OUTOKUMPU?S FIRST-QUARTER PROFITS UP
OUTOKUMPU OYJ STOCK EXCHANGE RELEASE April 28, 2004 at 1.00 pm
OUTOKUMPUS FIRST-QUARTER PROFITS UP
GOOD EARNINGS EXPECTED ALSO FOR THE SECOND QUARTER
Outokumpus net sales in the first quarter rose 10% compared with
the previous quarter to EUR 1 690 million. Operating profit was
EUR 133 million (IV/2003: EUR 124 million). The comparable
operating profit rose strongly from previous quarters EUR 25
million to EUR 109 million. Profit before extraordinary items
amounted to EUR 131 million. Earnings per share were EUR 0.55.
Good earnings are expected also for the second quarter, whereas
the third quarter is likely to be seasonally lower.
THE FIRST QUARTER IN BRIEF
- Positive development continued in the metals market during the
first quarter. The Groups comparable operating profit i.e.
operating profit excluding inventory gains and unusual items more
than quadrupled compared with the last quarter of 2003 and
amounted to EUR 109 million. Demand for metals increased healthily
due to faster growth in industrial production and investments.
- The biggest contribution came from Outokumpu Stainless, which
posted the best quarterly operating profit according to its
current structure. Stainless benefited particularly from an
improved product and market mix. Also, a positive turnaround took
place in Outokumpu Coppers business. Technology posted a typical
first-quarter loss.
- New Boliden started its operations in January 2004. Outokumpu
subscribed for shares according to its commitment for a pro rata
stake in Bolidens rights issue in March with EUR 76 million.
Outokumpus 49% interest in new Bolidens equity earnings amounted
to EUR 15.6 million in the first quarter.
- Cash flow from operating activities was EUR 170 million
negative. The main reason was a substantial increase in working
capital due to a higher business volume and raw material prices.
- Net interest-bearing debt increased by EUR 212 million from the
year-end 2003 level. At the end of March, the Groups gearing was
105.0% (Dec. 2003: 102.8%). Thanks to improved profitability
gearing increased only marginally, despite the substantial
increase in working capital.
- Outokumpus largest project, the ramp-up of the Tornio expansion
in Finland, is advancing with a clear target of having full
capacity on an annualized basis available in early 2005. The
planned second-quarter annualized production volume of finished
cold rolled products from the new cold rolling mill, RAP5, will
correspond to about one-third of the ultimate target.
- The Groups first-quarter profit exceeded the whole-year 2003
profit. Judging by the current market prospects of stainless
steel, copper products and technology sales, the Groups
comparable operating profit for the second quarter of 2004 is
expected to be at the first-quarter level, whereas the third
quarter is likely to be seasonally lower.
CEO Jyrki Juusela comments:
"The expected strong improvement in profits took place during the
first quarter, particularly in our stainless steel and copper
products business. Demand growth for stainless steel and copper
products is expected to continue in the coming months and margins
are likely to increase. Within stainless steel, however,
visibility over the summer is more uncertain because the market
typically slows down during the holiday season. Our gearing target
of less than 75% remains unchanged. Clear benefits from massive
investments are finally starting to be reflected in improved
profitability. Nevertheless, we need to put a good deal of effort
into tight working capital management, especially now that
business volumes are growing and we face higher raw material
prices. Some divestitures are also on our agenda in order to reach
our goal. We are expecting good earnings also for the second
quarter and the third quarter to be seasonally lower".
MANAGEMENT ANALYSIS OF THE FIRST QUARTER OPERATING RESULT
Significant improvement in the Groups comparable operating profit
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.
EUR million I/03 II/03 III/03
Net sales
Stainless 877 851 851
Copper 409 402 404
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
Comparable
operating profit
Stainless 49 35 11
Copper 2 8 (1)
Technology (9) (3) (1)
Zinc 5 2 4
Other operations (23) (17) (15)
Intra-group items 1 (1) 1
The Group 25 24 (1)
Items affecting
comparability, businesses 3 1 30
Items affecting
comparability, the Group - - -
The Group, official
operating profit 28 25 29
EUR million IV/03 2003 I/04
Net sales
Stainless 871 3 450 1 103
Copper 411 1 626 495
Technology 137 405 81
Zinc 110 396 -
Other operations 74 261 48
Intra-group sales (68) (217) (37)
The Group 1 535 5 921 1 690
Comparable
operating profit
Stainless 20 115 124
Copper 3 12 11
Technology 11 (2) (11)
Zinc 5 16 -
Other operations (13) (68) (16)
Intra-group items (1) 0 1
The Group 25 73 109
Items affecting
comparability, businesses (7) 27 24
Items affecting
comparability, the Group 106 106 -
The Group, official
operating profit 124 206 133
Outokumpu Rossija has been transferred to Stainless and Outokumpu
Research to Technology from Other operations as of
January 1, 2004. The comparison figures have been restated.
World economic growth accelerated in the first quarter of 2004,
with China still the fastest growing region. Economic recovery
continued in the US, whereas in Europe economic growth was slower.
