OUTOKUMPU ANNUAL ACCOUNTS 2003 - YEAR OF
OUTOKUMPU OYJ STOCK EXCHANGE RELEASE February 10, 2004 at 1.00 pm
OUTOKUMPU ANNUAL ACCOUNTS 2003 - YEAR OF TRANSFORMATION IN
DIFFICULT MARKET CONDITIONS, PROFITS DOWN TO EUR 92 MILLION
Outokumpus net sales in 2003 rose 7% to EUR 5 921 million.
Operating profit amounted to EUR 206 million (2002: EUR 267
million) supported by unusual items of EUR 119 million related
primarily to the Boliden transaction. Earnings per share were
EUR 0.54 (2002: EUR 1.15). Cash flow from operating activities
was EUR 214 million (2002: EUR 334 million). Groups capital
structure improved markedly, and gearing was reduced to 102.8%
thanks to several asset disposals. The Board is proposing a
dividend of EUR 0.20 per share.
Oct-Dec Jul-Sep
Group key figures 2003 2003
Net sales EUR million 1 535 1 464
Operating profit EUR million 124 29
Profit before
extraordinary items EUR million 101 9
Profit for the
financial period EUR million 108 1
Earnings per share EUR 0.63 0.01
Dividend per share EUR - -
Return on capital employed % 11.5 2.4
Net interest-bearing debt EUR million 2 013 2 847
Equity-to-assets ratio % 32.3 28.2
Debt-to-equity ratio % 102.8 155.9
Capital expenditure EUR million 204 116
Average personnel
for the period 21 037 21 440
Jan-Dec Jan-Dec
2003 2002
Net sales EUR million 5 921 5 558
Operating profit EUR million 206 267
Profit before
extraordinary items EUR million 100 213
Profit for the
financial period EUR million 92 159
Earnings per share EUR 0.54 1.15
Dividend per share EUR 0.20 1) 0.40
Return on capital employed % 5.0 7.0
Net interest-bearing debt EUR million 2 013 2 385
Equity-to-assets ratio % 32.3 31.1
Debt-to-equity ratio % 102.8 122.6
Capital expenditure EUR million 622 2 042
Average personnel
for the period 21 442 20 196
1) Board's proposal to the Annual General Meeting.
Outokumpu de-consolidated all the assets sold to Boliden at the
end of 2003, while the results from these assets were
consolidated until the end of 2003. The assets acquired from
Boliden were consolidated to Outokumpu at the end of 2003.
THE YEAR 2003 IN BRIEF
- World economic growth, particularly in the US, accelerated in
the second half of 2003 and sentiment of the metals market
improved in step with it. However, all the important conversion
margins and treatment charges for Outokumpu declined in 2003.
- Global demand for stainless steel grew by 7%, copper and
copper alloy products by 2% and zinc by 3% in 2003. The growth
was mainly attributable to China.
- Outokumpus net sales rose 7% to EUR 5 921 million thanks to
increased stainless steel deliveries and higher raw material
prices.
- The Groups operating profit declined to EUR 206 million and
the operating profit margin was 3.5%. This was mainly due to
weak profitability of Outokumpu Stainless and Outokumpu Copper,
both of which suffered from price pressure in the main markets
and from weak product mix. Furthermore, fixed costs of
Outokumpu Stainless were high due to Tornio ramp-up. Operating
profit includes unusual items of EUR 119 million relating
primarily to gains on asset disposals.
- Operating profit of EUR 124 million was generated in the
fourth quarter, of which unusual items amounted to EUR 93
million.
- Cash flow from operating activities decreased from the
previous year and was EUR 214 million mainly as a result of
weak underlying profitability.
- The Groups capital structure improved markedly due to
several asset disposals. At year-end net interest-bearing debt
stood at EUR 2 013 million and gearing was 102.8%. The target
remains to bring gearing below 75% by the end of 2004.
- The Groups total capital expenditure was still relatively
high and amounted to EUR 622 million.
OUTLOOK FOR 2004
The Tornio ramp-up continues to be the key factor for
Outokumpus profitability. The gradual ramp-up of the cold
rolling mill is estimated to have a positive effect on
profitability in 2004 because the proportion of cold rolled
products will increase. Although the full benefit of the
investments will be achieved only once the full capacity is
available in 2005, the operating profit of Outokumpu Stainless
in 2004 is expected to be markedly better than in 2003. The
demand for fabricated copper products is expected to strengthen
further during 2004. Based on improving market prospects and
increasing productivity, the comparable operating profit of
Outokumpu Copper in 2004 is estimated to improve clearly on
2003. Furthermore, the operating profit of Outokumpu Technology
in 2004 is expected to improve from 2003 thanks to the current
order backlog and better market conditions.
Judged from the current market prospects of stainless steel,
copper products and technology sales Outokumpus management
believes that the Groups operating profit excluding unusual
items for 2004 will be significantly better than in 2003.
Outokumpu CEO Jyrki Juusela comments:
"Last year was a year of transformation for Outokumpu.
Unfortunately, global economic growth did not yet support our
goal of delivering decent profits. In the meantime we put our
efforts into restructuring our portfolio - we sold our mining
and smelting assets to Boliden and disposed off other non-core
assets. Strict working capital management has also been a
priority for us. Both our debt level and gearing have
decreased. The outlook seems now much more positive for 2004.
The gradual ramp-up of the new capacity in Tornio is
progressing well and some price increases have been introduced
for the early part of 2004. Demand prospects for both copper
products and technology sales are also promising. Today we are
stronger and more competitive than ever before, and Im
positive that with our new brand, which demonstrates our
determination to exceed the expectations of our customers,
well be well poised to deliver on our promises in 2004".
Management analysis of the fourth-quarter operating result
The Groups comparable operating profit improved
The following table presents the Groups net sales and
comparable operating profit (i.e. operating profit excluding
inventory gains or losses as well as one-off items) by
business.
EUR million I/02 II/02 III/02 IV/02 2002
Net sales
Stainless 769 823 671 739 3 002
Copper 409 452 392 416 1 669
Zinc 99 120 101 98 418
Technology 71 114 90 124 399
Other operations 89 90 65 92 336
Intra-group sales (61) (68) (59) (78) (266)
The Group 1 376 1 531 1 260 1 391 5 558
Comparable
operating profit
Stainless 75 83 20 21 184
Copper 15 22 15 8 60
Zinc 3 1 1 (0) 5
Technology (8) 5 (1) 8 4
Other operations (4) 9 (15) (25) (35)
Intra-group items (0) (1) 5 1 5
The Group 81 119 25 13 223
Items affecting
comparability,
businesses 14 53 (20) 2 64
Items affecting
comparability,
the Group - (21) 1 - (20)
The Group, official
operating profit 95 151 6 15 267
EUR million I/03 II/03 III/03 IV/03 2003
Net sales
Stainless 876 851 849 873 3 449
Copper 409 402 404 411 1 626
Zinc 93 95 98 110 396
Technology 88 81 98 135 402
Other operations 87 99 101 103 390
Intra-group sales (70) (89) (86) (97) (342)
The Group 1 483 1 439 1 464 1 535 5 921
Comparable
operating profit
Stainless 49 36 9 23 117
Copper 2 8 (1) 3 12
Zinc 5 2 4 5 16
Technology (9) (4) (1) 14 0
Other operations (23) (17) (13) (19) (72)
Intra-group items 1 (1) 1 (1) 0
The Group 25 24 (1) 25 73
Items affecting
comparability,
businesses 3 1 30 (7) 27
Items affecting
comparability,
the Group - - - 106 106
The Group, official
operating profit 28 25 29 124 206
World economic growth accelerated in the second half of 2003
after sluggish first half of the year. Sentiment in the metals
market improved in step with it, and demand picked up due to
industrial recovery and partly due to speculative demand. The
growth of demand was led by China. The Groups net sales for
the fourth quarter increased 5% compared with the third quarter
due to the higher transaction prices and delivery volumes of
finished stainless steel products, higher deliveries and price
of zinc, as well as increased volume of technology sales. The
comparable fourth quarter operating profit of Stainless,
Copper, Zinc and Technology improved over the third quarter.
In October-December, the euro appreciated 6% against the US
dollar compared with the previous quarter. The appreciation of
the euro, in spite of hedging measures, eased off somewhat the
favorable development of the Groups fourth-quarter net sales
and operating profit. Following the completion of the Boliden
transaction at the end of 2003 the Groups operating profit and
cash flow sensitivity to the movements between the euro and the
US dollar has declined markedly. However, a considerable
indirect impact of the US dollar movements against the euro
will remain through the equity consolidation of Outokumpus 49%
share of New Bolidens profit for the period.
The Groups cash flow from operating activities was clearly
positive during the fourth quarter of 2003 although the nickel
price, which ties up a significant amount of the Groups
working capital, rose substantially. The Groups working
capital decreased considerably during the quarter, despite
rapidly rising raw material prices, due to intensive internal
measures taken to reduce inventories and trade receivables.
Also trade payables increased.
