OUTOTEC OYJ STOCK EXCHANGE RELEASE APRIL 26, 2007 AT 9.00 am
Outotec Oyj - January-March 2007 Interim Report
Good profit performance continued and order backlog remained strong
in the first quarter of 2007. The market conditions for mining and
metals industries continued to be favorable. Outotec achieved 47%
sales growth and 234% operating profit growth on the corresponding
period in 2006.
Highlights of the reporting period (Q1/2007):
- Sales for Q1/2007 grew by 47% from the comparison period in 2006
and amounted to EUR 211.7 million (Q1/2006: EUR 144.2 million).
- Operating profit improved by 234% to EUR 13.6 million (Q1/2006: EUR
4.1
million). Profit before taxes amounted to EUR 15.3 million (Q1/2006:
EUR 5.3 million). Earnings per share for the reporting period were
EUR 0.25 (Q1/2006: EUR 0.10).
- Order intake was EUR 168.1 million (Q1/2006: EUR 185.6 million).
- Order backlog was EUR 836.5 million (March 31, 2006: EUR 633.5
million), up by 32%.
- Net cash flow from operating activities totaled EUR 21.1 million
(Q1/2006: EUR -3.3 million).
CEO, Tapani Järvinen:"Our customers' investment activity and confidence in our
technologies and products strengthened our performance during the
first quarter. The new emerging markets are offering more and more
business opportunities for Outotec. Our customers in traditional
mining countries are also continuing their investments, because the
continued high metals consumption forecasts keep the metals prices
high. As the raw material prices have increased and delivery times
across the industry are getting longer, we have seen that the
decision-making process takes time in large projects. This means that
some large projects that we expected to become effective already in
the first quarter are anticipated in the second quarter of 2007. Our
operating profit during the first quarter of 2007 improved clearly
from the corresponding period in 2006. The balance sheet remained
strong, and our earnings per share more than doubled from the first
quarter of 2006.
When changing the company name to Outotec we turned a new leaf in our
decades-long history as a provider of leading-edge technologies for
the mining and metals industries. Outotec will be uniting all our
global businesses and represent technological leadership,
innovativeness, reliability, and good collaboration spirit with
customers - the same brand values that Outokumpu Technology had."
Summary of key figures
Jan-March Jan-March Jan-Dec
2007 2006 2006
Sales, EUR million 211.7 144.2 740.4
Gross margin, % 19.0 19.3 20.7
Operating profit, EUR million 13.6 4.1 51.6
Operating profit in relation to sales, % 6.4 2.8 7.0
Profit before taxes, EUR million 15.3 5.3 56.6
Net cash from operating activities, EUR
million 21.1 -3.3 67.8
Net interest-bearing debt at the end of
period, EUR million -187.8 -108.3 -170.0
Gearing at the end of period, % -121.7 -96.2 -118.0
Return on investment, % 44.5 20.4 45.4
Return on equity, % 27.6 14.7 29.1
Order backlog at the end of period, EUR
million 836.5 633.5 866.4
Order intake, EUR million 168.1 185.6 1,032.2
Personnel average for the period 1,860 1,803 1,825
Earnings per share, EUR 0.25 0.10 0.88
OUTLOOK FOR 2007
The mining and metals industry remains robust, and the underlying
imbalance in supply and demand encourages the industry to invest both
in green field projects and expansions. Good financial performance,
coupled with strong order backlog in the first quarter of 2007,
provides a solid base for the remainder of the year. Outotec's
management is confident that the company has the resources and
capacity to meet the expected growth in 2007.
Outotec reiterates its full year outlook in terms of sales and
operating profit: In 2007, the management expects similar sales
growth than during 2006. Operating profit is expected to grow clearly
from 2006. Furthermore, the management estimates that the closing
order backlog for 2007 will exceed that of the previous year-end.
REVIEW BY THE BOARD OF DIRECTORS
Outotec's goal is to further strengthen its position as a leading
global provider of process solutions, technologies, and services
principally for the mining and metals industries.
In line with this, the company will continue to implement its
business strategy through seeking sustainable growth by developing
and introducing new technological solutions, applying the company's
existing technologies in new customer industries, expanding the scope
of operations in selected geographic markets, increasing after-sales
business, and undertaking acquisitions.
Outotec is also seeking to improve its profitability further and to
decrease its susceptibility to business cycles by improving the
efficiency of operations, optimizing cost structures and the
flexibility of fixed costs, and increasing the proportion of
value-added components in its offerings. Outotec's operations are
organized into three divisions: Minerals Processing, Base Metals, and
Metals Processing. Minerals Processing division operates at the
beginning of the value chain from mine to metal, where as the Base
Metals and Metals Processing divisions focus on further processing of
ores and concentrates.
