EVALUATION OF THE POSSIBILITY OF LISTING OUTOKUMPU TECHNOLOGY PROGRESSES
OUTOKUMPU OYJ STOCK EXCHANGE RELEASE SEPTEMBER 11, 2006 AT 9.00 AM
Not for release, publication or distribution, directly or
indirectly, in or into the United States, Canada, Australia or
Japan.
EVALUATION OF THE POSSIBILITY OF LISTING OUTOKUMPU TECHNOLOGY
PROGRESSES
Outokumpu Oyj announced on June 7, 2006 that it has started to
evaluate the possibility of listing Outokumpu Technology on the
Helsinki Stock Exchange. In connection with the evaluation
process, Outokumpu Oyj has prepared and now makes public certain
financial information in respect of Outokumpu Technology. This
information reflects Outokumpu Technologys current legal and
operational structure and also includes Outokumpu Technologys
financial targets and dividend policy to be applied if the company
will be listed as a result of the evaluation. In addition,
Outokumpu Oyj discloses an updated current outlook for Outokumpu
Technology.
The financial disclosure includes audited combined financial
information of Outokumpu Technology for the years ended December
31, 2003, 2004 and 2005, and unaudited combined interim financial
information for the six months ended June 30, 2005 and 2006.
Furthermore, the disclosure includes unaudited sales and operating
profit on a quarterly basis for 2005 and for the first two
quarters of 2006. The combined financial information has been
prepared in accordance with IFRS as adopted by the EU and has been
derived from the historical financial statements of the Outokumpu
Group, as if Outokumpu Technology and its subsidiaries had been a
stand-alone independent group for the periods presented.
The financial disclosure takes into account certain structural
differences compared to previously published financial information
for Outokumpu Technology as a part of Outokumpu Oyj. Business
segment information has also been included on a more detailed
level.
Financial targets
Outokumpu Technology has defined sustainable profitable growth as
its objective and, based on its business strategy, adopted the
following financial targets:
- Average annual increase in earnings per share in excess of ten
percent;
- Annual operating profit margin always above five percent; and
- Strong balance sheet providing operational flexibility and
enabling Outokumpu Technology to finance potential acquisitions.
Dividend policy
Outokumpu Technologys Board of Directors has adopted a dividend
policy whereby the company intends to propose for the approval of
the companys shareholders dividends representing approximately 40
percent of the annual net income of Outokumpu Technology for the
preceding financial year, subject to the companys financial
condition, investment needs and other factors.
Current outlook
Demand for metals has continued to be strong. The mining and
metals industry continues to invest actively in both ferrous and
non-ferrous metals production capacity, and there are no signs of
a slow-down in the activity in the short-term. Outokumpu
Technology continues to be active in marketing and negotiating new
contracts offering potential for a continuing strong new order
intake. Outokumpu Technologys management expects that sales and
profitability in the year ending December 31, 2006 will represent
a clear improvement compared to sales and profitability in the
year ended December 31, 2005. Furthermore, during the six months
ending December 31, 2006 Outokumpu Technologys management expects
the companys sales and operating profit to be somewhat higher
than during the comparable period in 2005, excluding one-time
expenses related to the possible listing incurring to the company.
Outokumpu Technologys management further estimates that the
positive outlook for the mining and metals industries and
continued high market activity, together with the companys strong
recent order intake and record high order backlog, will provide
Outokumpu Technology a strong basis for the year 2007.