Demand for metals increased healthily due to faster growth of
industrial production and investments. The Groups net sales rose
by 10% compared with the previous quarter. Increased delivery
volumes and higher prices for stainless steel and fabricated
copper products boosted net sales, whereas the sale of the mining
and smelting assets to Boliden at the end of 2003 slowed down the
growth in net sales. The Groups comparable operating profit more
than quadrupled compared with the previous quarter. The biggest
contribution came from Outokumpu Stainless, which posted the best
quarterly operating profit according to its current structure. The
comparable first-quarter operating profit of Outokumpu Copper
improved compared with the previous quarter. Technologys first-
quarter operating result was a loss because typically a major part
of Technologys revenue is recognized toward the end of the year.
In January-March, the euro weakened by 3% against the US dollar
and by 6% against the British pound but strengthened by 2% against
the Swedish krona. The strengthening of the US dollar had a
positive impact on operating profit mainly through stainless steel
sales to Asian markets and global sales of radiator strip for
automotive heat exchangers. A substantial amount of Outokumpu
Stainless cost base is in the Swedish krona and the British
pound, whereas major part of the revenue is generated in euros.
Consequently, the weakening in the Swedish krona had a positive
impact on operating profit, whereas the British pound had a
negative impact.
Stainless posts record profits
Outokumpu Stainless key figures
EUR million I/03 II/03 III/03
Net sales
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
Comparable
operating profit
Coil Products 45 34 1
Special Products 0 2 (7)
North America (1) 0 4
Others 5 (1) 13
Outokumpu
Stainless total 49 35 11
Market valuation
provision in inventories 1 0 (1)
Provision for the Panteg - - -
closure
Outokumpu Stainless,
official operating profit 50 35 10
Operating capital
at the end of period 3 216 3 368 3 406
Deliveries of main
products (1 000 tonnes)
Cold rolled 228 210 208
White hot strip 83 69 72
Other 150 158 169
Total deliveries 461 437 449
Development of
market prices 1)
Stainless steel
Transaction price EUR/kg 1.77 1.78 1.75
Base price EUR/kg 1.43 1.39 1.38
Conversion margin EUR/kg 0.98 0.93 0.92
Nickel USD/lb 3.78 3.80 4.25
EUR/kg 7.77 7.36 8.33
Ferrochrome (Cr-content) USD/lb 0.36 0.41 0.46
EUR/kg 0.74 0.80 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 IV/03 2003 I/04
Net sales
Coil Products 653 2 629 851
Special Products 348 1 297 363
North America 65 252 78
Others (195) (728) (189)
Outokumpu
Stainless total 871 3 450 1 103
Comparable
operating profit
Coil Products 16 96 107
Special Products 4 (1) 7
North America 1 4 5
Others (1) 16 5
Outokumpu
Stainless total 20 115 124
Market valuation
provision in inventories 1 1 0
Provision for the Panteg (14) (14) -
closure
Outokumpu Stainless,
official operating profit 7 102 124
Operating capital
at the end of period 3 330 3 330 3 568
Deliveries of main
products (1 000 tonnes)
Cold rolled 221 867 239
White hot strip 92 316 103
Other 115 592 137
Total deliveries 428 1 775 479
Development of
market prices 1)
Stainless steel
Transaction price EUR/kg 1.87 1.80 2.12
Base price EUR/kg 1.38 1.40 1.40
Conversion margin EUR/kg 0.93 0.94 0.96
Nickel USD/lb 5.64 4.37 6.68
EUR/kg 10.46 8.52 11.79
Ferrochrome (Cr-content) USD/lb 0.49 0.43 0.60
EUR/kg 0.90 0.84 1.05
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.
Outokumpu Rossija has been transferred to Outokumpu Stainless
Coil Products division from Other operations as of January 1,
2004. The comparison figures have been restated.
Demand for stainless steel remained very healthy in Asia during
the first quarter, and a recovery in European and US demand
boosted the global markets. As a result, lead times lengthened and
prices continued to rise in all the major regions. According to
CRU, German cold rolled base price was 1% higher than in the
previous quarter and conversion margin increased by some 3%. The
demand for quarto plate remained under the normal level in Europe
because there were no clear signs of improved investment activity.
The markets for long products improved globally but no improvement
was seen in Europe. Project activity within tubular business
remained good. Demand for precision strip deteriorated slightly in
the first quarter. North American demand for tubes, long products
and quarto plate improved significantly.
Demand for nickel grew fast, some 3% in the first quarter compared
with the previous quarter. The market was undersupplied and
volatility continued. Consequently, the price of nickel remained
high and was 18% above previous quarter. Nickel inventories are
critically low, and demand continues to be boosted by growing
stainless steel production.
The ferrochrome market boomed in the first quarter of 2004. Demand
continued to grow at a rate of 7% compared with the previous
quarter. The ferrochrome market was heavily undersupplied, and
inventories fell to an all-time-low corresponding to just about
6.5 weeks consumption. Accordingly, the ferrochrome price soared,
and was 22% above the previous quarter.