A CONTINUING STRONG MARKET
The positive sentiment and strong overall investment activity in the
mining and metals industry continued throughout the first quarter of
2007, involving an increase of existing plant capacities as well as
greenfield plant projects. Investment activity has been strong mostly
in iron ore, aluminum, copper, zinc and nickel projects. Above all, a
good price outlook and tight market conditions of nickel are
encouraging investments in all available nickel projects. Strong
metals price fundamentals and a healthy demand outlook, especially in
China and India, imply a positive short-term market sentiment for the
mining and metals technology market.
ORDER INTAKE DEVELOPMENT
The value of orders received during the first quarter of 2007
amounted to EUR 168.1 million (Q1/2006: EUR 185.6 million). Because
of the timing of the project orders there is a natural quarterly
fluctuation in order intake. Therefore, quarterly fluctuations in
order intake figures are not in themselves indicators of the overall
market situation. Some large orders that were expected during the
first quarter are anticipated in the second quarter of 2007 and
further strengthen the order backlog.
Major new orders in the first quarter of 2007 included:
- a silver refinery equipment delivery for the JSC Krasnoyarsk
Non-Ferrous Metals Plant in Russia;
- a complete thickening circuit for Boddington Gold Mine in
Australia;
- a zinc plant expansion with new environmentally advanced leaching
technology for the leading Chinese zinc producer, Hunan Zhuye Torch
Metals Co.Ltd. in China (EUR 30 million);
- a modernization of a Flash Smelting production line Norilsk
Nickel's Nadezha metallurgical plant in Russia (EUR 16 million);
this project was in the backlog already at year-end 2006 due to the
effectiveness of the contract;
- three TankCell®-300 flotation cells, the largest mechanical
flotation cell in the world with an active capacity of over 300 m3,
to OceanaGold's Macraes operation in New Zealand;
- a gas cleaning plant for the new 208 MW Bluewaters Power Station
for IHI Engineering in Australia;
- KALDO precious metals technology for Tongling Nonferrous Metals
(Group) Inc. in China;
- a copper converter and gas handling technology supply to
Engineering Dobersek GmbH for the new copper smelter of Kazzinc in
Kazakhstan.
STRONG ORDER BACKLOG
The order backlog at the end of March 2007 totaled EUR 836.5 million
(March 31, 2006: EUR 633.5 million). The value of the order backlog
grew by 32% compared to the previous year's corresponding figure.
At the end of March 2007, the order backlog included 18 projects with
a value in excess of EUR 10 million each, accounting for 54% of the
total backlog. Due to the timing of the projects, the fluctuations in
quarterly order intake and backlog do not represent the overall
market conditions. According to the management's estimate, some 75%
of the current backlog will be delivered in 2007, and the rest in
2008 and 2009.
SALES AND FINANCIAL RESULT
Outotec's sales increased by 47% in the first quarter of 2007 from
the previous year's corresponding period and totaled EUR 211.7
million (Q1/2006: EUR 144.2 million). Growth in sales came from all
divisions and was based on organic growth. After-sales business,
which is included in the divisions' sales figures, contributed EUR
15.3 million (Q1/2006: EUR 9.9 million).
The operating profit for January-March 2007 improved significantly
compared to the same period in 2006 and stood at EUR 13.6 million
(Q1/2006: EUR 4.1 million), representing 6.4% of sales. The
profitability improved because of volume growth, improvement in some
project implementations and releases of project provisions reserved
for the accepted projects. Outotec's fixed costs in the first quarter
of 2007 were in line with the previous year's fixed costs without
administration costs. The raise in administration costs comes from
the change in Outotec's company status to a listed company on October
10, 2006 and subsequent strengthening of some management and support
functions.
Outotec's profit before taxes for the review period was EUR 15.3
million (Q1/2006: EUR 5.3 million). The strong cash situation
continued and contributed net interest income from the advances
received from several projects. Net profit for the first quarter of
2007 was EUR 10.3 million (Q1/2006: EUR 4.1 million). Earnings per
share were EUR 0.25 (Q1/2006: EUR 0.10).
Outotec's return on equity for January-March 2007 was 27.6% (Q1/2006:
14.7%), and return on investment during the reporting period was
44.5% (Q1/2006: 20.4%).
Sales and operating profit
by segment
Jan-March Jan-March Jan-Dec
EUR million 2007 2006 2006
Sales
Minerals Processing 55.2 36.4 256.6
Base Metals 60.1 44.9 192.3
Metals Processing 97.5 62.9 292.2
Other Businesses 6.7 6.6 32.6
Unallocated items*) and
intra-group sales -7.8 -6.7 -33.2
Total 211.7 144.2 740.4
Operating profit
Minerals Processing 1.9 -3.7 12.7
Base Metals 9.4 5.6 23.6
Metals Processing 4.7 4.1 21.2
Other Businesses 0.0 -0.5 0.3
Unallocated **) and
intra-group items -2.4 -1.5 -6.1
Total 13.6 4.1 51.6
*) Unallocated items primarily include invoicing of internal
management and administrative services.
