OUTOKUMPU?S THIRD-QUARTER 2006 INTERIM REPORT - SOARING BASE PRICES AND NICKEL RELATED INVENTORY
OUTOKUMPU OYJ STOCK EXCHANGE RELEASE OCTOBER 23, 2006 AT 1.00 PM
OUTOKUMPUS THIRD-QUARTER 2006 INTERIM REPORT - SOARING BASE PRICES
AND NICKEL RELATED INVENTORY GAINS BOOSTED PROFITS
Outokumpus sales for July-September 2006 increased to EUR 1 447
million (II/2006: EUR 1 392 million). Operating profit improved
substantially to EUR 231 million (II/2006: EUR 149 million). Net
profit for the period was EUR 172 million (II/2006: EUR 133 million)
and earnings per share EUR 0.94. Working capital increased by EUR
312 million as a result of higher nickel prices and consequently net
cash generated from the Groups operating activities was EUR 24
million negative. Following the sale of Outokumpu Technologys
shares in early October, Outokumpu Oyjs holding in the company was
reduced to 12%. Outokumpu Technology has in this interim report been
classified as a discontinued operation and comparative income
statement figures have been restated. Proceeds and capital gain from
the sale will be recorded in the Outokumpu Groups fourth quarter
results.
Group key figures July-Sept April- July-Sept Jan-Dec
June
2006 2006 2005 2005
Sales EUR million 1 447 1 392 1 063 5 016
Operating profit EUR million 231 149 (26) 57
Non-recurring items
in operating profit EUR million - - 10 (129)
Profit before taxes EUR million 214 141 (45) (8)
Net profit/(loss)
for the period
from continuing EUR million 166 112 (36) (24)
operations
Net profit/(loss)
for the period EUR million 172 133 (36) (363)
Earnings per share
from continuing EUR 0.91 0.62 (0.20) (0.14)
operations
Earnings per share EUR 0.94 0.73 (0.20) (2.01)
Net cash generated
from operating EUR million (24) 33 132 459
activities
Net interest-bearing
debt
at end of period EUR million 1 560 1 509 1 744 1 537
Debt-to-equity ratio
at end of period % 66.4 69.5 77.9 74.5
Return on capital % 24.3 16.5 (2.6) 1.3
employed
Capital expenditure,
continuing operations EUR million 45 34 37 164
Stainless steel 1 000 393 467 333 1 647
deliveries tonnes
Average personnel for
the period,
continuing operations 8 665 8 822 9 877 9 579
Following the sale of Outokumpu Technology shares comparative
figures have been restated.
THE THIRD QUARTER IN BRIEF
- Strong demand for stainless steel continued in Europe despite the
holiday season. Base prices rose primarily because of good end-user
demand. According to CRU, the German base price for cold rolled 304
sheet rose by 205 EUR/tonne from June and stood at 1 640 EUR/tonne
at the end of September.
- The price of nickel, the most expensive alloying material in
stainless steel, rose substantially during the third quarter and
reached a new all time high closing quotation at 34 750 USD/tonne in
late August. The average price during the quarter was 29 154
USD/tonne, up 46% from the preceding quarter.
- Outokumpus annual maintenance breaks in August and September were
completed as planned. Total stainless steel deliveries of 393 000
tonnes were 16% lower than during the second quarter. Available
capacity has been fully utilized and order backlogs of the units are
high.
- Operating profit increased substantially from the previous quarter
to EUR 231 million. The improvement in profit resulted from higher
than expected base price increases achieved and even more from
nickel related inventory gains. The performance improvement programs
continued to progress well. Return on capital employed was 24.3%.
- The Groups net cash generated from operating activities was EUR
24 million negative. EUR 312 million was tied up in working capital
primarily because of high raw material prices and partly because of
the slight increase in inventory volumes due to maintenance breaks.
However, due to the good result gearing improved further to 66.4%.
- The offering of shares in Outokumpu Technology commenced on
September 26, 2006 and ended on October 9, 2006. As a result of the
offering Outokumpu Oyj sold 36 960 001 shares and Outokumpu Oyjs
remaining holding in Outokumpu Technology decreased to 12%. In this
interim report Outokumpu Technology has therefore been classified as
a discontinued operation and reported separately from the continuing
operations. Net proceeds from the sale amounted to some EUR 450
million and capital gain from the sale to some EUR 330 million. The
transaction will be recorded in the Groups fourth quarter results.
SHORT-TERM OUTLOOK
Demand for stainless steel continues strong. The Groups order
backlog is firm and Outokumpu is currently selling for deliveries in
February. Good demand and supply constraints have been the main
drivers for base price increases for the fourth quarter deliveries.
For example in Germany, Outokumpus base price for cold rolled 304
sheet for December is 200-250 EUR/tonne higher than it was in
September. Further small base price increases have been achieved
also for January and February deliveries in Europe. The record high
nickel prices will increase alloy surcharges substantially during
the coming months. This will result in the highest ever stainless
steel transaction prices, which may cause uncertainty in the market.
All of Outokumpus mills continue to run at full load. With higher
deliveries and base prices Outokumpus operational profitability for
the fourth quarter is expected to clearly exceed that achieved in
the third quarter. In addition to improving operational result,
further inventory gains are estimated to be recognized in the fourth
quarter as a result of rapid rise in nickel prices in August and
September.
CEO Juha Rantanen:
"I am very pleased with our performance in the third quarter.
Stainless markets are strong and our internal improvement
initiatives are starting to deliver their benefits. Also an
important milestone was achieved with the successful listing of
Outokumpu Technology. That frees both managerial and financial
resources to develop our core stainless business further."
