OUTOKUMPU POSTS SOLID SECOND-QUARTER PRO
OUTOKUMPU OYJ STOCK EXCHANGE RELEASE August 5, 2004 at 1.00 pm
OUTOKUMPU POSTS SOLID SECOND-QUARTER PROFITS
Outokumpus net sales in April-June rose by 9% compared with the
previous quarter to EUR 1 841 million. Operating profit was EUR
132 million (I/2004: EUR 133 million). Comparable operating profit
increased by 25% to EUR 136 million. Profit before extraordinary
items amounted to EUR 118 million. Earnings per share were EUR
0.54. After the seasonally low third quarter, Outokumpus profits
are expected to get again into an improving track, because not
only are volumes increasing, but demand and the price outlook for
the rest of the year are encouraging, as well.
THE SECOND QUARTER IN BRIEF
- Demand for Outokumpus main products - stainless steel and
copper products - remained healthy during the second quarter.
Higher selling prices boosted the Groups net sales.
- The Groups comparable operating profit rose to EUR 136 million
(I/2004: EUR 109 million). The bulk of the profit was generated by
Outokumpu Stainless. In Europe, conversion margin for stainless
steel increased by 5% from the previous quarter. Outokumpus
stainless steel deliveries decreased by 7% mainly due to the
closure of the Panteg cold rolling facility at the end of March
and to some technical problems at the melt shops.
- The Groups net deferred tax liability lowered by EUR 15 million
in June following the decrease in the Finnish corporate income tax
rate to 26%.
- The Groups capital structure weakened. Net interest-bearing
debt was EUR 2 515 million and gearing 115.2%. Working capital
increased substantially due to higher business volume and raw
material prices as well as the temporary stock-build needed for
the planned production stoppages in August-October at Tornio.
- The ramp-up of the Tornio expansion has progressed well. Despite
some technical problems in June, the RAP5 line set a new quarterly
production record.
- In July, Mr. Juha Rantanen was appointed new CEO of the
Outokumpu Group as of January 1, 2005.
- The Groups comparable operating profit for the third quarter
will be seasonally lower. Fourth-quarter profits are expected to
get again into an improving track, because not only are volumes
increasing, but demand and the price outlook for the rest of the
year are encouraging, as well.
CEO Jyrki Juusela comments:
"Our second-quarter earnings were solid - well in line with our
expectations. Demand and prices for our main products have
remained healthy and the outlook for the latter part of the year
appears encouraging. The Tornio ramp-up is proceeding well. On the
volume side we had some technical problems in June, but now the
line is progressing well again and volumes are getting back to the
targeted levels."
MANAGEMENT ANALYSIS OF THE SECOND-QUARTER OPERATING RESULT
The Groups comparable operating profit rose by 25%
The following table presents the Groups net sales and comparable
operating profit (i.e. operating profit excluding inventory gains
or losses as well as unusual items) by business.
Group key figures
EUR million I/03 II/03 III/03 IV/03
Net sales
Stainless 877 851 851 871
Copper 409 402 404 411
Technology 89 81 98 137
Zinc 93 95 98 110
Other operations 63 65 59 74
Intra-group sales (48) (55) (46) (68)
The Group 1 483 1 439 1 464 1 535
Comparable
operating profit
Stainless 49 35 11 20
Copper 2 8 (1) 3
Technology (9) (3) (1) 11
Zinc 5 2 4 5
Other operations (23) (17) (15) (13)
Intra-group items 1 (1) 1 (1)
The Group 25 24 (1) 25
Items affecting
comparability 3 1 30 99
The Group, official
operating profit 28 25 29 124
EUR million 2003 I/04 II/04
Net sales
Stainless 3 450 1 103 1 168
Copper 1 626 495 554
Technology 405 81 104
Zinc 396 - -
Other operations 261 48 46
Intra-group sales (217) (37) (31)
The Group 5 921 1 690 1 841
Comparable
operating profit
Stainless 115 124 127
Copper 12 11 12
Technology (2) (11) (1)
Zinc 16 - -
Other operations (68) (16) (2)
Intra-group items 0 1 0
The Group 73 109 136
Items affecting
comparability 133 24 (4)
The Group, official
operating profit 206 133 132
World economic growth continued, with China still the fastest
growing country. The economic recovery stayed on track in the US,
whereas in Europe growth remained modest. Low interest rates
worldwide and the Chinese economic boom were the main factors
driving global growth. Globally, the demand for stainless steel
grew by some 7% in April-June. The Groups net sales rose by 9%
compared with the previous quarter. Higher prices for stainless
steel and fabricated copper products boosted the Groups net
sales, whereas delivery volumes of copper products were unchanged
and those of stainless steel 7% lower than in the first quarter.
The Groups comparable operating profit was 25% above the first
quarter. All the Outokumpu business areas improved their profits.
The euro continued to weaken against the US dollar, falling by 4%
during April-June. The euro was close to first-quarter levels both
against the Swedish krona and the British pound. The impact of
currency movements on the Groups second-quarter operating profit
was fairly small.
