INTERIM REPORT
20 July 2011 at 9.00 am EET
Second-quarter 2011 highlights
- Underlying operational result some EUR -5 million (I/2011: EUR -12 million).
- Raw material-related inventory losses of some EUR 26 million (I/2011: gains of
some EUR 45 million) and non-recurring items of EUR -138 million (I/2011: none).
- Operating loss EUR -169 million (I/2011: profit of EUR 33 million)
- Capital gains of EUR 242 million reported under net financial items, a
positive impact of EUR 162 million on cash flow.
- Net profit positive at EUR 50 million (I/2011: EUR 16 million)
- Operational cash flow EUR -66 million (I/2011: EUR -10 million).
- Customers destocking due to declining nickel price, deliveries at 348 000
tonnes (I/2011: 380 000 tonnes).
- Implementation of the short-term agenda initiated.
Group key figures
II/11 I/11 II/10 2010
Sales EUR million 1 281 1 371 1 125 4 229
Operating profit EUR million -169 33 72 -83
EBITDA EUR million -4 93 129 172
Non-recurring items
in operating profit EUR million -138 - - -17
Profit before taxes EUR million 21 17 64 -143
Non-recurring items
in financial income
and expenses EUR million 229 - - 9
Net profit for the period EUR million 50 16 44 -124
Earnings per share EUR 0,28 0,09 0,24 -0,68
Return on capital employed % -16,1 3,1 7,3 -2,1
Net cash generated from
operating activities EUR million -66 -10 -317 -497
Capital expenditure EUR million 50 42 45 161
Net interest-bearing debt
at end of period EUR million 1 885 1 873 1 696 1 837
Debt-to-equity ratio at
end of period % 82,0 80,4 68,1 77,3
Stainless steel deliveries 1 000 tonnes 348 380 339 1 315
Stainless steel
base price 1) EUR/tonne 1 223 1 215 1 317 1 252
Personnel at the
end of period 2) 9 474 8 452 9 082 8 431
1) Stainless steel: CRU - German base price (2 mm cold rolled 304 sheet).
2) Personnel reported as head count. Up to 31 December 2010 reported as
full-time equivalent. Comparative figures restated.
The underlying operational result in the second quarter improved marginally to
EUR -5 million. Operating loss in the second quarter included some EUR 26
million of raw material-related inventory losses and some EUR -138 million of
non-recurring impairments and restructuring costs. Net financial items of EUR
191 million included capital gains of EUR 242 million from financial asset
divestments. Net profit was positive at EUR 50 million.
Outokumpu's gearing at the end of the second quarter increased to 82.0%. While
the divestments had a positive effect on Group gearing, adverse impacts resulted
from impairments, working capital increase and dividends.
SHORT-TERM OUTLOOK
Demand for standard grades of stainless steel slowed in Europe as summer
approached and the nickel price began to decline. This led to destocking among
customers. While normal seasonality resulting from the holiday season in Europe
has affected the distributors' buying behaviour underlying demand continues to
be relatively stable globally. Lead times for standard grades continue to be
normal at 6-8 weeks.
As a result of the slowdown in demand during the European holiday season and
annual maintenance breaks at Group mills, Outokumpu expects that its stainless
steel delivery volumes in the third quarter will be slightly lower than in the
second quarter. Outokumpu's average base prices for stainless steel in the third
quarter are expected to be somewhat lower than average prices in the second
quarter.
Lower delivery volumes and lower average base prices are expected to lead to
negative underlying operational result in the third quarter. Additionally,
declined metal prices are expected to result in raw material-related inventory
losses (at current metal prices). Outokumpu therefore estimates the Group's
third-quarter operating profit to be clearly negative.
CEO Mika Seitovirta:
"During my first months much of our attention has been on the Group's short-term
agenda, and this has provided us with quick sources of cash and helped attack
the most critical factors burdening Outokumpu's profitability. In the stainless
business, improving sales, generating cash and reducing costs are part of a
never-ending race. Current market circumstances mean that the pressure to move
even faster with this work and related actions is higher."
The attachments present the Management analysis for the second quarter operating
result and the Interim review by the Board of Directors for January-June 2011,
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 1.00 pm
A combined news conference, conference call and live webcast concerning the
second-quarter 2011 financial results will be held on 20 July 2011 at 1.00 pm
EET (6.00 am US EST, 11.00 am UK time, 12.00 pm CET) at Hotel Kämp, conference
room Akseli Gallen-Kallela (2nd floor), Kluuvikatu 2, 00100 Helsinki.
To participate via a conference call, please dial in 5-10 minutes before the
beginning of the event:
UK +44 203 043 2436
US & Canada +1 866 458 4087
Sweden +46 8 505 598 53
Password Outokumpu
The news conference can be viewed live via Internet at www.outokumpu.com/
Investors/ Webcasts. Stock exchange release and presentation material will be
available before the news conference at www.outokumpu.com/Investors. Link to the
webcast
An on-demand webcast of the news conference will be available as of 20 July
2011 at around 3.00 pm EET at www.outokumpu.com/Investors/Webcasts.
OUTOKUMPU OYJ
[HUG#1532119]
