OUTOTEC OYJ INTERIM REPORT MAY 7, 2020 AT 9:00 AM
Outotec’s interim report January-March 2020
Growth in sales and adjusted EBIT, uncertain operating environment affected
order intake
“COVID-19 caused rapid uncertainty impacting the global operating environment
and prompting travel restrictions, sourcing challenges and limiting access to
customer sites.
Order intake decreased by 28% compared to the comparison period because
customers started to slow down decision-making relating to large projects. In
the Minerals Processing segment, smaller equipment orders continued to be at a
good level.
Sales grew by 16%. Large projects received last year contributed to 22% growth
in the Minerals Processing segment and 5% growth in the Metals Refining segment.
Currencies and sales mix had a negative impact on profitability.
In the service business, travel restrictions and site closures restricted our
field service personnel’s access to customer sites. Customers also postponed
service projects. This resulted in a 23% decline in service orders. Service
sales were at the level of the comparison period. Spare parts continued to grow
in spite of various challenges.
Net cash flow from operating activities was EUR -59 (-18) million. The cash flow
was negative mainly due to inventory build-up related to the delivery phase of
the three large projects received last year.
As we started to see signs of market uncertainty, we initiated actions on
several fronts. Securing our employee’s health and safety has been the key
priority. I am pleased with the way we have been able to shift to remote working
where necessary and actively continue to support our customers. Examples of our
virtual support include remote installation and commissioning services, advanced
process and control systems, as well as virtual seminars and trainings. We have
also initiated cost-saving actions covering the whole organization.
Our planned merger with Metso’s Minerals business is proceeding and the closing
of the transaction is expected to take place on June 30 subject to regulatory
approvals.
We are working actively with the existing market opportunities and strong
backlog as well as achieving our cost-savings targets,” concludes President &
CEO Markku Teräsvasara.
THE COMBINATION OF OUTOTEC AND METSO’S MINERALS BUSINESS
Outotec and Metso expect the completion of the combination of Outotec and
Metso’s Minerals business to take place on June 30, 2020, subject to the receipt
of all required regulatory and other approvals, including competition
clearances.
Summary of key figures
[][][][][]
Q1 Restated[3]Q1 Change, Q1-Q4
EUR million 2020 2019 % 2019
Order intake 240.0 332.2 -28 1,501.2
Service order intake 120.0 156.0 -23 586.3
Order backlog at end of 992.3 926.9 7 1,069.6
period
Sales 285.2 245.6 16 1,210.3
Service sales 109.7 109.3 0 550.1
Gross margin, % 24.7 28.0 29.8
Adjusted EBITA[1] 20.6 18.9 141.7
Adjusted EBITA[1, ]% 7.2 7.7 11.7
Adjusted EBIT[2 ] 15.5 13.8 121.8
Adjusted EBIT[2], % 5.4 5.6 10.1
EBIT 9.3 12.7 107.3
EBIT, % 3.3 5.2 8.9
Net cash from operating -58.6 -18.3 67.9
activities
Earnings per share, 0.01 0.03 0.35
continuing operations,
EUR
Earnings per share, -0.00 -0.02 -0.25
discontinued operations,
EUR
Earnings per share, EUR 0.01 0.02 0.10
[1]Excluding all amortizations, as well as adjustment items consisting of
restructuring and capacity adjustment costs, costs related to mergers and
acquisitions, the outcome of material intellectual property rights disputes,
gains and losses on business disposals and goodwill impairments. Since the
second quarter of 2019, Outotec has added adjusted EBITA to the reported numbers
at the Group level to reflect the planned combination.
[2]Excluding restructuring- and acquisition-related items as well as PPA
amortizations.
[3]Comparison figures related to the income statement, order intake and order
backlog have been restated due to business divestments in the Metals, Energy &
Water segment being classified as discontinued operations.
OUTLOOK FOR 2020 REVISED
Due to the ongoing COVID-19 pandemic, market activity and visibility in the
minerals processing and metals refining market have weakened. The timing of
larger investments in particular is uncertain.
The previous outlook, issued on February 6, 2020: The market activity in
minerals processing and metals refining is currently expected to remain at the
present level. Copper, gold and nickel projects are expected to continue to be
the most active. The timing of large investments is uncertain.
This text is a summary of Outotec's January-March 2020 Interim Report. 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
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