OUTOTEC OYJ STOCK EXCHANGE RELEASE, NOVEMBER 30, 2010 AT 8.30 AM
Outotec strategy update and new financial targets
Outotec announces new strategic priorities and financial targets as decided by the Board of Directors. The company's goal remains continuous profitable growth. Going forward, Outotec intends to focus more on providing sustainable life cycle solutions, which guarantee the best return on customer's investment. In addition to further strengthening its technology portfolio for the entire value chain from ore to metals, Outotec targets expansion to adjacent industries such as energy industry and industrial water treatment. Furthermore, the company will further strengthen its presence in emerging markets, and improve its productivity and scalability.
New long-term financial targets
Outotec is targeting continuous profitable growth.
- Growth: Outotec targets to grow faster than the market resulting in compound average annual sales growth target in the range of 10-20%.
- Profitability: Outotec's annual operating profit margin from business operations is targeted to be on average at 10%, excluding one time costs and purchase price allocations of acquired businesses.
- Balance sheet: Outotec targets to maintain strong balance sheet to provide operational flexibility and enable acquisitions.
These new targets replace the previous long-term financial targets of annual average EPS growth exceeding 10%, a 5% operating profit margin floor, and a strong balance sheet.
The Board of Directors has on November 30, 2010 adopted a dividend policy whereby the company aims to propose for the approval of the company's shareholders dividends representing at least 40% of the annual net income of Outotec for the preceding financial year.
The amount of future dividends, if any, will be subject to Outotec's future earnings, financial, condition, cash flows, and working capital requirements. In addition, investments in either organic growth or acquisitions as part of Outotec's growth strategy may impact the level of future dividends.
Although the Board of Directors has no reason to believe that dividend payments under this policy will not generally be made, there can be no assurance that any annual dividend will actually be paid, nor can there be any assurance as to the amount to be paid in any given year.
New service business target
Outotec has also set a new growth target for its service business. The company aims to grow the sales of services to the annual level of EUR 500 million by the end of 2015. Growth is planned to be achieved both organically and through acquisitions, expanding the scope of deliveries and new life cycle service offerings.
Capital markets day on November 30 in Stockholm
Outotec holds today a Capital Markets Day for investors and analysts in Stockholm. At the event, the new financial targets and the updated strategy will be discussed in greater detail. Presentations will be webcasted live starting at 8.45 (CET). On-demand webcast will be available beginning December 1 at www.outotec.com/investors. More information of the CMD agenda is available at www.outotec.com/investors.
For further information please contact:
Pertti Korhonen, President and CEO
tel. +358 20 529 211
Rita Uotila, Vice President - Investor Relations
tel. +358 20 429 2003, +358 400 954 141
Eila Paatela, Director - Corporate Communications
tel. +358 20 529 2004, +358 400 817 198
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