For further information, please contact:
Vesa-Pekka Takala, SVP Corporate Controller,
tel. +358 9 421 4134
vesa-pekka.takala@outokumpu.com
Kari Lassila, SVP IR and Communications, tel. +358 9 421 2555
kari.lassila@outokumpu.com
Eero Mustala, SVP Corporate Communications, tel. +358 9 421 2435
eero.mustala@outokumpu.com
OUTOKUMPU OYJ
Corporate Management
Ingela Ulfves
Vice President - Investor Relations
tel. + 358 9 421 2438, mobile +358 40 515 1531,
fax +358 9 421 2125
e-mail: ingela.ulfves@outokumpu.com
www.outokumpu.com
The information contained herein is not for publication or
distribution, directly or indirectly, in or into the United
States, Canada, Australia or Japan. The materials do not
constitute an offer of securities for sale in the United States,
nor may the securities be offered or sold in the United States
absent registration or an exemption from registration as provided
in the U.S. Securities Act of 1933, as amended, and the rules and
regulations thereunder. There is no intention to register any
portion of the offering in the United States or to conduct a
public offering of Shares in the United States.
The information contained herein shall not constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be
any sale of the securities referred to herein in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior
to registration, exemption from registration or qualification
under the securities laws of any such jurisdiction.
This document does not constitute an offer of securities to the
public in the United Kingdom. No prospectus has been or will be
registered in the United Kingdom in respect of the securities, and
consequently the securities must not be sold or offered for sale
in the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their
business or whom it is reasonable to suppose will acquire, hold,
manage or dispose of investments (as principal or agent) for the
purposes of their business.
Combined financial information of Outokumpu Technology
Combined financial information of Outokumpu Technology has been
prepared in accordance with the recognition and measurement
principles under IFRS as adopted by the EU.
Combined Income Statement
EUR million 2003 2004 2005
Continuing operations:
Sales 365.9 425.6 556.2
Cost of sales (280.3) (327.8) (451.5)
Gross margin 85.6 97.8 104.7
Other operating income 3.9 3.9 2.2
Selling and marketing expenses (40.7) (46.7) (39.2)
Administrative expenses (26.9) (30.2) (28.0)
Research and development expenses (11.7) (13.5) (13.9)
Other operating expenses (2.3) (0.6) (0.8)
Share of results of associated - - (0.6)
companies
Operating profit 7.9 10.8 24.3
Financial income and expenses
Net interest expenses (1.5) 1.6 1.9
Market price gains and losses (1.8) (0.3) 0.7
Other financial income and expenses (0.7) (0.2) (1.3)
Total financial income and expenses (3.9) 1.1 1.3
Profit before taxes 4.0 11.9 25.6
Income taxes 0.4 (2.4) (9.2)
Net profit for the financial year
from continuing operations 4.4 9.5 16.4
Discontinued operations:
Net profit for the financial year
from discontinued operations 1) 0.4 12.2 -
Net profit for the financial year 4.8 21.7 16.4
Attributable to:
Equity holders of the company 4.8 21.7 16.4
Minority interest 0.0 0.0 0.0
1) Sale of filter business to Larox Oyj
presented as discontinued operations.
All figures in the tables have been rounded and consequently the sum
of individual figures can deviate from the presented sum figure.