**) Unallocated items primarily include management and
administrative services and share of result of associated companies.
Minerals Processing
The division's sales grew by 52% in the first quarter of 2007 from
the previous year's figure, coming to EUR 55.2 million (Q1/2006: EUR
36.4 million). Operating profit was EUR 1.9 million, showing a marked
increase from the previous year (Q1/2006: EUR -3.7 million).
Improvement in profit followed the growth of sales. Concurrently, all
project implementations were on schedule. Profit generation for the
Minerals Processing division is typically weaker in the first half of
the year and stronger in the second half due to the seasonality
within a fiscal year. The improvement in the operating profit from
the previous year is the result of a different product mix and grown
net sales volume. Additionally, during the first quarter of 2006, the
Minerals Processing division experienced some additional costs
related to finalizing of a large project.
Base Metals
Base Metals division's sales were EUR 60.1 million (Q1/2006: EUR 44.9
million). The increased sales and proprietary technology deliveries
significantly improved the profitability of the division, which saw
68% growth in operating profit from the previous year and was EUR 9.4
million (Q1/2006: EUR 5.6 million). Profitability was impacted
favorably by project completions of two large technology transfer
deliveries.
Metals Processing
The Metals Processing division's sales grew significantly from the
previous year's figure to EUR 97.5 million (Q1/2006: EUR 62.9
million). The growth came from the projects' workload and the strong
project base at the beginning of the year. The operating profit for
the first quarter of 2007 was EUR 4.7 million (Q1/2006: EUR 4.1
million). The profitability improvement in the first quarter lagged
behind the sales growth due to one sizable subcontracted delivery.
The large turnkey projects in Brazil are progressing on time and
there have been no deviations in delivery times or quality.
BALANCE SHEET, FINANCING AND CASH FLOW
Net cash flow from operating activities for January-March 2007 was
good at EUR 21.1 million (Q1/2006: EUR -3.3 million). Despite the
strong growth and the fact that capital was tied up in project
deliveries, inventories, and receivables, a significant improvement
in net cash flow from operating activities was achieved. The working
capital development continued to be favorable due to several new
large projects and related advance payments. Liquidity was good and
improved further from the year-end with cash and cash equivalents at
the end of the first quarter of 2007 amounting to EUR 188.8 million
(March 31, 2006: EUR 116.5 million).
The balance sheet remained strong. Net interest-bearing debt on March
31, 2007 was EUR -187.8 million (March 31, 2006: EUR -108.3 million).
The advances received at the end of the period totaled EUR 141.0
million (March 31, 2006: EUR 120.2 million). Outotec's gearing was
-121.7% (March 31, 2006: -96.2%), and the equity-to-assets ratio was
35.6% (March 31, 2006: 40.1%). The company's capital expenditure was
EUR 4.6 million (Q1/2006: EUR 1.7 million), which consisted mainly of
replacements for machines, information technology, and investments in
intellectual property rights (IPRs).
Guarantees for commercial commitments, including advance payment
guarantees issued by the parent and other group companies, came to
EUR 248.8 million at the end of March 2007, increasing from the
previous year's level along with business growth (March 31, 2006: EUR
192.4 million).
RESEARCH AND TECHNOLOGY DEVELOPMENT
Research and technology development (RTD) is a corporate function of
Outotec and key to retaining the competitive advantage and
ascertaining the future success and development of the company. The
RTD function focuses on improving and developing existing
technologies in collaboration with the business divisions as well as
on coordinating development activities and the commercialization of
new technologies.
Outotec's research and technology development expenses for the
reporting period totaled EUR 5.0 million (Q1/2006: EUR 4.2 million),
representing 2.4% of sales. Outotec filed seven new priority patent
applications in the first quarter of 2007 and 49 new national patents
were granted in the same period.
Outotec commercialized two new products in the first quarter of 2007.
First, Outotec agreed with the leading Chinese zinc producer, Hunan
Zhuye Torch Metals Co. Ltd., on the design and delivery of a zinc
plant expansion with new environmentally advanced leaching
technology. The Atmospheric Direct Leaching Process eliminates the
conventional roasting phase in zinc processing. Secondly, Outotec
agreed to deliver three TankCell®-300 flotation cells to OceanaGold's
Macraes operation in New Zealand. TankCell®-300, with an active
capacity of over 300 m3, is the largest mechanical flotation cell in
the world. The Macraes delivery will be the first installation of
such technology and represents a significant development for
flotation technology.
In addition, Outotec complemented its process technology offering by
acquiring the Chena® (Chemistry Navigator) trademark from the Finnish
company Liqum. The technology acquisition will further improve
Outotec's competitiveness in minerals processing and
hydrometallurgical process solutions. Chena® is a patented technology
for improving the efficiency of production processes. The system
incorporates the professional expertise of the plant, process
measurements, and new information received from the process chemistry
and refines the information by data processing to an easily
understandable visual format.