Outokumpu Stainless net sales for the first quarter were EUR 1
103 million, an increase of 27% compared with the previous
quarter. This resulted mainly from increased delivery volumes and
higher transaction prices. Stainless comparable operating profit
for the first quarter, totaling EUR 124 million, was the best
since the combination of Outokumpu Steel and Avesta Sheffield in
2001. The main factors contributing to the significant profit
improvement were higher deliveries and improved average conversion
margin due to the improved product and market mix. The proportion
of less profitable semi-finished products declined and a greater
volume of higher-margin finished cold rolled products was sold to
Europe.
The expansion program at Tornio proceeded well. The new semi-cold
rolled product (2E) from the new cold rolling mill was approved as
a material for high pressure purposes according to the EU Pressure
Equipment Directive in January. The ramp-up of the underground
mine in Kemi and the increase of long product capacity in the US
continued as planned. The Panteg cold rolling facility in Britain
was closed in March as planned.
Good demand and the positive sentiment are expected to continue on
the stainless steel markets during the second quarter in spite of
increasing supply. At the end of March, the order backlog for
Outokumpu Stainless coil products was record-high. Based on the
announced price increases, base prices will rise in April and May
in Europe. In Europe and in the US, an iron scrap component will
be included in the alloy surcharge gradually starting in April to
cover the recent increase in iron scrap prices and to hedge the
increased volatility. However, visibility beyond the summer period
is more uncertain and the development of the markets depends
strongly on the overall improvement in the European and world
economy.
The Tornio ramp-up continues to be the key factor for Outokumpu
Stainless profitability. The gradual ramp-up of the new cold
rolling mill will continue to improve profitability during the
rest of 2004. The operating profit for 2004 will be significantly
better than in 2003.
A positive turnaround in Coppers business
Outokumpu Copper key figures
EUR million I/03 II/03 III/03
Net sales
Regional businesses 185 173 171
Global businesses 180 191 173
Others 44 38 60
Outokumpu Copper total 409 402 404
Comparable
operating profit
Regional businesses (4) 1 (4)
Global businesses 4 10 3
Others 2 (3) 0
Outokumpu Copper total 2 8 (1)
Market price adjustments 2 1 5
to inventories
Provision for the cartel - - -
fine (ACR tubes)
Outokumpu Copper,
official operating profit 4 9 4
Operating capital
at the end of period 947 945 915
Deliveries of fabricated
products (1 000 tonnes)
Regional businesses 59 57 54
Global businesses 47 53 48
Internal deliveries 0 0 0
Total deliveries 106 110 102
Order backlog at the
end of period
(1 000 tonnes) 67 64 51
Price development
Conversion margin
of copper products,
change on the
previous period, % 1) (4) (5) 1
Price of copper 2) USD/lb 0.75 0.74 0.80
EUR/kg 1.55 1.44 1.56
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 IV/03 2003 I/04
Net sales
Regional businesses 191 720 304
Global businesses 163 707 205
Others 57 199 (14)
Outokumpu Copper total 411 1 626 495
Comparable
operating profit
Regional businesses (3) (10) 7
Global businesses 2 19 7
Others 4 3 (3)
Outokumpu Copper total 3 12 11
Market price adjustments 5 13 7
to inventories
Provision for the cartel (18) (18) -
fine (ACR tubes)
Outokumpu Copper,
official operating profit (10) 7 18
Operating capital
at the end of period 779 779 893
Deliveries of fabricated
products (1 000 tonnes)
Regional businesses 58 228 107
Global businesses 45 193 54
Internal deliveries (1) (1) (13)
Total deliveries 102 420 148
Order backlog at the
end of period
(1 000 tonnes) 66 66 95
Price development
Conversion margin
of copper products,
change on the
previous period, % 1) (6) (15) (8)
Price of copper 2) USD/lb 0.93 0.81 1.24
EUR/kg 1.73 1.57 2.18
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.
Outokumpu Coppers reporting entities following the Boliden
transaction are Regional businesses, Global businesses and Others.
Regional businesses consists of Americas, Europe as well as Tube
and Brass divisions. Global businesses consists of 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 continued to improve
in the first quarter. Demand remained very healthy in China,
recovered strongly in Japan and improved also clearly in the US.
The growth in US demand was led by the construction, electronics
and telecommunication sectors. In Europe, the recovery in demand
was only modest. Conversion margins, however, increased more
moderately due to the difficulties of passing on the increased raw
material prices to customers. In Europe, orders for copper sheet,
strip and plate headed upward in line with increased demand from
the electronics and electrical sectors. The European construction
sector remained poor.
During the first quarter, a positive turnaround took place in
Outokumpu Coppers business. The order intake in tonnes for
fabricated copper products was 41% higher during January-March
than in the previous quarter. Of this increase, 16% is
attributable to the fabrication operations acquired from Boliden.
Net sales for the first quarter increased by 20% on the previous
quarter. The main drivers of the improved comparable operating
profit of EUR 11 million were higher delivery volumes and
conversion margins.
The integration of the fabrication operations acquired from
Boliden is in progress. The asset swap with SMI of Italy was
closed in January, and the acquisition of the remaining 50%
interest in Neumayer GmbH was finalized in February.
