OUTOTEC OYJ FINANCIAL STATEMENTS REVIEW FEBRUARY 7, 2014 AT 9.00 AM
FINANCIAL STATEMENTS REVIEW JANUARY-DECEMBER 2013
Challenging market, growth in services
Dividend proposal EUR 0.20
Reporting period January-December 2013 in brief (2012 corresponding period):
Order intake: EUR 1,512.4 (2,084.4) million, -27%
Order backlog: EUR 1,371.7 (1,947.1) million, -30%
Sales: EUR 1,911.5 (2,087.4) million, -8%
Service sales: EUR 505.9 (476.0) million, 6%
Operating profit from business operations1): EUR 162.9 (193.8) million, -16%
Earnings per share: EUR 0.51 (0.70), -28%
October-December 2013 in brief (2012 corresponding period):
Order intake: EUR 426.1 (471.2) million, -10%
Sales: EUR 457.2 (649.8) million, -30%
Service sales: EUR 150.7 (184.1) million, -18%
Operating profit from business operations1): EUR 40.5 (74.0) million, -45%
Financial guidance for 2014
Based on the year-end order backlog, current market outlook, customer tendering activity, and volatility in exchange rates, the management expects that in 2014:
Sales will be approximately EUR 1.5-1.8 billion, and
Operating profit from business operations1) will be approximately 5-8%.
1) excluding one-time items and purchase price allocations (PPA) amortizations
|Summary of key figures||Q4||Q4||Q1-Q4||Q1-Q4|
|Sales, EUR million||457.2||649.8||1,911.5||2,087.4|
|Gross margin, %||20.5||21.8||20.7||20.8|
|Operating profit from business operations, EUR million||40.5||74.0||162.9||193.8|
|Operating profit from business operations, %||8.9||11.4||8.5||9.3|
|Operating profit, EUR million||25.4||74.9||141.9||184.3|
|Operating profit margin, %||5.6||11.5||7.4||8.8|
|Profit before taxes, EUR million||21.4||72.3||132.2||179.7|
|Net cash from operating activities, EUR million||-2.5||-3.2||-42.1||77.1|
|Net interest-bearing debt at the end of period, EUR million||-87.1||-264.7||-87.1||-264.7|
|Gearing at the end of period, %||-18.2||-56.0||-18.2||-56.0|
|Working capital at the end of period, EUR million||-14.0||-191.3||-14.0||-191.3|
|Return on investment, %||17.5||59.4||25.7||37.0|
|Return on equity, %||11.1||46.7||19.4||29.4|
|Order backlog at the end of period, EUR million||1,371.7||1,947.1||1,371.7||1,947.1|
|Order intake, EUR million||426.1||471.2||1,512.4||2,084.4|
|Personnel, average for the period||4,921||4,755||4,927||4,456|
|Earnings per share, EUR||0.07||0.29||0.51||0.70|
|Dividend per share, EUR||-||-||0.201)||0.30|
1) Board of Directors' proposal for dividend per share
President and CEO Pertti Korhonen:
"The year 2013 was challenging for Outotec. The uncertainty in the world economy, weakened metals prices and the need to improve capital returns reduced mining and metal companies' investments. These matters together with the devaluation of emerging market currencies were reflected in the drop of our full-year order intake. Furthermore, in 2012 we received a large, EUR 350 million individual order, making the comparison point high. In the fourth quarter we booked again some larger orders. The accumulated slowdown in order intake, an order cancellation in September and exchange rate changes reduced our sales and consequently the profitability. Due to lower order intake and deliveries from backlog, cash flow was negative. I am very pleased with the six percent growth of our service sales despite significant currency fluctuations; with comparable currency rates, service sales growth would have been 13% and service order intake growth 19%. This was also visible in our personnel structure as the share of service personnel increased reflecting higher share of services.