MANAGEMENT ANALYSIS OF THE THIRD-QUARTER OPERATING RESULT
Group key figures
EUR million I/05 II/05 III/05 IV/05 2005 I/06 II/06 III/06
Sales
General Stainless 1 286 1 158 813 816 4 073 1 013 1 066 1 130
Specialty 785 819 584 552 2 739 650 638 614
Stainless
Other operations 55 71 70 76 272 87 93 96
Intra-group sales (732) (605) (404) (328) (2 068) (342) (405) (394)
The Group 1 394 1 442 1 063 1 117 5 016 1 408 1 392 1 447
Operating profit
General Stainless 71 93 (55) (170) (62) 43 91 166
Specialty 55 65 14 (23) 110 22 65 81
Stainless
Other operations 9 (3) 10 (8) 8 2 (8) (13)
Intra-group items (6) 3 5 (1) 1 (0) 1 (3)
The Group 129 157 (26) (202) 57 67 149 231
Stainless steel
deliveries
1 000 tonnes I/05 II/05 III/05 IV/05 2005 I/06 II/06 III/06
Cold rolled 233 226 195 212 867 286 239 200
White hot strip 135 126 61 68 391 104 103 80
Other 117 106 77 89 390 121 125 113
Total deliveries 485 459 333 370 1 647 510 467 393
Market prices and exchange
rates
I/05 II/05 III/05 IV/05 2005 I/06 II/06 III/06
Market prices 1)
Stainless steel
Base price EUR/t 1 332 1 217 1 113 1 035 1 174 1 127 1 342 1 572
Alloy surcharge EUR/t 875 956 1 012 923 942 844 1 020 1 437
Transaction EUR/t 2 207 2 173 2 125 1 958 2 116 1 971 2 362 3 009
price
Nickel USD/t 15 348 16 411 14 567 12 649 14 744 14 810 19 925 29 154
EUR/t 11 704 13 031 11 941 10 644 11 851 12 318 15 836 22 878
Ferrochrome
(Cr-content) USD/lb 0.78 0.78 0.73 0.68 0.74 0.63 0.70 0.75
EUR/kg 1.31 1.37 1.32 1.26 1.32 1.16 1.23 1.30
Molybdenum USD/lb 32.02 35.62 31.74 30.66 32.51 23.38 25.01 26.47
EUR/kg 53.84 62.35 57.37 56.89 57.61 42.86 43.82 45.79
Steel scrap USD/t 221 193 208 193 204 200 238 243
EUR/t 169 153 170 162 164 167 189 191
Exchange rates
EUR/USD 1.311 1.259 1.220 1.188 1.244 1.202 1.258 1.274
EUR/SEK 9.074 9.208 9.366 9.473 9.282 9.352 9.298 9.230
EUR/GBP 0.694 0.679 0.683 0.680 0.684 0.686 0.688 0.680
1) Sources of market prices:
Stainless steel: CRU - German base price, alloy surcharge and
transaction price (2 mm cold rolled 304 sheet), estimates for
deliveries during the period
Nickel: London Metal Exchange (LME) cash quotation
Ferrochrome: Metal Bulletin - Ferrochrome lumpy chrome charge, basis
52% chrome
Molybdenum: Metal Bulletin - Molybdenum oxide - Europe
Steel Scrap: Metal Bulletin - Steel scrap HMS 1&2 fob Rotterdam
Strong demand in the stainless steel market continued
Favorable development in global stainless steel markets continued in
the third quarter. Demand remained at a high level. It seems that
customer inventories have increased only moderately closer to normal
levels. Mainly due to the holiday season in Europe, global apparent
consumption of stainless steel flat products decreased by some 3%
from the previous quarter, but was 17% higher compared to the third
quarter in 2005. The supply of stainless steel in Europe continued
to be affected by production constraints and base prices rose
strongly. According to CRU, the base price for 304 cold rolled
stainless steel sheet in Germany rose by a total of 205 EUR/tonne
during the period. The average German base price was 1 572
EUR/tonne, up by 17% from the previous quarter.
Prices for the main alloying materials used in manufacturing
stainless steel; nickel, ferrochrome and molybdenum continued to be
high. The price of nickel reached another new record and the average
price was 29 154 USD/tonne, an increase of 46% from the previous
quarter. Nickel prices have remained above 30 000 USD/tonne in
October. Markets for ferrochrome continued to be undersupplied. The
average price of ferrochrome was 0.75 USD/lb, up by 7% from the
previous quarter. The price of molybdenum rose by 6% from the
previous quarter to 26.47 USD/lb. The price of stainless steel scrap
increased by 2%. The alloy surcharge has increased month-on-month
throughout 2006. According to CRU, the alloy surcharge for 304 cold
rolled stainless steel sheet in Germany was 1 620 EUR/tonne in
September and it is expected to exceed 1 900 EUR/tonne in October
and 2 000 EUR/tonne in November. This together with soaring base
prices will result in the highest ever stainless steel transaction
prices during the fourth quarter.
Performance improvement programs progressing well
A total of sixteen plants are currently involved in the production
excellence program: five are in the preparation phase, eight are in
the pilot phase and all three melt shops are in the expansion phase.
Two more plants will join the program this year. The results
achieved are encouraging and units have already recognized and
implemented a multitude of improvement actions in the production
processes. In the commercial excellence program a common pricing
methodology and tools are being developed. Training of key account
managers continues. The combined benefits from these long-term
operational enhancement programs will be achieved in future years
and are expected to total EUR 40 million in 2007, EUR 80 million in
2008 and EUR 160 million on an annual basis thereafter.
The annual profit improvement resulting from the closure of Coil
Products Sheffield, which was completed at the end of April, will be
some EUR 50 million.
The fixed cost reduction program progresses according to plan with
the annual savings target of EUR 100 million. The reduced fixed cost
running rate has started to materialize during the third quarter and
full effect will materialize in 2007.
Operating profit boosted
The Groups sales in the review period totaled EUR 1 447 million, 4%
higher than in the previous quarter due to higher transaction
prices. Order intake for all of the Groups units continued strong.
The annual maintenance breaks were successfully completed in August
and September and reduced total stainless steel deliveries
deliveries to 393 000 tonnes, 16% lower than in the second quarter.
Operating profit increased by 55% to EUR 231 million. Solid rise in
base prices and even more so substantial nickel related inventory
gains contributed to the significant profit improvement in spite of
the lower deliveries. These inventory gains resulted from timing
differences between the alloy surcharge and inventory turnover
especially in Specialty Stainless. In principle, the alloy surcharge
mechanism offers the stainless steel producer a hedge tool against
the fluctuations in the prices of alloying materials. Strong and
rapid changes in raw material prices may, however, cause substantial
inventory gains or losses even if timing differences are small.
General Stainless profiting from price increases
General Stainless
EUR million I/05 II/05 III/05 IV/05 2005 I/06 II/06 III/06
Sales 1 286 1 158 813 816 4 073 1 013 1 066 1 130
of which Tornio 699 657 476 467 2 299 652 740 781
Works
Operating profit 71 93 (55) (170) (62) 43 91 166
of which Tornio 59 74 (36) (48) 49 37 70 120
Works
Operating capital
at the end of 2 920 2 901 2 820 2 484 2 484 2 397 2 404 2 602
period
Deliveries of
main products
(1 000 tonnes)
Cold rolled 210 183 162 179 734 246 206 172
White hot strip 102 89 41 53 284 74 85 62
Other 238 192 105 97 631 128 144 126
Total deliveries
of the division 550 463 307 329 1 649 448 434 360
Sales by General Stainless totaled EUR 1 130 million, an increase of
6% compared to the previous quarter. Higher transaction prices
boosted sales while deliveries were 17% lower than in the previous
quarter due to annual maintenance breaks and the holiday season.
