Metso Corporate Newsroom News 2014 Outotec's Interim Report January-March 2014
Stock exchange release April 29, 2014

Outotec's Interim Report January-March 2014

OUTOTEC OYJ                         INTERIM REPORT                    APRIL 29, 2014 AT 9.00 AM     


Weak Capex order intake and sales, good progress in services

January-March 2014 (comparison period in 2013):

  • Order intake: EUR 210.3 (491.1) million, -57% (in comparable currencies -51%)
  • Order backlog: EUR 1,215.8 (1,938.9) million, -37%
  • Sales: EUR 343.9 (502.9) million, -32% (in comparable currencies -26%)
  • Service sales: EUR 107.5 (103.8) million, +4% (in comparable currencies +16%)
  • Operating profit from business operations1): EUR 12.4 (35.0) million, -65%

Financial guidance for 2014 reiterated

Based on the year-end order backlog, current market outlook, customer tendering activity, and volatility in exchange rates, the management expects that in 2014:

  • Sales will be approximately EUR 1.5-1.8 billion, and
  • Operating profit from business operations1) will be approximately 5-8%.

1) excluding one-time items and purchase price allocations (PPA) amortizations

Summary of key figures Q1 Q1 Last 12 Q1-Q4
2014 2013 months 2013
Sales, EUR million 343.9 502.9 1,752.5 1,911.5
Gross margin, % 19.5 19.1 20.9 20.7
Operating profit from business operations, EUR million 12.4 35.0 140.3 162.9
Operating profit from business operations, % 3.6 7.0 8.0 8.5
Operating profit, EUR million 8.7 31.7 119.0 141.9
Operating profit margin, % 2.5 6.3 6.8 7.4
Profit before taxes, EUR million 6.4 29.9 108.7 132.2
Net cash from operating activities, EUR million 4.7 -33.6 -3.8 -42.1
Net interest-bearing debt at the end of period, EUR million -82.7 -218.4 -82.7 -87.1
Gearing at the end of period, % -18.7 -49.4 -18.7 -18.2
Working capital at the end of period, EUR million -24.6 -148.7 -24.6 -14.0
Return on investment, %, LTM 21.6 35.0 21.6 25.7
Return on equity, %, LTM 17.0 31.7 17.0 19.4
Order backlog at the end of period, EUR million 1,215.8 1,938.9 1,215.8 1,371.7
Order intake, EUR million 210.3 491.1 1,231.6 1,512.4
Personnel, average for the period 4,830 4,825 4,929 4,927
Earnings per share, EUR 0.03 0.12 0.42 0.51

President and CEO Pertti Korhonen:

 "Weak investment sentiment in the mining and metals industry continued during the start of the year, resulting in low order intake. Customers continued to focus on brownfield capacity upgrades and modernizations rather than large greenfield projects where typically Engineering, Procurement, and Construction Management (EPCM) companies are employed as the main contractors. Our low level of unannounced orders in the first quarter was largely due to subdued equipment demand of the EPCM channel. As a process technology company, Outotec is addressing this shift in the market dynamics by offering the mining and metals companies solutions that enable them to better leverage their existing assets. The customer traction for this approach is good and we have a strong funnel of larger solution sales cases. However, decision-making takes time, and we continue to see large volatility in the quarterly Capex order intake.

The market for services continued solid, driven by reasonably good production levels in the industry. I am delighted that we were able to grow the service business with our new service concepts, further penetration into our installed base and expanded geographical coverage. Our service order intake was flat in the first quarter, with comparable currencies the growth was 15%. Service sales grew by 4% and with comparable currencies the growth was 16%. Service margins continued to be solid.

The main reasons for the reduced sales in the first quarter of 2014 were the weak Capex order intake in 2013, and devaluation of emerging market currencies. Profitability was weak due to reduced sales and high fixed costs in relation to sales. In addition, three large projects of the Metals, Energy & Water business area had weaker than planned profitability.

Weakened economy in emerging markets, further amplified by significant devaluation of currencies, political instability in some key markets, and concerns about the sustainability of China's growth, are dragging the market down despite some recovery in US and European economies. We maintain our view that the mining and metals industries' capital expenditure will continue to contract in 2014, however, we are seeing some early signs that the market may have reached the bottom. Although we have a good number of promising larger sales cases, we have been preparing ourselves for continued market slowness. The EUR 50 million efficiency improvement program is progressing according to plan and as part of that plan, we have also triggered temporary lay-offs as a response to the weak order intake in the beginning of the year. We are prepared to take further actions to adjust our costs in line with possibly continuing weak order intake and subsequent lower sales. In a cyclical industry we need to balance our actions to be well positioned for the eventual upward turn of the cycle."


Outotec's long-term service contracts, which have production based volume dependent variable portion, are recognized in the order intake with the estimated sales value of the next 12 months. The fixed value contracts are recognized as full value when the order becomes effective. Following the previous recognition principles, the current calendar year's portion of the long-term service contract was booked once per year into order intake. The change in the reporting principles did not have any material impact in the 2014 first quarter order intake compared to the comparison period.

This text is a summary of Outotec's January-March 2014 Interim Report. The full report is available as an attachment.


Outotec Oyj

Pertti Korhonen, President and CEO
tel. +358 20 529 211

Mikko Puolakka, CFO
tel. +358 20 529 2002

Rita Uotila, Vice President - Investor Relations
tel. +358 20 529 2003, mobile +358 400 954 141

Format for e-mail addresses:


Date: Tuesday, April 29, 2014

Time: 2.00 pm (Finnish time)

Venue: Bank, Unioninkatu 20, Helsinki

Joining via webcast

You may follow the briefing via a live webcast at The webcast will be recorded and published on Outotec's website for on-demand viewing.

Joining via teleconference

You may also join the briefing by telephone. To register as a participant in the teleconference and Q&A session, please dial 5 to 10 minutes before the start of the event:

FI: +358 9 8171 0467
SE: +46 8 5199 9370
UK: +44 20 7660 2078
US: +1 855 2692 606 (only US)

Contact information is gathered for registration purposes only and is not used for commercial purposes.


  • Interim Report for January-June: July 31, 2014
  • Interim Report for January-September: October 30, 2014
  • Capital Markets Day, Outotec headquarters Espoo, Finland: December 4, 2014


NASDAQ OMX Helsinki Ltd
Main media

Outotec provides leading technologies and services for the Sustainable use of Earth's natural resources. As the global leader in minerals and metals processing technology, we have developed many breakthrough technologies over the decades for our customers in metals and mining industry. We also provide innovative solutions for industrial water treatment, the utilization of alternative energy sources and the chemical industry. With a global network of sales and service centers, research facilities and over 4,800 experts, Outotec generated annual sales of approximately EUR 1.9 billion in 2013. Outotec shares are listed on NASDAQ OMX Helsinki.

Outotec's Interim Report January-March 2014 Download