During recent years we have been increasing our investments in R&D which is bearing fruit. As an example of innovative new products, we introduced a revolutionary modular solvent extraction plant concept to the market and succeeded in selling the first plant to Turkey. We have also further expanded our extensive patent portfolio and the number of new patent applications and granted patents was at an all time high level, both up by over 40% from 2012. In Finland, Outotec was number one company in terms of new patents applied. I am also very pleased with the good progress in our operation and maintenance business concept and I see good opportunities to continue to expand our service business globally. We have made 13 acquisitions since 2010 which also have enhanced our product and service offering.
We expect the long-term demand drivers to remain intact as the metals demand will grow, ore grades decline and the environmental requirements tighten. In short-term, the mining industry's capital expenditure is expected to shrink 10-20% whereas the demand for services is expected to grow. In order to be prepared for continuing slowness of the Capex market, we launched a program to reduce our annual operational costs. Thus far, we have progressed according to the plan and achieved EUR 12 million annualized savings. Actions continue in 2014 to reach the EUR 50 million annualized savings by the end of the year through further reduction of personnel, usage of external services, and travelling.
Going forward, we aim to increase our market share by leveraging our lifecycle solutions business model in providing our customers the best return on investment with predictable investment cost, faster time to cash flow and guaranteed process performance. As the third most sustainable company on the Global 100 list, we are naturally continuing our efforts for sustainable use of Earth's natural resources."
Changes in segment reporting
Outotec changed the company's operating model and organization structure on July 1, 2013. According to the new segment reporting, Outotec's two new business areas form the IFRS 8 operating segments. Restated Q1-Q2 2013 figures were published on October 18, 2013.
Free share issue (split)
The shares issued in the free share issue (split) approved by Outotec's AGM on March 26, 2013, were entered into the share register on April 2, 2013. The total number of Outotec's shares increased to 183,121,492 as shareholders were issued with three new shares for each old share. The free share issue (split) did not affect the company's share capital or capital structure. Share-based key figures have been restated to reflect the increased number of shares.
Efficiency improvement program
On October 17, 2013, Outotec announced that the company will start an efficiency improvement program targeting up to EUR 50 million annualized savings in operational costs by the end of 2014, compared to the Q3/2013 situation. The majority of the savings will materialize in 2014. The estimated one-time costs from the program for 2013 and 2014 will be at maximum EUR 30 million.
EUR 150 million bond issue
Outotec issued a EUR 150 million fixed rate unsecured bond in September 2013. The bond matures in seven (7) years and pays an annual coupon of 3.75%. The bond is listed on NASDAQ OMX Helsinki Ltd.
This text is a summary of Outotec's January-December 2013 Financial Statements Review. The full review is available as an attachment to this report.
Pertti Korhonen, President and CEO
tel. +358 20 529 211
Mikko Puolakka, CFO
tel. +358 20 529 2002
Rita Uotila, Vice President - Investor Relations
tel. +358 20 529 2003, mobile +358 400 954 141
Format for e-mail addresses: email@example.com
Date: Friday, February 7, 2014
Time: 2.00 pm (Finnish time)
Venue: Bank, Unioninkatu 20, Helsinki
Joining via webcast
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FINANCIAL REPORTING SCHEDULE IN 2014
Annual General Meeting 2014: March 31, 2014
Interim Report for January-March: April 29, 2014
Interim Report for January-June: July 31, 2014
Interim Report for January-September: October 30, 2014
The Financial Statements for 2013 will be published in week 10.
NASDAQ OMX Helsinki Ltd
Outotec provides leading technologies and services for the sustainable use of Earth's natural resources. As the global leader in minerals and metals processing technology, Outotec has developed over the decades many breakthrough technologies. The company also provides innovative solutions for industrial water treatment, the utilization of alternative energy sources, and the chemical industry. Outotec has a global network of sales and service centers, research facilities and approximately 5,000 experts. Outotec shares are listed on NASDAQ OMX Helsinki. www.outotec.com
|Outotec's Financial Statements Review January-December2013||Download|