Demand for copper products is expected to improve further during
the rest of 2004. This, together with higher conversion margins
and internal efficiency programs, is estimated to have a
significant positive impact on Coppers comparable operating
profit in 2004.
Technology aims for improved profitability
Outokumpu Technology key figures
EUR million I/03 II/03 III/03
Net sales 89 81 98
Comparable
operating profit (9) (3) (1)
Gain on the sale of
the filter business - - -
Technology, official
operating profit (9) (3) (1)
Operating capital at
the end of period 41 46 26
Order backlog at
the end of period 359 294 410
EUR million IV/03 2003 I/04
Net sales 137 405 81
Comparable
operating profit 11 (2) (11)
Gain on the sale of
the filter business - - 18
Technology, official
operating profit 11 (2) 7
Operating capital at
the end of period 30 30 13
Order backlog at
the end of period 356 356 390
Outokumpu Research has been transferred from Other operations to
Technology as of January 1, 2004. The comparison figures have been
restated.
The market situation for Outokumpu Technology has improved, and at
the end of March the order backlog was EUR 390 million compared
with EUR 356 million at the end of 2003. The biggest orders
received during the first quarter were for a ferrochrome plant to
Hernic in South Africa and Hindustan Zincs ore beneficiation
plant for the Rampura Agucha mine expansion in India.
Technologys net sales for the first quarter amounted to EUR 81
million, a typical seasonal decrease of 41% on the previous
quarter. The comparable operating result was consequently a loss
of EUR 11 million.
Increased investment activity in the metals industry is expected
to improve Technologys business climate in 2004. The mining and
metallurgical industry is actively planning for investments and
Technology is expecting a good order intake this year. The
comparable operating result is expected to swing to profit in
2004.
Other operations
Other operations key figures
EUR million I/03 II/03 III/03
Net sales 63 65 59
Comparable
operating profit (23) (17) (15)
Gain on the
Boliden transaction - - -
Gain on the sale
of the Inmet shares - - -
Gain on the sale of
the precious
metals assets - - -
Gain on the sale of
Arctic Platinum
Partnership (49%) - - 26
Other operations,
official operating profit (23) (17) 11
Operating capital at
the end of period 204 223 264
EUR million IV/03 2003 I/04
Net sales 74 261 48
Comparable
operating profit (13) (68) (16)
Gain on the
Boliden transaction 106 106 (1)
Gain on the sale
of the Inmet shares 10 10 -
Gain on the sale of
the precious
metals assets 9 9 -
Gain on the sale of
Arctic Platinum
Partnership (49%) - 26 -
Other operations,
official operating profit 112 83 (17)
Operating capital at
the end of period 2 2 26
Outokumpu Rossija has been transferred to Stainless and Outokumpu
Research to Technology from the beginning of 2004. The comparison
figures have been restated. The Tara mine was sold to Boliden in
December 2003. Due to these changes, the comparable operating
result of 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
Vesa-Pekka Takala, Executive Vice President - 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 first quarter 2004 results will be held today, on
April 28, 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
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 April 28, 2004 at 4.30 pm. An instant
reply service of the conference call will be available until
Saturday,
May 1, 2004 in the following numbers: +44 20 8288 4459 (UK) or +1
334 323 6222 (US & Canada). The access code is 168562.
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 Groups net sales increased by 14% in the first quarter from
the corresponding period last year and stood at EUR 1 690 million
(I/2003: EUR 1 483 million). The rise was primarily attributable
to increased delivery volumes and higher prices for stainless
steel and fabricated copper products, whereas the sale of the
mining and smelting activities to Boliden reduced the growth in
sales.
Operating profit for the first quarter rose to EUR 133 million
(I/2003: EUR 28 million). The favorable development was mainly
attributable to Outokumpu Stainless. The main factors contributing
to Stainless significant profit improvement were higher
deliveries and conversion margins due to the improved product and
market mix. Good demand in Europe enabled Outokumpu to swap the
less profitable semi-product deliveries to Asia with higher-margin
cold rolled deliveries to Europe.
During January-March the euro was 17% stronger against the US
dollar and 1% weaker against the British pound compared with the
corresponding period last year. The Swedish krona was unchanged
against the euro. The Groups net financial expenses decreased to
EUR 17 million (I/2003: EUR 29 million) in the first quarter
primarily due to the low average interest rate of debt, increased
interest income and foreign exchange gains. During the first
quarter, the Group continued to hedge most of its currency fair
value risk and risk related to committed cash flows, whereas there
were no significant currency hedges for forecasted cash flows. The
Groups share of equity earnings in associated companies was EUR
15 million (I/2003: EUR 3 million negative).
The Groups profit before extraordinary items for January-March
was EUR 131 million (I/2003: EUR 4 million negative) and profit
for the period was EUR 99 million (I/2003: a loss of EUR 5
million). Earnings per share increased to EUR 0.55 (I/2003: EUR
0.03 negative). The return on capital employed rose to 12.8%
compared with 2.5% in the first quarter of 2003.
New Boliden started operations
New Boliden started its operations at the beginning of 2004.