Operating profit increased to
EUR 166 million. The strong result improvement is attributable to
higher stainless steel base prices. In General Stainless, inventory
turnover is close to the determination period used for the alloy
surcharge and, therefore, inventory gains due to the timing
differences between the alloy surcharge and inventory turnover were
quite moderate.
Tornio Works posted an excellent operating profit of EUR 120 million
for the review period. Annual maintenance breaks in August-September
were completed as planned.
Specialty Stainless support from inventory gains
Specialty Stainless
EUR million I/05 II/05 III/05 IV/05 2005 I/06 II/06 III/06
Sales 785 819 584 552 2 739 650 638 614
Operating profit 55 65 14 (23) 110 22 65 81
Operating capital
at the end of 1 248 1 358 1 310 1 161 1 161 1 173 1 240 1 350
period
Deliveries of
main products
(1 000 tonnes)
Cold rolled 44 54 43 47 188 56 54 39
White hot strip 57 43 30 30 160 49 41 33
Other 148 148 89 71 455 76 79 67
Total deliveries
of the division 249 245 162 148 803 182 173 139
Sales by Specialty Stainless were slightly lower than in the
previous quarter and totaled EUR 614 million. Deliveries
were 20% lower than in the second quarter. Operating profit increased
by 25% and totaled EUR 81 million. The main contributors to the improved
profit were higher prices and inventory gains. The prices of project
related and special products are more stable than those of standard
products. Therefore, profit improvement following base price increases
materializes in Specialty Stainless slightly slower than in General
Stainless. In Specialty Stainless, the inventory turnover is slower
than in big volume standard products due to the more specialised
production with longer lead-times. Consequently, Specialty
Stainless units are more sensitive to inventory gains and losses.
The EUR 53 million investment in the Thin Strip cold rolling mill in
Kloster, Sweden is coming close to completion and production will
commence during the first quarter of 2007.
Other operations
Other operations
EUR million I/05 II/05 III/05 IV/05 2005 I/06 II/06 III/06
Sales 55 71 70 76 272 87 93 96
Operating profit 9 (3) 10 (8) 8 2 (8) (13)
Operating capital
at the end of 34 43 37 139 139 134 240 188
period
Other operations consists of activities outside the Groups primary
businesses as well as industrial holdings. Business development
costs and expenses associated with Group functions that are not
allocated to the businesses are also reported under Other
operations.
The attachments present the interim review by the Board of
Directors, the accounts and notes to the interim accounts.
This interim report is unaudited.
For further information, please contact:
Kari Lassila, SVP - IR and Communications, tel. +358 9 421 2555
kari.lassila@outokumpu.com
Eero Mustala, SVP - Corporate Communications, tel. +358 9 421 2435
eero.mustala@outokumpu.com
News conference and live webcast today at 3.00 pm
A combined news conference, conference call and live webcast
concerning the third-quarter interim report will be held on October
23, 2006 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 Mirror Room,
Pohjoisesplanadi 29, 00100 Helsinki, Finland.
To participate via a conference call, please dial in 5-10 minutes
before the beginning of the event: +44 20 7162 0125 (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. The stock exchange release and presentation
material will be available before the news conference at
www.outokumpu.com -> Investors -> Downloads.
An on-demand webcast of the news conference will be available at
www.outokumpu.com as of October 23, 2006 at around 6.00 pm. An
instant replay service of the conference call will be available
until Thursday, October 26, 2006 on the following numbers: +44 20
7031 4064 (UK replay number) or +1 954 334 0342
(US & Canada replay number). The access code is 722 974.
OUTOKUMPU OYJ
Corporate Management
Ingela Ulfves
Vice President - Investor Relations
tel. + 358 9 421 2438, mobile +358 40 515 1531, fax +358 9 421 2125
e-mail: ingela.ulfves@outokumpu.com
www.outokumpu.com
INTERIM REVIEW BY THE BOARD OF DIRECTORS - JANUARY-SEPTEMBER 2006
Strong demand for stainless steel
During January-September, global apparent consumption of stainless
steel was 7% higher than in the comparable period in the previous
year. Demand for stainless steel has been strong and both base
prices and transaction prices have risen month-on-month. According
to CRU, the average German base price for 304 2mm cold rolled sheet
was 1 347 EUR/tonne, 10% higher than in January-September 2005. At
the end of September 2006, the base price was 1 640 EUR/tonne, an
increase of 59% compared to 1 030 EUR/tonne at the end of 2005. Also
raw material prices have increased strongly during 2006. The average
nickel price in January-September was 21 296 USD/tonne, 38% higher
than in 2005. In mid-August the price of nickel exceeded 30 000
USD/tonne and stood at 31 500 USD/tonne at the end of September.
Solid improvement in financial result
The Groups sales in January-September totaled EUR 4 247 million
(I-III/2005: EUR 3 899 million), an increase of 9%. Stainless steel
deliveries increased by 7% to 1 371 000 tonnes.
The Groups operating profit rose to EUR 446 million (I-III/2005:
EUR 260 million). In the comparison period in 2005, operating profit
included a non-recurring gain of EUR 35 million from the sale of
Boliden shares. Increased deliveries and higher base prices together
with substantial inventory gains due to timing differences between
the alloy surcharge and inventory turnover were the main
contributors to the significant improvement in profit. The Groups
performance improvement programs continued to progress according to
plan.
Net financial expenses totaled EUR 35 million (I-III/2005: EUR 54
million) and included net market price gains of EUR 13 million
(I-III/2005: EUR 3 million losses). Net profit for the period from
continuing operations totaled EUR 320 million (I-III/2005: EUR 160
million) and net profit from discontinued operations totaled EUR 40
million (I-III/2005: EUR 343 million negative). Earnings per share
from continuing operations rose to EUR 1.76 and from discontinued
operations to EUR 0.22. Return on capital employed improved to 15.8%
(I-III/2005: 7.8%).
Capital expenditure and cash flow
Capital expenditure for January-September totaled EUR 113 million
(I-III/2005: EUR 112 million). The Group's capital expenditure limit
for the 2006-2007 period has been set at an annual level of EUR 175
million.
Net cash generated from operating activities totaled EUR 47 million
(I-III/2005: EUR 253 million). It is estimated that the Group has
excess working capital of some EUR 400 million as a result of the
extremely high nickel prices compared to 2005 year-end prices.
Outokumpu strives to keep inventory volumes low, especially when raw
material prices are high and volatile.