Outokumpu Stainless fourth-quarter operating profit up
Outokumpu Stainless key figures
EUR million I/02 II/02 III/02 IV/02 2002
Net sales
Coil Products 599 628 517 584 2 328
Special Products 325 375 299 312 1 311
North America 71 72 60 64 267
Others (226) (252) (205) (221) (904)
Outokumpu Stainless
total 769 823 671 739 3 002
Comparable operating
profit
Coil Products 54 60 16 32 162
Special Products 9 11 1 (8) 13
North America 1 3 1 (2) 3
Others 11 9 2 (1) 6
Outokumpu Stainless
total 75 83 20 21 184
Market valuation
provision
in inventories - - - 0 0
Provision for
Panteg closure - - - - -
Amortization of
positive goodwill
arising
from the
acquisition
of the AvestaPolarit
minority interest 1) - - - (15) -
Insurance
compensation - 20 - - 20
Outokumpu Stainless,
official
operating profit 75 103 20 6 204
Operating capital at
the end of period 1 992 2 154 2 819 3 038 3 038
Production of main
products
(1 000 tonnes)
Coil Products
Steel slabs 411 411 337 435 1 594
- of which Long
Products share 130 147 109 115 501
Cold rolling
mill production
- cold rolled 205 222 179 201 807
- white hot strip 102 104 75 104 385
Special Products
Ferrochrome 63 63 59 63 248
Tubes 18 19 14 17 68
Quarto plate 25 26 19 25 95
Long products 2) 40 54 33 53 180
Precision strip 5 5 6 5 21
North America
Quarto plate, bar
and tubes 19 21 17 17 74
Development of
market prices 3)
Stainless steel
Transaction
price EUR/kg 1.54 1.75 1.82 1.76 1.72
Base price EUR/kg 1.31 1.41 1.45 1.44 1.41
Conversion
margin EUR/kg 0.88 0.98 1.03 1.00 0.97
Nickel USD/lb 2.81 3.15 3.10 3.22 3.07
EUR/kg 7.08 7.56 6.95 7.11 7.16
Ferrochrome
(Cr-content) USD/lb 0.29 0.30 0.32 0.35 0.31
EUR/kg 0.72 0.72 0.72 0.77 0.73
1) In the fourth quarter of 2002, an EUR 15 million
amortization of positive goodwill not belonging to the period
was made so that the total amount corresponds to the annual
amortization level.
2) Other than slabs.
3) Sources: Stainless steel: CRU - German conversion margin (2
mm cold rolled 304 sheet), price estimate for deliveries during
the period. Nickel: London Metal Exchange (LME) cash quotations
converted into USD/lb and EUR/kg. Ferrochrome: CRU - US
imported high carbon 50-55% Cr.
EUR million I/03 II/03 III/03 IV/03 2003
Net sales
Coil Products 682 667 624 655 2 628
Special Products 349 327 273 348 1 297
North America 64 59 64 65 252
Others (219) (202) (112) (195) (728)
Outokumpu Stainless
total 876 851 849 873 3 449
Comparable operating
profit
Coil Products 45 35 (1) 19 98
Special Products 0 2 (7) 4 (1)
North America (1) 0 4 1 4
Others 5 (1) 13 (1) 16
Outokumpu Stainless
total 49 36 9 23 117
Market valuation
provision
in inventories 1 0 (1) 1 1
Provision for
Panteg closure - - - (14) (14)
Amortization of
positive
goodwill arising
from the
acquisition
of the AvestaPolarit
minority interest 1) - - - - -
Insurance
compensation - - - - -
Outokumpu Stainless,
official
operating profit 50 36 8 10 104
Operating capital at
the end of period 3 204 3 355 3 392 3 317 3 317
Production of main
products
(1 000 tonnes)
Coil Products
Steel slabs 494 500 411 463 1 868
- of which Long
Products share 110 93 64 82 349
Cold rolling
mill production
- cold rolled 204 207 180 216 807
- white hot strip 112 125 103 129 469
Special Products
Ferrochrome 63 62 62 63 250
Tubes 20 18 14 17 69
Quarto plate 27 32 25 32 116
Long products 2) 54 52 40 48 194
Precision strip 5 7 5 5 22
North America
Quarto plate, bar
and tubes 20 20 18 18 76
Development of
market prices 3)
Stainless steel
Transaction
price EUR/kg 1.77 1.78 1.75 1.87 1.80
Base price EUR/kg 1.43 1.39 1.38 1.38 1.40
Conversion
margin EUR/kg 0.98 0.93 0.92 0.93 0.94
Nickel USD/lb 3.78 3.80 4.25 5.64 4.37
EUR/kg 7.77 7.36 8.33 10.46 8.52
Ferrochrome
(Cr-content) USD/lb 0.36 0.41 0.46 0.49 0.43
EUR/kg 0.74 0.80 0.90 0.90 0.84
1) In the fourth quarter of 2002, an EUR 15 million
amortization of positive goodwill not belonging to the period
was made so that the total amount corresponds to the annual
amortization level.
2) Other than slabs.
3) Sources: Stainless steel: CRU - German conversion margin (2
mm cold rolled 304 sheet), price estimate for deliveries during
the period. Nickel: London Metal Exchange (LME) cash quotations
converted into USD/lb and EUR/kg. Ferrochrome: CRU - US
imported high carbon 50-55% Cr.
The markets for stainless steel improved cautiously in the
fourth quarter. Demand remained very strong in Asia, led by
impressive Chinese consumption. In Europe and the US, the
market sentiment brightened, but the actual market conditions
improved only moderately. In Europe, the order intake
increased. The increase in demand, however, is partly
considered to have been speculative due to the rapid rise in
the alloy surcharge. The additional capacity and the Asian
imports resulted in pressure on the European base prices, which
remained roughly unchanged during the quarter. In the US, the
industrial sector continued to recover and sentiment and orders
improved. The US price level remained unchanged, however. The
cold rolled stainless steel conversion margin for the fourth
quarter exceeded the third quarter margin by 1%. Demand for
nickel increased in the fourth quarter of 2003 and the price of
nickel surged 33% from the previous quarter. The rise was
partly led by investment fund interest and by expectations of a
market undersupply in 2004. Demand for ferrochrome remained
high and the price rose 7% from the previous quarter.
Net sales of Outokumpu Stainless for the fourth quarter were
EUR 873 million, up 3% compared to the third quarter. This
resulted mainly from increased deliveries of finished products
and higher raw material prices. The deliveries of semi-finished
products were significantly lower. Comparable operating profit
for the fourth quarter improved on the previous quarter and
amounted to EUR 23 million. The improvement was mainly due to
the higher average conversion margins because more finished
products were delivered.
The ramp-up of the rolling, annealing and picking (RAP5) line
continued successfully at Tornio after some technical
modifications. The annealing and pickling stage of the new RAP5
line is now functioning well, enabling all the hot band
material to be processed further into finished products. The
line has also proven the ability to produce all originally
planned products cold rolled and semi-cold rolled.
The plan to close the Panteg ferritic cold rolling plant in
Wales, Britain by the end of the first quarter of 2004 was
announced in October 2003. The closure will result in the
redundancy of 116 direct employees at Panteg and approximately
20 job losses in Sheffield. The Panteg closure provision
decreased the last quarter official operating profit by EUR 14
million.
The demand for stainless steel has improved for the first
months of 2004. Also the European cold rolled stainless steel
base price has increased marginally in certain markets for the
first months of 2004. However, a sustainable improvement in the
stainless steel market is pending improvement in world economic
prospects. The ramp-up of the Tornio expansion continues to be
the key factor for Outokumpu Stainless profitability. The
gradual ramp-up of the cold rolling mill is forecast to have a
positive effect on profitability in 2004 because the proportion
of cold rolled products within deliveries will increase.
Outokumpu Stainless is expected to post clearly better
operating profit in 2004 than in 2003.
Outokumpu Copper still beset by price pressure
Outokumpu Copper key figures
EUR million I/02 II/02 III/02 IV/02 2002
Net sales
Americas 90 93 81 76 340
Europe 142 144 120 120 526
Automotive Heat
Exchangers 61 74 63 58 256
Appliance Heat
Exchangers & Asia 73 92 85 101 351
Harjavalta Metals 96 103 87 105 391
Others (53) (54) (44) (44) (195)
Outokumpu Copper
total 409 452 392 416 1 669
Comparable
operating profit
Americas 4 5 5 5 19
Europe 2 7 0 0 9
Automotive Heat
Exchangers 4 8 6 5 23
Appliance Heat
Exchangers & Asia 2 4 0 (7) (1)
Harjavalta Metals 8 (1) 2 5 14
Others (5) (1) 2 0 (4)
Outokumpu
Copper total 15 22 15 8 60
Market price
adjustments
to inventories 7 (1) (9) 2 (1)
Provision for the
cartel fine
(ACR tubes) - - - - -
Pension provision
(the US) - - - (6) (6)
Outokumpu Copper,
official
operating profit 22 21 6 4 53
Operating capital
at the end
of period 1 008 933 991 935 935
Deliveries of
fabricated
products
(1 000 tonnes)
Americas 24 25 25 24 98
Europe 36 40 34 35 145
Automotive Heat
Exchangers 21 24 22 21 88
Appliance Heat
Exchangers & Asia 22 28 21 19 90
Internal deliveries (1) (2) (2) (1) (6)
Total deliveries 102 115 100 98 415
Order backlog
at the end of
period
(1 000 tonnes) 67 61 60 60 60
Production of
Harjavalta
Metals
(1 000 tonnes)
Blister copper 43 34 41 43 161
Cathode copper 29 28 27 31 115
Price development
Conversion
margin of
copper products,
change on the
previous period 1) 3 (3) (7) (3) (4)
Copper TC/RC,
change on the
previous
period, % 2) (8) (2) (8) 7 (8)
Price of copper 3) USD/lb 0.71 0.73 0.69 0.70 0.71
EUR/kg 1.78 1.85 1.54 1.55 1.65
1) The average conversion margin of Outokumpus copper
products. Includes changes in the product mix.
2) Combined treatment and refining charges received by
Outokumpu.
3) London Metal Exchange (LME) cash quotation.