Outokumpu subscribed for 41 223 237 shares according to its
commitment for a pro rata stake in Bolidens rights issue in March
with EUR 76 million. Outokumpus ownership in new Boliden, 123 669
712 shares, had a market value of EUR 447 million and it was
clearly above the carrying value of EUR 332 million as per March
31, 2004. Outokumpus 49% interest in new Bolidens equity
earnings amounted to EUR 15.6 million in the first quarter. At the
end of 2003 Outokumpu deferred 49% of the gross capital gain on
the Boliden transaction due to continuing ownership in new
Boliden. The deferred gain will be released in the next 20 years
period, which is the same as new Bolidens amortization period for
the consolidation goodwill. The release of deferred gain is
entered in the line equity earnings in associated companies and in
the balance sheet it has been considered in the carrying value of
Outokumpus shareholding in new Boliden. Last adjustments related
to the Boliden transaction have been settled and the final amount
for the subordinated note was fixed to EUR 166 million.
Outokumpus stake in new Boliden had thus the total carrying value
of EUR 498 million on March 31, 2004.
Capital structure unchanged
Cash flow from operating activities for January-March was EUR 170
million negative (I/2003: EUR 22 million negative). Cash flow
deteriorated despite improved profits due to substantial increase
in working capital, which soared as a result of higher business
volume and higher nickel, ferrochrome and copper prices. Net
interest-bearing debt increased by EUR 212 million from the end of
2003. Gearing ratio was 105.0% (Dec. 31, 2003: 102.8%). Thanks to
improved profitability gearing rose only marginally despite higher
working capital. The target for the gearing ratio is less than 75%
by the end of 2004. Improved profitability, tight working capital
discipline and divestitures are the key measures to achieve this.
The growing business volume, the revamp of the older melt shop and
the ramp-up of capacity at Tornio as well as higher raw material
prices will, however, put pressure on working capital management
during the year.
Capital expenditure declining
The Groups total capital expenditure for January-March amounted
to EUR 156 million (I/2003: EUR 178 million). The biggest single
capital expenditure item, EUR 76 million, was the share
subscription in the Boliden 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 - continued as planned. The Groups capital expenditure for
2004 is estimated to exceed EUR 400 million.
In February, Outokumpu and SMI (Societá Metallurgica Italiana)
finalized the agreement whereby SMI Group exchanged its
superconductors business in Italy and its air-conditioning and
refrigeration tube operations in China for Outokumpus 50%
shareholding in LOCSA - Laminados Oviedo Cordoba, S.A. of Spain,
which was earlier equally owned (50/50) by the two groups. The
remaining 50% interest in Neumayer GmbH was acquired in February.
The sale of Technologys filter business to Larox was finalized in
January. The total transaction value was EUR 31 million and
capital gain of EUR 18 million was booked on the deal.
Tornio ramp-up advancing
Outokumpus largest project, the ramp-up of the Tornio expansion
in Finland, is advancing with a 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. The expansion program, which was started in
2000, comprises construction of a new melt shop and a new cold
rolling mill (RAP5) as well as expansion of the existing hot
rolling mill. By the end of the first quarter 2004, some EUR 1
billion of the total investment had been used.
Tornio expansion
Hot rolling Cold 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) 75 50 60
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 first quarter
2004.
Production at the new melt shop commenced in August 2002 and the
modernization of the older melt shop, which has an annual capacity
of some 650 000 tonnes, will be carried out in the third quarter.
The expansion of the hot rolling capacity at Tornio to 1.65
million tonnes is progressing as planned and is due to be
commissioned at the end of the third quarter. Together with the
older cold rolling mill the combined cold rolling mill capacity at
Tornio will be 1.2 million tonnes annually once the new RAP5 line
comes fully on stream. The production palette of the RAP5 line is
flexible: the product mix can vary from finished cold rolled
products (2B) to semi-cold rolled (2E) as well as white hot strip
according to the market demand.
Today, the entire production palette of the RAP5 products is being
manufactured and all hot band material can be further processed
into final products. The quality of both 2B and 2E is very good
with excellent tolerances, and everything learned so far supports
the view that RAP5's technical and operational capability will
meet Outokumpus expectations. Cost-advantages started to show up
throughout the Tornio Works during the first quarter. RAP5's
ability to feed the older cold rolling mill with thinner and
higher quality feedstock is enhancing the competitiveness of the
existing finishing lines. Similarly, the steckel capacity has
increased, as the RAP5 is able to take over the previously hot
rolled final reduction work. All of this is creating a lower cost
base and increased yields throughout Tornio. Outokumpu is
targeting a production of about 350 000 tonnes of finished cold
rolled products (2B) with the RAP5 line per annum, the rest being
other products and feedstock for downstream operations once the
entire expanded capacity is available. The planned second-quarter
annualized production volume of finished cold rolled products from
the RAP5 line will correspond to some one-third of the ultimate
target.
Appeal concerning the grounds and amount of the cartel fine
relating to ACR tubes
The European Commission delivered its ruling in December 2003 on
Outokumpus participation in an European price fixing and market
sharing cartel regarding copper air-conditioning tubes and
Outokumpu was fined EUR 18 million for participation in the
cartel. On March 31, 2004, Outokumpu submitted an appeal to the
Court of First Instance for Europe 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 is
expected from the European Commission during 2004.