Net interest-bearing debt totaled EUR 1 560 (Dec. 31, 2005:
EUR 1 537 million). Gearing has improved throughout 2006 and stood at
66.4% at the end of September (Dec. 31, 2005: 74.5%). Net assets in
discontinued operations are classified as interest-bearing assets in
the calculation of gearing.
Sale of Outokumpu Technology shares
In June 2006, the Board of Directors of Outokumpu Oyj decided to
start evaluating the possibility of listing Outokumpu Technology Oyj
on the Helsinki Stock Exchange. On September 25, 2006, the Board
decided to commence the offering of shares in Outokumpu Technology.
The offering structure was a sale of shares and the offering
commenced on September 26, 2006 and ended on October 9, 2006. As a
result of the offering, Outokumpu Oyj sold 36 960 001 shares at EUR
12.50 per share and Outokumpu Oyjs remaining holding in Outokumpu
Technology is 12%. As a consequence, Outokumpu Technology has been
classified as a discontinued operation in this interim report and
reported separately from the Groups continuing operations. Net
proceeds from the sale amounted to some EUR 450 million and the
capital gain totaled some EUR 330 million. The sale of shares and
fair valuation of the remaining stake in Outokumpu Technology will
increase the total equity and reduce the net interest-bearing debt
of Outokumpu Group by some EUR 380 million. The increase in
Outokumpus total equity consists of the capital gain resulting from
the sale of the shares and fair valuation of the remaining shares,
recognised directly in the total equity. The transaction will be
recorded in the Group´s fourth quarter results.
Outokumpu Technology Oyj is a global leader in designing, developing
and supplying tailored plants, processes and equipment for the
minerals and metals processing industries worldwide. Outokumpu
Technology has 1 800 employees and generated sales of EUR 556
million in 2005. The net assets related to Outokumpu Technology in
the Group´s balance sheet at the end of September totaled
EUR 84 million.
Other discontinued operations - Outokumpu Copper Tube and Brass
The profitability improvement program in Outokumpu Copper Tube and
Brass continues. In January-September 2006, the copper tube and
brass business posted an operating profit of EUR 33 million, this figure
includes the gain from the sale of Outokumpu Copper MKM Ltd and
inventory gains. Operating capital at the end of September
was EUR 174 million.
The fabricated copper products business that was sold in 2005
comprised among others Outokumpu Copper (USA), Inc. The company has
been served with several complaints in cases filed in federal
district courts and state courts in US by various plaintiffs. The
complaints allege claims and damages under US antitrust laws and
purport to be class actions on behalf of all direct and indirect
purchasers of copper plumbing tubes and ACR tubes in the US.
Outokumpu believes that the allegations in these cases are
groundless and will defend itself in any such proceeding. In
connection with the transaction to sell the fabricated copper
products business to Nordic Capital, Outokumpu has agreed to
indemnify and hold harmless Nordic Capital with respect to these
class actions.
Environment, health and safety
Actual 2005 carbon dioxide emissions have been reported and
pertinent allowances submitted to the local authorities. In 2005,
the plants in Finland and Sweden had surplus allowances due to lower
production volumes and better than estimated energy efficiency.
During January-September 2006 Outokumpu has sold 285 000 tonnes of
excess allowances and the proceeds from the sale totaled EUR 5
million. New allowances for 2006 were distributed in February.
Preparations to apply for allowances in the 2008-2012 Kyoto-period
are underway.
Emissions and discharges were within permitted limits at the
majority of the Groups sites.
The lost time injury frequency rate (i.e lost time accidents per
million working hours) in the Groups continuing operations was 16
(I-III/2005:18). The Groups target is less than 14 lost time
accidents per million working hours in 2006 and less than five in
2009. No major accidents were reported during January-September
2006. The Groups annual safety seminar was held in September.
Avesta Works received the Outokumpu Safety Award 2006. This annual
award is given to one of Outokumpus units as a recognition for the
systematic development of safety management and for good safety
performance.
Personnel
During January-September 2006 the Groups continuing operations
employed an average of 8 620 people (I-III/2005: 9 785) and
there were 8 215 employees at the end of September
(Dec. 31, 2005: 8 963).
Annual General Meeting 2006
The Annual General Meeting (AGM) of March 30, 2006 approved a
dividend of EUR 0.45 per share for 2005. Dividends totaling EUR 81
million were paid on April 11, 2006.
The AGM authorized the Board of Directors for one year to increase
the Companys share capital with a total maximum of EUR 30 800 000
by issuing new shares or convertible bonds. Accordingly, an
aggregate maximum of 18 117 647 shares, having the account
equivalent value of EUR 1.70 each, may be issued. The AGM authorized
the Board of Directors for one year to repurchase and transfer the
Companys own shares. The maximum number of shares to be repurchased
and transferred is
18 000 000. The number of own shares in the Companys possession may
not exceed 10% of the total amount of the Companys shares. By
October 23, 2006, the authorizations had not been exercised.
The AGM decided on the number of the Board members, including the
Chairman and Vice Chairman, to be eight (previously ten). For the
term expiring at the close of the following AGM, Mr. Evert Henkes,
Mr. Jukka Härmälä, Mr. Ole Johansson, Mr. Juha Lohiniva, Ms. Anna
Nilsson-Ehle, Ms. Leena Saarinen and Ms. Soili Suonoja were re-
elected as members of the Board of Directors, and Mr. Taisto Turunen
was elected as a new member. Mr. Jukka Härmälä was elected Chairman
of the Board of Directors and Mr. Ole Johansson Vice Chairman. The
AGM also resolved to form a shareholders nomination committee to
prepare proposals on the composition and remuneration of the Board
of Directors for presentation to the next AGM.
KPMG Oy Ab, Authorized Public Accountants, was elected as the
Companys new auditor for the term ending at the close of the next
AGM.
At its first meeting, the Board of Directors appointed two permanent
committees consisting of board members. Mr. Ole Johansson
(Chairman), Ms. Leena Saarinen and Mr. Taisto Turunen were elected
as members of the Board Audit Committee. Mr. Jukka Härmälä
(Chairman), Mr. Evert Henkes and Ms. Anna Nilsson-Ehle were elected
as members of the Board Nomination and Compensation Committee.
Short-term outlook
Demand for stainless steel continues strong. The Groups order
backlog is firm and Outokumpu is currently selling for deliveries in
February. Good demand and supply constraints have been the main
drivers for base price increases for the fourth quarter deliveries.
For example in Germany, Outokumpus base price for cold rolled 304
sheet for December is 200-250 EUR/tonne higher than it was in
September. Further small base price increases have been achieved
also for January and February deliveries in Europe. The record high
nickel prices will increase alloy surcharges substantially during
the coming months. This will result in the highest ever stainless
steel transaction prices, which may cause uncertainty in the market.
