OUTOKUMPU OYJ 
By Outokumpu - Unsatisfactory results in a weaker than expected market environment
OUTOKUMPU OYJ
STOCK EXCHANGE RELEASE
April 25, 2013 at 9.00 am EET
Highlights of the first quarter 2013
The first quarter 2013 closed with lower underlying EBIT losses versus the fourth quarter 2012 despite the challenging environment and weaker than anticipated seasonality support.
- During the first quarter of 2013, global stainless steel demand declined by 1.2% compared to Q1 2012. European stainless steel base prices increased by 3% and the average nickel price was up by 2% for the quarter compared to Q4 2012. On a year-on-year basis the average transaction price declined by 5.6%.
- Outokumpu's stainless steel external deliveries reached 703,000 tonnes (Q4 2012: 644,000 tonnes, Q1 2012: 758,000 tonnes). Sequential growth was driven by seasonality while the year-on-year reduction highlights the weak economic environment and the price increases implemented by Outokumpu during the first quarter.
- Outokumpu was able to increase stainless steel prices in Europe despite the weak market, even if not to the full extent targeted.
- The underlying EBIT for the first quarter 2013 improved to EUR -77 million (Q4 2012: EUR -162 million). Reduced losses were mainly driven by overall higher deliveries, somewhat higher prices, cost savings and the Ferrochrome ramp-up. The profitability improved in all Business Areas compared to Q4 2012 with main improvements in High Performance Stainless and Alloys (HPSA) and Stainless Coil EMEA (EMEA). Compared to Q1 2012 the underlying EBIT decreased (Q1 2012: EUR -21 million).
- Including non-recurring items of EUR -2 million (Q4 2012: EUR -142 million) and raw material-related inventory effects of EUR 3 million (Q4 2012: EUR -3 million), the EBIT was EUR -82 million (Q4 2012: EUR -307 million).
- Operating cash flow was negative at EUR 46 million (Q4 2012: comparable data not available) mainly driven by the Calvert melt shop ramp-up related working capital increase.
- Net interest-bearing debt increased to EUR 2,891 million (December 31, 2012: EUR 2,620 million), leading to a gearing of 103.3% (December 31, 2012: 88.8%).
During the first quarter Outokumpu continued the divestment process of the Terni operations and related assets as required by the European Commission. Following an ongoing dialogue and consultation with the
Commission, the timeline for the transaction has been extended to accommodate the required EU regulatory process. Outokumpu expects to release further information during the second quarter of 2013.
Business outlook for the second quarter of 2013
Outokumpu reiterates its expectations of a soft first half year with improvements in underlying EBIT during the second half of 2013.
For the second quarter Outokumpu expects sequentially flat or slightly lower delivery volumes, weaker product mix and increased uncertainties from the nickel price development. These developments are expected to be partly compensated by the positive effects of the Ferrochrome and Calvert ramp-ups.
Therefore, we expect the second quarter underlying EBIT loss to be equal or slightly worse than in the first quarter. Outokumpu's operating result in the second quarter could be impacted by non-recurring items associated with the Group's on-going cost-cutting programs.
Note: This report contains comparisons to both Outokumpu stand alone as well as comparable figures for the combined entity based on management estimates. Tables that are marked as 'comparable' show the combined entity comparisons. In the text itself only comparable numbers are stated and analyzed. Terni is reported as a discontinued operation.