The activity level in the Research Centers both in Pori and in
Frankfurt continued to be high relating to on own development and
sales projects, but also on the active test-work made for customers.
PERSONNEL
In the first quarter of 2007, Outotec had on average 1,860 employees
(Q1/2006: 1,803). At the end of March, the company had a total of
1,921 employees (March 31, 2006 1,815), in 20 countries. Because the
company has been able to make efficient use of its network of
international contractors and temporary employees, the number of
permanent personnel has grown only moderately from 2006. Temporary
employees accounted for some 10% of the total number of employees,
and contracted employees accounted for some 20% of the company's own
employees in the first quarter of 2007.
Distribution of personnel by countries, %
March 31, 2007 March 31, 2006
Finland 40.5 40.8
Germany 15.5 19.4
Rest of Europe 10.7 10.4
Americas 17.5 16.7
Australia 10.7 8.0
Rest of the world 5.2 4.6
In addition to the company's own personnel, Outotec has an
international network of subcontractors for engineering and
manufacturing. The company continues its global programs to
strengthen and improve the work culture. Continuous learning programs
are in place to support performance improvements and to be able to
respond to the global constraints in recruiting of competent and
professional employees.
SHARE-BASED INCENTIVE PROGRAM FOR KEY PERSONNEL
In March 23, 2007 Outotec published a share-based incentive program.
The purpose of the incentive program is to get key employees'
commitment and to encourage them in achieving of the company's
financial targets and also for increasing of the company's
shareholder value. Some 20 key employees participate in the two-year
share-based incentive program. The earnings period has started on
January 1, 2007 and ends on December 31, 2008.
The reward paid to the key personnel is determined by the achievement
of the targets set for the development of the company's net profit
and order backlog. The reward is paid in shares and as a cash payment
(which approximately will cover income taxes payable of the reward).
The shares will be allocated to the key personnel in the spring of
2009. The maximum reward of the incentive program is EUR 6.7 million.
SHARES and SHARE CAPITAL
Outotec's shares were entered into the Finnish Book-Entry Securities
System on September 22, 2006. The company's share capital is EUR 16.8
million, consisting of 42.0 million shares. The counter-book value of
the shares is EUR 0.40 per share. Each share entitles its holder to
one vote at the general meetings of shareholders of the company.
trading and Market capitalization
Outotec's shares are listed on the Helsinki Stock Exchange (OTE1V).
During the first quarter of 2007 the highest quotation for the
company's share was EUR 28.00 and the lowest EUR 19.25. The trading
of Outotec's shares during the reporting period exceeded 37.2 million
shares with a total value of approximately EUR 896.0 million. On
March 31, 2007, Outotec's market capitalization was EUR 1,171
million.
RESOLUTIONS OF THE ANNUAL GENERAL MEETING 2007
Outokumpu Technology Oyj's Annual General Meeting (AGM) was held on
April 2, 2007 in Espoo, Finland. The AGM approved the parent
company's and the group's Financial Statements, and discharged the
members of the Board of Directors and the CEO from liability for the
financial year 2006. The AGM decided that a dividend of EUR 0.35 per
share be paid for the financial year ended on December 31, 2006. The
dividend record date was April 5, 2007, and the dividend was paid on
April 17, 2007.
The AGM decided that the number of Board members, including Chairman
and Vice Chairman, will be five (5). Mr. Carl-Gustaf Bergström, Mr.
Karri Kaitue, Mr. Hannu Linnoinen, Mr. Anssi Soila, and Mr. Risto
Virrankoski were re-elected as members of the Board of Directors for
the term expiring at the end of the next AGM. The AGM re-elected Mr.
Risto Virrankoski as the Chairman and Mr. Karri Kaitue as the Vice
Chairman of the Board of Directors.
The AGM confirmed the monthly remunerations paid to the Board members
as follows: Chairman EUR 3,000, Vice Chairman EUR 2,500, and other
Board members EUR 2,000, and in addition a meeting remuneration of
EUR 500 per meeting for each Board member.
KPMG Oy Ab, Authorized Public Accountants, was re-elected as the
company's auditor, with Mauri Palvi as auditor in charge. The fees
for the auditor are paid according to invoice.
Amendment to the Articles of Association and company's business name
The AGM approved the amendments to the Articles of Association,
including the change of the company's business name, to Outotec Oyj.
The change of business name became effective on April 24, 2007. Other
amendments include the technical revision of the company's line of
business and the election procedure of the Vice Chairman of the
Board, and other amendments of a technical nature.
BOARD'S AUTHORIZATIONS
The Annual General Meeting authorized the Board of Directors to
resolve upon issues of shares as follows:
- The authorization includes the right to issue new shares,
distribute own shares held by the company, and the right to issue
special rights referred to in Chapter 10, Section 1 of the Companies
Act. This authorization to the Board of Directors does not, however,
entitle the Board of Directors to issue share option rights as an
incentive to the personnel.