All of Outokumpus mills continue to run at full load. With higher
deliveries and base prices Outokumpus operational profitability for
the fourth quarter is expected to clearly exceed that achieved in
the third quarter. In addition to improving operational result,
further inventory gains are estimated to be recognized in the fourth
quarter as a result of rapid rise in nickel prices in August and
September.
Espoo, October 23, 2006
Board of Directors
CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Condensed income statement
Jan-Sept Jan-Sept Jan-Dec
EUR million 2006 2005 2005
Continuing operations:
Sales 4 247 3 899 5 016
Other operating income 52 60 83
Costs and expenses (3 836) (3 695) (4 947)
Other operating expenses (18) (5) (94)
Operating profit 446 260 57
Share of results in associated companies 3 1 1
Financial income and expenses
Net interest expenses (51) (52) (65)
Market price gains and losses 13 (3) (1)
Other financial income and expenses 3 0 0
Profit before taxes 415 207 (8)
Income taxes (95) (47) (16)
Net profit/(loss) for the period
from continuing operations 320 160 (24)
Discontinued operations:
Net profit/(loss) for the period
from discontinued operations 40 (343) (339)
Net profit/(loss) for the period 360 (183) (363)
Attributable to:
Equity holders of the Company 359 (185) (364)
Minority interest 1 2 1
Earnings per share
for profit attributable
to the equity holders of the Company:
Earnings per share, EUR 1.98 (1.02) (2.01)
Diluted earnings per share, EUR 1.98 (1.02) (2.01)
Earnings per share from continuing
operations
attributable to the equity holders of the
Company:
Earnings per share, EUR 1.76 0.87 (0.14)
Earnings per share from discontinued
operations
attributable to the equity holders of the
Company:
Earnings per share, EUR 0.22 (1.89) (1.87)
All figures in the accounts have been rounded and consequently the
sum of individual figures can deviate from the presented sum figure.
Condensed balance sheet
Sept 30 Sept 30 Dec 31
EUR million 2006 2005 2005
ASSETS
Non-current assets
Intangible assets 496 589 578
Property, plant and 2 037 2 217 2 125
equipment
Non-current financial
assets
Interest-bearing 270 249 262
Non interest-bearing 42 42 45
2 845 3 097 3 009
Current assets
Inventories 1 518 1 414 1 186
Current financial assets
Interest-bearing 69 46 37
Non interest-bearing 1 026 832 841
Cash and cash equivalents 98 257 212
2 711 2 549 2 277
Assets held for sale 678 201 221
Total assets 6 233 5 846 5 507
EQUITY AND LIABILITIES
Equity
Equity attributable to the
equity holders of the 2 334 2 221 2 047
Company
Minority interest 16 16 15
2 350 2 237 2 062
Non-current liabilities
Interest-bearing 1 365 1 779 1 624
Non interest-bearing 329 387 319
1 694 2 166 1 943
Current liabilities
Interest-bearing 890 637 556
Non interest-bearing 880 725 857
1 770 1 362 1 413
Liabilities related to
assets held for sale 420 80 89
Total equity and 6 233 5 846 5 507
liabilities
Consolidated statement of changes in
equity
Attributable to the equity holders of
the Company
EUR million Share Share Other Fair Treasury
capital premium reser- value shares
fund ves reserves
Equity on December 31, 2004 308 700 13 15 (5)
Cash flow hedges - - - 5 -
Fair value gains on
available-for-sale
financial assets - - - 0 -
Net investment hedges - - - - -
Change in translation
differences - - - - -
Items recognised directly in - - - 5 -
equity
Net loss for the period - - - - -
Total recognised
income and expenses - - - 5 -
Dividend distribution - - - - -
Management stock option
program:
value of received services - - - - -
Transfer of treasury shares - 1 - - 3
Effect of the sale of the
fabricated copper products - - - - -
business
Other changes - - (1) - -
Equity on September 30, 2005 308 701 11 20 (2)
Equity on December 31, 2005 308 701 11 23 (2)
Cash flow hedges - - - 5 -
Fair value gains on
available-for-sale financial - - - 9 -
assets
Net investment hedges - - - - -
Change in translation - - - - -
differences
Items recognised directly in - - - 14 -
equity
Net profit for the period - - - - -
Total recognised
income and expenses - - - 14 -
Dividend distribution - - - - -
Management stock option
program:
value of received services - - - - -
Equity on September 30, 2006 308 701 11 37 (2)
Attributable to the equity holders of
the Company
EUR million Cumu- Re-tained Mino- Total
lative earnings rity equity
trans- inte-
lation rest
diffe-
rences
Equity on December 31, 2004 (59) 1 496 38 2 506
Cash flow hedges - - - 5
Fair value gains on
available-for-sale
financial assets - - - 0
Net investment hedges 0 - - 0
Change in translation
differences 19 - 1 20
Items recognised directly in 19 - 1 25
equity
Net loss for the period - (185) 1 (184)
Total recognised
income and expenses 19 (185) 1 (160)
Dividend distribution - (91) - (91)
Management stock option
program:
value of received services - 2 - 2
Transfer of treasury shares - - - 4
Effect of the sale of the
fabricated copper products - - (24) (24)
business
Other changes - - - (1)
Equity on September 30, 2005 (39) 1 222 16 2 237
Equity on December 31, 2005 (38) 1 044 15 2 062
Cash flow hedges - - - 5
Fair value gains on
available-for-sale financial - - - 9
assets
Net investment hedges (1) - - (1)
Change in translation (5) - 0 (5)
differences
Items recognised directly in (6) - 0 8
equity
Net profit for the period - 359 1 360
Total recognised
income and expenses (6) 359 1 368
Dividend distribution - (81) - (81)
Management stock option
program:
value of received services - 1 - 1
Equity on September 30, 2006 (44) 1 323 16 2 350
Condensed statement of cash flows
Jan-Sept Jan-Sept Jan-Dec
EUR million 2006 2005 2005
Net profit/(loss) for the period 360 (183) (363)
Adjustments
Depreciation and amortization 176 176 232
Impairments 6 88 168
Loss on the sale of the
fabricated copper products business - 245 252
Other adjustments 141 120 92
(Increase)/decrease in working capital (525) (85) 202
Dividends received 7 7 7
Interests received 12 12 21
Interests paid (69) (79) (93)
Income taxes paid (63) (47) (58)
Net cash from operating activities 47 253 459
Purchases of assets (127) (184) (245)
Proceeds from the sale of subsidiaries 20 482 489
Proceeds from the sale of shares
in associated companies 9 290 290
Proceeds from sale of other assets 9 10 13
Net cash from other investing activities 1 24 18
Net cash from investing activities (88) 622 565
Cash flow before financing activities (41) 875 1 024
Borrowings of long-term debt 181 108 136
Repayments of long-term debt (277) (300) (454)
Increase/(decrease) in current debt 191 (510) (600)
Dividends paid (81) (91) (91)
Other financing cash flow (2) (39) (22)
Net cash from financing activities 11 (833) (1 032)
Adjustments 0 (0) 2
Net change in cash and cash equivalents (30) 42 (6)
Cash and cash equivalents
at the beginning of the financial year 212 211 211
Foreign exchange rate effect (6) 4 7