Stainless sustained profits at a good level
Outokumpu Stainless key figures
EUR million I/03 II/03 III/03 IV/03
Net sales
Coil Products 683 667 626 653
Special Products 349 327 273 348
North America 64 59 64 65
Others (219) (202) (112) (195)
Outokumpu Stainless total 877 851 851 871
Comparable operating profit
Coil Products 45 34 1 16
Special Products 0 2 (7) 4
North America (1) 0 4 1
Others 5 (1) 13 (1)
Outokumpu Stainless total 49 35 11 20
Market valuation 1 0 (1) 1
provision in inventories
Provision for the Panteg - - - (14)
closure
Outokumpu Stainless,
official operating profit 50 35 10 7
Operating capital at
the end of period 3 216 3 368 3 406 3 330
Deliveries of main
products (1 000 tonnes)
Cold rolled 228 210 208 221
White hot strip 83 69 72 92
Other 150 158 169 115
Total deliveries 461 437 449 428
Development of
market prices 1)
Stainless steel
Transaction price EUR/kg 1.77 1.78 1.75 1.87
Base price EUR/kg 1.43 1.39 1.38 1.38
Conversion margin EUR/kg 0.98 0.93 0.92 0.93
Nickel USD/lb 3.78 3.80 4.25 5.64
EUR/kg 7.77 7.36 8.33 10.46
Ferrochrome (Cr-content) USD/lb 0.36 0.41 0.46 0.49
EUR/kg 0.74 0.80 0.90 0.90
1) 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 2003 I/04 II/04
Net sales
Coil Products 2 629 851 897
Special Products 1 297 363 460
North America 252 78 94
Others (728) (189) (283)
Outokumpu Stainless total 3 450 1 103 1 168
Comparable operating profit
Coil Products 96 107 93
Special Products (1) 7 26
North America 4 5 5
Others 16 5 3
Outokumpu Stainless total 115 124 127
Market valuation 1 0 0
provision in inventories
Provision for the Panteg (14) - -
closure
Outokumpu Stainless,
official operating profit 102 124 127
Operating capital at
the end of period 3 330 3 568 3 811
Deliveries of main
products (1 000 tonnes)
Cold rolled 867 239 221
White hot strip 316 103 99
Other 592 137 124
Total deliveries 1 775 479 444
Development of
market prices 1)
Stainless steel
Transaction price EUR/kg 1.80 2.12 2.28
Base price EUR/kg 1.40 1.40 1.43
Conversion margin EUR/kg 0.94 0.96 1.01
Nickel USD/lb 4.37 6.68 5.67
EUR/kg 8.52 11.79 10.38
Ferrochrome (Cr-content) USD/lb 0.43 0.60 0.71
EUR/kg 0.84 1.05 1.30
1) 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.
Global demand for and supply of stainless steel both grew by about
7% during the quarter. The demand for cold rolled products
remained at good level in Europe, although the normal seasonal
slowdown to prepare for the summer period reduced demand toward
the end of the period. In Asia, the Chinese governments measures
to cool down economic growth, coupled with falling alloy costs and
high stock levels, slowed down the market toward the end of June.
The US stainless steel market continued to benefit from strong
economic growth.
Outokumpu succeeded in putting through price increases in April-
June in Europe as planned and an iron scrap component was included
in the alloy surcharge formula. According to CRU, the German base
price for 2 mm cold rolled sheet was 2% higher and the conversion
margin 5% higher than in the previous quarter. In Asia, prices
fluctuated during the quarter due to volatility in the raw
materials market and the slowdown in Chinese demand. US cold
rolled prices were stable. Demand for quarto plate improved in
Europe, and project activity in the tubular market remained good.
The market for long products continued to improve worldwide.
Demand for precision strip remained stable. In North America,
there was continued healthy demand for quarto plate as well as
tubular and long products.
Demand for nickel grew almost at the same pace as that for
stainless steel. The nickel markets were undersupplied and
inventories critically low. The nickel price was extremely
volatile, dropping from USD 14 000/tonne in early April to below
USD 11 000/tonne in May and back to USD 15 000/tonne in late June.
The demand for nickel is still receiving a boost from growing
stainless steel production. The ferrochrome market remained
strongly undersupplied and the USD price was 18% above the
previous quarter. Molybdenum prices have stayed at the
historically high levels reached in April. The price of iron scrap
eased up slightly toward the end of the quarter.
Outokumpu Stainless net sales for the second quarter were EUR 1
168 million, an increase of 6% from the previous quarter. This
resulted mainly from higher raw material prices and improved base
prices. Deliveries were down 7% compared with the previous
quarter. The decrease in deliveries resulted partly from the
closure of the Panteg cold rolling facility in Britain at the end
of March and to some technical problems at the Tornio, Avesta and
Sheffield melt shops, creating a feedstock shortage at hot and
cold rolling facilities.
Stainless comparable operating profit amounted to EUR 127
million. The improved base prices for European cold rolled and
quarto plate products had a favorable impact on profitability. Due
to good European demand for cold rolled products, Outokumpus
share of cold rolled deliveries to Europe increased at the expense
of both deliveries to Asia and deliveries of white hot strip. This
had a positive impact on the average conversion margin. The
inclusion of iron scrap in the alloy surcharge by the end of the
quarter also improved conversion margins. Outokumpu Stainless
furthermore benefited from high ferrochrome prices through its own
ferrochrome production. These factors mitigated the lower
deliveries and the profit effect relating to timing differences
when applying the alloy surcharge mechanism. The actual inventory
turnover time of Outokumpu Stainless is today longer than the
turnover time used in defining the alloy surcharge. Accordingly,
the second-quarter operating profit was negatively affected by the
changes in the nickel price.
The expansion program at Tornio proceeded well. The focus was on
the ramp-up of the RAP5 line and preparations for the 6-week
shutdown of the older melt shop for reconditioning and the 2-week
shutdown of the hot rolling mill for capacity expansion to 1.65
million tonnes. These production stoppages are scheduled for
August-October, followed by a ramp-up period, especially for the
hot rolling mill. Inventories have been increased due to the
temporary stock-build needed for the planned production stoppages.
The Kemi underground mine ramp-up and the increase in long
products capacity in the US have continued as planned. The new
premises of the distribution and service center in Sheffield,
Britain, were inaugurated in April. The Sheffield service center
acts as the British distribution hub for Outokumpu Stainless
plants in Finland, Sweden and Britain, and it supplies Britain and
Ireland, which are traditionally strong markets for Outokumpu.
European cold rolled demand in the third quarter is estimated to
remain fair, bolstered by the expected increases in the alloy
surcharge in September-October and a balanced supply-demand
position. The nickel and ferrochrome markets are both forecast to
remain undersupplied in 2004, thus keeping up the expectation of
high raw material prices. Outokumpu Stainless will continue to
benefit from the high ferrochrome prices. Toward the end of 2004,
the ramp-up of the new cold rolling mill at Tornio will improve
profitability by way of increasing volumes and a better product
mix. However, successful reconditioning of the older melt shop and
the capacity increase at the hot rolling mill in unison with the
planned production stoppages and subsequent ramp-ups are the
critical factors for profitability during the rest of the year.
The full benefit of the Tornio investments will be achieved once
full capacity is available in early 2005.
Outokumpu Stainless third-quarter comparable operating profit
will be markedly lower due to seasonality and the planned
production stoppages. Further ahead, however, Outokumpu Stainless
is expected to generate good comparable operating profit, thanks
to increased volumes and a better product mix.