- The total number of new shares to be issued and own shares held by
the company to be distributed under the authorization may not exceed
4,200,000 shares.
- The Board of Directors is entitled to decide on the terms of the
share issue, such as the grounds for determining the subscription
price of the shares and the final subscription price as well as the
approval of the subscriptions, the allocation of the issued new
shares, and the final amount of issued shares.
The authorization shall be in force until the end of the next AGM.
The Annual General Meeting authorized the Board of Directors to
resolve upon the repurchase of the company's own shares as follows:
- The company may repurchase the maximum number of 4,200,000 shares
using free equity and deviating from the shareholders' pre-emptive
rights to the shares, provided that the number of own shares held by
the company will not exceed ten (10) percent of all shares of the
company.
- The shares are to be repurchased in public trading at the Helsinki
Stock Exchange at the price established in the trading at the time of
acquisition.
The authorization shall be in force until the end of the next AGM.
SHORT-TERM RISKS AND UNCERTAINTIES
Project risks related to projects in both the offering and
implementation phases were measured continuously, and no short-term
business risks were identified.
The content of the project risk matrix covers all projects with a
value of over EUR 1 million and those factors influencing Outotec's
sales, profits, cash flow, and quality, as well as the availability
of resources and technology. In projects including new commercialized
products and new application areas of Outotec's products, the risks
are evaluated in their own category. Once the potential risks had
been qualified, and quantified, the necessary provisions were
reserved.
Over half of Outotec's total cash flow is coming in euros and the
rest is divided between different currencies, mainly US dollars,
Brazilian reals and Australian dollars. However, depending on the new
projects, the weight of any given currency can change materially, but
almost all cash flow risks to firm commitments are hedged in short-
and long-term. The forecasted and probable cash flows are hedged
selectively and are always based on the separate decisions and
separate risk analysis.
SUBSEQUENT EVENTS AFTER THE REPORTING PERIOD
In April, Outotec has been awarded several new grinding technology
contracts worth EUR 45 million by customers in Canada, Australia, and
Kazakhstan.
Mirabela Nickel of Australia has awarded Outotec the contract for
grinding technology for Mirabela's Santa Rita nickel sulfide project
in Bahia State, Brazil. Adanac Molybdenum of Canada has ordered
grinding technology for Adanac's Ruby Creek molybdenum project in
British Columbia, Canada. Shalkiya Zinc of Kazakhstan has awarded
Outotec the contract for grinding technology for the Shalkiya
zinc-lead project in Kazakhstan. This project became effective
already in March and was booked to the backlog in the first quarter.
The deliveries of these are scheduled for late 2008 and early 2009.
The parent company changed its name from Outokumpu Technology Oyj to
Outotec Oyj on April 24, 2007 and started to use Outotec as the
company's business name globally.
OUTLOOK FOR 2007
The mining and metals industry remains robust, and the underlying
imbalance in supply and demand encourages the industry to invest both
in green field projects and expansions. Good financial performance,
coupled with strong order backlog in the first quarter of 2007,
provides a solid base for the remainder of the year. Outotec's
management is confident that the company has the resources and
capacity to meet the expected growth in 2007.
Outotec reiterates its full year outlook in terms of sales and
operating profit: In 2007, the management expects similar sales
growth than during 2006. Operating profit is expected to grow clearly
from 2006. Furthermore, the management estimates that the closing
order backlog for 2007 will exceed that of the previous year-end.
FINANCIAL REPORTING IN 2007
Outotec will publish the following financial information during 2007:
Interim report for January-June, on Wednesday, July 25, 2007
Interim report for January-September, on Thursday, October 25, 2007
Espoo, April 26, 2007
Outotec Oyj
Board of Directors
For further information, please contact:
Outotec Oyj
Tapani Järvinen, CEO
tel. +358 20 529211
Vesa-Pekka Takala, CFO
tel. +358 20 529211, mobile +358 40 5700074
Eila Paatela, Vice President - Corporate Communications
tel. +358 20 5292004, mobile +358 400 817198
Rita Uotila, Vice President - Investor Relations
tel. +358 20 5292003, mobile +358 400 954141
e-mails: firstname.lastname(at)outotec.com
BRIEFING FOR ANALYSTS AND MEDIA
Welcome to the briefing on the first quarter of 2007 results, in
which CEO Tapani Järvinen and CFO Vesa-Pekka Takala will present the
first quarter 2007 results.
BRIEFING
Date: Thursday, April 26, 2007
Time: 3.00 pm EET
Venue: Hotel Kämp, Mirror room, Pohjoisesplanadi 29, 00100 Helsinki,
Finland
JOINING VIA AUDIO WEBCAST
You may follow the briefing via a live audio webcast at
www.outotec.com/Presentations. Please, log in and register
approximately 5 to 10 minutes before the briefing.
