Home News 2018 Outotec's Financial Statements Review January-December 2017
Stock Exchange Release February 2, 2018 09:00:00 AM CET

Outotec's Financial Statements Review January-December 2017

OUTOTEC OYJ FINANCIAL STATEMENTS REVIEW  FEBRUARY 2, 2018 AT 9:00 AM

Outotec's Financial Statements Review January-December 2017

Order intake increased and profitability improved

"After several challenging years, 2017 was clearly more positive for Outotec. The minerals and metals processing market improved, but the market situation varied significantly by business. The demand for equipment and services in the Minerals Processing segment continued to pick up. We also saw increased demand for our hydrometallurgical and smelting solutions offered by the Metals, Energy & Water segment, whereas the demand for large metallurgical and waste-to-energy plants remained subdued. The demand for spare parts, equipment upgrades and plant modernization services continued to be steady.

Boosted by increased metals prices and demand from the electric car industry, both our business segments received orders from copper, cobalt, nickel, and lithium producers. We also received  large orders for aluminum and copper/cobalt plants. Our 2017 total order intake increased by 20% from 2016 and we saw an accelerated growth towards the end of the year.

In terms of sales and profitability, our two business segments were in different phases. The sales of the Minerals Processing segment and services developed favorably throughout the year, whereas the sales of the Metals, Energy & Water segment decreased. Group sales increased by 8% and service sales by 6% from 2016.

I am pleased with the sales growth and our fixed cost savings which improved our profitability. In Minerals Processing, the adjusted EBIT improved in 2017. The adjusted EBIT of Metals, Energy & Water improved, but remained negative. Therefore, we initiated new measures - such as the outsourcing of some engineering activities - to enhance flexibility and ensure the future profitability of the segment.

I have visited many customers during my first year at Outotec. Our advanced technologies and the expertise of our people are highly valued by our customers, and we are well-positioned along the entire value chain from ore to metal. That said, all our businesses need to be profitable, and we focus on five development programs to reach our profitability target: customer focus, service business, product competitiveness, project excellence, and our employees. We have already made good progress.

To capitalize the significant growth potential in the service business, we established a Services organization in April to develop our competences and service offering. Our ambition is to grow service sales annually by over 10% on average. In the area of product competitiveness, we have launched new products for sustainable tailings and water management, as well as enhanced digitalization of our products, and have further developed our virtual plant concepts. In 2017, we invested EUR 56 million in R&D. I believe that our leading technologies, new products and plant concepts, combined with increased best-cost-country sourcing, will help us to further improve our competitiveness and win more market share.

In 2018, our target is to grow our sales as well as improve profitability. Together with improved market sentiment, global megatrends - such as resource efficiency, sustainability and digitalization - provide us with good growth opportunities," President & CEO Markku Teräsvasara sums up.

Dividend proposal

Due to the negative earnings per share, the Board of Directors proposes to the AGM that no dividend is paid for the year 2017.

Summary of key figures


 
Q4 Q4     Q1-Q4 Q1-Q4    
EUR million 2017 2016 %1 %2 2017 2016 %1 %2
Order intake 365.8 282.7 29 32 1,204.6 1,007.7 20 18
Service order intake 125.5 107.8 16 22 494.9 443.3 12 10
Order backlog at end of period 988.2 1,002.1 -1 - 988.2 1,002.1 -1 -
Sales 328.9 305.4 8 11 1,139.2 1,057.9 8 7
Service sales 146.0 127.4 15 18 475.2 447.0 6 5
Gross margin, % 24.4 15.6     23.6 22.1    
Adjusted EBIT3 16.0 -24.8     32.1 -23.0    
Adjusted EBIT3, % 4.9 -8.1     2.8 -2.2    
EBIT 14.0 -53.5     24.6 -67.7    
EBIT, % 4.3 -17.5     2.2 -6.4    
Net cash from operating activities 47.0 -11.9     39.6 -84.6    
Earnings per share, EUR -0.01 -0.30     -0.04 -0.42    

1 Change, %
2 Change in comparable currencies, %
3 Excluding restructuring and acquisition-related items as well as PPA amortizations.

Financial guidance for 2018

The guidance for 2018 is based on the current order backlog as well as expected order intake.

  • Sales are expected to be approximately EUR 1.2 - 1.3 billion, and
  • Adjusted EBIT* is expected to be approximately 5 - 7%

* Excluding restructuring and acquisition-related items, as well as purchase price allocation amortizations.

This text is a summary of Outotec's January-December 2017 Financial Statements review. The full report is available as an attachment to this report.

FURTHER INFORMATION

Outotec Oyj

Markku Teräsvasara, CEO
Tel. +358 20 529 2000

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: February 2, 2018

Time: 2:00 PM EET

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 numbers below.

The contact information is gathered for registration purposes only and it is not used for commercial purposes.

Dial in numbers:

US: +1 323 794 2095
UK: +44 (0) 330 336 9104
SWE: +46 (0)8 5033 6573
FIN: +358 (0)9 7479 0360
Confirmation Code: 063270

DISTRIBUTION

Nasdaq Helsinki
Main media
www.outotec.com

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