Copper maintained its positive development
Outokumpu Copper key figures
EUR million I/03 II/03 III/03 IV/03
Net sales
Regional businesses 185 173 171 191
Global businesses 180 191 173 163
Others 44 38 60 57
Outokumpu Copper total 409 402 404 411
Comparable operating profit
Regional businesses (4) 1 (4) (3)
Global businesses 4 10 3 2
Others 2 (3) 0 4
Outokumpu Copper total 2 8 (1) 3
Market price 2 1 5 5
adjustments to
inventories
Provision for the - - - (18)
cartel fine (ACR tubes)
Outokumpu Copper,
official operating profit 4 9 4 (10)
Operating capital at
the end of period 947 945 915 779
Deliveries of fabricated
products (1 000 tonnes)
Regional businesses 59 57 54 58
Global businesses 47 53 48 45
Internal deliveries 0 0 0 (1)
Total deliveries 106 110 102 102
Order backlog at the
end of period (1 000 tonnes) 67 64 51 66
Price development
Conversion margin of
copper products,
change on the
previous period, % 1) (4) (5) 1 (6)
Price of copper 2) USD/lb 0.75 0.74 0.80 0.93
EUR/kg 1.55 1.44 1.56 1.73
1) The average conversion margin of Outokumpus copper products.
Includes changes in the product mix. The fabrication business
acquired from Boliden is included as of January 2004.
2) London Metal Exchange (LME) cash quotation.
EUR million 2003 I/04 II/04
Net sales
Regional businesses 720 304 326
Global businesses 707 205 246
Others 199 (14) (18)
Outokumpu Copper total 1 626 495 554
Comparable operating profit
Regional businesses (10) 7 5
Global businesses 19 7 9
Others 3 (3) (2)
Outokumpu Copper total 12 11 12
Market price 13 7 (3)
adjustments to
inventories
Provision for the (18) - -
cartel fine (ACR tubes)
Outokumpu Copper,
official operating profit 7 18 9
Operating capital at
the end of period 779 893 976
Deliveries of fabricated
products (1 000 tonnes)
Regional businesses 228 107 106
Global businesses 193 54 58
Internal deliveries (1) (13) (15)
Total deliveries 420 148 149
Order backlog at the
end of period (1 000 tonnes) 66 95 108
Price development
Conversion margin of
copper products,
change on the
previous period, % 1) (15) (8) 6
Price of copper 2) USD/lb 0.81 1.24 1.27
EUR/kg 1.57 2.18 2.32
1) The average conversion margin of Outokumpus copper products.
Includes changes in the product mix. The fabrication business
acquired from Boliden is included as of January 2004.
2) London Metal Exchange (LME) cash quotation.
Regional businesses consists of the Americas, Europe, as well as
Tube and Brass divisions. Global businesses consists of the
Automotive Heat Exchangers as well as Appliance Heat Exchangers &
Asia divisions. Harjavalta Metals, which was sold to Boliden, is
included in 2003 figures for Others.
Demand for copper and copper alloy products improved further in
the second quarter. Asia was again the region with the fastest
growth, followed by the healthy US markets. In Europe, the
recovery in demand was fairly slow. On a global scale, electronics
and air conditioners were the fastest growing end-uses. The
European construction sector showed some signs of a revival in the
period and demand for alloy wire picked up. The electronics and
industrial investments related sectors were the best areas of
demand in Europe. The conversion margins for Outokumpus copper
products increased in the US, although at a slower pace than in
the first quarter. In Europe, conversion margins edged up
cautiously because cheap production in the East European countries
tightened competition and made any significant price increases
difficult.
Delivery volumes and the order intake for copper products were at
the same level as in the previous quarter. Outokumpu Coppers net
sales increased by 12% compared with the previous quarter and
comparable operating profit improved to EUR 12 million. The
improvement is mainly attributable to better product mix and
higher conversion margins.
Integration of the fabrication operations acquired from Boliden
moved ahead. In June, discussions were started on closing down
copper tube production in Waalwijk, the Netherlands. The closure
is in line with Outokumpu Coppers overall strategy of utilizing
the synergies and streamlining possibilities resulting from the
Boliden transaction in the highly competitive European market. The
Dutch mill produces about 13 000 tonnes of copper sanitary tubes
annually and it employs 90 people.
In July, Outokumpu Wasacopper Oy and Aurajoki Oy entered into an
agreement to combine their electrolytic coating businesses. The
new company will become a domestic market leader in Finland. The
arrangement enables both companies to focus on their core
businesses.
Demand for copper and copper alloy products is estimated to be
strong for the remainder of 2004. This, together with higher
conversion margins due to price increases and improved product mix
as well as internal efficiency programs, will improve Outokumpu
Coppers profitability in 2004.
Technology aims for improvement during the rest of the year
Outokumpu Technology key figures
EUR million I/03 II/03 III/03 IV/03
Net sales 89 81 98 137
Comparable
operating profit (9) (3) (1) 11
Gain on the sale of
the filter business - - - -
Technology, official
operating profit (9) (3) (1) 11
Operating capital at
the end of period 41 46 26 30
Order backlog at
the end of period 359 294 410 356
EUR million 2003 I/04 II/04
Net sales 405 81 104
Comparable
operating profit (2) (11) (1)
Gain on the sale of
the filter business - 18 (1)
Technology, official
operating profit (2) 7 (2)
Operating capital at
the end of period 30 13 39
Order backlog at
the end of period 356 390 336
The increased investment activity in the metals and mining
industry has not yet materialized in the form of any significant
orders for Outokumpu Technology due to postponement of final
decisions by the customers. Order intake has been considerably
lower than anticipated. It is expected, however, that investment
decisions will be made in the near future, and the second half of
2004 will be active in this respect. At the end of June, the order
backlog of Outokumpu Technology was EUR 336 million.
Technologys net sales for the second quarter amounted to EUR 104
million, an increase of 28% compared with the previous quarter.
The comparable operating result improved, but was still a loss of
EUR 1 million.
Outokumpu Technologys direct leaching technology has been chosen
for Iran Zinc Production Company´s greenfield zinc plant.