Net change in cash and cash equivalents (30) 42 (6)
Cash and cash equivalents
at the end of the financial year 176 257 212
Key figures
Jan-Sept Jan-Sept Jan-Dec
EUR million 2006 2005 2005
Operating profit margin, % 10.5 6.7 1.1
Return on capital employed, % 15.8 7.8 1.3
Return on equity, % 21.8 (10.3) (15.9)
Return on equity from continuing 19.3 9.0 (1.1)
operations, %
Capital employed at end of period 3 910 3 981 3 599
Net interest-bearing debt at end of 1 560 1 744 1 537
period
Equity-to-assets ratio at end of period, 37.7 38.7 38.2
%
Debt-to-equity ratio at end of period, % 66.4 77.9 74.5
Earnings per share, EUR 1.98 (1.02) (2.01)
Earnings per share from
continuing operations, EUR 1.76 0.87 (0.14)
Earnings per share from
discontinued operations, EUR 0.22 (1.89) (1.87)
Average number of
shares outstanding, in thousands 1) 181 032 181 027 181 031
Fully diluted earnings per share, EUR 1.98 (1.02) (2.01)
Fully diluted average
number of shares, in thousands 1) 181 754 181 149 181 140
Equity per share at end of period, EUR 12.89 12.27 11.31
Number of shares outstanding at end of
period,
in thousands 1) 181 032 181 032 181 032
Capital expenditure, continuing 113 112 164
operations
Depreciation, continuing operations 169 154 207
Average personnel for the period,
continuing operations 8 620 9 785 9 579
1) The number of own shares repurchased is excluded.
NOTES TO THE INCOME STATEMENT AND BALANCE SHEET
This interim financial report is prepared in accordance with IAS 34
(Interim Financial Reporting).
Use of estimates
The preparation of the financial statements in accordance with IFRS
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, as well as the
disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of income and
expenses during the reporting period. Accounting estimates are
employed in the financial statements to determine reported amounts,
including the realizability of certain assets, the useful lives of
tangible and intangible assets, income taxes, provisions, pension
obligations, impairment of goodwill and other items. Although these
estimates are based on managements best knowledge of current events
and actions, actual results may differ from the estimates.
Amended and new International Financial Reporting Standards (IFRS)
as of January 1, 2006
Outokumpu has adopted the following amended and new standards as of
January 1, 2006:
IAS 39 Financial Instruments: Recognition and Measurement:
Amendments after March 31, 2004:
- Cash flow hedges of forecast intra group transactions, issued on
April 14, 2005, effective date January 1, 2006.
- Fair value option, issued on June 16, 2005, effective date January
1, 2006.
- Financial guarantee contracts, issued on August 18, 2005,
effective date January 1, 2006.
The adoption of these amendments has not had material effect on the
Groups financial statements.
Amendment to IAS 19 Employee Benefits - Actuarial Gains and Losses,
Group Plans and Disclosures, issued on December 16, 2004, effective
date January 1, 2006. The amendment introduces the option of an
alternative recognition approach for actuarial gains and losses. It
also adds new disclosure requirements. As the Group does not intend
to change the accounting policy adopted for recognition of actuarial
gains and losses, adoption of this amendment will only impact the
format and extent of disclosures presented in the accounts.
IFRIC 4 Interpretation: Determining whether an Arrangement contains
a Lease, issued on December 2, 2004, effective date January 1, 2006.
The adoption of this interpretation has not had material effect on
the Groups financial statements.
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 September 30, 2006.
Outokumpu Oyj held 218 603 treasury shares on September 30, 2006
with a total account equivalent value of EUR 0.4 million. This
corresponded to 0.1% of the share capital and the total voting
rights of the Company on September 30, 2006.
Trading with Outokumpu Oyj's stock options 2003A has commenced on
the main list of the Helsinki Stock Exchange as of September 1,
2006. Outokumpu has issued a total of 1.700.000 stock options 2003A.
The Stock options have been allocated as part of the Group's
incentive programs to key personnel of Outokumpu. Currently a total
of 659 302 Outokumpu Oyj shares can be subscribed for with the 2003A
stock options. The remaining 1.040.698 stock options have been
annulled and removed from the Finnish book-entry system. The share
subscription period for the 2003A stock options is September 1, 2006
- March 1, 2009. The current amounts that Outokumpu Oyj shares could
be subscribed for with the 2003B and 2003C stock options are as
follows: 2003B 1 032 570 shares and 2003C 87 500 shares. As a result
of the share subscriptions with the 2003 stock options, Outokumpu
Oyjs share capital may be increased by a maximum of EUR 3 024 932
and the number of shares by a maximum of 1 779 372 shares. This
corresponds to 1.0% of the Company's shares and voting rights.
Outokumpus Board of Directors confirmed on February 2, 2006 a share-
based incentive program for years 2006-2010 as part of the key
employee incentive and commitment system of the Company. If persons
to be covered by the first earning period 2006-2008 of the program
were to receive the number of shares in accordance with the maximum
reward, currently a total of 397 400 shares, their shareholding
obtained via the program would amount to 0.2% of the Companys
shares and voting rights.
The detailed information of the 2003 option program and of the share-
based incentive program for 2006-2010 is presented in the annual
report 2005 of Outokumpu Oyj.
Non-current assets held for sale and discontinued operations
Outokumpu Technology
In June, the Board of Directors of Outokumpu Oyj decided to start
evaluating the possibility of listing
Outokumpu Technology Oyj on the Helsinki Stock Exchange. On
September 25, 2006, the Board decided to commence the offering of
shares in Outokumpu Technology. The offering structure was sale of
shares and the offering commenced on September 26, 2006 and ended on
October 9, 2006. As a result of the offering Outokumpu Oyj sold 36
960 001 shares at EUR 12.50 per share and Outokumpu Oyjs remaining
holding in Outokumpu Technology is 12%. Consequently Outokumpu
Technology has been classified as a discontinued operation according
to IFRS 5 Non-current assets held for sale and Discontinued
operations and reported separately from the continuing operations
in this interim report. The receivables and liabilities related to
assets held for sale include 100% of Outokumpu Technology. The
remaining 12 % share of Outokumpu Technology will be reported in the
fourth quarter interim report as available-for-sale investment in
accordance with IAS 39 and the fair valuation of the shares will be
recognized directly in equity.