EUR million I/03 II/03 III/03 IV/03 2003
Net sales
Americas 74 66 63 70 273
Europe 112 109 109 122 452
Automotive Heat
Exchangers 59 62 62 61 244
Appliance Heat
Exchangers & Asia 121 128 111 103 463
Harjavalta Metals 93 88 111 111 403
Others (50) (51) (52) (56) (209)
Outokumpu Copper
total 409 402 404 411 1 626
Comparable
operating profit
Americas 2 1 0 0 3
Europe (6) (0) (5) (3) (14)
Automotive Heat
Exchangers 3 4 5 3 15
Appliance Heat
Exchangers & Asia 1 6 (2) (1) 4
Harjavalta Metals 3 (2) 3 8 12
Others (1) (1) (2) (4) (8)
Outokumpu
Copper total 2 8 (1) 3 12
Market price
adjustments
to inventories 2 1 5 5 13
Provision for the
cartel fine
(ACR tubes) - - - (18) (18)
Pension provision
(the US) - - - - -
Outokumpu Copper,
official
operating profit 4 9 4 (10) 7
Operating capital
at the end
of period 947 945 915 779 779
Deliveries of
fabricated
products
(1 000 tonnes)
Americas 24 23 20 24 91
Europe 35 35 34 35 139
Automotive Heat
Exchangers 22 23 23 21 89
Appliance Heat
Exchangers & Asia 26 30 24 23 103
Internal deliveries (1) (1) 1 (1) (2)
Total deliveries 106 110 102 102 420
Order backlog
at the end of
period
(1 000 tonnes) 67 64 51 66 66
Production of
Harjavalta
Metals
(1 000 tonnes)
Blister copper 43 34 43 41 161
Cathode copper 31 32 31 32 126
Price development
Conversion
margin of
copper products,
change on the
previous period 1) (4) (5) 1 (6) (15)
Copper TC/RC,
change on the
previous
period, % 2) (9) (15) (13) 7 (30)
Price of copper 3) USD/lb 0.75 0.74 0.80 0.93 0.81
EUR/kg 1.55 1.44 1.56 1.73 1.57
1) The average conversion margin of Outokumpus copper
products. Includes changes in the product mix.
2) Combined treatment and refining charges received by
Outokumpu.
3) London Metal Exchange (LME) cash quotation.
The markets for copper and copper alloy products remained
difficult in the fourth quarter. China, however, was the growth
market for all products. For instance, air conditioner
production in China grew by 111% in November compared to same
period a year ago. Some underlying improvement was also seen in
the US, whereas in Europe the recovery related mainly to
sentiment. In the US, demand for copper products swung upward
in many end-use segments. The increasing activity of the US
residential, electronics and telecom sectors resulted in a rise
in demand for copper tube, sheet and strip. However, the
increase in the US orders did not yet have an impact on the
margins, which remained very low. Severe competition persisted
in Europe too, keeping margins close to record lows. Only some
faint signs of recovery were recognized in Europe. Demand from
the European electrical and electronics sector improved a
little, but the construction sector was weak.
The copper cathode markets enjoyed a favorable quarter. Markets
were clearly undersupplied, inventories continued to fall and
demand accelerated. Consequently, the price of copper rose 17%
from the third quarter. Treatment and refining charges,
however, remained at a record low due to massive concentrate
purchases by the Chinese metal producers and to a number of
difficulties within mine production.
The fourth-quarter net sales of Outokumpu Copper increased
slightly on the previous quarter owing to higher raw material
prices. Comparable operating profit improved a little
compared to the third quarter and was EUR 3 million. The
profitability of Harjavalta Metals developed particularly well.
Official operating profit of Outokumpu Copper includes a EUR
18 million provision for cartel fine from the European
Commission.
Orders for fabricated copper products received during the
fourth quarter increased by 31%. The demand for fabricated
copper products is expected to strengthen further during 2004.
Based on improving market prospects and increasing
productivity, the comparable operating profit of Outokumpu
Copper in 2004 is estimated to improve markedly on 2003.
Zincs profitability continued to improve
Zinc key figures
EUR million I/02 II/02 III/02 IV/02 2002
Net sales 99 120 101 98 418
Comparable
operating profit 3 1 1 (0) 5
Market price
adjustments
to inventories 1 (0) (1) 2 2
Write down of - - (4) - (4)
reactors at Kokkola
Zinc, official
operating profit 4 1 (4) 2 3
Operating
capital at the
end of period 416 383 378 361 361
Production of
zinc (1 000 tonnes) 103 81 94 102 380
Price development
Zinc TC,
change on the
previous
period, % 1) (4) (6) (9) (2) (20)
Price of zinc 2) USD/lb 0.36 0.35 0.35 0.35 0.35
EUR/kg 0.91 0.85 0.78 0.77 0.82
1) Zinc TC received by Outokumpu. Includes so-called free zinc.
2) London Metal Exchange (LME) cash quotation.
EUR million I/03 II/03 III/03 IV/03 2003
Net sales 93 95 98 110 396
Comparable
operating profit 5 2 4 5 16
Market price
adjustments
to inventories (0) 0 (0) 0 0
Write down of 0 - - - 0
reactors at Kokkola
Zinc, official
operating profit 5 2 4 5 16
Operating
capital at the
end of period 353 347 354 - -
Production of
zinc (1 000 tonnes) 97 103 100 107 407
Price development
Zinc TC,
change on the
previous
period, % 1) (9) (7) 7 6 (20)
Price of zinc 2) USD/lb 0.36 0.35 0.37 0.42 0.38
EUR/kg 0.73 0.68 0.73 0.78 0.73
1) Zinc TC received by Outokumpu. Includes so-called free zinc.
2) London Metal Exchange (LME) cash quotation.
The zinc metal markets were oversupplied in the fourth quarter
and inventories continued to rise. However, the price of zinc
in US dollar terms rose by 13% from the previous quarter. The
rise was attributable to the improving metal market sentiment
and to interest shown by investment funds. Demand for zinc
showed some signs of picking up. The concentrate markets
improved in the fourth quarter, too. Zinc treatment charges
rose by some 10% from the extremely poor level of the third
quarter due to the increase of zinc price. The current
treatment charges are still very low, especially for the
European producers, due to the weakening in the US dollar
against the euro. The increased sea freight charges could raise
treatment charges in Europe.
Both Outokumpus zinc production facilities operated well
during the quarter and the Kokkola plant made a new annual
production record. Fourth-quarter net sales and comparable
operating profit of EUR 5 million were both improvements from
the previous quarter. Profitability improved slightly due to
the rise in the price of zinc and higher treatment charges, but
remained still low by historical standards. The weak US dollar
against the euro and the Norwegian krone had a minimal adverse
effect on the divisions financial result thanks to currency
hedging measures.
The zinc price has had a strong start at the beginning of 2004
in spite of rising inventories. However, the strength of the
euro against the US dollar has partly dissipaled this favorable
impact on European producers and the rationalization of supply
is likely to continue. The recovery in underlying demand and
further production cuts are essential for a better zinc market
in 2004.
Strong last quarter performance by Outokumpu Technology
Outokumpu Technology key figures
EUR million I/02 II/02 III/02 IV/02 2002
Net sales 71 114 90 124 399
Official
operating profit (8) 5 (1) 8 4
Operating capital
at the end
of period 33 36 26 35 35
Order backlog at
the end of period 392 401 370 370 370
EUR million I/03 II/03 III/03 IV/03 2003
Net sales 88 81 98 135 402
Official
operating profit (9) (4) (1) 14 0
Operating capital
at the end
of period 28 32 12 17 17
Order backlog at
the end of period 359 294 410 356 356
The markets for technology sales remained good during the
fourth quarter after having improved markedly during the third
quarter. Customers have activated their investment plans
particularly in the emerging markets. Technologys order
backlog amounted to EUR 356 million at the end of the year and
was almost at the same level as a year ago. The most important
new contract in the fourth quarter was the copper solvent
extraction/electrowinning (SX/EW) plant for Milpillas
Industrias Peñoles Mexico. During the latter part of the year,
there was a noteworthy increase in the number of metals
processing, as well as smaller mineral processing orders. In
addition to closed deals, other major contracts were in the
pipeline.
Outokumpu Technologys fourth-quarter operating profit improved
on the previous quarters, as expected, and stood at EUR 14
million. This was mainly attributable to high sales volume and
successful project implementation. The operating profit of
Outokumpu Technology in 2004 is expected to improve on 2003
thanks to the current order backlog and better market
conditions.
Other operations boosted by capital gains
Other operations key figures
EUR million I/02 II/02 III/02 IV/02 2002
Net sales 89 90 65 92 336
Comparable
operating profit (4) 9 (15) (25) (35)
Gain on the
Boliden transaction - - - - -
Gain on the sale
of Inmet shares - - - - -
Gain on the sale
of precious
metals assets - - - - -
Gain on the
sale of Arctic
Platinum
Partnership (49%) - - - - -
Gain on the sale of
the real estate
in Espoo - - - 13 13
Refund of
actuarial surplus - - - 4 4
Refund of pension
surplus from
Henki-Sampo - - - 2 2
Final settlement
on the sale
of the Harjavalta
nickel refinery - - (6) - (6)
Capital gain on - 34 - - 34
AvestaPolarit Oyj Abp
shares
Gain on the sale of
the Pyhäsalmi mine 6 - - - 6
Other operations,
official
operating profit 2 43 (21) (6) 18
Operating capital
at the end
of period 147 223 100 209 209
Mine production
(1 000 tonnes)
Zinc in concentrates,
the Tara mine - - 7 42 49
EUR million I/03 II/03 III/03 IV/03 2003
Net sales 87 99 101 103 390
Comparable
operating profit (23) (17) (13) (19) (72)
Gain on the
Boliden transaction - - - 106 106
Gain on the sale
of Inmet shares - - - 10 10
Gain on the sale
of precious
metals assets - - - 9 9
Gain on the
sale of Arctic
Platinum
Partnership (49%) - - 26 - 26
Gain on the sale of
the real estate
in Espoo - - - - -
Refund of
actuarial surplus - - - - -
Refund of pension
surplus from
Henki-Sampo - - - - -
Final settlement
on the sale
of the Harjavalta
nickel refinery - - - - -
Capital gain on - - - - -
AvestaPolarit Oyj Abp
shares
Gain on the sale of
the Pyhäsalmi mine - - - - -
Other operations,
official
operating profit (23) (17) 13 106 79
Operating capital
at the end
of period 228 248 289 24 24
Mine production
(1 000 tonnes)
Zinc in concentrates,
the Tara mine 43 41 51 53 188
The comparable operating loss reported by Other operations
increased slightly from the previous quarter. This was due to
such business development and Corporate Management expenses,
that are not allocated to the businesses. The rising zinc price
and improved efficiency of the Tara mine had a positive effect
on fourth-quarter comparable operating profit, as Tara turned
to the black after a few successive quarters of operating
losses. The official fourth-quarter operating profit of Other
operations includes unusual gains of EUR 125 million, arising
from the Boliden transaction as well as from the sale of Inmet
shares and precious metals assets.