Combined Balance Sheet
Dec 31 Dec 31 Dec 31
EUR million 2003 2004 2005
ASSETS
Non-current assets
Intangible assets 71.6 73.9 75.2
Property, plant and equipment 38.7 31.4 30.5
Investments in associated companies - - 1.9
Available-for-sale financial assets 1) 1.6 0.0 0.8
Deferred tax assets 12.1 9.6 12.2
Trade and other receivables 3.1 1.6 0.9
Total non-current assets 127.1 116.4 121.5
Current assets
Inventories 31.7 30.8 35.2
Available-for-sale financial assets 1) - 0.5 0.0
Derivative financial instruments 5.9 5.6 0.6
Trade and other receivables 104.8 92.5 125.5
Cash and cash equivalents 1) 34.9 52.9 126.3
Total current assets 177.3 182.2 287.7
TOTAL ASSETS 304.4 298.7 409.2
Dec 31 Dec 31 Dec 31
EUR million 2003 2004 2005
EQUITY AND LIABILITIES
Equity attributable to the
equity holders of the Company
Share capital 16.8 16.8 16.8
Premium fund 20.2 20.2 20.2
Other reserves 0.1 0.3 0.1
Retained earnings 27.5 31.9 57.1
Net profit for the financial year 4.8 21.7 16.4
69.5 90.8 110.6
Minority interest 0.0 0.0 0.1
Total equity 69.5 90.9 110.7
Non-current liabilities
Interest-bearing debt 1) 3.5 3.6 3.1
Deferred tax liabilities 10.7 8.2 15.2
Pension obligations 22.4 18.1 18.2
Provisions - 1.0 0.8
Trade and other payables 2.9 - 0.7
Total non-current liabilities 39.6 30.9 37.9
Current liabilities
Interest-bearing debt 1) 19.5 8.4 7.8
Derivative financial instruments 1.4 5.1 1.1
Income tax liabilities 0.1 2.1 2.9
Provisions 0.6 1.9 1.6
Trade and other payables 173.7 159.4 247.1
Total current liabilities 195.3 176.9 260.6
TOTAL EQUITY AND LIABILITIES 304.4 298.7 409.2
1) Included in net interest-bearing
debt.
Combined Cash Flow Statement
EUR million 2003 2004 2005
Cash flow from operating activities
Net profit for the financial year 4.8 21.7 16.4
Adjustments for
Taxes (0.4) 2.4 9.2
Depreciation and amorization 6.8 9.7 9.4
Share of results of associated companies - - 0.6
Profit/(loss) on sale of property,
plant and equipment (0.1) (0.3) (1.2)
Interest income (2.1) (2.5) (3.0)
Dividend income (0.0) (0.0) (0.0)
Interest expense 3.5 0.9 1.0
Gain on the sale of the filter business - (16.2) -
Other adjustments (0.1) 3.2 (0.1)
7.6 (2.7) 16.0
Change in working capital
Change in trade and other receivables (2.8) 12.1 (20.9)
Change in inventories 7.9 (5.9) (3.3)
Change in trade and other payables 8.6 (11.9) 74.7
Change in provisions 1.6 (1.9) (0.9)
15.3 (7.6) 49.5
Interest received 2.1 2.5 3.0
Interest paid (3.5) (1.7) (1.1)
Income tax paid (1.4) (4.1) (3.6)
Net cash from operating activities 24.9 8.1 80.2
Cash flow from investing activities
Acquisition of shares in subsidiaries (3.2) - -
Acquisition of shares in associated - - (2.5)
companies
Acquisition of available-for-sale
financial assets - (0.3) (0.8)
Purchases of property, plant and equipment (12.6) (3.6) (5.4)
Purchases of intangible assets (15.5) (8.4) (3.4)
Proceeds from the sale of the filter - 31.0 -
business
Proceeds from sale of available-for-sale
financial assets - 1.6 0.5
Proceeds from sale of property,
plant and equipment 3.6 0.6 1.8
Proceeds from sale of intangible assets 0.0 - 0.0
Change in other long-term receivables 2.2 1.5 (0.2)
Net cash from investing activities (25.5) 22.4 (10.1)
EUR million 2003 2004 2005
Cash flow before financing activities (0.6) 30.5 70.1
Cash flow from financing activities
Borrowings of long-term debt 1.4 0.1 -
Repayments of long-term debt (0.3) (0.7) (0.7)
Change in current debt 3.7 (7.3) (3.1)
Borrowings of finance lease liabilities - 0.1 -
Repayments of finance lease liabilities - - (0.1)
Other financing cash flow 2.0 0.0 2.4
Net cash from financing activities 6.8 (7.8) (1.6)
Other adjustments 3.9 (4.6) (0.3)
Net change in cash and cash equivalents 10.1 18.1 68.2
Cash and cash equivalents at the
beginning of the financial year 24.8 34.9 52.9
Foreign exchange rate effect
on cash and cash equivalents 0.0 (0.1) 5.2
Net change in cash and cash equivalents 10.1 18.1 68.2
Cash and cash equivalents
at the end of the financial year 34.9 52.9 126.3
Business Segment Information
EUR million 2003 2004 2005
Sales
Minerals Processing division 1) 125.0 150.0 184.8
Base Metals division 2) 117.1 139.2 160.0
Metals Processing division 3) 123.3 134.8 205.9
Other businesses 4), 5) 24.7 34.7 32.2
Unallocated items 6) and intersegment eliminations (24.2) (33.0) (26.7)
365.9 425.6 556.2
Operating profit
Minerals Processing division 3.5 8.3 8.3
Base Metals division 5.2 4.4 11.6
Metals Processing division 4.7 (1.6) 7.1
Other businesses (2.8) 2.4 0.2
Unallocated items (2.8) (2.7) (2.8)
7.9 10.8 24.3
1) Includes inter-segment sales
of EUR 7.7 million (2003),
4.3 million (2004) and 1.5 million (2005).
