Ovako publishes its report for the third quarter 2016

Ovako today announced its results for the third quarter 2016. EBITDA before restructuring costs improved to EUR 5 (0) million and order intake increased by 2 percent compared to the previous year. Ovako’s restructuring program is proceeding according to plan and has so far delivered savings of EUR 17 million during 2016.

Financial summary Q3 2016 (Q3 2015):

  • Order intake increased by 2 percent compared to the previous year
  • Sales volume was 146 (150) thousand metric tons 
  • Revenue was EUR 165 (188) million. Revenue development was influenced by lower scrap and alloy surcharges and a weaker sales mix
  • EBITDA before restructuring costs improved to EUR 5 (0) million
  • EBIT was EUR -8 (-12) million after restructuring costs of EUR 3 (2) million
  • Cash flow from operating activities was EUR 3 (15) million, including restructuring costs of EUR 2 million 
  • Ovako’s restructuring program is proceeding according to plan and has contributed EUR 7 million in the form of lower costs during the quarter

“The third quarter of 2016 continued as the previous one for Ovako, with good order intake, growth in several customer segments, and improved profits. This was despite the fact that deliveries to customers fell slightly compared to the previous year. Safety is a top priority at Ovako and our safety data continues to move in the right direction. The number of accidents leading to sick leave decreased compared to the previous year", says Marcus Hedblom, President and CEO at Ovako, and continues:

"Profit strengthened significantly during the quarter compared to the previous year, and we can conclude that the restructuring program made a significant contribution to the result. Thanks to hard work throughout the company EUR 17 million of the planned savings of EUR 22 million for 2016 have been realized already. The group now has 174 fewer employees compared to a year ago and most of the initiatives in the restructuring program are on or ahead of schedule."

Short-term outlook
Ovako expects the market for engineering steel in Europe to be characterized by continued uncertainty in the next quarter. In view of the current strong order book, Ovako believes that the deliveries in the fourth quarter will be slightly higher than in the corresponding period of the previous year.

Group KPI:s  2016
Full year
Sales volumes  Kton  146  150  532  525  681 
Net revenue  EURm  165  188  585  651  834 
EBITDA before restructuring cost  EURm  51  53  48 
Adjusted EBITDA margin  3.2 %  -0.2 %  8.8 %  8.1 %  5.7 % 
EBITDA  EURm  -2  47  51  44 
EBITDA margin  1.4 %  -1.1 %  8.0 %  7.8 %  5.2 % 
EBIT before restructuring cost  EURm  -5  -11  21  22 
Adjusted EBIT margin  -2.9 %  -5.6 %  3.6 %  3.4 %  0.9 % 
Operating profit (EBIT)  EURm  -8  -12  16  20 
EBIT margin  -4.7 %  -6.5 %  2.8 %  3.1 %  0.1 % 
Net profit/loss  EURm  -11  -14  -1  -23 
Cash flow from operating activities  EURm  15  14  14  25 
Net debt (excl pension liabilities)/equity ratio  209 %  164 %  209 %  164 %  181 % 
Return on capital employed (ROCE)  -1 %  1 %  -1 %  1 %  0 % 
Full time employees at end of period (FTE)  No.  2,811  2,985  2,811  2,985  2,905 

The table of key performance indicators (KPIs) contains data taken directly from the financial statements in Ovako's third quarter interim report and information that can be derived from these, as well as statistical information. A reconciliation between financial KPIs and the financial statements, including those KPIs that are not defined under IFRS, is presented on Page 10 of the quarterly report, and definitions of all KPIs can be found on Page 13. KPIs are presented as a supplement to the financial statements to facilitate the understanding of performance and financial position over time.

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Ovako's report for the third quarter 2016 can be found on www.ovako.com/en/Financial-information/Financial-reports/

For more information please contact:
Oskar Bosson, Head of Group Communication, +46 (0)8 622 13 16
Nicholas Källsäter, Head of Group Business Control, +46 (0)8 622 13 23

Ovako develops high-tech steel solutions for, and in cooperation with, its customers in the bearing, transport and manufacturing industries. Our steel makes our customers’ end products more resilient and extends their useful life, ultimately resulting in smarter, more energy-efficient and more environmentally-friendly products.

Our production is based on recycled scrap and includes steel in the form of bar, tube, ring and pre-components. Ovako is represented in more than 30 countries, and has sales offices in Europe, North America and Asia. Ovako’s sales in 2015 amounted to EUR 834 million, and the company had 2,905 employees at year-end. For more information, please visit us at www.ovako.com