The attachments present a summary of the corporate review of
the year by the Board of Directors and accounts.
For further information, please contact:
Kari Lassila, SVP - Investor Relations and Economic Research,
tel. +358 9 421 2555, kari.lassila@outokumpu.com
Eero Mustala, SVP - Corporate Communications, tel. +358 9 421
2435, eero.mustala@outokumpu.com
Vesa-Pekka Takala, Executive Vice President - Corporate
Controller, tel. +358 9 421 4134,
vesa-pekka.takala@outokumpu.com
News conference today at 3.00 pm
A combined news conference, conference call and live web cast
concerning the 2003 financial results will be held today at
3.00 pm Finnish time (8.00 am US EST, 1.00 pm UK time, 2.00 pm
CET) at Hotel Kämp, conference room Akseli Gallen-Kallela,
Pohjoisesplanadi 29, 00100 Helsinki, Finland.
To participate via a conference call, please dial 5-10 minutes
before the beginning of the event: +44 20 7162 0186 (UK) or +1
334 323 6203 (US & Canada). The password is Outokumpu.
The news conference can be viewed live via Internet at
www.outokumpu.com
Stock exchange release and presentation material will be
available before the news conference at www.outokumpu.com ->
Investors -> Downloads.
An on-demand web cast of the news conference will be available
at www.outokumpu.com as of February 10, 2003 at 4.30 pm.
An instant reply service of the conference call will be
available until Friday, February 13, 2004 in the following
numbers: +44 20 7288 4459 (UK) or+1 334 323 6222 (US & Canada).
The access code is 221892.
OUTOKUMPU OYJ
Corporate Management
Johanna Sintonen
Vice President - Investor Relations
tel. +358 9 421 2438, mobile +358 40 530 0778,
fax +358 9 421 2125
e-mail: johanna.sintonen@outokumpu.com
www.outokumpu.com
SUMMARY OF THE Corporate review FOR 2003
Outokumpus financial result for 2003 declined due to major
transformation process of the Group, slow global economic
growth and difficult market conditions. The Groups financial
performance deteriorated compared to the previous year,
primarily due to the fall in the profitability of Stainless and
Copper. Capital gains on the asset disposals contributed
favorably to the financial result. The Groups net sales
amounted to EUR 5 921 million (2002: EUR 5 558 million) and
operating profit was EUR 206 million (2002: EUR 267 million).
Profit for the financial year was EUR 92 million (2002: EUR 159
million) and earnings per share were EUR 0.54 (2002: EUR 1.15).
Cash flow from operating activities was EUR 214 million (2002:
EUR 334 million) and capital expenditure amounted to EUR 622
million (2002: EUR 2 042 million). Groups capital structure
improved markedly and gearing was reduced to 102.8% (Dec. 31,
2002: EUR 122.6%). Asset disposals contributed to the more
solid balance sheet structure.
The Board of Directors is proposing to the Annual General
Meeting that a dividend of EUR 0.20 per share be paid for 2003.
Demand for stainless steel grew by 7%
World economic growth accelerated in the second half of 2003
after slow growth in the first half of the year. However, due
to the sluggish growth in the first half of the year global
economic growth in 2003 amounted to just 2.6%. The recovery
took place mainly in the US, where GDP rose 6% in the second
half of the year. The US recovery was stimulated by massive
fiscal measures and exceptionally low interest rates. Growth
remained generally weak in Europe, but there were some faint
signs of a recovery toward the end of the year. Chinese
economic growth continued robust throughout the year. Also most
Asian countries, supported by China, performed well.
Demand for stainless steel grew by some 7% in 2003, coming in
above the long-term trend of 5.5%. The growth was led by China
where consumption of cold rolled flat products increased by 25-
30%. In Europe and in the US, demand remained unsatisfactory.
European demand slowed down in the first half of the year but
improved after the seasonally slow summer, supported by the
rising nickel price. On annual basis demand for cold rolled
flat products contracted slightly. The stainless steel market
remained very poor in the US for most of the year, and the
recovery in demand did not take place until the last quarter.
The nickel markets were very volatile and the price more than
doubled in the course of the year. The ferrochrome price
increased quarter by quarter and the US dollar price rose over
50% during the year.
Price development of stainless steel was disappointing in 2003.
The oversupply in Europe created by new capacity and imports,
that were attracted by the strong euro, put pressure on base
price. In the third quarter, the production cuts of some
producers helped to balance supply and demand. The German
annual average cold rolled base price was slightly lower
compared to 2002. The cold rolled stainless steel conversion
margin declined by 3% compared to 2002. Demand for quarto plate
remained below normal levels throughout the year and the
overcapacity in European long products market continued to put
pressure on prices. Prices and demand for precision strip
remained relatively stable. Prices of tubes decreased slightly
toward the end of the year but prices of fittings were quite
stable.
Global demand for copper and copper alloy products increased by
just 2% in 2003. Asian demand increased by over 10%, while
demand fell both in Europe and the US. The US demand fell by
about 6% in spite of the strong economic recovery in the latter
half of the year. The US industrial sector remained stagnant
for most of the year, with housing the only growth sector. The
healthy housing starts supported copper tube and alloy wire
businesses, but in the telecom and electronics sectors demand
fell clearly below 2002. Toward the end of 2003, there were
signs that the strengthening US industrial sector was beginning
to feed through. In Western Europe demand for copper products
fell by some 2%. The construction sector grew only in few
European countries, and in Germany construction was about 10%
below year-ago levels. Overcapacity and a tight copper cathode
and scrap market faced European producers with mounting
problems. Demand continued at a very high level in China. In
Japan, the economic recovery resulted in a significant increase
in demand from the automotive industry. The Japanese
electronics and construction sector continued to improve.
Generally, there were heavy pressure on prices in 2003.
The zinc markets were poor for most of the year and recovered
only in the last quarter of 2003. Global demand for zinc grew
by some 3% driven by the 13% growth in China. Demand dropped in
Europe and in the US due to the weakness within commercial
construction and the stagnant automotive sector. The zinc metal
market was oversupplied, inventories continued to rise and
prices rose only in the last quarter of the year. The average
US dollar price of zinc was 9% higher than in 2002, but the
average price in euro terms declined by 11%. Because of Chinas
massive purchases, the zinc concentrate markets remained tight
and treatment charges were low. The average spot treatment
charges fell by 4% and contract treatment charges were down 11%
compared with 2002.
Net sales up 7%
The Groups net sales rose 7% compared with 2002 and amounted
to EUR 5 921 million. The growth was primarily attributable to
the increase in stainless steel delivery volumes and higher raw
material prices.
Net sales by business
EUR million 2003 2002 Change,
%
Stainless 3 449 3 002 15
Copper 1 626 1 669 (3)
Zinc 396 418 (5)
Technology 402 399 1
Other operations 390 336 16
Intra-group sales (342) (266) 29
The Group 5 921 5 558 7
Net sales of Outokumpu Stainless rose 15% compared to the
previous year. This resulted mainly from increased delivery
volumes and higher raw material prices. A significant part of
the increase in deliveries came from stainless steel slabs and
hot rolled coils. This decreased the average transaction price
compared to 2002. Deliveries of cold rolled products increased
14% on the previous year. The weakening in the US dollar
against the euro had a negative effect on net sales.
Net sales of Outokumpu Copper decreased by 3% compared with
previous year. The drop in sales was mainly due to the lower
average conversion margins resulting from weaker product mix,
as well as to severe price pressure. Delivery volumes of
fabricated copper products rose slightly.
Zincs net sales declined by 5% in spite of slightly higher
delivery volumes. The decrease resulted mainly from the 11%
lower average euro price of zinc. Net sales of Outokumpu
Technology remained at the previous years level. Net sales of
Other operations increased markedly due to the higher delivery
volumes of zinc concentrates from the Tara mine.
The Groups sales to Europe declined to 62% and to Americas to
18%, whereas Asias share rose to 17%.
Profits down
The Groups operating profit declined to EUR 206 million (2002:
EUR 267 million) and the operating profit margin was 3.5%
(2002: 4.8%). Operating profit declined from previous year at
both Stainless and Copper. Operating profit includes EUR 119
million of unusual items (2002: EUR 49 million).
Operating profit by business
EUR million 2003 2002 Change
Stainless 104 204 (100)
Copper 7 53 (46)
Zinc 16 3 13
Technology 0 4 (4)
Other operations 79 18 61
Intra-group items 0 (15) 15
The Group 206 267 (61)
At Outokumpu Stainless, operating profit deteriorated
appreciably compared to the previous year. The fall in
profitability is primarily attributable to the decrease in
average conversion margins, which resulted mainly from lower
base prices in Europe, a higher relative share of semi-finished
products and weaker US dollar against the euro. Furthermore,
the geographical sales mix was unfavorable, with large
proportion of deliveries going to Asia, where the price level
was lower than in Europe. The increase in fixed costs,
resulting mainly from the ramp-up of Tornio expansion, had an
adverse effect on operating profit. Production difficulties
encountered in the billet and bloom casting ramp-up at the
Sheffield melt shop postponed the closure of the Degerfors melt
shop to the end of the third quarter and cut into
profitability. Operating profit includes an EUR 14 million
provision for the closure of the Panteg plant in Wales,
Britain.
Outokumpu Coppers operating profit declined markedly on 2002.