Net proceeds from the sale amounted to some EUR 450 million and the
capital gain from the sale to some EUR 330 million. The sale of
shares and fair valuation of the remaining stake in Outokumpu
Technology will increase the total equity and reduce the net
interest-bearing debt of Outokumpu Group by some EUR 380 million.
The increase in the total equity of Outokumpu consists of the
capital gain from the sale of the shares and the fair valuation of
the remaining shares. The transaction will be recorded in the
Group´s fourth quarter results.
Outokumpu Technology Oyj is a global leader in designing, developing
and supplying tailored plants, processes and equipment for the
minerals and metals processing industries worldwide. Outokumpu
Technology has 1 800 employees and generated sales of EUR 556
million in 2005. Outokumpu Technology posted an operating profit of
EUR 31 million in January-September and the net assets related to
Outokumpu Technology at the end of September totaled EUR 84 million.
Outokumpu Copper Tube and Brass
On April 5, 2005 Outokumpu and Nordic Capital signed a sales and
purchase agreement according to which Outokumpu sold its fabricated
copper products business to Nordic Capital. The sale was finalized
on June 7, 2005. The scope of the transaction comprised the
following businesses of the former Outokumpu Copper business area:
Americas, Europe, Automotive Heat Exchangers, Appliance Heat
Exchanger & Asia, including 100% of Outokumpu Heatcraft, and the
Forming equipment businesses. Sales in 2004 by the divested
businesses totaled EUR 1 684 million and the number of personnel was
6 400 at the year-end. Outokumpu Copper Tube and Brass business was
excluded from the transaction and comprises European sanitary and
industrial tubes, including air-conditioning and refrigeration tubes
in Europe, as well as brass rod.
On February 27, 2006 Outokumpu sold its brass rod mill, Outokumpu
Copper MKM Ltd, located in Aldridge in the UK, to The Meade
Corporation. The total consideration of the transaction was some EUR
20 million. The production capacity of Outokumpu Copper MKM Ltd is
some 40 000 tonnes of brass rod and its sales in 2005 amounted to
some EUR 70 million. It employs 320 people.
In July 2006 Outokumpu sold two minor companies with insignificant
effect on Outokumpu Copper Tube and Brass result.
The assets and liabilities of Outokumpu Copper Tube and Brass are
presented as held for sale. Outokumpu is implementing a vigorous
improvement project in its existing copper tube and brass business
and it is Outokumpus intention to divest the tube and brass
business.
In the following tables, Outokumpu Technology is referred as OT,
Outokumpu Copper Tube and Brass as TB and Outokumpu Copper as OC.
Specification of non-current assets held for sale and
discontinued operations
Income statement
Jan-Sept
2006
EUR million Total OT TB
Sales 1 014 501 513
Expenses (946) (470) (476)
Operating profit 68 31 37
Net financial items 0 5 (5)
Profit/(loss) before taxes 68 36 32
Taxes (18) (14) (4)
Profit/(loss) after taxes 50 22 28
Impairment loss recognized
on the fair valuation of
the Tube and Brass division's
assets and liabilities (4) - (4)
Loss on the sale of the
fabricated copper products business - - -
Costs related to initial public offering
of Outokumpu Technology (6) (6) -
Taxes - - -
After-tax loss recognized
on the measurement of
assets and liabilities of the disposal (9) (6) (4)
group
Minority interest 0 0 -
Net profit/(loss) for the period
from discontinued operations 40 16 25
Balance sheet
Sept 30
2006
EUR million Total OT TB
Assets
Intangible and tangible assets 106 101 6
Other non-current assets 23 19 4
Inventories 190 60 130
Current interest-bearing assets 79 79 -
Other current non interest-bearing assets 280 159 121
678 418 260
Liabilities
Provisions 6 0 6
Non-current interest-bearing liabilities 4 4 -
Other non-current
non interest-bearing liabilities 41 33 8
Current interest-bearing liabilities 0 0 -
Trade payables 100 43 57
Other current non interest-bearing 269 253 15
liabilities
420 334 86
Cash flows
Jan- Jan- Jan-
Sept Sept Dec
EUR million 2006 2005 2005
Operating cash flows (13) (70) (6)
Investing cash flows (11) (74) (83)
Financing cash flows 24 129 132
Total cash flows 1 (16) 42
Income statement
Jan-Sept Jan-Dec
2005 2005
EUR million Total OT OC Total OT OC
Sales 1 144 349 795 1 477 556 921
Expenses (1 146) (347) (799) (1 458) (531) (927)
Operating profit (2) 2 (4) 19 25 (6)
Net financial items (5) 3 (8) (8) 3 (10)
Profit/(loss) before taxes (7) 6 (12) 11 28 (16)
Taxes (9) (4) (5) (13) (9) (4)
Profit/(loss) after taxes (15) 2 (17) (1) 19 (20)
Impairment loss recognized
on the fair valuation of
the Tube and Brass division's
assets and liabilities (83) - (83) (86) - (86)
Loss on the sale of the
fabricated copper products business (245) - (245) (252) - (252)
Costs related to initial public
offering
of Outokumpu Technology - - - - - -
Taxes - - - - - -
After-tax loss recognized
on the measurement of
assets and liabilities of the disposal (328) - (328) (338) - (338)
group
Minority interest (1) 0 (1) (1) (0) (1)
Net profit/(loss) for the period
from discontinued operations (343) 2 (346) (339) 19 (360)
Balance sheet
Sept 30 Dec 31
2005 2005
EUR million Total OT TB Total OT TB
Assets
Intangible and tangible assets 9 - 9 9 - 9
Other non-current assets 4 - 4 4 - 4
Inventories 90 - 90 113 - 113
Current interest-bearing assets - - - - - -
Other current non interest-bearing 98 - 98 95 - 95
assets
201 - 201 221 - 221
Liabilities - -
Provisions 3 - 3 7 - 7
Non-current interest-bearing - - - - - -
liabilities
Other non-current
non interest-bearing liabilities 24 - 24 17 - 17
Current interest-bearing liabilities - - - - - -
Trade payables 36 - 36 49 - 49