2) Includes inter-segment sales
of EUR 2.9 million (2003),
4.1 million (2004) and 4.5 million (2005).
3) Includes inter-segment sales
of EUR 0.0 million (2003),
3.0 million (2004) and 0.9 million (2005).
4) Other businesses includes equipment
manufacturing
and R&D to external customers.
5) Includes inter-segment sales
of EUR 13.7 million (2003),
21.7 million (2004) and 19.8 million (2005).
6) Unallocated items primarily include invoicing
of internal management services.
Key Figures
2003 2004 2005
Operating profit margin, % 2.1 2.5 4.4
Net interest-bearing debt at
the end of the period, EUR million (13.4) (41.4) (116.1)
Debt-to-equity ratio at the end of the period, % (19.3) (45.5) (104.9)
Equity-to-assets ratio at the end of the period, % 28.9 38.1 36.1
Return on equity, % 6.6 11.8 16.3
Order backlog at the end
of the period 1), EUR million 355.5 450.2 596.0
Order intake 1), EUR million 458.1 542.0 678.5
Personnel at the end of the period 1) 2 008 1 809 1 801
1) Unaudited
Combined Income Statement
Jan- Jan-
June June
EUR million 2005 2006
Sales 216.7 320.9
Cost of sales (177.6) (258.9)
Gross margin 39.1 62.1
Other operating income 0.5 1.4
Selling and marketing expenses (20.3) (23.1)
Administrative expenses (14.2) (15.8)
Research and development expenses (6.9) (8.5)
Other operating expenses (1.4) (1.6)
Share of results of associated (0.1) (0.4)
companies
Operating profit (3.4) 14.1
Financial income and expenses
Net interest expenses 0.8 3.7
Market price gains and losses 0.9 (1.4)
Other financial income and (0.3) (0.8)
expenses
Total financial income and 1.5 1.5
expenses
Profit/(loss) before taxes (1.9) 15.6
Income taxes (1.5) (7.0)
Net profit/(loss) for the (3.4) 8.7
period
Attributable to:
Equity holders of the company (3.4) 8.7
Minority interest 0.0 0.0
Combined Balance Sheet
June 30 June 30
EUR million 2005 2006
ASSETS
Non-current assets
Intangible assets 74.3 73.3
Property, plant and equipment 31.1 29.1
Investments in associated companies 1.2 1.5
Available-for-sale financial assets 1) 0.8 0.8
Deferred tax assets 9.3 12.3
Trade and other receivables 3.6 2.5
Total non-current assets 120.2 119.5
Current assets
Inventories 50.6 38.6
Available-for-sale financial assets 1) 0.0 0.0
Derivative financial instruments 3.3 1.0
Trade and other receivables 82.3 131.1
Cash and cash equivalents 1) 69.1 117.8
Total current assets 205.3 288.5
TOTAL ASSETS 325.5 408.0
June 30 June 30
EUR million 2005 2006
EQUITY AND LIABILITIES
Equity attributable to the equity holders of the
Company
Share capital 16.8 16.8
Premium fund 20.2 20.2
Other reserves 0.2 0.1
Retained earnings 56.4 70.3
Net profit/(loss) for the period (3.4) 8.7
90.1 116.1
Minority interest 0.0 0.0
Total equity 90.1 116.1
Non-current liabilities
Interest-bearing debt 1) 3.6 3.8
Deferred tax liabilities 8.1 14.7
Pension obligations 18.0 18.5
Provisions 1.0 0.9
Trade and other payables 3.3 2.4
Total non-current liabilities 34.1 40.3
Current liabilities
Interest-bearing debt 1) 10.5 6.8
Derivative financial instruments 5.1 0.5
Income tax liabilities 0.9 4.3
Provisions 3.0 2.2
Trade and other payables 181.8 237.9
Total current liabilities 201.3 251.6
TOTAL EQUITY AND LIABILITIES 325.5 408.0
1) Included in net interest-bearing debt.
