Ovako publishes its report for the third quarter 2017
Today Ovako announced its result for the third quarter 2017. EBITDA before restructuring costs improved to EUR 9 (5) million. Sales volume during the quarter amounted to 162 kton, 11 percent higher than previous year. Order intake increased by 14 percent, while the order book was more than 50 percent higher compared to corresponding time last year. Cash flow from operating activities improved from EUR 3 to 14 million. Ovako’s restructuring program has delivered savings of EUR 4 million during the quarter.
Third quarter 2017 (2016)
- Order intake increased by 14 percent compared to the previous year
- Sales volume was 11 percent higher than in the previous year, and revenue rose by 19 percent
- EBITDA before restructuring costs amounted to EUR 9 (5) million strengthened by increased sales and reduced costs from the restructuring program. The result was also affected by ramp-up costs, which will contribute to higher production during the fourth quarter
- Operating profit (EBITA) was EUR 1 (-3) million before restructuring costs of EUR 0 (3) million
- Cash flow from operating activities amounted to EUR 14 (3) million, including payment of restructuring costs of EUR 1 (2) million
- Ovako’s restructuring program contributed EUR 4 million in the form of lower costs
- Refinancing of the group was secured in September through the issue of EUR 310 million in new five-year notes at a fixed interest rate of 5.0 percent, which provides a saving of EUR 4 million annually in interest expense.
“We are glad to see that our long-term and systematic safety efforts continue to yield results, and the number of accidents leading to lost time is now at the lowest level in the company’s history,” says Marcus Hedblom, President and CEO at Ovako. “The positive trend from the first half-year continued during the third quarter. Both sales volume and order intake increased and we delivered our strongest Q3 earnings since 2011. The improved result was driven by increased sales and further reductions in structural costs. The ongoing capacity ramp-up to meet increased demand in the fourth quarter somewhat impacted earnings. Our improved performance enabled a successful refinancing during the quarter through the issue of new five-year notes at a lower interest rate.”
In view of the continued high level of industrial activity among our customers, increased shifts in several of our production flows, and a well-filled order book, we estimate that we will see a continued strong sales volume development in the fourth quarter.
|2017 Q3||2016 Q3||2017 Q1–3||2016 Q1–3||2016 Full year|
|EBITDA before restructuring cost||EURm||9||5||71||51||57|
|Adjusted EBITDA margin||4.6 %||3.2 %||10.5 %||8.8 %||7.3 %|
|EBITDA margin||4.5 %||1.4 %||10.1 %||8.0 %||6.4 %|
|Operating profit (EBITA) before restructuring cost||EURm||1||-3||47||28||25|
|Operating profit (EBITA)||EURm||1||-6||44||23||18|
|Adjusted operating margin (EBITA)||0.6 %||-1.6 %||7.0 %||4.7 %||3.2 %|
|Operating margin (EBITA)||0.5 %||-3.4 %||6.6 %||3.9 %||2.3 %|
|Cash flow from operating activities||EURm||14||3||20||14||35|
|Full time employees at end of period (FTE)||No||3,024||2,811||3,024||2,811||2,773|
For more information please contact:
Press and media contacts
Oskar Bosson, Head of Group Communications
Telephone: +46 704 10 71 80
Nicholas Källsäter, Head of Group Business Control
Telephone: +46 8 622 1323
Ovako develops high-tech steel solutions for, and in cooperation with, its customers in the bearing, transport and manufacturing industries. Our steel makes our customers’ end products more resilient and extends their useful life, ultimately resulting in smarter, more energy-efficient and more environmentally friendly products.
Our production is based on recycled scrap and includes steel in the form of bar, tube, ring and components. Ovako is represented in more than 30 countries and has sales offices in Europe, North America and Asia. Ovako’s sales in 2016 amounted to EUR 781 million, and the company had 2,800 employees at year-end. For more information, please visit us at www.ovako.com.
This information is information that Ovako AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 8.00 CET on October 25, 2017.