The fall was mainly due to an EUR 18 million cartel fine from
the European Commission, lower average conversion margins from
weaker product mix and price pressure, one-time restructuring
costs, weaker US dollar against the euro and a strike at the
Zaratamo plant in Spain. The result includes an EUR 13 million
market price adjustment to inventories (2002: EUR 1 million
negative).
Zinc reported a significant improvement in operating profit
compared with 2002, thought it was low by historical standards.
Profits were up despite the weak US dollar against the euro and
the Norwegian krone thanks to currency hedging measures. The
smaller unit costs of production contributed to the rise in
profitability. Technology managed to break even at the
operating profit level despite a difficult start to the year.
The improvement in Other operations operating profit was
particularly due to an EUR 106 million gain on the Boliden
transaction, an EUR 26 million gain on the sale of 49% stake in
Arctic Platinum Partnership, an EUR 10 million gain on the sale
of Inmet shares and an EUR 9 million gain on the sale of
precious metals assets.
The Groups net financial expenses increased to EUR 91 million
(2002: EUR 46 million). The increase was mainly due to the
temporarily high amount of net interest-bearing debt prior to
the completion of the Boliden transaction at the end of the
year. The Groups profit before extraordinary items was EUR 100
million (2002: EUR 213 million).
The Groups return on capital employed was 5.0% and the return
on shareholders equity 4.7% (2002: 7.0% and 8.0%). Profit for
the financial year was EUR 92 million and earnings per share
EUR 0.54 (2002: EUR 159 million and EUR 1.15).
Improved capital structure
Cash flow from operating activities decreased from the previous
year and was EUR 214 million (2002: EUR 334 million). The
decrease was mainly attributable to weaker underlying
profitability of key businesses
Key financial indicators on financial
position
EUR million 2003 2002
Net interest-
bearing debt
Long-term debt 1 782 1 493
Current debt 1 016 1 352
Total interest-
bearing debt 2 798 2 845
Interest-bearing
assets (785) (460)
Net interest-
bearing debt 2 013 2 385
Net interest-bearing
debt in relation
to net sales, % 34.0 42.9
Shareholders' equity 1 924 1 906
Debt-to-equity
ratio, % 102.8 122.6
Equity-to-assets
ratio, % 32.3 31.1
Cash provided by
operating activities 214 334
Net financial
expenses 91 46
Net financial
expenses in relation
to net sales, % 1.5 0.8
Interest cover 2.0 3.8
Due to several asset disposals, the Groups net interest-
bearing debt decreased on the previous year and stood at EUR 2
013 million at year-end (Dec. 31, 2002: EUR 2 385 million). The
Groups equity-to-assets ratio strengthened to 32.3% (Dec. 31,
2002: 31.1%) and the debt-to-equity ratio decreased to 102.8%
(Dec. 31, 2002: 122.6%). The target for the gearing ratio is
less than 75% by the end of 2004.
The Groups liquidity remained satisfactory throughout the
year. At year-end, cash and marketable securities amounted to
EUR 230 million. The total amount of committed credit
facilities at the end of the year was EUR 1 475 million, of
which about EUR 673 million was unused and available to the
parent company. In addition to the above facilities, the Group
has several uncommitted credit facilities with various
financial institutions.
Capital expenditure remained high
The Groups total capital expenditure was still relatively high
and amounted to EUR 622 million (2002: EUR 2 042 million). The
comparison figure includes EUR 1 118 million used for the
acquisition of the AvestaPolarit minority interest. Capital
expenditure in 2004 is estimated to decrease compared with
2003, but it will nevertheless exceed the level of
depreciation.
Capital expenditure by business
EUR million 2003 2002
Stainless 373 633
Acquisition of the
AvestaPolarit minority interest - 1 118
Copper 106 149
Zinc 60 23
Technology 13 8
Other operations 70 111
The Group 622 2 042
The EUR 1 billion expansion program at Tornio progressed well,
although the ramp-up of the new cold rolling mill proceeded
slightly slower than originally planned. The full capacity of
the Tornio investment is scheduled to be available in 2005.
Commissioning of the new cold rolling mill (RAP5) was started
in February, deliveries of hot band began in March and
deliveries of cold rolled material started in August. The
expansion to increase the hot rolling capacity in Tornio to 1.7
million tonnes is due to be commissioned in the third quarter
of 2004. The reconditioning of the first steel melting shop in
Tornio was announced in February 2003 and will be carried out
in the second half of 2004 at a total investment cost of EUR 55
million. The integration of the quarto plate business of
ThyssenKrupp Nirosta, which was acquired in February 2003 at a
cost of EUR 59 million, proceeded well. The EUR 73 million Kemi
underground mine investment was commissioned at the beginning
of September 2003. The increase in long products capacity in
the US is proceeding according to plan.
The EUR 88 million modernization program that is being carried
out at the Odda zinc plant in Norway is moving ahead at planned
cost estimate and schedule. The project will be completed in
the autumn of 2004. The construction phase will not cause any
significant production losses.
Outokumpu and Boliden completed a major zinc and copper
restructuring
On December 30, 2003, Outokumpu and Boliden completed the
transaction whereby Boliden acquired Outokumpus mining and
smelting operations within zinc and copper and sold its
fabrication and technology sales operations to Outokumpu. New
Boliden became one of the world-leading mining and smelting
companies within zinc and copper. New Boliden started
operations on January 1, 2004.
According to an estimate available at the closing, Bolidens
total consideration for the acquired Outokumpu assets was EUR
849 million. Bolidens consideration consisted of issuance of
new shares in kind to Outokumpu - corresponding to 49% of all
shares in New Boliden - and cash payment of EUR 373 million as
well as issue of a subordinated debenture to Outokumpu.
The final consideration will be adjusted depending on the
closing accounts of the transaction, which will be finalized in
March 2004 at the latest. Any changes in the capital employed
of the assets acquired from Outokumpu in the closing accounts
will be reflected in the subordinated debenture part of the
total consideration. It is currently estimated that the
subordinated debenture will amount to some EUR 146 million.
As a partial payment for the mining and smelting assets that
Boliden acquired from Outokumpu, Outokumpu subscribed for 82
446 475 new shares in Boliden AB. Following the subscription,
Outokumpu owns 49% of all the shares and votes in Boliden.
Outokumpu has no intention of increasing this holding and nor
will Outokumpu seek a majority position. Outokumpu may in time
decrease its shareholding in Boliden by way of well-controlled
transactions. Based on the closing price of the Boliden share
on the Stockholm stock exchange on December 29, 2003, the total
market value of issued shares was some EUR 349 million. The new
shares are entitled to full dividends as from the financial
year 2003, and carry the same rights as all the other
outstanding shares in Boliden.
As a payment for the fabrication and technology sales
operations that Outokumpu acquired from Boliden, Outokumpu
issued Boliden 5 000 000 new shares in deviation of the
shareholders pre-emptive subscription right. Boliden sold all
the Outokumpu shares in January 2004.
The assets acquired from Boliden were consolidated in
Outokumpus accounts at the end of the year. Outokumpu de-
consolidated all the assets sold to Boliden at the end of 2003,
while the results from these assets were consolidated until the
end of 2003.
Outokumpu's gross gain on the sale of its mining and smelting
assets to Boliden was some EUR 208 million, of which EUR 106
million was booked in the fourth-quarter financial results as a
tax free unusual item. The deal decreased Outokumpu's gearing
by some 40 percentage points. In addition to the EUR 106
million gain booked in 2003, there is a deferred gain element
corresponding to 49% of the gross gain. The deferred gain will
be released in the same period as Boliden will amortize the
consolidation goodwill arising from the transaction. The
deferred gain can also be released proportionately in the event
that Outokumpu's ownership in Boliden falls, and entirely if
Outokumpu's ownership in Boliden falls below 20%.
Divestment of non-core assets progressed well
In September 2003, Gold Fields of South Africa exercised its
pre-emptive right to acquire Outokumpus 49% stake in Arctic
Platinum Partnership and paid Outokumpu USD 23 million in cash
and USD 8 million in Gold Fields shares, which Outokumpu sold
immediately. A capital gain of EUR 26 million was entered as an
unusual item in the third-quarter financial results of Other
operations.
In October 2003, Outokumpu and Inmet agreed on removing the
lock-up period for the Inmet shares held by Outokumpu.
Outokumpu had received the shares as a partial payment for the
sale of the Pyhäsalmi mine to Inmet in 2002. Outokumpu sold the
shares for EUR 23 million, net of costs. The acquisition price
of the shares was around EUR 13 million. A capital gain of EUR
10 million was entered as an unusual item in the fourth-quarter
financial results of Other operations.
In November 2003, Outokumpu sold to Dragon Mining of Australia
its wholly-owned precious metals mining assets, including the
Orivesi gold mine and the Vammala concentrator as well as
certain exploration assets, most of which are located in
Finland. The total consideration was EUR 11 million, comprising
EUR 6 million in cash and the balance in Dragon Mining shares.
A capital gain of EUR 9 million was entered as an unusual item
in the fourth-quarter financial results of Other operations.
The sale of Outokumpu Technologys filter business to Larox of
Finland was completed in January 2004. At the closing, the
total transaction value was EUR 31 million, and the capital
employed of the business sold was EUR 12 million. The deal will
be entered in the first-quarter 2004 financial results of
Technology.
R&D focus on new products and applications
Total expenditure on research and development amounted to EUR
48 million, or 0.8% of net sales (2002: EUR 47 million and 0.8
%). Numerous innovations were made and a record number of
patent applications, 74, were filed in 2003. In addition to new
products and applications there was a focus on innovative
process improvements and lower emissions, shortening of lead
times and importance to make good quality.
Within applications, special R&D interest is directed on
product development for building and transport vehicle
segments. Advanced copper-based solutions for facades and
roofing were developed, as well as continuous production
technology for patinated surfaces. The automotive applications
are approached with a new HyTens- component concept, where the
excellent forming characteristics and work hardening capability
of austenitic stainless steel is utilized. A special downstream
innovation task force has been assigned to work closely with
car manufacturers.
