Outotec's interim report January-September 2016

OUTOTEC OYJ                         INTERIM REPORT                    OCTOBER 28, 2016 AT 1:00 PM

INTERIM REPORT JANUARY-SEPTEMBER 2016

Minerals Processing recovering, continued challenges in Metals, Energy & Water

Financial guidance narrowed

January-September 2016 in brief (comparison period January-September 2015):

• Order intake: EUR 725 (923) million, -21% (in comparable currencies -17%)
• Service order intake: EUR 336 (387) million, -13% (in comparable currencies -7%)
• Order backlog: EUR 1,030 (1,117) million, -8%
• Sales: EUR 753 (895) million, -16% (in comparable currencies -12%)
• Service sales: EUR 320 (373) million, -14% (in comparable currencies -8%)
• EBIT: EUR -14 (18) million
• Adjusted EBIT*: EUR 2 (38) million
• Adjusted EBIT*: 0 (4)%
• Net cash flow from operating activities: EUR -73 (22) million
• Earnings per share: EUR -0.12 (0.03)

July-September 2016 in brief (comparison period July-September 2015):

• Order intake: EUR 274 (268) million, 2% (in comparable currencies 4%)
• Service order intake: EUR 121 (138) million, -12% (in comparable currencies -10%)
• Sales: EUR 245 (307) million, -20% (in comparable currencies -20%)
• Service sales: EUR 105 (129) million, -18% (in comparable currencies -17%)
• EBIT: EUR -1 (7) million
• Adjusted EBIT*: EUR 2 (15) million
• Adjusted EBIT*: 1 (5)%

Financial guidance for 2016 narrowed

Sales guidance is narrowed and due to the continued challenges in the Metals, Energy & Water segment adjusted EBIT is expected to be at the lower end of the guidance range: 

• Sales will be approximately EUR 1.0-1.1 billion (previously 1.0-1.2), and
• Adjusted EBIT* will be approximately 2-3% (previously 2-4%)

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

Summary of the Group's key figures	Q3	Q3	Q1-Q3	Q1-Q3	Last 12	Q1-Q4
	2016	2015	2016	2015	months	2015
Order intake, EUR million	274.1	268.4	725.0	922.7	992.2	1,189.9
Service order intake, EUR million	121.4	138.3	335.5	387.4	444.8	496.6
Share of services in order intake, %	44.3	51.5	46.3	42.0	44.8	41.7
Order backlog at the end of the period, EUR million	1,029.7	1,116.7	1,029.7	1,116.7	1,029.7	1,102.8
Sales, EUR million	245.2	307.2	752.5	895.5	1,058.3	1,201.2
Service sales, EUR million	105.3	129.2	319.6	373.3	457.6	511.3
Share of services in sales, %	43.0	42.1	42.5	41.7	43.2	42.6
Gross margin, %	23.5	27.9	24.7	28.4	25.2	27.9
Adjusted EBIT1, EUR million	1.6	14.7	1.7	38.4	19.3	56.0
Adjusted EBIT1, %	0.7	4.8	0.2	4.3	1.8	4.7
EBIT, EUR million	-1.2	6.7	-14.3	18.3	-44.8	-12.3
EBIT, %	-0.5	2.2	-1.9	2.0	-4.2	-1.0
Profit before taxes, EUR million	-3.9	2.5	-21.5	9.2	-53.6	-22.9
Net cash from operating activities, EUR million	-23.1	64.8	-72.7	21.9	-25.1	69.5
Net interest-bearing debt at the end of the period, EUR million	-20.82	74.3	-20.82	74.3	-20.8	39.9
Equity at the end of the period, EUR million	534.5	425.8	534.5	425.8	534.5	404.7
Equity-to-assets ratio at the end of the period, %	41.92	32.2	41.92	32.2	41.9	31.1
Gearing at the end of the period, %	-3.92	17.4	-3.92	17.4	-3.9	9.9
Working capital at the end of the period, EUR million	-10.0	-12.0	-10.0	-12.0	-10.0	-89.4
Return on investment, %, LTM	-6.0	3.7	-6.0	3.7	-6.0	-1.5
Return on equity, %, LTM	-8.4	1.5	-8.4	1.5	-8.4	-4.0
Personnel at the end of the period	4,167	4,913	4,167	4,913	4,167	4,859
Earnings per share, EUR	-0.03	0.01	-0.12	0.03	-0.25	-0.10

¹ Excluding restructuring and acquisition-related costs and PPA amortizations.
² If the hybrid bond were treated as a liability the equity-to-assets ratio would be 30.2%, gearing 33.6%, and net interest-bearing debt EUR 129.2 million.

President & CEO Markku Teräsvasara:

"The minerals processing market showed signs of recovery and our third quarter total order intake grew compared to last year. The market environment continued to be challenging for the metals refining segment. The service business suffered from weaker demand due to postponements in maintenance and modernization projects.

Our profitability and cashflow were impacted by weak performance in certain large Metals, Energy & Water projects. We are actively working on improving our performance in this segment.

We have been able to reduce fixed costs by EUR 56 million from a year ago, and the targeted EUR 70 million savings are on track. We continue cost saving actions, especially in the Metals, Energy & Water segment.

We have significant opportunities in our installed base, and we will now strongly focus on improving our service capabilities.

Outotec has developed and commercialized modular plant concepts. In the third quarter, we received three orders for modular plants with customer benefits, such as fast-track delivery and easy maintainability. We will continue to productize our solutions and services.

We expect the minerals processing market to continue gradual improvement, while metals refining is expected to remain weak. Customers are focusing on reducing their production costs and we do not expect major changes in the service market soon."

This text is a summary of Outotec's January-September 2016 Interim Report. The full report is available as an attachment to this report.

FURTHER INFORMATION

Outotec Oyj

Markku Teräsvasara, CEO
Tel. [phone]

Jari Ålgars, CFO
Tel. [phone]

Rita Uotila, Vice President - Investor Relations
Tel. [phone], mobile [phone]

Format for e-mail addresses: [e-mail]

BRIEFING/TELECONFERENCE

Date: Friday, October 28, 2016

Time: 3:00 PM

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 confirmation code and numbers below.

Conference ID: 1852268
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The contact information is gathered for registration purposes only and it is not used for commercial purposes.

FINANCIAL REPORTING SCHEDULE IN 2017

• Financial Statements Review 2016: February 13
• Interim Report for January-March 2017: May 4
• Interim Report for January-June 2017: July 27
• Interim Report for January-September 2017: November 2 

The Financial Statements for 2016 will be published in week 9 of 2017. The 2017 Annual General Meeting is planned for March 30, 2017.

DISTRIBUTION

Nasdaq Helsinki
Main media
www.outotec.com

Outotec's interim report January-September 2016

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Source: Outotec Oyj via Globenewswire