Combined Condenced Cash Flow Statement
Jan-June Jan-June
EUR million 2005 2006
Cash flow from operating activities
Net profit/(loss) for the financial year (3.4) 8.7
Adjustments for
Depreciation and amortization 4.8 5.1
Impairments - 1.5
Other adjustments 0.5 3.6
Decrease (increase) in working capital 19.2 (18.3)
Interest received 1.4 4.3
Interest paid (0.5) (0.6)
Income tax paid (1.8) (3.7)
Net cash from operating activities 20.2 0.6
Cash flow from investing activities
Purchases of assets (5.5) (3.3)
Proceeds from sale of other assets 0.8 0.0
Change in other investing activities (2.1) (0.1)
Net cash from investing activities (6.8) (3.4)
Cash flow before financing activities 13.3 (2.9)
Cash flow from financing activities
Repayments of long-term debt (0.2) (2.4)
Increase (decrease) in current debt 0.6 3.2
Change in other financing activities (0.0) (0.9)
Net cash from financing activities 0.4 (0.1)
Other adjustments 1.9 (0.0)
Net change in cash and cash equivalents 15.6 (2.9)
Cash and cash equivalents at the
beginning
of the financial year 52.9 126.3
Foreign exchange rate effect
on cash and cash equivalents 0.6 (5.7)
Net change in cash and cash equivalents 15.6 (2.9)
Cash and cash equivalents
at the end of the period 69.1 117.8
Business
Segment Information
Jan-June Jan-June
EUR million 2005 2006
Sales
Minerals
Processing division 65.5 93.8
Base Metals division 56.2 95.5
Metals
Processing division 91.0 130.4
Other businesses 15.8 14.7
Unallocated items and
intersegment
eliminations (11.7) (13.4)
216.7 320.9
Operating profit
Minerals
Processing division 1.4 (5.6)
Base Metals division (2.2) 12.7
Metals
Processing division (2.0) 10.2
Other businesses 0.5 (0.3)
Unallocated items (1.1) (2.9)
(3.4) 14.1
Key Figures
Jan-June Jan-June
2005 2006
Operating
profit margin, % (1.6) 4.4
Net interest-bearing
debt at the end of
the
period, EUR million (55.7) (108.5)
Debt-to-equity
ratio at the end
of the period, % (61.8) (93.4)
Equity-to-assets
ratio at the end
of the period, % 37.0 40.9
Return on equity, % (14.8) 15.3
Order backlog at
the end of the period, EUR million 519.5 693.8
Order intake, EUR million 278.0 425.9
Personnel at the
end of the period 1 883 1 889
Combined
Quarterly Information
EUR million I/2005 II/2005 III/2005 IV/2005 I/2006 II/2006
Sales 65.3 151.4 133.1 206.4 144.2 176.8
Operating profit (7.6) 4.2 5.5 22.2 4.1 10.0