Other current non interest-bearing 16 - 16 17 - 17
liabilities
80 - 80 89 - 89
Major non-recurring items in operating
profit
Jan-Sept Jan-Sept Jan-Dec
EUR million 2006 2005 2005
Gain on the sale of the Boliden - 35 35
shares
Fixed cost reduction program - - (34)
Coil Products Sheffield closure - - (130)
- 35 (129)
Income taxes
Jan-Sept Jan-Sept Jan-Dec
EUR million 2006 2005 2005
Current taxes (61) (30) (63)
Deferred taxes (34) (17) 47
(95) (47) (16)
Commitments
Sept 30 Sept 30 Dec 31
EUR million 2006 2005 2005
Mortgages and pledges
Mortgages on land 129 86 94
Other pledges 4 0 8
Guarantees
On behalf of subsidiaries
For commercial commitments 137 124 77
On behalf of associated companies
For financing 4 4 4
Other commitments 61 68 65
Minimum future lease payments
on operating leases 119 122 120
Fair values and nominal amounts of derivative
instruments
Sept Sept Sept Dec 31 Sept Dec
30 30 30
2006 2006 2006 2005 2006 2005
Posi- Nega-
tive tive Net Net
fair fair fair fair Contract Contract
EUR million value value value value amounts amounts
Currency and interest rate
derivatives
Currency forwards 9 6 3 (1) 2 179 1 796
Interest rate swaps 8 - 8 3 282 432
Tonnes Tonnes
Metal derivatives
Forward and futures copper 1 0 1 (1) 2 825 33 775
contracts
Forward and futures nickel 4 1 3 1 1 812 1 608
contracts
Forward and futures zinc 0 0 0 0 1 100 1 300
contracts
TWh TWh
Electricity derivatives
Publicly traded
electricity derivatives 1 0 1 1 0.0 0.1
Other electricity derivatives 53 20 33 13 4.5 4.6
76 27 49 15
Income statement by quarter
EUR million I/05 II/05 III/05 IV/05 2005
Continuing operations:
Sales 1 394 1 442 1 063 1 117 5 016
Operating profit 129 157 (26) (202) 57
Share of results in
associated companies (1) 2 (0) 0 1
Financial income and (13) (22) (19) (13) (67)
expenses
Profit/(loss) before taxes 115 137 (45) (215) (8)
Income taxes (19) (37) 10 31 (16)
Net profit/(loss) for the
period
from continuing operations 96 99 (36) (184) (24)
Net profit/(loss) for the
period
from discontinued operations (340) (3) (0) 4 (339)
Net profit/(loss) for the (244) 97 (36) (180) (363)
period
Attributable to:
Equity holders of the (245) 96 (36) (179) (364)
Company
Minority interest 1 1 0 (1) 1
EUR million I/06 II/06 III/06
Continuing operations:
Sales 1 408 1 392 1 447
Operating profit 67 149 231
Share of results in
associated companies 0 2 1
Financial income and (7) (10) (18)
expenses
Profit/(loss) before taxes 60 141 214
Income taxes (18) (29) (48)
Net profit/(loss) for the
period
from continuing operations 41 112 166
Net profit/(loss) for the
period
from discontinued operations 15 20 6
Net profit/(loss) for the 56 133 172
period
Attributable to:
Equity holders of the 56 132 171
Company
Minority interest (0) 0 1
Major non-recurring items in operating
profit
EUR million I/05 II/05 III/05 IV/05 2005
General Stainless
Coil Products Sheffield closure - - - (127) (127)
Fixed cost reduction program - - - (11) (11)
Specialty Stainless
Fixed cost reduction program - - - (21) (21)
Other operations
Coil Products Sheffield closure - - - (3) (3)
Fixed cost reduction program - - - (3) (3)
Gain on the sale of
the Boliden shares 25 - 10 - 35
25 - 10 (164) (129)
EUR million I/06 II/06 III/06
General Stainless
Coil Products Sheffield closure - - -
Fixed cost reduction program - - -
Specialty Stainless
Fixed cost reduction program - - -
Other operations
Coil Products Sheffield closure - - -
Fixed cost reduction program - - -
Gain on the sale of
the Boliden shares - - -
- - -
Key figures by quarter
EUR million I/05 II/05 III/05 IV/05
Operating profit margin, % 9.2 10.9 (2.4) (18.1)
Return on capital employed, % 11.6 15.6 (2.6) (21.4)
Return on equity, % (41.0) 17.2 (6.4) (33.5)
Return on equity, continuing 16.1 17.6 (6.3) (34.2)
operations, %
Capital employed at end of period 3 953 4 084 3 981 3 599
Net interest-bearing debt at end of 1 695 1 822 1 744 1 537
period
Equity-to-assets ratio at end of 35.5 37.2 38.7 38.2
period, %
Debt-to-equity ratio at end of 75.0 80.6 77.9 74.5
period, %
Earnings per share, EUR (1.35) 0.53 (0.20) (0.99)
Earnings per share from
continuing operations, EUR 0.53 0.54 (0.20) (1.01)
Earnings per share from
discontinued operations, EUR (1.88) (0.01) (0.00) 0.02
Average number of shares
outstanding, in thousands 1) 180 901 181 032 181 032 181 032
Equity per share at end of period, 12.39 12.41 12.27 11.31
EUR
Number of shares outstanding
at end of period, in thousands 1) 181 032 181 032 181 032 181 032
Capital expenditure, continuing 29 46 37 53
operations
Depreciation, continuing operations 51 52 52 53
Average personnel
for the period, continuing operations 9 645 9 973 9 877 9 186
1) The number of own shares repurchased is
excluded.
EUR million I/06 II/06 III/06
Operating profit margin, % 4.7 10.7 16.0
Return on capital employed, % 7.5 16.5 24.3
Return on equity, % 11.0 25.2 30.4
Return on equity, continuing 8.1 21.4 29.4
operations, %
Capital employed at end of period 3 513 3 679 3 910
Net interest-bearing debt at end of 1 483 1 509 1 560
period
Equity-to-assets ratio at end of 37.4 38.4 37.7
period, %
Debt-to-equity ratio at end of 73.0 69.5 66.4
period, %
Earnings per share, EUR 0.31 0.73 0.94
Earnings per share from
continuing operations, EUR 0.23 0.62 0.91
Earnings per share from
discontinued operations, EUR 0.08 0.11 0.03
Average number of shares
outstanding, in thousands 1) 181 032 181 032 181 032
Equity per share at end of period, 11.14 11.91 12.89
EUR
Number of shares outstanding
at end of period, in thousands 1) 181 032 181 032 181 032
Capital expenditure, continuing 33 34 45
operations
Depreciation, continuing operations 50 50 68
Average personnel
for the period, continuing operations 8 746 8 822 8 665
1) The number of own shares repurchased is excluded.