| Group key figures | ||||||||||||||||||||||||||||||||||||||
| I/13 | IV/12 | I/12 | 2012 | |||||||||||||||||||||||||||||||||||
| Restated 1) | ||||||||||||||||||||||||||||||||||||||
| Sales | EUR million | 2,221 | 1,004 | 1,304 | 4,538 | |||||||||||||||||||||||||||||||||
| EBITDA | EUR million | 12 | -67 | 61 | -50 | |||||||||||||||||||||||||||||||||
| Adjustments to EBITDA 2) | EUR million | 5 | 59 | -1 | 121 | |||||||||||||||||||||||||||||||||
| Underlying EBITDA | EUR million | 17 | -9 | 60 | 71 | |||||||||||||||||||||||||||||||||
| EBIT | EUR million | -82 | -220 | 3 | -385 | |||||||||||||||||||||||||||||||||
| Adjustments to EBIT 3) | EUR million | 5 | 145 | -1 | 217 | |||||||||||||||||||||||||||||||||
| Underlying EBIT | EUR million | -77 | -76 | 2 | -168 | |||||||||||||||||||||||||||||||||
| Result before taxes | EUR million | -140 | -269 | 7 | -524 | |||||||||||||||||||||||||||||||||
| Net result for the period from continuing operations | EUR million | -139 | -309 | 12 | -536 | |||||||||||||||||||||||||||||||||
| excluding non-recurring items | EUR million | -137 | -170 | 24 | -336 | |||||||||||||||||||||||||||||||||
| Net result for the period | EUR million | -152 | -309 | 12 | -536 | |||||||||||||||||||||||||||||||||
| Earnings per share 4) | EUR | -0.07 | -0.21 | 0.04 | -0.46 | |||||||||||||||||||||||||||||||||
| excluding non-recurring items 4) | EUR | -0.07 | -0.11 | 0.09 | -0.29 | |||||||||||||||||||||||||||||||||
| Return on capital employed | % | -5.8 | -19.4 | 0.4 | -8.2 | |||||||||||||||||||||||||||||||||
| excluding non-recurring items | % | -5.7 | -7.1 | 1.7 | -4.0 | |||||||||||||||||||||||||||||||||
| Net cash generated from operating activities | EUR million | -46 | 45 | 116 | 266 | |||||||||||||||||||||||||||||||||
| Capital expenditure, continuing operations 5) | EUR million | 82 | 2,885 | 79 | 3,155 | |||||||||||||||||||||||||||||||||
| Net interest-bearing debt at the end of period 6) | EUR million | 2,891 | 2,620 | 1,495 | 2,620 | |||||||||||||||||||||||||||||||||
| Debt-to-equity ratio at the end of period 6) | % | 103.3 | 88.8 | 80.0 | 88.8 | |||||||||||||||||||||||||||||||||
| External deliveries | 1,000 tonnes | 721 | 351 | 418 | 1,495 | |||||||||||||||||||||||||||||||||
| Stainless steel external deliveries 7) | 1,000 tonnes | 703 | 337 | 399 | 1,428 | |||||||||||||||||||||||||||||||||
| Stainless steel base price 8) | EUR/tonne | 1,177 | 1,167 | 1,185 | 1,172 | |||||||||||||||||||||||||||||||||
| Personnel at the end of period, continuing operations | 15,705 | 16,649 | 7,968 | 16,649 | ||||||||||||||||||||||||||||||||||
| 1) Figures for 2012 have been restated due to change in accounting principle of defined benefit plans and other long-term employee benefits, | ||||||||||||||||||||||||||||||||||||||
| and adoption of revised IAS 19 standard. | ||||||||||||||||||||||||||||||||||||||
| 2)Non-recurring items, other than impairments; and inventory gains/losses, unaudited. | ||||||||||||||||||||||||||||||||||||||
| 3)Non-recurring items and inventory gains/losses, unaudited. | ||||||||||||||||||||||||||||||||||||||
| 4)2012 figures calculated based on the rights-issue-adjusted weighted average number of shares. | ||||||||||||||||||||||||||||||||||||||
| 5)Oct 1-Dec 31, 2012 and Jan 1-Dec 31, 2012 include Inoxum acquisition of EUR 2,720 million and acquisition-related finance leases and | ||||||||||||||||||||||||||||||||||||||
| asset purchases of EUR 79 million. | ||||||||||||||||||||||||||||||||||||||
| 6)March 31, 2012 adjusted to exclude the effect of the rights issue. Debt-to-equity ratio, including the effect of the rights issue, | ||||||||||||||||||||||||||||||||||||||
| on March 31, 2012 was 67.8%. | ||||||||||||||||||||||||||||||||||||||
| 7)Excludes ferrochrome deliveries, includes high performance alloy deliveries. | ||||||||||||||||||||||||||||||||||||||
| 8)Stainless steel: CRU - German base price (2 mm cold rolled 304 sheet). | ||||||||||||||||||||||||||||||||||||||
| Raw material-related inventory gains or losses | ||||||||||||||||||||||||||||||||||||||
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The realized timing gain or loss per tonne of stainless steel is estimated based on the difference between the purchase price and invoice price of each metal in EUR per tonne times the average metal content in stainless steel. The unrealized timing impact consists of the change in net realizable value
Share
© Publicnow - 2013
Outokumpu Oyj is one of the world's leading manufacturers of stainless steels. Net sales break down by activity as follows:
- sales of generic steel products (95.3%): rolled products, plates, flat steels, etc. The group also develops ferrochrome production activity. Net sales break down by geographical area between Europe (71.6%) and America (28.4%);
- ferrochrome production (3%);
- other (1.7%): primarily holdings in industrial groups.
Net sales are distributed geographically as follows: Finland (3.5%), Europe (61.2%), North America (28.7%), Asia/Pacific (5.3%) and other (1.3%).
Sector
Iron & Steel
Calendar
2024-05-07
- Q1 2024 Earnings Release
Trading Rating
Investor Rating
ESG Refinitiv
A- Sell  Mean consensus OUTPERFORM Number of Analysts 10 Last Close Price
3.738
EUR Average target price
4.68
EUR Spread / Average Target +25.20% EPS Revisions
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