Technologys new revolutionary method to produce copper,
HydroCopper, was demonstrated at the new hydrometallurgical
pilot plant commissioned at the Pori research center.
Commerzialization of the technology continues. The Circofer-
technology for the direct reduction of iron ore fines was
successfully piloted at the Frankfurt research center. It will
be further developed in specific applications to open new
ironmaking routes.
The most important process development has been the ramp-up of
the unique, integrated rolling, annealing and pickling (RAP5)
line at the Tornio stainless steel plant. The planned
capabilities of the line have been demonstrated in production
scale. The quality of various products is equal or better than
that from the existing processes and they are approved for
demanding applications by the authorities. The concept has
aroused even ideas for new production routes for ferritic
stainless steel grades. Fine-tuning and process optimization
continues, particularly in the pickling section.
Challenging tasks have also been the production swaps of
stainless blooms and billets from Degerfors to Sheffield, as
well as the move of the quartoplate hot rolling businesses from
Germany to Degerfors. Furthermore, a new Micro Mill concept to
produce connector strips was implemented in Delaware, Ohio.
Outokumpu is world leader in stainless special grades. The
latest member in the family is the lean duplex grade LDX 2101
with low nickel content. It is designed for general
construction applications, building and transportation. The
special grade knowledge and competence was specifically
demonstrated in winning a big desalination plant project in
Israel and gas & oil field projects in China. Micro alloyed
oxygen free (OF) copper product has been developed to tailor
properties for specific end-uses.
Health and safety performance marked by serious accidents
The goal in safety performance was to halve the frequency of
accidents compared with the average for five previous years.
Some production units reached this target, but the group-level
accident rate remained the same as in 2002.
In spite of various actions and positive development in safety
there were two fatal accidents during the year. The first
fatality took place in January 2003 in Pori. Furthermore, an
explosive fire in September 2003 took the lives of three people
in Tornio. These cases are still under investigations and the
results will be utilized to prevent similar accidents.
Implementation of environmental management systems continued
Outokumpu's key environmental targets are to decrease fugitive
emissions, increase energy-efficiency, promote the utilization
of by-products, cut down water consumption and decrease
discharges to water. In 2003 there were no significant non-
compliances and energy saving agreements and projects
continued.
Outokumpu's aims that all of its production sites have
certified environmental management systems by the end of 2005.
Five new production sites certified their environmental
management systems during 2003 and now altogether 27 sites have
a certified environmental management system in place. Thanks to
implemented environmental management systems the operational
security has improved and there are less disturbances.
All the Outokumpu units have the necessary environmental
permits in place. Outokumpu is not a party in any significant
juridical or administrative proceeding concerning environmental
issues, nor is it aware of any environmental risks that could
have a material adverse effect on the Group's financial
position.
Common tools for human resources development
During the past few years Outokumpu employees have experienced
a strong transformation process as the Group has implemented
its strategy of growth and transformation. The integration of
administrative functions of Outokumpu Stainless (former
AvestaPolarit) is now completed and the integration of the
companies acquired from Boliden is ongoing.
In 2003, the first OPeople employee survey of the Group was
conducted with more than 8 000 people in 14 countries
participating. Outokumpu units and other working groups will
utilize the survey results in order to improve their
performance. The survey did not yet include employees of
Outokumpu Stainless, but the aim is to conduct surveys
regularly so that all Outokumpu employees have a possibility to
participate.
Outokumpu Stainless implemented once again the Management
Review process, which is aimed at identifying future leaders.
The process was also piloted in two units of Outokumpu Copper.
Utilization of the Management Review process will be expanded
in 2004 with the target to implement it group-wide in 2005.
Outokumpu values - the Outokumpu way - were defined in 2002.
The group-wide value process will continue in 2004 and it will
also cover Outokumpu Stainless and the units acquired from
Boliden.
Personnel by business
Dec. 31 2003 2002
Stainless 9 200 9 147
Copper 7 585 7 564
Zinc - 1 117
Technology 1 706 1 737
Other operations 868 1 565
The Group 19 359 21 130
At the end of the year, the Group employed 19 359 people in
some 40 countries. The number of personnel declined mainly due
to the Boliden transaction. As a result of the transaction,
some 2 200 Outokumpu employees transferred to New Boliden on
December 31, 2003. At the same time some 1 200 people joined
Outokumpu.
Repurchase and transfer of the companys own shares
Outokumpu Oyj currently holds 1 123 440 treasury shares, which
it has acquired in 2001.
The Board of Directors has a valid authorization from the
Annual General Meeting on April 3, 2003 to repurchase and
transfer of companys own shares. The authorizations are valid
until the next Annual General Meeting. No shares have been
repurchased on the basis of this authorization.
In December 2003, Outokumpu signed an agreement whereby it will
acquire the remaining 50% holding in its subsidiary Neumayer
GmbH. The transaction is aimed to be completed at the end of
February 2004. As consideration Outokumpu Oyj would transfer
309 597 treasury shares to the seller.
On February 10, 2004, the Board of Directors confirmed the
management remuneration of the second scheme that expired at
the end of 2003. Approximately 329 510 treasury shares that the
Company currently holds will be transferred to the assigned
persons as share part of the total remuneration on February 12,
2004.
The repurchase and transfer of the companys own shares is
dealt with in more detail in the section Notes to the income
statement and balance sheet.
Competition law issues
In December 2003, Outokumpu received a notification from the
European Commission concerning participation by Outokumpus
copper tube business in a cartel with respect to air-
conditioning and refrigeration (ACR) tubes in the European
Union. The Commission has concluded that the company has
participated in a cartel and has therefore decided to fine
Outokumpu EUR 18 million. Outokumpu will study the Commissions
decision and decide whether to appeal or not. A provision for
the fine was entered as an unusual item in the fourth-quarter
2003 financial results of Outokumpu Copper.
Outokumpu had also received a Statement of Objections relating
to sanitary tubes in September 2003. Outokumpu has submitted
its written reply and the Commissions decision is expected
during 2004. As the proceedings are still ongoing, no provision
has been entered into the accounts with respect to the sanitary
tube proceedings. Outokumpu has cooperated with the European
Commission in connection with the investigations.
A united Outokumpu corporate brand launched
In August 2003, following an analysis of the Groups branding
hierarchy, Outokumpu decided to align all its businesses under
the Outokumpu brand. During the autumn, a renewed
communications concept as well as a new visual identity were
developed. On January 12, 2004, the project culminated in the
launch of the renewed brand and a new visual identity.
According to the new brand hierarchy, all Outokumpu business
areas have adopted a uniform name structure. The uniformity
will help bring together all the strengths of the businesses to
form a strong, united Outokumpu brand, and enable all the
Groups businesses to leverage the combined strength.
The essence of the brand is crystallized into the Outokumpu
factor, which is the competitive advantage Outokumpu gives its
customers by helping them enhance the performance of their
processes, products and services. It is a factor customers can
rely on to help them overcome even the most demanding
challenges.
The renewed communication concept focuses on presenting the
Outokumpu factor. Various cases will be highlighted to
demonstrate where Outokumpu has enhanced customers
performance.
Better profitability for 2004
The global economy is estimated to grow at a rate of about 3-4%
in 2004. The steady rise of the US confidence indices, the
increase of equity prices and improved corporate profitability
all indicate a recovery of the US economy, which is forecast to
grow by about 4.5% in 2004. Growth prospects are supported by
the weak US dollar and record-low interest rates. It is
generally estimated that Europe will lag the US economic growth
by about 6-9 months. The strengthening of the euro, however,
has cast some uncertainty over the European outlook. The
economic outlook remains very bright in Asia, with China being
the engine of growth.
Demand for stainless steel has improved for the first months of
2004, bolstered by a significant increase in the price of
nickel. The European cold rolled stainless steel base price has
also increased marginally in certain markets for the first
months of 2004. Capacity utilization rates are improving even
though global production capacity continues to rise somewhat in
2004. Sustainable improvement in the stainless steel market is
pending the improvement of world economic prospects. The nickel
market is forecast to remain strongly undersupplied in 2004
keeping up the expectation of a high nickel price. The
ferrochrome market is forecast to remain tight in 2004, and the
reference price has risen another 15% for the first quarter.
Tornio ramp-up continues to be the key factor for Outokumpus
profitability. The gradual ramp-up of the cold rolling mill is
estimated to have a positive effect on profitability in 2004
because the proportion of cold rolled products will increase.
Successful reconditioning of the first melting shop and the
capacity increase in the hot rolling mill in 2004 will also
have a positive impact on profitability toward the end of the
year. The full benefit of the investments will not be achieved
until the full capacity is available in 2005. Outokumpu
Stainless is expected to post clearly better operating profit
in 2004 than in 2003.
The demand for fabricated copper products is expected to
strengthen further during 2004. Based on improving market
prospects and increasing productivity, the comparable operating
profit of Outokumpu Copper in 2004 is estimated to improve
clearly from 2003. Also, the operating profit of Outokumpu
Technology in 2004 is expected to improve from 2003 thanks to
the current order backlog and better market conditions.
Judged from the current market prospects of stainless steel,
copper products and technology sales Outokumpus management
believes that the Groups operating profit without unusual
items for 2004 will be significantly better than in 2003.
Board of Directors proposal for profit distribution
In accordance with the Board of Directors established dividend
policy, the pay-out ratio over a business cycle should be at
least one-third of the companys profit for the period. In its
annual dividend proposal to the Annual General Meeting, the
Board of Directors will, in addition to financial results, take
into consideration the companys investment and development
needs.
The Board of Directors is proposing to the Annual General
Meeting that a dividend of EUR 0,20 per share be paid from
the profits of the financial year ended December 31, 2003 and
that any remaining distributable funds be allocated to retained
earnings. The suggested dividend record date is on April 7,
2004 and the dividend will be paid on April 16, 2004. All new
shares issued in 2003 and all of the treasury shares
transferred on February 12, 2004, from the company to the
persons belonging to the managements share remuneration scheme
are also entitled to a full dividend from 2003.
