COMPARATIVE INFORMATION ACCORDING TO THE NEW BUSINESS STRUCTURE AND RECLASSIFICATION OF MARKET PRICE
OUTOKUMPU OYJ STOCK EXCHANGE RELEASE JUNE 21, 2005 AT 3.45 pm
COMPARATIVE INFORMATION ACCORDING TO THE NEW BUSINESS STRUCTURE AND
RECLASSIFICATION OF MARKET PRICE GAINS AND LOSSES
New business structure
Following Outokumpus new organizational structure effective on
April 1, 2005, the Groups main business, stainless steel, has been
organized according to product types into two divisions and into a
separate Outokumpu Stainless Tubular Products business unit. The
General Stainless division comprises three business units: Tornio
Works, Coil Products Sheffield and Sheffield Primary Products.
Outokumpu Stainless Tubular Products is reported as part of General
Stainless division. The Specialty Stainless division consists of
five business units: Avesta Works, Thin Strip, Hot Rolled Plate,
Long Products and Sheffield Special Strip.
Outokumpu Technology is managed at arms-length as a stand-alone
business through Technology´s board of directors, and reported on as
a separate business. The Group´s Other operations consists of
industrial holdings as well as activities outside the divisions,
such as Corporate Management and support functions. The divested
fabricated copper products business and the Tube and Brass business,
to be divested at a later date, are reported as discontinued
operations in the income statement.
Reclassification of market price gains and losses
According to Outokumpus reporting practice, realized and unrealized
market price gains and losses on derivative instruments have been
recognized in financial income and expenses, unless hedge accounting
in accordance with IAS 39 has been applied. Based on the revised IAS
1 standard and after discussions held in IASB and IFRIC meetings at
year end 2004, Outokumpu will from Q2/2005 onwards present gains and
losses on derivative instruments above operating profit, and in
financial income and expenses only when the derivative instrument is
assigned to financial assets or liabilities. Exchange gains and
losses from accounts receivable and payable will also be presented
above operating profit. The comparative figures have been restated
accordingly.
The reclassification does not affect the Group´s net profits for the
financial periods. Changes to the operating profit and net financial
expenses are presented in a separate table.
Comparative information for 2004 and Q1/2005
The attached tables present comparative quarterly information for
2004 and the first quarter of 2005 in accordance with the new
business structure and after reclassification of market price gains
and losses.
In the management analysis of the operating results, comparable
operating profit (i.e. operating profit excluding non-recurring
items and the LIFO-FIFO inventory adjustment) will no longer be
presented. Following the sale of fabricated copper products
business, LIFO-FIFO inventory adjustment is no longer applicable.
Major non-recurring items by division and business are, however,
specified in the notes to the financial statements.
For further information, please contact:
Kari Lassila, SVP - IR and Communications, tel. +358 9 421 2555,
kari.lassila@outokumpu.com
Vesa-Pekka Takala, SVP - Corporate Controller, tel. +358 9 421 4134,
vesa-pekka.takala@outokumpu.com
OUTOKUMPU OYJ
Corporate Management
Eero Mustala
Senior Vice President Corporate Communications
tel. +358 9 421 2435
eero.mustala@outokumpu.com
Group key
figures
EUR million I/04 II/04 III/04 IV/04 2004 I/05
Sales
General 1 080 1 178 1 014 1 213 4 485 1 342
Stainless
Specialty 570 638 531 670 2 409 718
Stainless
Technology 81 104 91 146 423 65
Other operations 55 50 56 57 218 55
Intra-group (590) (687) (549) (586) (2 413) (724)
sales
The Group 1 196 1 283 1 143 1 500 5 122 1 456
Operating profit
General 88 81 46 80 295 75
Stainless
Specialty 41 38 33 42 154 55
Stainless
Technology 9 (1) 2 20 30 (8)
Other operations (4) (10) (4) (14) (33) 0
Intra-group (6) 13 0 0 7 (4)
items
The Group 128 121 77 128 453 118
Stainless steel
deliveries
1 000 tonnes I/04 II/04 III/04 IV/04 2004 I/05
Cold rolled 239 222 213 217 891 235
White hot strip 103 99 74 157 432 135
Other 137 123 87 116 464 115
Total deliveries 479 444 374 490 1 787 485
Market prices and exchange rates
I/04 II/04 III/04 IV/04 2004 I/05
Market prices 1)
Stainless steel
Transaction EUR/t 2 122 2 280 2 257 2 350 2 252 2 207
price
Base price EUR/t 1 397 1 433 1 442 1 425 1 424 1 332
Nickel USD/t 14 737 12 503 13 998 14 080 13 852 15 348
EUR/t 11 792 10 379 11 455 10 850 11 136 11 704
Ferrochrome
(Cr-content) USD/lb 0.61 0.69 0.73 0.73 0.69 0.78
EUR/kg 1.08 1.26 1.32 1.24 1.22 1.31
Molybdenum USD/lb 8.20 14.61 16.91 25.85 16.39 32.02
EUR/kg 14.46 26.49 30.50 43.92 29.05 53.84
Iron scrap USD/t 231 211 238 265 236 240
EUR/t 185 176 195 204 190 183
Exchange rates
EUR/USD 1.250 1.200 1.220 1.298 1.244 1.311
EUR/SEK 9.184 9.150 9.150 9.013 9.124 9.074
EUR/GBP 0.680 0.667 0.672 0.695 0.679 0.694
1) Sources of market prices:
Stainless steel: CRU - German transaction and base prices (2 mm cold
rolled 304 sheet), estimates for deliveries during the period.
Nickel: London Metal Exchange (LME) cash quotation.
Ferrochrome: Metal Bulletin - Ferrochrome lumpy chrome charge, basis
52% chrome.