Outokumpu Technologys share of the total delivery will be
approximately EUR 40 million. The deal was not included in the
order backlog at the end of June. Outokumpu Technology and
EuroZinc of Canada agreed on technical co-operation in June. The
agreement covers the supply, for the next nine years, of expert
services, process equipment and process technology to EuroZincs
copper and zinc/lead mines in Portugal.
The mining and metallurgical industry is actively planning for
investments and Outokumpu Technology is expecting an improving
order intake during the second half of 2004. The comparable
operating result is estimated to improve from the previous year.
Other operations
Other operations key figures
EUR million I/03 II/03 III/03 IV/03
Net sales 63 65 59 74
Comparable operating profit (23) (17) (15) (13)
Gain on the
Boliden transaction - - - 106
Gain on the
sale of the Inmet shares - - - 10
Gain on the sale of
the precious metals assets - - - 9
Gain on the sale of
Arctic Platinum
Partnership (49%) - - 26 -
Other operations,
official operating profit (23) (17) 11 112
Operating capital at
the end of period 204 223 264 57
EUR million 2003 I/04 II/04
Net sales 261 48 46
Comparable operating profit (68) (16) (2)
Gain on the
Boliden transaction 106 (1) -
Gain on the
sale of the Inmet shares 10 - -
Gain on the sale of
the precious metals assets 9 - -
Gain on the sale of
Arctic Platinum
Partnership (49%) 26 - -
Other operations,
official operating profit 83 (17) (2)
Operating capital at
the end of period 57 84 86
Proceeds from the sale of fixed assets and other positive
adjustments relating to the disposed mining activities reduced the
second-quarter operating loss by EUR 7 million. Following the exit
from mining activities, Other operations now consists mainly of
such business development and Corporate Management expenses that
are not allocated to businesses.
The attachments present the interim review 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, EVP Corporate Controller, tel. +358 9 421
4134, vesa-pekka.takala@outokumpu.com
News conference and live web cast today at 3.00 pm
A combined news conference, conference call and live web cast
concerning the second quarter 2004 results will be held today, on
August 5, 2004 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
420 4950 (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 August 5, 2004 at 4.30 pm. An instant
reply service of the conference call will be available until
Monday, August 9, 2004 in the following numbers: +44 20 8288 4459
(UK) or +1 334 323 6222 (US & Canada). The access code is 856292.
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
INTERIM REVIEW BY THE BOARD OF DIRECTORS
Profits improved significantly
The good demand for stainless steel and copper products during the
first half of 2004 boosted the Groups net sales and profits. Net
sales increased by 21% compared with January-June 2003 and stood
at EUR 3 531 million (I-II/2003: EUR 2 922 million). Operating
profit rose five-fold to EUR 265 million (I-II/2003 EUR 53
million). The improvement was mainly attributable to Outokumpu
Stainless. Higher delivery volumes and prices combined with a
better market and product mix increased profits significantly
compared with last year.
During the first half of 2004, the euro was 11% stronger against
the US dollar and 2% weaker against the British pound compared
with the corresponding period of last year. The Swedish krona was
unchanged against the euro. The Groups net financial expenses
decreased to EUR 38 million (I-II/2003: EUR 57 million) due to the
low average interest rate on debt, increased interest income and
foreign exchange gains. Outokumpu has hedged most of the currency
fair value risks and risks related to committed cash flows. During
the first half of the year, there have not been any significant
currency hedges for forecasted cash flows.
The Groups share of equity earnings in associated companies was
EUR 22 million (I-II/2003: EUR 6 million negative). Outokumpus
49% interest in new Bolidens equity earnings amounted to
EUR 31 million in the first half of 2004. At the end of June, the
market value of Outokumpus holding in Boliden was EUR 369 million
and Outokumpus total stake in Boliden, including the subordinated
note of EUR 166 million, had a carrying value of EUR 518 million.
Outokumpus 32% share of the result of Okmetic was EUR 11 million
negative because the company recognized substantial restructuring
write-downs and costs in the first quarter of 2004.
The Groups profit before extraordinary items for January-June was
EUR 249 million (I-II/2003: a loss of EUR 10 million) and profit
for the period EUR 197 million (I-II/2003: a loss of EUR 17
million). In June, the Finnish Parliament enacted a reduction in
the corporate income tax rate from 29% to 26% from the beginning
of 2005. This lowered the Groups net deferred tax liability by
EUR 15 million. Earnings per share increased to EUR 1.09 (I-
II/2003: EUR 0.10 negative). The return on capital employed rose
to 12.2% compared with 2.3% in the first half of 2003.
Capital structure weakened
Cash flow from operating activities was EUR 266 million negative
(I-II/2003: EUR 84 million negative). Net interest-bearing debt
rose by EUR 502 million from the end of 2003. Working capital
increased substantially due to a higher business volume and raw
material prices as well as the stock-build needed for the planned
production stoppages in August-October at Tornio. It is currently
estimated that the Group has excess working capital of EUR 350-400
million due to increased raw material prices compared with long-
term average prices.
At the end of June, the equity-to-assets ratio stood at 31.7%
(Dec. 31, 2003: 32.3%). The gearing ratio was 115.2% (Dec. 31,
2003: 102.8%). The target for the gearing ratio is less than 75%
by the end of 2004. Improved profitability, tight working capital
management and divestitures continue to be the key measures to
achieve this. The inventory buildup to cover production stoppages
and the ramp-ups at Tornio will be wound down by the end of the
year. Furthermore, when adopting International Financial Reporting
Standards (IFRS) in the third quarter of 2004, a part of the
negative goodwill will be recognized as equity and this will have
an estimated positive impact of roughly ten percentage points on
the gearing ratio.
Capital expenditure
The Groups total capital expenditure for January-June amounted to
EUR 249 million (I-II/2003: EUR 302 million). The biggest single
capital expenditure item, EUR 76 million, was the share
subscription in Bolidens rights issue in March. Major investment
programs the Tornio expansion, the ramp-up of the Kemi
underground mine and the increase in long product capacity in the
US have continued as planned. The Groups capital expenditure
for 2004 is estimated to exceed EUR 400 million.
Tornio expansion advancing to final stages
Outokumpus largest project, the ramp-up of the Tornio expansion
in Finland, is advancing with the clear target of having full
capacity on an annualized basis available in early 2005. The EUR
1.1 billion program will more than double the production volume at
Tornio.