According to the financial statements at December 31, 2003, the
Groups distributable funds total EUR 592 million and those of
the parent company EUR 611 million. The proposed dividend
corresponds to 37% of the Groups profit for the financial
year.
Espoo, February 10, 2004
Board of Directors
CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
INCOME STATEMENT Jan-Dec Jan-Dec
EUR million 2003 2002
Net sales 5 921 5 558
Costs and expenses (5 836) (5 332)
Unusual items 119 49
Other operating
income and expenses 6 (6)
Amortization of positive
and negative goodwill (4) (2)
Operating profit 206 267
Equity earnings in
associated companies (15) (7)
Financial income
and expenses
Net interest expenses (98) (75)
Exchange gains and losses (0) 15
Other financial
income and expenses 7 13
Profit before
extraordinary items 100 213
Extraordinary items - -
Income taxes (8) (53)
Minority interest in earnings 0 (1)
Profit for the financial year 92 159
BALANCE SHEET Dec 31 Dec 31
EUR million 2003 2002
Fixed assets and other long-term investments
Intangible assets 380 373
Property, plant and equipment 2 665 3 088
Long-term financial assets
Interest-bearing 480 157
Non interest-bearing 71 105
3 596 3 723
Current assets
Inventories 1 181 1 235
Receivables
Interest-bearing 74 76
Non interest-bearing 1 056 1 067
Marketable securities 20 31
Cash and bank 210 195
2 541 2 604
Total assets 6 137 6 327
Shareholders equity 1 924 1 906
Minority interest 34 40
Long-term liabilities
Interest-bearing 1 782 1 493
Non interest-bearing 384 463
2 166 1 956
Current liabilities
Interest-bearing 1 016 1 352
Non interest-bearing 997 1 073
2 013 2 425
Total shareholders equity and 6 137 6 327
liabilities
STATEMENT OF CASH FLOWS Jan-Dec Jan-Dec
EUR million 2003 2002
Income financing 260 450
Increase in working capital (13) (100)
Other adjustments (33) (16)
Cash provided by
operating activities 214 334
Capital expenditure (622) (2 042)
Capital expenditure
financed with own shares 53 -
Proceeds from asset disposals 429 76
Other investing activities (37) (3)
Cash flow before
financing activities 37 (1 635)
Cash (used in) provided
by financing activities (29) 1 569
Adjustments (3) 7
Increase (decrease) in
cash and marketable
securities 5 (59)
Jan-Dec Jan-Dec
GROUP KEY FIGURES 2003 2002
Operating profit
margin, % 3.5 4.8
Return on capital
employed, % 5.0 7.0
Return on shareholders'
equity, % 4.7 8.0
Capital employed
at end of period,
EUR million 3 972 4 331
Net interest-bearing
debt at end of
period, EUR million 2 013 2 385
Equity-to-assets
ratio at end
of period, % 1) 32.3 31.1
Debt-to-equity
ratio at end
of period, % 102.8 122.6
Earnings per share
(excluding extraordinary
items), EUR 0.54 1.15
Earnings per share, EUR 0.54 1.15
Average number of
shares outstanding,
in thousands 2) 171 623 137 658
Fully diluted
earnings per share
(excl. extraordinary
items), EUR 0.54 1.14
Fully diluted average
number of shares,
in thousands 2) 172 566 139 293
Shareholders' equity
per share at
end of period, EUR 10.84 11.14
Number of shares
outstanding at
end of period,
in thousands 2) 177 451 171 111
Capital expenditure,
EUR million 3) 622 2 042
Depreciation,
EUR million 4) 307 264
Average personnel
for the period 21 442 20 196
1) The negative goodwill is netted against assets.
2) The number of own shares repurchased is excluded.
3) The acquisition of AvestaPolarit shares is included in 2002
figure.
4) The amortization of negative and positive goodwill is
excluded.
NOTES TO THE INCOME STATEMENT AND BALANCE SHEET
Goodwill of acquitisions
The acquisition of ThyssenKrupp Nirosta quarto plate operations
was finalized in the beginning of February 2003. The
acquisition cost totaled EUR 59 million of which EUR 53 million
is allocated to goodwill and EUR 6 million to inventories. The
goodwill will be amortized over 10 years from the acquisition
date.
The acquisition of Outokumpu Heatcraft was finalized in October
2002. The acquisition cost totaled USD 61 million. Based on
fair values at closing date, USD 15 million is allocated to
fixed assets and USD 0.6 million to inventories. The amount
allocated to fixed assets is depreciated over the useful life
of the assets. The goodwill on consolidation is USD 14 million
and will be amortized over 10 years from the acquisition date.
The amortization periods of both acquisitions are based on
expected future economic benefits.
Shares and share capital
The total number of Outokumpu Oyj shares was 178 574 165 and
the share capital amounted to EUR 303.6 million on December 31,
2003. Outokumpu Oyj held a total of 1 123 440 treasury shares
on December 31, 2003 with total account equivalent value of EUR
1.9 million. This equals to 0.6% of the share capital and the
total voting rights of the Company.
Bonds relating to the 1999 convertible bond loan have been
converted into 1 297 968 shares by December 31, 2003. In
addition, altogether 659 629 shares have been subscribed for
under the management option warrants issued in 1998 by December
31, 2003. The number of Outokumpu Oyj shares may be increased
to a maximum of 181 294 514 following the share subscriptions
under the convertible bonds and the option program.
Shares subscribed under the convertible bond and option
warrants in 2004 are not entitled to dividends from the
financial year 2003. The new shares have been listed as a
separate class from the old shares as of January 30, 2004.
Following the payment of dividends from the financial year 2003
in April 2004, the separate class will be combined with the old
shares.
The Annual General Meeting of April 3, 2003 approved a stock
option program for management. Under the terms and conditions
of the stock option program, altogether 5 100 000 stock options
may be issued entitling their holders to subscribe for 5 100
000 new shares in the Company during the years 2006 and 2011.
As a result of the share subscriptions with the 2003 stock
options, the share capital of Outokumpu Oyj may be increased by
a maximum of EUR 8 670 000 and the number of shares by a
maximum of 5 100 000 shares. The shares that can be subscribed
with the 2003 stock options equal to 2.9% of the Company's
shares and voting rights following the potential share capital
increase.
In June 2003, the Board of Directors decided the earnings
criteria on the basis of which stock options 2003A will be
distributed to 118 key persons of the Outokumpu Group in spring
2004. The earnings criteria comprise the Group's earnings per
share (EPS), share price development, and additionally gearing
for the Group Executive Committee members. A total maximum of 1
700 000 Outokumpu Oyj shares can be subscribed for with the
2003A stock options between September 1, 2006 and March 1,
2009. The subscription price for a stock option will be the
trading volume weighted average of the Outokumpu share on the
Helsinki Exchanges between December 1, 2003 and February 29,
2004.
Authorizations of the Board of Directors
The Board of Directors has a valid authorization by the Annual
General Meeting of April 3, 2003 to repurchase and transfer the
Company's own shares. Shares may be repurchased through
purchases in public trading on the Helsinki Exchanges at the
market price prevailing at the time of the purchase. The
maximum number of shares to be repurchased or transferred is 8
632 955, which equals 5% of the total number of shares of the
Company registered on April 3, 2003. Own shares can be
repurchased for improving the Company's equity structure or to
be used as consideration when acquiring assets for the
Company's business or as consideration in possible corporate
acquisitions, in the manner and to the extent decided by the
Board of Directors. Repurchased shares may also be used as a
part of incentive and bonus schemes directed to the personnel
of the Company. Authorizations to repurchase and transfer the
Company's own shares are valid until AGM in 2004. No shares
have been repurchased on the basis of this authorization.
In December 2003, Outokumpu signed an agreement whereby it will
acquire the remaining 50% holding in its subsidiary Neumayer
GmbH. The transaction is aimed to be completed at the end of
February 2004. As consideration Outokumpu Oyj would transfer
309 597 treasury shares to the seller.
On February 10, 2004, the Board of Directors confirmed the
management remuneration of the second scheme that expired at
the end of 2003. Approximately 329 510 treasury shares that the
Company currently holds will be transferred to the assigned
persons as share part of the total remuneration on February 12,
2004.
The Annual General Meeting of April 3, 2003 authorized the
Board of Directors to increase the share capital through an
issue of new shares, stock options, option warrants and/or
convertible bonds. According to the authorization the share
capital may be increased by no more than EUR 29 352 050 and the
aggregate maximum number of new shares shall not exceed 17 265
911 shares. This equals 10% of the share capital and voting
rights of the Company registered on April 3, 2003. This
authorization is valid until AGM in 2004.
On December 30, 2003, Outokumpu Oyj issued , in deviation of
the shareholders pre-emptive subscription rights, 5 000 000
new shares to Boliden as a payment for the fabrication and
technology sales operations that Outokumpu acquired from
Boliden. The corresponding increase in Outokumpu Oyj's share
capital was registered with the Finnish Trade Register on
December 31, 2003. The shares are entitled to full dividends as
from the financial year 2003 and carry the same rights as all
other outstanding shares in Outokumpu.