Molybdenum: Metal Bulletin - Molybdenum oxide - Europe.
Iron Scrap: Metal Bulletin - Iron scrap HMS1 fob Rotterdam.
General Stainless
EUR million I/04 II/04 III/04 IV/04 2004 I/05
Sales 1 080 1 178 1 014 1 213 4 485 1 342
of which Tornio 522 578 471 613 2 183 699
Works
Operating profit 88 81 46 80 295 75
of which Tornio 70 67 47 57 241 59
Works
Operating capital
at the end of 2 734 2 854 2 928 2 988 2 988 3 021
period
Deliveries of main
products
(1 000 tonnes)
Cold rolled 215 195 195 191 796 205
White hot strip 77 72 54 116 320 97
Other 238 251 173 198 860 246
Total deliveries
of the division 529 518 422 506 1 976 547
Specialty
Stainless
EUR million I/04 II/04 III/04 IV/04 2004 I/05
Sales 570 638 531 670 2 409 718
Operating profit 41 38 33 42 154 55
Operating capital
at the end of 1 038 1 107 1 094 1 143 1 143 1 137
period
Deliveries of main
products
(1 000 tonnes)
Cold rolled 51 50 33 62 178 46
White hot strip 65 61 42 45 231 65
Other 133 138 121 126 517 132
Total deliveries
of the division 249 249 195 233 926 243
Technology
EUR million I/04 II/04 III/04 IV/04 2004 I/05
Sales 81 104 91 146 423 65
Operating profit 9 (1) 2 20 30 (8)
Operating capital
at the end of 27 45 29 39 39 40
period
Order backlog
at the end of 390 336 423 458 458 490
period
Other operations
EUR million I/04 II/04 III/04 IV/04 2004 I/05
Sales 55 50 56 57 218 55
Operating profit (4) (10) (4) (14) (33) 0
Operating capital
at the end of 89 83 113 58 58 43
period
Income statement by
quarter
EUR million I/04 II/04 III/04 IV/04 2004 I/05
Continuing
operations:
Sales 1 196 1 283 1 143 1 500 5 122 1 456
Operating profit 128 121 77 128 453 118
Share of results
in associated 16 8 31 24 78 (1)
companies
Financial income
and expenses (13) (4) (33) (41) (92) (8)
Profit before taxes 130 124 75 111 440 108
Income taxes (31) (17) (17) 4 (61) (20)
Net profit for the
period from
continuing operations 99 107 58 115 379 89
Net profit, (loss)
for the period from
discontinued 33 (12) (5) (9) 7 (333)
operations
Net profit, (loss)
for the period 132 96 53 106 386 (244)
Attributable to:
Equity holders
of the Company 130 95 52 105 382 (245)
Minority interest 2 1 0 0 4 1
Non-recurring items
in operating profit
EUR million I/04 II/04 III/04 IV/04 2004 I/05
General Stainless
Release of the
Finnish
TEL disability - - - 13 13 -
pension liability
Technology
Release of the Finnish
TEL disability
pension liability - - - 5 5 -
Gain on the sale
of the filter 18 (1) - (1) 16 -
business
Other operations
Release of the
Finnish
TEL disability
pension liability - - - 4 4 -
Gain/loss on the
sale
of the Boliden - - - (19) (19) 25
shares
18 (1) - 2 19 25
Key figures by
quarter
EUR million I/04 II/04 III/04 IV/04 2004 I/05
Operating profit
margin, % 10.7 9.4 6.8 8.5 8.8 8.1
Return on capital
employed, % 11.8 10.3 6.3 10.4 10.0 10.6
Return on equity, % 24.1 16.5 8.9 17.2 16.8 (41.0)
Return on equity,
continuing
operations, % 18.1 18.6 9.7 18.7 16.5 14.9
Capital employed
at end of period 4 543 4 839 4 919 4 941 4 941 3 953
Net interest-
bearing
debt at end
of period 2 261 2 496 2 515 2 435 2 435 1 695
Equity-to-assets
ratio
at end of period, % 33.1 32.7 33.6 35.8 35.8 35.5
Debt-to-equity
ratio
at end of period, % 99.0 106.5 104.6 97.2 97.2 75.0
Earnings per share,
EUR 0.73 0.52 0.29 0.58 2.12 (1.35)
Earnings per share
from continuing
operations, EUR 0.54 0.59 0.32 0.37 1.82 0.47
Earnings per share
from discontinued
operations, EUR 0.19 (0.07) (0.03) 0.21 0.30 (1.82)
Average number of
shares outstanding,
in thousands 1) 178 081 180 742 180 752 180 752 180 057 180 901
Equity per share
at end of period, 12.43 12.75 13.08 13.65 13.65 12.39
EUR
Number of shares
outstanding at end
of period,
in thousands 1) 178 914 180 752 180 752 180 752 180 752 181 032
Capital
expenditure,
continuing 133 76 91 114 414 37
operations
Depreciation,
continuing 44 48 48 50 191 53
operations
Average personnel
for the period,
continuing 11 681 11 997 11 960 11 513 11 787 11 475
operations
1) The number of own shares repurchased is excluded.
The impact of reclassification of market price
gains and losses
EUR million I/04 II/04 III/04 IV/04 2004 I/05
Operating profit,
as reported 118 117 72 108 415 111
Impact of
reclassification 10 3 5 20 38 7
Restated
operating profit 128 121 77 128 453 118
Net financial expenses,
as reported (10) (10) (25) (15) (60) (10)
Impact of
reclassification 1) (3) 5 (7) (27) (32) 2
Restated net
financial expenses (13) (4) (33) (41) (92) (8)
1) Part of the reclassification has been allocated to discontinued
operations.