JOINING VIA TELECONFERENCE
You may join the briefing by telephone. To register as a participant
for the teleconference, please dial in 5-10 minutes before the
beginning of the event:
FI/UK: +44 20 7162 0025
US/CANADA: +1 334 323 6201
Password: Outokumpu Technology or Outotec
In addition, an instant replay service of the conference call will be
available until April 29, 2007 midnight on the following numbers:
FI/UK: +44 20 7031 4064
US/CANADA: +1 954 334 0342
Access code: 747021
The contact information is gathered for registration purposes only
and it is not used for commercial purposes.
DISTRIBUTION:
Helsinki Stock Exchange
Main media
www.outotec.com
INTERIM FINANCIAL STATEMENTS (unaudited)
Income statement
Jan-March Jan-March Jan-Dec
EUR million 2007 2006 2006
Sales 211.7 144.2 740.4
Cost of sales -171.5 -116.3 -587.5
Gross margin 40.2 27.9 153.0
Other operating income 0.2 0.5 3.7
Selling and marketing expenses -11.2 -11.8 -46.1
Administrative expenses -10.2 -8.1 -35.0
Research and development
expenses -5.0 -4.2 -19.2
Other operating expenses -0.0 -0.0 -3.8
Share of results of associated
companies -0.3 -0.2 -1.1
Operating profit 13.6 4.1 51.6
Financial income and expenses
Interest income and expenses 2.6 2.1 9.3
Market price gains and losses 0.3 -0.5 -1.4
Other financial income and
expenses -1.2 -0.3 -2.9
Total financial income and
expenses 1.7 1.2 5.0
Profit before taxes 15.3 5.3 56.6
Income taxes -5.0 -1.2 -19.6
Net profit for the period 10.3 4.1 37.0
Attributable to:
Equity holders of the Company 10.3 4.1 37.1
Minority interest -0.0 -0.0 -0.0
Earnings per share for profit attributable to the equity
holders of the Company:
Earnings per share, EUR 0.25 0.10 0.88
Diluted earnings per share,
EUR 0.25 0.10 0.88
All figures in the tables have been rounded and consequently the sum
of individual figures can deviate from the presented sum figure.
Condensed balance sheet
March 31 March 31 Dec 31
2007 2006 2006
EUR million
ASSETS
Non-current assets
Intangible assets 74.9 75.0 72.7
Property, plant and equipment 26.3 29.7 26.7
Non-current financial assets
Interest-bearing 1.4 0.8 1.1
Non interest-bearing 12.4 16.1 13.0
Total non-current assets 115.0 121.7 113.5
Current assets
Inventories *) 131.7 38.3 84.4
Current financial assets
Interest-bearing 1.0 0.0 1.0
Non interest-bearing 137.8 124.3 214.7
Cash and cash equivalents 188.8 116.5 171.4
Total current assets 459.3 279.2 471.4
TOTAL ASSETS 574.2 400.8 584.9
EQUITY AND LIABILITIES
Equity
Equity attributable to the equity
holders of the Company 154.3 112.6 144.0
Minority interest 0.0 0.0 0.0
Total equity 154.3 112.6 144.1
Non-current liabilities
Interest-bearing 2.2 3.9 2.2
Non interest-bearing 38.0 36.5 35.6
Total non-current liabilities 40.1 40.4 37.8
Current liabilities
Interest-bearing 1.2 5.1 1.2
Non interest-bearing **) 378.6 242.7 401.7
Total current liabilities 379.8 247.8 403.0
TOTAL EQUITY AND LIABILITIES 574.2 400.8 584.9
*) Of which advances paid for inventories amounted to EUR 45.1
million at March 31, 2007 (EUR 8.8 million at March 31, 2006 and EUR
30.0 million at December 31, 2006)
**) Of which advances received amounted to EUR 141.0 at March 31,
2007 (EUR 120.2 million at March 31, 2006 and EUR 194.8 million at
December 31, 2006)
Statement of changes in equity
Attributable to equity holders of the Company
EUR million
Fair Cumulative
Share Premium Other value translation Retained Minority Total
capital fund reserves reserves differences earnings interest equity
Equity on
Jan 1, 2006 16.8 20.2 0.1 0.0 9.3 64.2 0.1 110.7
Change in
translation
differences - - - - -2.2 - 0.0 -2.2
Items
recognized
directly in
equity - - - - -2.2 - 0.0 -2.2
Net profit
for the
period - - - - - 4.1 -0.0 4.1
Total
recognized
income and
expenses - - - - -2.2 4.1 -0.0 1.9
Equity on
March 31,
2006 16.8 20.2 0.1 0.0 7.1 68.4 0.0 112.6
Equity on
Jan 1, 2007 16.8 20.2 0.1 - 5.8 101.1 0.0 144.1
Change in
translation
differences - - - - -0.1 - 0.0 -0.1
Items
recognized
directly in
equity - - - - -0.1 - 0.0 -0.1
Net profit
for the
period - - - - - 10.3 -0.0 10.3
Total
recognized
income and
expenses - - - - -0.1 10.3 -0.0 10.2
Equity on
March 31,
2007 16.8 20.2 0.1 - 5.7 111.4 0.0 154.3
Condensed statement of cash flows
Jan-March Jan-March Jan-Dec
EUR million 2007 2006 2006
Cash flow from operating activities
Net profit for the period 10.3 4.1 37.0