Tornio expansion
Hot Cold
rolling rolling
1 000 tonnes Melt shop mill mill 1)
Prior expansion 650 650 550
New capacity 1 000 1 000 650
Total 1 650 1 650 1 200
Production volume,
annualized % 2) 80 50 65
1) Product mix of finished cold rolled (2B), semi-cold rolled (2E)
and white hot strip.
2) Based on production volumes at the end of the second quarter
2004.
The ramp-up of the new cold rolling line, RAP5, has proceeded
well, setting a new quarterly production record. Unfortunately, in
June the lines performance was affected by two bad weeks of
technical problems. Consequently, the volume targets for the
second quarter were not fully reached. RAP5 products are now
qualified for almost all planned applications, and the first
trials for producing 1.5 mm thick 2E and 1.0 mm thick 2B were
carried out successfully in June. There will be a 6-week shutdown
of the older melt shop for reconditioning and a 2-week shutdown of
the hot rolling mill for capacity expansion to 1.65 million tones
in August-October. These will be followed by a ramp-up period,
especially for the hot rolling mill. Outokumpu is targeting a
production of about 350 000 tonnes of finished cold rolled
products (2B) with the RAP5 line per annum, the remainder
consisting of other products and feedstock for downstream
operations once the entire expanded capacity is available.
Environment, health and safety
The European emissions trading system is making progress in all
the countries where Outokumpu has stainless steel melting and
casting operations: Finland, Sweden and Britain. The unit in
Sheffield already has a greenhouse gas emission permit, and the
units in Sweden and Finland are ready to apply for it when the
European Emission Trade Directive is implemented in the national
legislation of these countries.
Emissions and discharges were at the normal or lower than normal
level at all Outokumpu sites during the first half of the year. At
Tornio, an environmental impact assessment process is ongoing in
view of a possible increase in production capacity. The aim is to
complete the process by the end of 2004.
The safety management assessment continued and the safety review
of the main sites was finalized within Outokumpu Stainless.
Despite the fact that many major production sites improved their
safety performance, the accident frequency remained unchanged. No
major accidents were reported during January-June.
Outokumpu issued two domestic bonds to repay its short-term debt
In May, Outokumpu issued two bonds having a maximum nominal value
of EUR 150 million each. The aggregate maximum value of the bonds
was limited, however, to EUR 200 million. Bids from investors
totaled EUR 211 million. The amount of the floating rate note
1/2004 was set at EUR 125 million, and that for the fixed rate
note 2/2004 at EUR 75 million. The bonds will be repaid in their
entirety at maturity in 2007 and 2011, respectively.
Cartel investigation by the European Commission
Outokumpu was fined EUR 18 million by the European Commission for
participation in a European price fixing and market-sharing cartel
regarding copper air-conditioning tubes in December 2003. In
March, Outokumpu submitted an appeal with respect to the grounds
for the calculation of the fine and the amount of the fine itself.
The cartel investigation relating to copper sanitary tubes, which
is part of the same process, is in progress and a decision from
the European Commission is expected during 2004.
CEO Jyrki Juusela retires - Juha Rantanen appointed new CEO
In May, the CEO of Outokumpu Oyj, Dr. Jyrki Juusela, announced
that he will retire at the end of this year. He has been employed
by the Outokumpu Group since 1971 and has served as CEO since the
beginning of 1992. Jyrki Juusela will be 61 years of age in
November. On July 22, 2004, the Board of Directors of Outokumpu
Oyj appointed Juha Rantanen CEO of the Outokumpu Group, effective
January 1, 2005. Mr. Rantanen is currently CEO of Ahlstrom
Corporation of Finland. Born in 1952, Juha Rantanen holds a
Masters degree from the Helsinki School of Economics and an MBA
from the International Management Institute in Geneva. Mr.
Rantanen will join Outokumpu on October 1, 2004, to familiarize
himself with his new duties.
Due to the appointment and in accordance with Outokumpu's
corporate governance principles, Mr. Rantanen has tendered his
resignation from Outokumpu's Board of Directors effective
September 30, 2004. The Board has elected its member Ole Johansson
as the new Vice Chairman as of October 1, 2004. Mr. Johansson will
also move from the Nomination and Compensation Committee to be the
new Chairman of the Board's Audit Committee.
Outokumpu to adopt IFRS standards in its financial reporting in
the third quarter
Outokumpu has decided to apply International Financial Reporting
Standards (IFRS) in its financial reporting for the first time in
the third quarter interim report, which is to be published on
October 26, 2004. Comparison figures for the financial year 2003
and first half of 2004 will be published on October 11, 2004. The
date of transition to IFRS is January 1, 2003. The most
significant changes to the accounting practice from Outokumpus
point of view relate to pension and inventory accounting, the
valuation of financial instruments and the treatment of positive
and negative goodwill.
Third-quarter profits seasonally lower; profits to swing upward
again in the fourth quarter
World economic growth is generally expected to remain robust for
the rest of 2004. Global economic growth is forecast to total 4%
in 2004, with Asia and the US being the fastest growing regions.
European recovery is estimated to be fairly slow. In China, the
government has taken measures to curb the overheating economy by
tightening credit and cutting investments in some sectors. Chinas
economic growth is forecast to slow down to about 7-8% as result
of these measures. Led by the Chinese economic boom, Japans
economic prospects have improved significantly and Japanese
investments are projected to grow by over 10% in 2004. In the US,
the business and consumer confidence indices are very high and
suggest that the US economy will grow strongly. To prevent a
possible overheating of the economy, short-term interest rates
were raised for the first time in over three years in the US. The
estimates for Europe have been upgraded during the past few weeks,
too. Europe is forecast to grow at a rate of some 2% in 2004.
Demand for stainless steel is set to grow for the remainder of
2004, although at a slower pace than in the first half. The
markets for both nickel and ferrochrome important raw materials
for stainless steel are tight and forecast to remain
undersupplied in the near future.
For Outokumpu, the commissioning of the new RAP5 cold rolling mill
at Tornio will have a positive impact on profitability in 2004 as
the proportion of cold rolled products increases. Successful
reconditioning of the older melt shop and the capacity increase at
the hot rolling mill in unison with the planned production
stoppages and ramp-ups are the critical factors for profitability
in the second half of 2004. The full benefit of the Tornio
investments will be achieved once full capacity is available in
early 2005.