Preparations for emissions trading underway in the EU
The preparation of the emissions trading system is progressing in
the European Union. The governments have submitted their initial
proposals for national allocation plans to the European
Commission. So far the proposed allowances for industrial segments
in Finland, Sweden and Britain are in line with Outokumpus
expectations. Outokumpus sites covered by the EUs emissions
trading directive are the stainless steel production plants in
Tornio, Finland; Avesta and Degerfors in Sweden and Sheffield in
Britain.
Emissions and discharges were at normal or lower than normal level
at all Outokumpus sites during the first quarter. At Tornio, an
environmental impact assessment process has been started for the
increased production capacity. Dust emissions will be further
reduced through investments in renovating the older steel melt
shop and installing a new electrostatic precipitator for the hot
rolling mill.
There are ongoing projects at some operating and closed operations
to assess the soil and/or groundwater contamination and to plan
for remediation. Clean-up or test pumpings are in progress at five
sites in North America and at one in Europe.
No major accidents were reported during the first quarter. The
accident frequency and severity decreased slightly. A thorough
safety management assessment continued within Outokumpu Stainless.
Annual General Meeting on April 2, 2004
The Annual General Meeting (AGM) approved a dividend of EUR 0.20
per share for 2003. The AGM also authorized the Board of
Directors to increase the Companys share capital as well as
repurchase and transfer the Companys own shares. The Boards
authorizations are explained in more detail in the notes to the
interim accounts. Mr. Evert Henkes, Mr. Arto Honkaniemi, Mr. Jorma
Huuhtanen, Mr. Ole Johansson, Mr. Heimo Karinen, Mr. Juha
Rantanen, Ms. Leena Saarinen and Ms. Soili Suonoja were re-elected
as members to the Board of Directors, and Mr. Arto Vilppola was
elected a new member for the term expiring at the close of the
next AGM. The AGM also resolved to form a Shareholders Nomination
Committee to prepare proposals on the composition and remuneration
of the Board for the next AGM.
At its first meeting, the Board elected Mr. Heimo Karinen Chairman
and Mr. Juha Rantanen Vice Chairman. As a consequence of the
Annual General Meetings decision to establish a Shareholders
Nomination Committee, the Board resolved to amend the existing
Corporate Governance Policy and the Board Nomination and
Compensation Committee Rules of Procedure to the effect that the
scope of duties of the Committee no longer includes work
concerning the composition of the Board and remuneration of the
Board members. The Board appointed two permanent committees
consisting of Board members - the Board Audit Committee and the
Board Nomination and Compensation Committee. The members of the
Board Audit Committee are Mr. Juha Rantanen (Chairman), Mr. Jorma
Huuhtanen and Ms. Leena Saarinen. The members of the Board
Nomination and Compensation Committee are Mr. Heimo Karinen
(Chairman), Mr. Evert Henkes, Mr. Arto Honkaniemi and Mr. Ole
Johansson.
PricewaterhouseCoopers Oy, Authorized Public Accountants, was re-
appointed the Companys Auditor, with Mr. Markku Marjomaa as the
audit partner in charge.
Good earnings expected also for the second quarter
World economic prospects are favorable and global growth is
estimated to continue at a rate of 3-4% for the rest of 2004. In
spite of some factors of uncertainty, the economic climate is at
its highest level since early 2000. Of the three major regions -
the US, Europe and Asia - only Europe is growing slowly, currently
by about 1%. In Asia, the huge growth rate of China has activated
the rest of the Asian economies, and for example, in Japan
economic performance is the highest level in over a decade. In the
US, the forecasting indicators have mainly been positive and the
US growth is generally predicted to continue at a rate of over 4%
in 2004. In Europe the recovery has been slow, resulting partly
from the strong euro. Most indicators suggest that the European
economies will recover but the upswing is forecast to be only
moderate.
Demand growth for stainless steel is expected to continue,
although visibility over the summer is more uncertain and
sustainable improvement in the stainless steel market is pending
an improvement of the world economy. 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 contract prices have
continued to increase clearly for the second quarter of 2004.
The commissioning of the RAP5 cold rolling mill at Tornio will
have a positive effect on profitability in 2004 because the
proportion of cold rolled products will increase. Successful
reconditioning of the older melt shop and the capacity increase in
the hot rolling mill will also contribute to improved
profitability toward the end of the year. The full benefit of the
investments will be achieved once the full capacity is available
in early 2005. Outokumpu Stainless operating profit is expected
to be significantly better in 2004 compared with 2003.
The demand for fabricated copper products is expected to
strengthen further in 2004. Based on improving market prospects
and rising productivity, the comparable operating profit of
Outokumpu Copper in 2004 is estimated to improve clearly from
2003. Furthermore, the operating profit of Outokumpu Technology in
2004 is expected to improve from 2003 thanks to a good order
intake and better market conditions.
