Outokumpu's Annual Accounts Bulletin 2010 - stainless markets recovered in 2010, operating loss reduced
FINANCIAL STATEMENT BULLETIN February 2, 2011 9.00 am EET
Year 2010 highlights - Operating profit was EUR -83 million (2009: EUR -441 million), underlying operational result some EUR -91 million (2009: some EUR -343 million). - EBITDA EUR 172 million (2009: EUR -212 million), operative cash flow EUR -497 million. - Deliveries increased by 28% to 1 315 000 tonnes. - Major investment decisions totalling approximately EUR 550 million: ferrochrome capacity to be doubled, position in quarto plate to be strengthened. - The Board of Directors is proposing a dividend of EUR 0.25 per share (2009: EUR 0.35). Fourth-quarter highlights - Operating profit EUR -85 million (III/2010: EUR -49 million), underlying operational result EUR -68 million (III/2010: EUR -10 million). - EBITDA EUR -4 million (III/2010: EUR 12 million). - Deliveries totalled 336 000 tonnes (III/2010: 307 000 tonnes). - Inventories reduced, cash flow positive at EUR 18 million (III/2010: EUR -111 million). Group key figures IV/10 III/10 IV/09 2010 2009 ---------------------------------------------------------------------- Sales EUR million 1 162 1 014 736 4 229 2 641 Operating profit EUR million -85 -49 -31 -83 -441 EBITDA EUR million -4 12 26 172 -212 Non-recurring items in operating profit EUR million -17 - - -17 -20 Profit before taxes EUR million -86 -88 -38 -143 -479 Non-recurring items in financial income and expenses EUR million 9 - - 9 - Net profit for the period EUR million -91 -56 -6 -124 -336 Earnings per share EUR -0.50 -0.31 -0.04 -0.68 -1.86 Return on capital employed % -8.0 -4.6 -3.5 -2.1 -11.7 Net cash generated from operating activities EUR million 18 -111 -111 -497 201 Capital expenditure EUR million 48 40 83 161 248 Net interest-bearing debt at end of period EUR million 1 837 1 831 1 191 1 837 1 191 Debt-to-equity ratio at end of period % 77.3 74.9 48.6 77.3 48.6 Stainless steel deliveries 1 000 tonnes 336 307 277 1 315 1 030 Stainless steel base price 1) EUR/tonne 1 213 1 245 1 297 1 252 1 161 Personnel at the end of period 8 104 8 048 7 754 8 104 7 754 ---------------------------------------------------------------------- 1) Stainless steel: CRU - German base price (2 mm cold rolled 304 sheet). SHORT-TERM OUTLOOK Following the softer market situation that characterised late 2010, demand for standard grades of stainless steel began to pick-up in the new-year. The increase in the nickel price supported buying by distributors and lead times for standard grades are currently somewhat above the usual 6-8 weeks. Distributor inventories in Europe are estimated to be approximately at normal level. Demand from investment-driven end-use segments has not yet shown any major recovery. Outokumpu's order intake has been encouraging from the beginning of 2011. After the decline in base prices in late 2010, Outokumpu has been able to increase prices, but this will only have an impact on average prices towards the end of the first quarter. Based on current order intake, Outokumpu estimates that delivery volumes in the first quarter of 2011 will be some 10-20% higher than in the fourth quarter of 2010. Outokumpu's operating profit in the first quarter is expected to be around break-even or slightly positive with some positive impact from raw material- related timing gains (at current metal prices). CEO Juha Rantanen: "The market environment in 2010 continued to be difficult in our home market, Europe. Demand for stainless was well below the pre-crisis levels, especially for investment-driven applications. The resulting still rather low capacity utilisation and deteriorated cost-efficiency were the main reasons for the clearly loss-making result in 2010. Currently, the overall economic development indicates better stainless markets for this year. Our focus stays on the essentials; better profitability, stronger balance sheet and implementation of our strategy. Last year we made good progress on many operational areas, like safety, inventory levels and delivery performance. It gives me confidence to expect significant progress on our financial performance this year." Changes in disclosure procedure Outokumpu Oyj is now adopting the new disclosure procedure enabled by the Standard 5.2b published by the Finnish Financial Supervision Authority. This is a summary of Outokumpu's Annual Accounts Bulletin 2010 and the complete report with tables is available as an attachment to this stock exchange release and is also available on the Outokumpu website at: www.outokumpu.com/investors. The attachments present the Management analysis of the fourth quarter 2010 operating result and a summary of the Review by the Board of Directors for January-December 2010 as well as extracts from the financial statements. The report is based on restated financial information for the Group's brass operations previously reported as discontinued operations. All full-year figures have been audited. For further information, please contact: Päivi Lindqvist, SVP - Communications and IR tel. +358 9 421 2432, mobile +358 40 708 5351 paivi.lindqvist@outokumpu.com Ingela Ulfves, VP - Investor Relations and Financial Communications tel. +358 9 421 2438, mobile +358 40 515 1531 ingela.ulfves@outokumpu.com Esa Lager, CFO Tel. +358 9 421 2516 esa.lager@outokumpu.com News conference and live webcast today at 1.00 pm A combined news conference, conference call and live webcast concerning Outokumpu's annual accounts 2010 will be held on 2 February 2011 at 1.00 pm EET (6.00 am US EST, 11.00 am UK time, 12.00 pm CET) at Restaurant Bank, meeting rooms 12-14, address Unioninkatu 20, 00130 Helsinki, Finland. To participate via the conference call, please dial in 5-10 minutes before the beginning of the event: UK +44 20 3043 2436 US & Canada +1 866 458 4087 Sweden +46 8 505 598 53 Password Outokumpu The news conference can be viewed live via the Internet at www.outokumpu.com. A stock exchange release and presentation material will be available before the news conference at: www.outokumpu.com/Investors. An on-demand webcast of the news conference will be available at www.outokumpu.com on February 3, 2011 from around 3.00 pm. OUTOKUMPU OYJ Corporate Management