Beyond the seasonally low third quarter, the demand outlook for
stainless steel is bright. Outokumpu management believes that
stainless steel supply and demand will be quite balanced going
forward, and industry capacity utilization rates are estimated to
remain at a historically high level throughout 2004-2005.
Outokumpu Stainless third-quarter comparable operating profit
will be markedly lower due to seasonality and planned production
stoppages. Further ahead, however, Outokumpu Stainless is expected
to generate good comparable operating profit, thanks to increased
volumes and a better product mix.
The demand for fabricated copper products is estimated to be
strong for the remainder of 2004. Based on improving market
prospects and rising productivity, the comparable operating profit
of Outokumpu Copper in 2004 is estimated to be clearly better than
last year. Gradually improving investment activity and order
intake support the expected operating profit improvement of
Outokumpu Technology in 2004 compared with 2003.
The Groups comparable operating profit for the third quarter will
be seasonally lower. Fourth-quarter profits are expected to get
again into an improving track, because not only are volumes
increasing, but demand and the price outlook for the rest of the
year are encouraging, as well.
Espoo, August 5, 2004
Board of Directors
CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
INCOME STATEMENT Jan-Jun Jan-Jun Jan-Dec
EUR million 2004 2003 2003
Net sales 3 531 2 922 5 921
Costs and expenses (3 302) (2 876) (5 836)
Unusual items 16 0 119
Other operating
income and expenses 14 9 6
Amortization of positive
and negative goodwill 6 (2) (4)
Operating profit 265 53 206
Equity earnings in
associated companies 22 (6) (15)
Financial income
and expenses
Net interest expenses (44) (52) (98)
Exchange gains and losses 3 (7) (0)
Other financial
income and expenses 3 2 7
Profit before
extraordinary items 249 (10) 100
Extraordinary items - - -
Income taxes (48) (6) (8)
Minority interest
in earnings (4) (1) 0
Profit for the
financial period 197 (17) 92
BALANCE SHEET Jun 30 Jun 30 Dec 31
EUR million 2004 2003 2003
Fixed assets and
other long-term
investments
Intangible assets 392 451 380
Property, plant
and equipment 2 708 3 091 2 665
Long-term financial
assets
Interest-bearing 612 149 480
Non interest-bearing 59 91 71
3 771 3 782 3 596
Current assets
Inventories 1 587 1 357 1 181
Receivables
Interest-bearing 67 40 74
Non interest-bearing 1 396 1 145 1 056
Marketable securities 12 11 20
Cash and bank 125 146 210
3 187 2 699 2 541
Total assets 6 958 6 481 6 137
Shareholders equity 2 145 1 774 1 924
Minority interest 38 40 34
Long-term liabilities
Interest-bearing 2 039 1 629 1 782
Non interest-bearing 415 447 384
2 454 2 076 2 166
Current liabilities
Interest-bearing 1 293 1 589 1 016
Non interest-bearing 1 028 1 002 997
2 321 2 591 2 013
Total shareholders
equity and liabilities 6 958 6 481 6 137
STATEMENT OF CASH FLOWS Jan-Jun Jan-Jun Jan-Dec
EUR million 2004 2003 2003
Income financing 294 137 260
Increase in
working capital (608) (212) (13)
Other adjustments 48 (9) (33)
Cash (used in)
provided
by operating activities (266) (84) 214
Capital expenditure (249) (302) (622)
Capital expenditure
financed with own shares 3 - 53
Proceeds from
asset disposal 18 - 429
Other investing
activities (65) (30) (37)
Cash flow before
financing activities (559) (416) 37
Cash provided by
(used in)
financing activities 475 376 (29)
Adjustments (15) (29) (3)
(Decrease) increase
in cash and marketable
securities (99) (69) 5
Jan-Jun Jan-Jun Jan-Dec
GROUP KEY FIGURES 2004 2003 2003
Operating
profit margin, % 7.5 1.8 3.5
Return on capital
employed, % 12.2 2.3 5.0
Return on shareholders'
equity, % 19.5 neg. 4.7
Capital employed at
end of period,
EUR million 4 698 4 687 3 972
Net interest-bearing
debt at end of
period, EUR million 2 515 2 873 2 013
Equity-to-assets
ratio at end of
period, % 1) 31.7 28.3 32.3
Debt-to-equity ratio
at end of period, % 115.2 158.3 102.8
Earnings per share
(excluding extraordinary
items), EUR 1.09 (0.10) 0.54
Earnings per share, EUR 1.09 (0.10) 0.54
Average number of
shares outstanding,
in thousands 2) 180 652 171 381 171 623
Fully diluted
earnings per share
(excl. extraordinary
items), EUR 1.09 (0.10) 0.54
Fully diluted average
number of shares,
in thousands 2) 180 722 172 187 172 566
Shareholders' equity
per share at
end of period, EUR 11.87 10.34 10.84
Number of shares
outstanding at
end of period,
in thousands 2) 180 752 171 540 177 451
Capital expenditure,
EUR million 249 302 622
Depreciation,
EUR million 3) 125 150 307
Average personnel
for the period 19 831 21 667 21 442
1) The negative goodwill is netted against assets.
2) The number of own shares repurchased is excluded.
3) The amortization of negative and positive goodwill is excluded.
NOTES TO THE INCOME STATEMENT AND BALANCE SHEET
Shares and share capital
The total number of Outokumpu Oyj shares was 181 250 555 and the
share capital amounted to EUR 308.1 million on June 30, 2004.
Outokumpu Oyj held a total of 498 533 treasury shares on June 30,
2004 with total account equivalent value of EUR 0.8 million. This
equalled to 0.3% of the share capital and the total voting rights
of the Company on June 30, 2004.
Two of Outokumpus share related incentive schemes - the 1998
option program and the 1999 convertible bond - have come to an end
and the last share subscriptions have been registered with the
Finnish trade register on April 7, 2004.
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 holders thereof to subscribe for 5 100 000 new
shares in the Company during the years 2006 and 2011.