The Groups first-quarter profit exceeded the whole year 2003
profit. Judging by the current market prospects of stainless
steel, copper products and technology sales, the Groups
comparable operating profit for the second quarter of 2004 is
expected to be at the first-quarter level, whereas the third-
quarter is likely to be seasonally lower.
Espoo, April 28, 2004
Board of Directors
CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
INCOME STATEMENT Jan-Mar Jan-Mar Jan-Dec
EUR million 2004 2003 2003
Net sales 1 690 1 483 5 921
Costs and expenses (1 589) (1 455) (5 836)
Unusual items 17 0 119
Other operating
income and expenses 13 1 6
Amortization of positive
and negative goodwill 2 (1) (4)
Operating profit 133 28 206
Equity earnings in
associated companies 15 (3) (15)
Financial income
and expenses
Net interest expenses (24) (25) (98)
Exchange gains and losses 6 (3) (0)
Other financial
income and expenses 1 (1) 7
Profit before
extraordinary items 131 (4) 100
Extraordinary items - - -
Income taxes (30) (1) (8)
Minority interest
in earnings (2) 0 0
Profit for the
financial period 99 (5) 92
BALANCE SHEET Mar 31 Mar 31 Dec 31
EUR million 2004 2003 2003
Fixed assets and
other long-term investments
Intangible assets 386 455 380
Property, plant and equipment 2 687 3 067 2 665
Long-term financial assets
Interest-bearing 621 153 480
Non interest-bearing 48 92 71
3 742 3 767 3 596
Current assets
Inventories 1 414 1 261 1 181
Receivables
Interest-bearing 32 41 74
Non interest-bearing 1 320 1 174 1 056
Marketable securities 24 10 20
Cash and bank 159 166 210
2 949 2 652 2 541
Total assets 6 691 6 419 6 137
Shareholders equity 2 082 1 863 1 924
Minority interest 37 40 34
Long-term liabilities
Interest-bearing 1 767 1 549 1 782
Non interest-bearing 391 455 384
2 158 2 004 2 166
Current liabilities
Interest-bearing 1 294 1 444 1 016
Non interest-bearing 1 120 1 068 997
2 414 2 512 2 013
Total shareholders
equity and liabilities 6 691 6 419 6 137
STATEMENT OF CASH FLOWS Jan-Mar Jan-Mar Jan-Dec
EUR million 2004 2003 2003
Income financing 102 87 260
Increase in
working capital (290) (108) (13)
Other adjustments 18 (1) (33)
Cash (used in)
provided by
operating activities (170) (22) 214
Capital expenditure (156) (178) (622)
Capital expenditure
financed with own shares 3 - 53
Proceeds from
asset disposal 18 - 429
Other investing
activities (2) (14) (37)
Cash flow before
financing activities (307) (214) 37
Cash provided by
(used in)
financing activities 286 176 (29)
Adjustments (26) (12) (3)
(Decrease) increase
in cash and
marketable securities (47) (50) 5
Jan-Mar Jan-Mar Jan-Dec
GROUP KEY FIGURES 2004 2003 2003
Operating profit
margin, % 7.9 1.9 3.5
Return on
capital employed, % 12.8 2.5 5.0
Return on
shareholders' equity, % 19.8 neg. 4.7
Capital employed
at end of period,
EUR million 4 344 4 528 3 972
Net interest-bearing
debt at end of period,
EUR million 2 225 2 624 2 013
Equity-to-assets
ratio at end of
period, % 1) 32.1 29.9 32.3
Debt-to-equity
ratio at end
of period, % 105.0 137.8 102.8
Earnings per share
(excluding extraordinary
items), EUR 0.55 (0.03) 0.54
Earnings per
share, EUR 0.55 (0.03) 0.54
Average number of
shares outstanding,
in thousands 2) 178 081 171 375 171 623
Fully diluted
earnings per share
(excl. extraordinary
items), EUR 0.55 (0.03) 0.54
Fully diluted
average number
of shares,
in thousands 2) 178 516 172 189 172 566
Shareholders' equity
per share at
end of period, EUR 11.53 10.86 10.84
Number of shares
outstanding at
end of period,
in thousands 2) 178 914 171 534 177 451
Capital expenditure,
EUR million 156 178 622
Depreciation,
EUR million 3) 60 75 307
Average personnel
for the period 19 433 21 242 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 179 412 424 and the
share capital amounted to EUR 305.0 million on March 31, 2004.
Outokumpu Oyj held a total of 498 533 treasury shares on March 31,
2004 with total account equivalent value of EUR 0.8 million. This
equaled to 0.3% of the share capital and the total voting rights
of the Company on March 31, 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 were registered with the Finnish
trade register on April 7, 2004. The registered share capital of
Outokumpu Oyj is therefore EUR 308.1 million and the number of
shares issued 181 250 555.
During the last conversion period, from March 17 to March 31,
2004, 1 647 423 shares were subscribed for under the option
warrants and convertible bonds were converted into 190 708
Outokumpu Oyj shares from March 15 to April 5, 2004. The shares
subscribed earlier in 2004 with the option warrants and
convertible bonds that traded as a separate class (OUT1VN0104),
due to the fact that those shares did not entitle holders thereof
to dividends from 2003, have commenced trading together with the
old shares as of April 8, 2004.