Adjustments for
Depreciation and amortization 2.7 2.5 10.1
Impairments - - 3.3
Other adjustments 2.6 -0.6 10.9
Decrease(+)/increase(-) in working
capital 11.6 -9.4 12.4
Interest received 2.4 2.4 9.8
Interest paid -0.1 -0.4 -0.4
Income tax paid -8.4 -1.8 -15.3
Net cash from operating activities 21.1 -3.3 67.8
Purchases of assets -4.3 -1.4 -8.0
Proceeds from sale of assets 0.0 0.1 0.3
Change in other investing activities -0.4 - -0.3
Net cash from investing activities -4.7 -1.3 -8.0
Cash flow before financing activities 16.4 -4.6 59.8
Repayments of long-term debt -0.0 -0.0 -0.4
Decrease in current debt -0.0 -2.8 -4.8
Change in other financing activities -0.1 -0.0 -0.9
Net cash from financing activities -0.1 -2.9 -6.1
Net change in cash and cash equivalents 16.3 -7.5 53.6
Cash and cash equivalents at the
beginning of the period 171.4 126.3 126.3
Foreign exchange rate effect on cash and
cash equivalents 1.1 -2.3 -8.6
Net change in cash and cash equivalents 16.3 -7.5 53.6
Cash and cash equivalents at the end of
the period 188.8 116.5 171.4
Key figures
Jan-March Jan-March Jan-Dec
2007 2006 2006
Sales, EUR million 211.7 144.2 740.4
Gross margin, % 19.0 19.3 20.7
Operating profit, EUR million 13.6 4.1 51.6
Operating profit in relation
to sales, % 6.4 2.8 7.0
Profit before taxes, EUR
million 15.3 5.3 56.6
Profit before taxes in
relation to sales, % 7.2 3.7 7.6
Net cash from operating
activities, EUR million 21.1 -3.3 67.8
Net interest-bearing debt at
the end of period, EUR million -187.8 -108.3 -170.0
Gearing at the end of period,
% -121.7 -96.2 -118.0
Equity-to-assets ratio at the
end of period, % 35.6 40.1 36.9
Capital expenditure, EUR
million 4.6 1.7 8.0
Capital expenditure in
relation to sales, % 2.2 1.2 1.1
Return on investment, % 44.5 20.4 45.4
Return on equity, % 27.6 14.7 29.1
Order backlog at the end of
period, EUR million 836.5 633.5 866.4
Order intake, EUR million 168.1 185.6 1,032.2
Personnel average for the
period 1,860 1,803 1,825
Net profit for the period in
relation to sales, % 4.9 2.8 5.0
Research and development
expenses, EUR million 5.0 4.2 19.2
Research and development
expenses in relation to sales,
% 2.4 2.9 2.6
Earnings per share, EUR *) 0.25 0.10 0.88
Equity per share, EUR *) 3.67 2.68 3.43
Dividend per share, EUR *) - - 0.35
*) Outotec Oyj shares have been split on August 10, 2006 from 8.4
million to 42.0 million shares, after which counter-book value of a
share is EUR 0.40. Earnings per share and equity per share have been
calculated with 42.0 million shares.
NOTES TO THE INCOME STATEMENT AND BALANCE SHEET
Interim financial statements are prepared in accordance with IAS 34
Interim Financial Reporting using the same accounting policies and
methods as in the recent annual financial statements. The interim
financial figures, which have been presented in these interim
financial statements are unaudited.
The comparison figures for 2006 are based on combined financial
statements, which have been prepared so that business structure and
combined financial information of Outotec would fairly present the
result of operations, cash flows and financial position of Outotec's
current operations.
Use of estimates
The preparation of the financial statements in accordance with IFRS
requires the management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, as well as the
disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of income and expenses
during the reporting period. Accounting estimates are employed in the
financial statements to determine reported amounts, including the
realizability of certain assets, the useful lives of tangible and
intangible assets, income taxes, provisions, pension obligations,
impairment of goodwill and other items. Although these estimates are
based on the management's best knowledge of current events and
actions, actual results may differ from the estimates.
Adoption of new and amended standards and interpretations
Outotec has adopted the following new standards, renewed standards
and interpretations when they are effective.
- IFRS 7 Financial instruments: Disclosures (effective date January
1, 2007) and
- Amendment to IAS 1 - Presentation of financial statements - Capital
disclosures (effective date January 1, 2007).
The adoption of these new standards will mainly have impact on the
disclosure information on the 2007 financial statements.