In February 2004, the Board of Directors confirmed that altogether
742 988 stock options 2003A be distributed to 116 persons in
management positions of Outokumpu. The members of the Group
Executive Committee received 62.00% and other key persons 45.25%
of the maximum number of stock options 2003A approved in June
2003. The number of stock options 2003A distributed was decided
based on the Groups earnings per share (EPS) and share price
development that were set as earnings criteria for the options in
June 2003. The additional earnings criterion for the Group
Executive Committee members was the Groups gearing. Altogether
742 988 Outokumpu Oyj shares can be subscribed for with the 2003A
stock options between September 1, 2006 and March 1, 2009.
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, i.e. EUR 10.70 per
share deducted with dividends paid annually.
In February 2004, the Board of Directors of Outokumpu Oyj decided
the earnings criteria on the basis of which stock options 2003B
will be distributed to 131 key persons of the Outokumpu Group in
spring 2005. The earnings criteria comprise the Groups 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 2003B
stock options between September 1, 2007 and March 1, 2010.
Subscription price for a stock option will be the trading volume
weighted average of the Outokumpu share on the Helsinki Exchanges
between December 1, 2004 and February 28, 2005.
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 7 043 079.60 and the number of shares by a maximum
of 4 142 988 shares. The shares that can be subscribed with the
2003 stock options equal to 2.3% of the Company's shares and
voting rights.
Authorizations of the Board of Directors
During January-June 2004, the Board of Directors has twice
utilized its authorization to transfer the Companys own shares
granted by the Annual General Meeting in 2003. On February 12,
2004, Outokumpu Oyj transferred a total of 315 310 of treasury
shares to the persons participating in the 2001 share remuneration
scheme for management. Furthermore on February 26, 2004, in
conjunction with the acquisition of the remaining 50% interest in
its subsidiary Neumayer GmbH, Outokumpu transferred 309 597
treasury shares to the seller as consideration. Subsequently,
Outokumpu now holds 498 533 treasury shares.
The Board of Directors has a valid authorizations granted by the
Annual General Meeting of April 2, 2004 to increase the share
capital by issuing new shares, stock options or convertible bonds.
The share capital may be increased by no more than EUR 30 400 000
and the aggregate maximum of 17 882 352 new shares may be issued
(10% of the companys share capital). The Board of Directors is
authorized to decide who will have the right to subscribe for the
new shares, stock options or convertible bonds. The Board of
Directors may deviate from the shareholders' pre-emptive
subscription right, provided that such deviation is justified by
an important financial reason for the Company, such as
strengthening the Company's capital structure or financing
corporate acquisitions or restructurings. The Board of Directors
decides the subscription price and the other terms and conditions
of the issue of shares, stock options or convertible bonds. The
Board of Directors may decide that the subscription price for new
shares can be paid by means of contribution in kind, set-off or
otherwise subject to specific terms and conditions determined by
the Board of Directors. The authorization is valid until the
Annual General Meeting in 2005, however no longer than one year
from the decision of the General Meeting. By
August 5, 2004, the Board of Directors had not used this
authorization.
The Board of Directors has a valid authorization granted by the
Annual General Meeting of April 2, 2004 to repurchase the
Companys own shares. The maximum number of shares to be
repurchased is 8 900 000. The number of own shares in the
Companys possession may not exceed 5% of the total of the
Companys shares. Shares may be repurchased pursuant to a decision
of the Board of Directors through purchases in public trading at
the Helsinki Exchanges at the prevailing market price. Shares may
be repurchased for improving of the Company's capital 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. The authorization is valid until the Annual General
Meeting in 2005, however no longer than one year from the decision
of the General Meeting. By August 5, 2004, the Board of Directors
had not used this authorization.
The Board of Directors has a valid authorization granted by the
Annual General Meeting of April 2, 2004 to transfer the Companys
own shares. The maximum number of shares to be transferred is 10
000 000. Shares may be transferred on one or several occasions.
The Board of Directors is authorized to decide on the recipients
of the shares and the procedure and terms to be applied. The Board
of Directors may decide to transfer shares in deviation of the pre-
emptive right of the shareholders to the Companys shares. Shares
can be transferred 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. The Board of Directors may decide to sell shares
through public trading at the Helsinki Exchanges in order to
obtain funds for the Company for investments and possible
corporate acquisitions. Shares can also be transferred as a part
of incentive and bonus schemes directed to the personnel of the
Company, including the Chief Executive Officer and his/her deputy.
Except as specifically authorized, the Board of Directors may not
deviate from the shareholders' pre-emptive right to shares in
favor of persons that are closely connected to the Company in the
meaning of chapter 1, section 4, subsection 1 of the Finnish
Companies Act. The transfer price may not be less than the fair
market value of the shares at the time of the transfer set in
public trading at the Helsinki Exchanges. The consideration can be
paid by means of contribution in kind, set-off or otherwise
subject to specific terms and conditions determined by the Board
of Directors. The authorization is valid until the Annual General
Meeting in 2005, however no longer than one year from the decision
of the General Meeting. By August 5, 2004, the Board of Directors
had not used this authorization.