Altogether 2 836 068 Outokumpu Oyj shares were subscribed for
under the 1998 option warrants that Outokumpu Oyj issued in March
1998 during the subscription period from May 2, 2001 to March 31,
2004. All 2 584 option warrants were exercised by the close of the
subscription period. Bonds relating to the convertible bond loan
of EUR 18 180 000, which was issued in April 1999 for the Groups
personnel were converted into 1 797 919 shares in Outokumpu Oyj
during the subscription period from April 9, 2001 to April 5,
2004. EUR 2 092 000 of the total amount of the convertible bond
loan was prepaid in advance and repayment of non-converted bonds
of EUR 363 000 took place 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, e.g. 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 the first quarter 2004, the Board of Directors utilized
twice 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 April 28, 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 April 28, 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 April 28, 2004, the Board of Directors
had not used this authorization.
Jan-Mar Jan-Mar Jan-Dec
EUR million 2004 2003 2003
Unusual items
Gain on the sale
of the filter business 18 - -
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
Provision for the
Panteg closure - - (14)
Provision for the
cartel fine (ACR tubes) - - (18)
17 - 119
Income taxes
Current taxes (12) (4) (18)
Deferred taxes (18) 3 10
(30) (1) (8)
Commitments Mar 31 Mar 31 Dec 31
EUR million 2004 2003 2003
Mortgages and pledges
To secure borrowings
of Group companies 149 165 144
Guarantees
On behalf of
associated companies 2 7 6
On behalf of other parties 45 35 52
47 42 58
Minimum future lease
payments on operating leases 154 128 160
Open derivative instruments Carrying Fair value
value
Mar 31 Mar 31
EUR million 2004 2004
Financial derivatives
Forward foreign
exchange contracts 16 16
Currency options
Purchased 1 1
Written (1) (1)
Currency swaps (2) (2)
Interest rate swaps (2) (2)
Metal derivatives 1)
Forward and futures
copper contracts 1 1
Forward and futures
nickel contracts 0 2
Nickel options
Purchased 0 0
Written 0 0
Forward and futures
zinc contracts 0 0
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 - 8
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
Mar 31 Dec 31
EUR million 2004 2003
Financial derivatives
Forward foreign
exchange contracts 1 690 1 620
Currency options
Purchased 38 280
Written 39 270
Currency swaps 20 40
Interest rate swaps 175 210
Metal derivatives 1)
Forward and futures
copper contracts 108 200 101 400
Forward and futures
nickel contracts 2 350 4 300
Nickel options
Purchased 960 720
Written 960 -
Forward and futures
zinc contracts 135 100 299 700
Forward and futures
aluminium contracts 2 250 2 800
Forward and futures
gold contracts 4 480 146 800
Forward and futures
silver contracts 172 400 886 800
Electricity derivatives 2)
Traded electricity
forwards and futures 0.0 0.0
Other financial contracts 3.0 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
Net sales
Outokumpu Stainless
Coil Products 653 851
Special Products 348 363
North America 65 78
Others (195) (189)
Outokumpu Stainless total 871 1 103
Outokumpu Copper
Regional businesses 191 304
Global businesses 163 205
Others 57 (14)
Outokumpu Copper total 411 495
Outokumpu Technology 137 81
Zinc 110 -
Other operations 74 48
Intra-group sales (68) (37)
The Group 1 535 1 690
Operating profit
Outokumpu Stainless
Coil Products 2 107
Special Products 4 7
North America 1 5
Others 0 5
Outokumpu Stainless total 7 124
Outokumpu Copper
Regional businesses (2) 10
Global businesses 6 11
Others (14) (3)
Outokumpu Copper total (10) 18
Outokumpu Technology 11 7
Zinc 5 -
Other operations 112 (17)
Intra-group items (1) 1
The Group 124 133
Equity earnings in
associated companies (5) 15
Financial income
and expenses (18) (17)
Profit (loss) before
extraordinary items 101 131
Income taxes 7 (30)
Minority interest
in earnings 0 (2)
Profit (loss) for
the period 108 99
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
IV/03 I/04
Operating profit
margin, % 8.1 7.9
Return on
capital employed, % 11.5 12.8
Return on
shareholders' equity, % 22.9 19.8
Capital employed
at end of period,
EUR million 3 972 4 344
Net interest-bearing
debt at end of
period, EUR million 2 013 2 225
Equity-to-assets
ratio at end of
period, % 1) 32.3 32.1
Debt-to-equity ratio
at end of period, % 102.8 105.0
Earnings per share
(excluding extraordinary
items), EUR 0.63 0.55
Earnings per share, EUR 0.63 0.55
Average number of
shares outstanding,
in thousands 2) 172 138 178 081
Shareholders' equity
per share at
end of period, EUR 10.84 11.53
Number of shares
outstanding at
end of period,
in thousands 2) 177 451 178 914
Capital expenditure,
EUR million 204 156
Depreciation,
EUR million 3) 82 60
Average personnel
for the period 21 037 19 433
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.
