    27.9     24.7    28.4    25.2    27.9
--------------------------------------------------------------------------------
Adjusted EBIT(1), EUR million       1.6    14.7      1.7    38.4    19.3    56.0
--------------------------------------------------------------------------------
Adjusted EBIT(1), %                 0.7     4.8      0.2     4.3     1.8     4.7
--------------------------------------------------------------------------------
EBIT, EUR million                  -1.2     6.7    -14.3    18.3   -44.8   -12.3
--------------------------------------------------------------------------------
EBIT, %                            -0.5     2.2     -1.9     2.0    -4.2    -1.0
--------------------------------------------------------------------------------
Profit before taxes, EUR                                                   -22.9
million                            -3.9     2.5    -21.5     9.2   -53.6
--------------------------------------------------------------------------------
Net cash from operating                                                     69.5
activities, EUR million           -23.1    64.8    -72.7    21.9   -25.1
--------------------------------------------------------------------------------
Net interest-bearing debt at
the end of the period, EUR     -20.8(2)    74.3 -20.8(2)    74.3   -20.8    39.9
million
--------------------------------------------------------------------------------
Equity at the end of the          534.5            534.5
period, EUR million                       425.8            425.8   534.5   404.7
--------------------------------------------------------------------------------
Equity-to-assets ratio at the   41.9(2)          41.9(2)
end of the period, %                       32.2             32.2    41.9    31.1
--------------------------------------------------------------------------------
Gearing at the end of the       -3.9(2)          -3.9(2)
period, %                                  17.4             17.4    -3.9     9.9
--------------------------------------------------------------------------------
Working capital at the end of     -10.0   -12.0    -10.0   -12.0   -10.0   -89.4
the period, EUR million
--------------------------------------------------------------------------------
Return on investment, %, LTM       -6.0     3.7     -6.0     3.7    -6.0    -1.5
--------------------------------------------------------------------------------
Return on equity, %, LTM           -8.4     1.5     -8.4     1.5    -8.4    -4.0
--------------------------------------------------------------------------------
Personnel at the end of the                        4,167
period                            4,167   4,913            4,913   4,167   4,859
--------------------------------------------------------------------------------
Earnings per share, EUR           -0.03    0.01    -0.12    0.03   -0.25   -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 30.2%, gearing 33.6%, and net interest-bearing debt EUR 129.2 million.


President & CEO Markku Teräsvasara:

"The minerals processing market showed signs of recovery and our third quarter
total order intake grew compared to last year. The market environment continued
to be challenging for the metals refining segment. The service business suffered
from weaker demand due to postponements in maintenance and modernization
projects.

Our profitability and cashflow were impacted by weak performance in certain
large Metals, Energy & Water projects. We are actively working on improving our
performance in this segment.

We have been able to reduce fixed costs by EUR 56 million from a year ago, and
the targeted EUR 70 million savings are on track. We continue cost saving
actions, especially in the Metals, Energy & Water segment.

We have significant opportunities in our installed base, and we will now
strongly focus on improving our service capabilities.

Outotec has developed and commercialized modular plant concepts. In the third
quarter, we received three orders for modular plants with customer benefits,
such as fast-track delivery and easy maintainability. We will continue to
productize our solutions and services.

We expect the minerals processing market to continue gradual improvement, while
metals refining is expected to remain weak. Customers are focusing on reducing
their production costs and we do not expect major changes in the service market
soon."

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



FURTHER INFORMATION

Outotec Oyj

Markku Teräsvasara, CEO
Tel. +358 20 529 211

Jari Ålgars, CFO
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: Friday, October 28, 2016

Time: 3:00 PM

Venue: Outotec House, Rauhalanpuisto 9, Espoo, Finland

Joining the 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
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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 2017

  * Financial Statements Review 2016: February 13
  * Interim Report for January-March 2017: May 4
  * Interim Report for January-June 2017: July 27
  * Interim Report for January-September 2017: November 2
The Financial Statements for 2016 will be published in week 9 of 2017. The 2017
Annual General Meeting is planned for March 30, 2017.



DISTRIBUTION

Nasdaq Helsinki
Main media
www.outotec.com




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Attachments:

Outotec s interim report January-September 2016.pdf