Jan-Jun Jan-Jun Jan-Dec
EUR million 2004 2003 2003
Unusual items
Gain on the sale of
the filter business 17 - -
Gain on the
Boliden transaction (1) - 106
Gain on the sale of Arctic
Platinum Partnership (49%) - - 26
Gain on the sale
of the Inmet shares - - 10
Gain on the sale of the
precious metals assets - - 9
Write down of
reactors at Kokkola - 0 0
Provision for the
Panteg closure - - (14)
Provision for the
cartel fine (ACR tubes) - - (18)
16 0 119
Income taxes
Current taxes (33) (8) (18)
Deferred taxes (15) 2 10
(48) (6) (8)
Commitments Jun 30 Jun 30 Dec 31
EUR million 2004 2003 2003
Mortgages and pledges
To secure borrowings
of Group companies 137 145 144
Guarantees
On behalf of
associated companies 4 16 6
On behalf of other parties 47 39 52
51 55 58
Minimum future lease
payments on operating leases 149 128 160
Open derivative instruments
Carrying Fair value
value
Jun 30 Jun 30
EUR million 2004 2004
Financial derivatives
Forward foreign
exchange contracts 12 12
Currency options
Purchased 0 0
Written 0 0
Currency swaps (2) (2)
Interest rate swaps 0 0
Metal derivatives 1)
Forward and futures
copper contracts 0 0
Forward and futures
nickel contracts 0 9
Nickel options
Purchased - -
Forward and futures
zinc contracts 0 0
Forward and futures
aluminium contracts - -
Forward and futures
gold contracts - -
Forward and futures
silver contracts - -
Electricity
derivatives 2)
Traded electricity
forwards and futures - 0
Other financial contracts - 11
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
Jun 30 Dec 31
EUR million 2004 2003
Financial derivatives
Forward foreign
exchange contracts 1 590 1 620
Currency options
Purchased 10 280
Written 10 270
Currency swaps 20 40
Interest rate swaps 180 210
Metal derivatives 1)
Forward and futures
copper contracts 65 900 101 400
Forward and futures
nickel contracts 8 600 4 300
Nickel options
Purchased - 720
Forward and futures
zinc contracts 109 700 299 700
Forward and futures
aluminium contracts - 2 800
Forward and futures
gold contracts - 146 800
Forward and futures
silver contracts - 886 800
Electricity
derivatives 2)
Traded electricity
forwards and futures 0.0 0.0
Other financial contracts 2.7 3.5
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/03 II/03 III/03
Net sales
Outokumpu Stainless
Coil Products 683 667 626
Special Products 349 327 273
North America 64 59 64
Others (219) (202) (112)
Outokumpu Stainless total 877 851 851
Outokumpu Copper
Regional businesses 185 173 171
Global businesses 180 191 173
Others 44 38 60
Outokumpu Copper total 409 402 404
Outokumpu Technology 89 81 98
Zinc 93 95 98
Other operations 63 65 59
Intra-group sales (48) (55) (46)
The Group 1 483 1 439 1 464
Operating profit
Outokumpu Stainless
Coil Products 45 34 1
Special Products 0 2 (8)
North America (1) 0 4
Others 6 (1) 13
Outokumpu Stainless total 50 35 10
Outokumpu Copper
Regional businesses (3) 1 (1)
Global businesses 5 11 5
Others 2 (3) 0
Outokumpu Copper total 4 9 4
Outokumpu Technology (9) (3) (1)
Zinc 5 2 4
Other operations (23) (17) 11
Intra-group items 1 (1) 1
The Group 28 25 29
Equity earnings in
associated companies (3) (3) (4)
Financial income
and expenses (29) (28) (16)
Profit (loss) before
extraordinary items (4) (6) 9
Income taxes (1) (5) (9)
Minority interest
in earnings 0 (1) 1
Profit (loss)
for the period (5) (12) 1
EUR million IV/03 I/04 II/04
Net sales
Outokumpu Stainless
Coil Products 653 851 897
Special Products 348 363 460
North America 65 78 94
Others (195) (189) (283)
Outokumpu Stainless total 871 1 103 1 168
Outokumpu Copper
Regional businesses 191 304 326
Global businesses 163 205 246
Others 57 (14) (18)
Outokumpu Copper total 411 495 554
Outokumpu Technology 137 81 104
Zinc 110 - -
Other operations 74 48 46
Intra-group sales (68) (37) (31)
The Group 1 535 1 690 1 841
Operating profit
Outokumpu Stainless
Coil Products 2 107 93
Special Products 4 7 26
North America 1 5 5
Others 0 5 3
Outokumpu Stainless total 7 124 127
Outokumpu Copper
Regional businesses (2) 10 2
Global businesses 6 11 5
Others (14) (3) 2
Outokumpu Copper total (10) 18 9
Outokumpu Technology 11 7 (2)
Zinc 5 - -
Other operations 112 (17) (2)
Intra-group items (1) 1 0
The Group 124 133 132
Equity earnings in
associated companies (5) 15 7
Financial income
and expenses (18) (17) (21)
Profit (loss) before
extraordinary items 101 131 118
Income taxes 7 (30) (18)
Minority interest
in earnings 0 (2) (2)
Profit (loss)
for the period 108 99 98
GROUP KEY FIGURES BY QUARTER I/03 II/03 III/03
Operating profit
margin, % 1.9 1.8 2.0
Return on capital
employed, % 2.5 2.2 2.4
Return on shareholders'
equity, % neg. neg. 0.6
Capital employed at
end of period,
EUR million 4 528 4 687 4 673
Net interest-bearing
debt at end of
period, EUR million 2 624 2 873 2 847
Equity-to-assets
ratio at end of period, % 1) 29.9 28.3 28.2
Debt-to-equity ratio
at end of period, % 137.8 158.3 155.9
Earnings per share (excluding
extraordinary items), EUR (0.03) (0.07) 0.01
Earnings per share, EUR (0.03) (0.07) 0.01
Average number of
shares outstanding,
in thousands 2) 171 375 171 534 171 719
Shareholders' equity per
share at end of period, EUR 10.86 10.34 10.42
Number of shares
outstanding at end of period,
in thousands 2) 171 534 171 540 171 613
Capital expenditure,
EUR million 178 124 116
Depreciation, EUR million 3) 75 75 75
Average personnel
for the period 21 242 22 064 21 440
1) The negative goodwill is netted against assets.
2) The number of own shares repurchased is excluded.
3) The amortization of negative and positive goodwill is excluded.
IV/03 I/04 II/04
Operating profit
margin, % 8.1 7.9 7.1
Return on capital
employed, % 11.5 12.8 11.6
Return on shareholders'
equity, % 22.9 19.8 20.9
Capital employed at
end of period,
EUR million 3 972 4 344 4 698
Net interest-bearing
debt at end of
period, EUR million 2 013 2 225 2 515
Equity-to-assets
ratio at end of period, % 1) 32.3 32.1 31.7
Debt-to-equity ratio
at end of period, % 102.8 105.0 115.2
Earnings per share (excluding
extraordinary items), EUR 0.63 0.55 0.54
Earnings per share, EUR 0.63 0.55 0.54
Average number of
shares outstanding,
in thousands 2) 172 138 178 081 180 742
Shareholders' equity per
share at end of period, EUR 10.84 11.53 11.87
Number of shares
outstanding at end of period,
in thousands 2) 177 451 178 914 180 752
Capital expenditure,
EUR million 204 156 93
Depreciation, EUR million 3) 82 60 65
Average personnel
for the period 21 037 19 433 20 122
1) The negative goodwill is netted against assets.
2) The number of own shares repurchased is excluded.
3) The amortization of negative and positive goodwill is excluded.