- IFRIC 8 - Scope of IFRS 2 (effective date May 1, 2006)
- IFRIC 9 - Reassessment of Embedded Derivatives (effective date June
1, 2006) and
- IFRIC 10 Interim Financial Reporting and Impairment (effective date
November 1, 2006).
The adoption of these interpretations will not have impact on 2007
financial statements.
Outotec will estimate the impacts on the disclosure information for
the following standard in 2007:
IFRS 8 Operating segments (effective date January 1, 2009). The
standard has not yet been approved to be applied in the EU.
Major non-recurring items in operating profit for the period
Jan-March Jan-March Jan-Dec
EUR million 2007 2006 2006
One-time expenses related
to the listing - - -1.3
Income taxes
Jan-March Jan-March Jan-Dec
EUR million 2007 2006 2006
Current taxes -3.0 -1.3 -17.9
Deferred taxes -2.1 0.1 -1.7
Total income taxes -5.0 -1.2 -19.6
Property, plant and equipment
The changes in property, plant and equipment during the first quarter
of 2007 were mainly due to normal business activities.
Commitments and contingent
liabilities
March 31 March 31 Dec 31
EUR million 2007 2006 2006
Pledges 29.7 2.1 27.8
Guarantees for commercial
commitments 129.7 75.5 121.3
Minimum future lease
payments on operating
leases 48.1 19.6 51.2
The above value of commercial guarantees does not include advance
payment guarantees issued by the parent company or other group
companies.
The total amount of guarantees for financing issued by group
companies amounted to EUR 0.4 million at March 31, 2007 (at March 31,
2006: EUR 2.5 million and at December 2006: EUR 0.4 million) and for
commercial guarantees EUR 248.8 million at March 31, 2007 (at March
31, 2006: EUR 192.4 million and at December 31, 2006; EUR 259.4
million).
Derivative instruments
Currency forwards
March 31 March 31 Dec 31
EUR million 2007 2006 2006
Net fair values 1.7 0.0 2.0
Contract amounts 117 70 103
Related party transactions
Transactions and balances with associated companies
Jan-March Jan-March Jan-Dec
EUR million 2007 2006 2006
Sales 0.7 0.1 0.3
Financial income and
expenses 0.0 - 0.1
Loan receivables 1.6 - 1.3
Trade and other receivables 1.8 0.2 0.9
Current liabilities - - 2.2
According to shareholder agreement, Outotec is committed to invest
in Intune Circuits Oy EUR 2.5 million.
Sales and operating profit by quarters
EUR million Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07
Sales
Minerals
Processing 19.5 46.0 49.6 69.8 36.4 57.4 67.5 95.3 55.2
Base Metals 20.6 35.6 39.6 64.2 44.9 50.6 43.3 53.4 60.1
Metals
Processing 22.8 68.2 44.6 70.2 62.9 67.5 71.0 90.8 97.5
Other
Businesses 6.0 9.8 5.9 10.5 6.6 8.1 6.0 11.9 6.7
Unallocated
items*) and
intra-group
sales -3.7 -8.2 -6.5 -8.3 -6.7 -6.8 -7.9 -11.9 -7.8
65.3 151.4 133.1 206.4 144.2 176.8 179.9 239.6 211.7
Operating profit
Minerals
Processing 0.1 1.4 2.3 4.6 -3.7 -1.9 5.2 13.1 1.9
Base Metals -3.6 1.4 1.2 12.7 5.6 7.1 4.1 6.7 9.4
Metals
Processing -4.1 2.1 2.9 6.1 4.1 6.1 5.6 5.3 4.7
Other
Businesses -0.0 0.5 -0.1 -0.1 -0.5 0.2 -0.3 1.0 0.0
Unallocated
items **) 0.1 -1.2 -0.7 -1.1 -1.5 -1.5 -0.2 -3.0 -2.4
-7.6 4.2 5.5 22.2 4.1 10.0 14.5 23.0 13.6
*) Unallocated items primarily include invoicing of internal
management and administrative services.
**) Unallocated items primarily include management and
administrative services and share of result of associated companies.
Definitions of key financial figures
Net interest-bearing debt = Interest-bearing debt -
interest-bearing assets
Gearing = Net interest-bearing debt × 100
Total equity
Equity-to-assets ratio = Total equity × 100
Total assets - advances received
Return on investment = Operating profit + financial income × 100
Total assets - non interest-bearing
debt (average for the period)
Return on equity = Net profit for the period × 100
Total equity (average for the
period)
Research and development = Research and development expenses
costs in the income statement
(including expenses covered by
grants received)
Earnings per share = Net profit for the financial period
attributable to the equity holders
Average number of shares during the
period, as adjusted for stock split
Dividend per share = Dividend for the financial year
Number of shares at the end of the
period, as adjusted for stock split
OFFICIAL FINANCIAL REPORTING LANGUAGE
Outotec publishes all financial reports in Finnish and English (US).
Because of the international nature of the business, the official and
approved version is prepared in English and is translated into
Finnish.