Jan-Dec Jan-Dec
EUR million 2003 2002
Unusual items
Gain on the
Boliden transaction 106 -
Gain on the sale of
Arctic Platinum
Partnership (49%) 26 -
Gain on the sale
of Inmet shares 10 -
Gain on the sale of
precious metals assets 9 -
Write down of
reactors at Kokkola 0 (4)
Provision for
Panteg closure (14) -
Cartel fine (ACR tubes) (18) -
Gain on the sale
of the real estate
in Espoo - 13
Refund of
actuarial surplus
Outokumpu Oyj - 3
Other companies - 1
Refund of pension
surplus from Henki-Sampo,
Outokumpu Oyj - 2
Final settlement on
the sale of the
Harjavalta
nickel refinery - (6)
Capital gain on
AvestaPolarit
Oyj Abp shares - 14
AvestaPolarit's
insurance compensation - 20
Restructuring provision
of AvestaPolarit - (32)
Additional amortization
of negative goodwill
of AvestaPolarit - 32
Gain on the sale
of the Pyhäsalmi mine - 6
119 49
Income taxes
Current taxes (18) (53)
Deferred taxes 10 0
(8) (53)
Commitments Dec 31 Dec 31
EUR million 2003 2002
Mortgages and pledges
To secure borrowings
of Group companies 144 119
Guarantees
On behalf of
associated companies 6 7
On behalf of other parties 52 41
58 48
Minimum future lease
payments on operating leases 160 133
Open derivative instruments
Carrying Fair value
value
Dec 31 Dec 31
EUR million 2003 2003
Financial derivatives
Forward foreign
exchange contracts 29 29
Currency options
Purchased 5 5
Written (4) (4)
Currency swaps (3) (3)
Interest rate swaps (3) (3)
Metal derivatives 1)
Forward and futures
copper contracts 1 1
Forward and futures
nickel contracts 1 7
Nickel options
Purchased 0 0
Forward and futures
zinc contracts 0 0
Zinc options
Purchased - -
Written - -
Forward and futures
aluminium contracts 0 0
Forward and futures
gold contracts 0 0
Forward and futures
silver contracts 0 0
Electricity
derivatives 2)
Traded electricity
forwards and futures - 0
Other financial contracts - -
1) Contract amounts of base metal derivatives in tonnes and
precious metal derivatives in troy ounce.
2) Contract amounts of electricity derivatives in TWh.
Contract amounts
Dec 31 Dec 31
EUR million 2003 2002
Financial derivatives
Forward foreign
exchange contracts 1 620 1 100
Currency options
Purchased 280 60
Written 270 60
Currency swaps 40 60
Interest rate swaps 210 70
Metal derivatives 1)
Forward and futures
copper contracts 101 400 121 200
Forward and futures
nickel contracts 4 300 2 200
Nickel options
Purchased 720 -
Forward and futures
zinc contracts 299 700 197 300
Zinc options
Purchased - 3 000
Written - 3 000
Forward and futures
aluminium contracts 2 800 1 300
Forward and futures
gold contracts 146 800 63 400
Forward and futures
silver contracts 886 800 529 300
Electricity
derivatives 2)
Traded electricity
forwards and futures 0.0 0.2
Other financial contracts 3.5 4.5
1) Contract amounts of base metal derivatives in tonnes and
precious metal derivatives in troy ounce.
2) Contract amounts of electricity derivatives in TWh.
The derivate transactions have been made for hedging purposes.
The market value of derivatives indicates the result of those
transactions if the deals were closed at the balance sheet
date. The realized gains and losses of derivative instruments
are booked in the income statement according to hedge
accounting principle i.e. against the underlying transaction.
The carrying amount of forward foreign exchange contracts,
currency options and currency swaps include unrealized gains
and losses relating to hedges of firm and anticipated
commitments, which have been deferred.
KEY FINANCIAL INDICATORS BY QUARTER
EUR million I/02 II/02 III/02 IV/02
Net sales
Outokumpu Stainless
Coil Products 599 628 517 584
Special Products 325 375 299 312
North America 71 72 60 64
Others (226) (252) (205) (221)
Outokumpu Stainless total 769 823 671 739
Outokumpu Copper
Americas 90 93 81 76
Europe 142 144 120 120
Automotive Heat
Exchangers 61 74 63 58
Appliance Heat
Exchangers & Asia 73 92 85 101
Harjavalta Metals 96 103 87 105
Others (53) (54) (44) (44)
Outokumpu Copper total 409 452 392 416
Zinc 99 120 101 98
Outokumpu Technology 71 114 90 124
Other operations 89 90 65 92
Intra-group sales (61) (68) (59) (78)
The Group 1 376 1 531 1 260 1 391
Operating profit
Outokumpu Stainless
Coil Products 54 60 16 32
Special Products 9 26 1 (8)
North America 1 3 1 (2)
Others 11 14 2 (16)
Outokumpu Stainless total 75 103 20 6
Outokumpu Copper
Americas 7 6 1 (0)
Europe 2 6 (2) 0
Automotive Heat
Exchangers 4 7 5 5
Appliance Heat
Exchangers & Asia 5 4 (2) (6)
Harjavalta Metals 8 (1) 2 5
Others (4) (1) 2 0
Outokumpu Copper total 22 21 6 4
Zinc 4 1 (4) 2
Outokumpu Technology (8) 5 (1) 8
Other operations 2 43 (21) (6)
Intra-group items 0 (22) 6 1
The Group 95 151 6 15
Equity earnings in
associated companies (0) (2) (3) (2)
Financial income
and expenses (11) 10 (21) (25)
Profit (loss) before
extraordinary items 84 159 (18) (12)
Income taxes (12) (48) (12) 19
Minority interest
in earnings (26) (28) 50 3
Profit (loss)
for the period 46 83 20 10
EUR million I/03 II/03 III/03 IV/03
Net sales
Outokumpu Stainless
Coil Products 682 667 624 655
Special Products 349 327 273 348
North America 64 59 64 65
Others (219) (202) (112) (195)
Outokumpu Stainless total 876 851 849 873
Outokumpu Copper
Americas 74 66 63 70
Europe 112 109 109 122
Automotive Heat
Exchangers 59 62 62 61
Appliance Heat
Exchangers & Asia 121 128 111 103
Harjavalta Metals 93 88 111 111
Others (50) (51) (52) (56)
Outokumpu Copper total 409 402 404 411
Zinc 93 95 98 110
Outokumpu Technology 88 81 98 135
Other operations 87 99 101 103
Intra-group sales (70) (89) (86) (97)
The Group 1 483 1 439 1 464 1 535
Operating profit
Outokumpu Stainless
Coil Products 45 35 (1) 5
Special Products 0 2 (8) 4
North America (1) 0 4 1
Others 6 (1) 13 0
Outokumpu Stainless total 50 36 8 10
Outokumpu Copper
Americas 3 1 3 0
Europe (7) (0) (2) (3)
Automotive Heat
Exchangers 4 4 5 5
Appliance Heat
Exchangers & Asia 2 7 (1) 1
Harjavalta Metals 3 (2) 2 9
Others (1) (1) (3) (22)
Outokumpu Copper total 4 9 4 (10)
Zinc 5 2 4 5
Outokumpu Technology (9) (4) (1) 14
Other operations (23) (17) 13 106
Intra-group items 1 (1) 1 (1)
The Group 28 25 29 124
Equity earnings in
associated companies (3) (3) (4) (5)
Financial income
and expenses (29) (28) (16) (18)
Profit (loss) before
extraordinary items (4) (6) 9 101
Income taxes (1) (5) (9) 7
Minority interest
in earnings 0 (1) 1 0
Profit (loss)
for the period (5) (12) 1 108
GROUP KEY FIGURES BY
QUARTER
I/02 II/02 III/02 IV/02
Operating profit
margin, % 6.9 9.9 0.5 1.0
Return on
capital employed, % 11.4 17.7 0.7 1.3
Return on
shareholders' equity, 13.6 20.1 neg. 1.6
%
Capital employed
at end of period,
EUR million 3 393 3 443 4 083 4 331
Net interest-
bearing debt
at end of period,
EUR million 1 207 1 229 2 414 2 385
Equity-to-assets
ratio at end
of period, % 1) 42.2 41.2 27.7 31.1
bt-to-equity ratio
Deat end of period, % 55.3 55.5 144.7 122.6
Earnings per share
(excluding
extraordinary
items), EUR 0.34 0.60 0.15 0.06
Earnings per
share, EUR 0.34 0.60 0.15 0.06
Average number
of shares
outstanding,
in thousands 2) 136 278 136 774 137 138 140 498
Shareholders'
equity per
share at end of
period, EUR 11.87 11.70 11.78 11.14
Number of shares
outstanding at
end of period,
in thousands 2) 136 278 137 082 137 168 171 111
Capital expenditure,
EUR million 3) 146 194 1 403 299
Depreciation,
EUR million 4) 67 64 62 71
Average personnel
for the period 19 312 19 727 20 886 21 173
1) The negative goodwill is netted against assets.
2) The number of own shares repurchased is excluded.
3) The acquisition of AvestaPolarit shares is included in
III/02 figure.
4) The amortization of negative and positive goodwill is
excluded.
I/03 II/03 III/03 IV/03
Operating profit
margin, % 1.9 1.8 2.0 8.1
Return on
capital employed, % 2.5 2.2 2.4 11.5
Return on
shareholders' equity, neg. neg. 0.6 22.9
%
Capital employed
at end of period,
EUR million 4 528 4 687 4 673 3 972
Net interest-
bearing debt
at end of period,
EUR million 2 624 2 873 2 847 2 013
Equity-to-assets
ratio at end
of period, % 1) 29.9 28.3 28.2 32.3
bt-to-equity ratio
Deat end of period, % 137.8 158.3 155.9 102.8
Earnings per share
(excluding
extraordinary
items), EUR (0.03) (0.07) 0.01 0.63
Earnings per
share, EUR (0.03) (0.07) 0.01 0.63
Average number
of shares
outstanding,
in thousands 2) 171 375 171 534 171 719 172 138
Shareholders'
equity per
share at end of
period, EUR 10.86 10.34 10.42 10.84
Number of shares
outstanding at
end of period,
in thousands 2) 171 534 171 540 171 613 177 451
Capital expenditure,
EUR million 3) 178 124 116 204
Depreciation,
EUR million 4) 75 75 75 82
Average personnel
for the period 21 242 22 064 21 440 21 037
1) The negative goodwill is netted against assets.
2) The number of own shares repurchased is excluded.
3) The acquisition of AvestaPolarit shares is included in
III/02 figure.
4) The amortization of negative and positive goodwill is
excluded.
