Outokumpu publishes historical financial information for

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News Desk 2018

Apr 15, 2016 at 9:15 AM

Outokumpu publishes historical financial information for new business areas and updates definitions of certain financial key figures

OUTOKUMPU OYJ STOCK EXCHANGE RELEASE April 15, 2016 at 4.00 pm EET

Outokumpu has today published restated historical financial information for the new streamlined business area structure which was announced in connection with the launch of Outokumpu’s new vision and measures to improve competitiveness and financial performance of the company. Outokumpu’s first-quarter 2016 financial results will follow the new structure having three business areas: Europe, Americas and Long Products. Europe and Americas will cover Outokumpu’s entire flat products offering in these two markets, including all coil and plate business. The current European Quarto Plate operations and sales network in APAC will be reported as part of Europe, and the US Quarto Plate business under Americas. The Long Products operations and financial information remain unchanged.

Outokumpu continues to follow underlying EBIT as its main profitability measure because it best shows the underlying profit drivers and operational performance of the business. However, following the changes in the European Securities and Markets Authority’s (ESMA) Guidelines on Alternative Performance Measures related to the definition of non-recurring items, Outokumpu has updated its definitions of underlying EBITDA and underlying EBIT: material income and expense items earlier labelled as non-recurring items, such as restructuring costs, impairments, and gains or losses on sale of assets or businesses, as well as raw material related inventory gains/losses and metal derivative gains/losses, are now reported as adjustments. These items affecting comparability between periods are excluded from underlying EBITDA/EBIT. As the content of the underlying profitability measures remains unchanged, this has no effect on the historical group-level figures.

Outokumpu has also updated definitions for the following financial key figures: capital employed, operating capital, return on capital employed (ROCE) and return on equity (ROE). New definitions of capital employed and operating capital exclude defined benefit and other long-term employee benefit obligations but include net derivative liabilities (other than interest rate derivative). Returns will be calculated for four previous quarters on a rolling basis. Furthermore, Outokumpu will replace net debt to EBITDA with net debt to underlying EBITDA metric. The updated definitions are aligned with Outokumpu’s long-term financial targets.

The following tables include restated historical financial information for the new business areas for 2014 and 2015 and updated Group financial key figures and definitions for 2015. Figures are unaudited.

For more information:

Investors: Johanna Henttonen, tel. +358 9 421 3804, mobile +358 40 530 0778

Outokumpu Group

Outokumpu is a global leader in stainless steel. We create advanced materials that are efficient, long lasting and recyclable – thus building a world that lasts forever. Stainless steel, invented a century ago, is an ideal material to create lasting solutions in demanding applications from cutlery to bridges, energy and medical equipment: it is 100% recyclable, corrosion-resistant, maintenance-free, durable and hygienic. Outokumpu employs 11,000 professionals in more than 30 countries, with headquarters in Espoo, Finland and shares listed in Nasdaq Helsinki. www.outokumpu.com outokumpu.com/stainless-news choosestainless.outokumpu.com

Business Area key figures by quarters

Stainless steel deliveries
1,000 tonnes	I/14	II/14	III/14	IV/14	2014	I/15	II/15	III/15	IV/15	2015
Europe total	456	437	402	367	1,661	410	413	375	381	1,578
of which intra-group	6	5	1	13	26	5	7	4	6	23
Americas total	143	151	144	133	572	133	117	139	144	533
of which intra-group	3	3	1	1	9	0	0	12	1	14
Long Products total	65	80	60	43	248	52	62	58	42	213
of which intra-group	20	34	22	8	84	16	22	30	12	80
Other operations total	40	50	53	48	192	48	56	45	27	176
of which intra-group	-	-	-	-	-	-	2	1	1	3
Group total deliveries	676	675	634	568	2,554	620	616	570	574	2,381

Sales
EUR million	I/14	II/14	III/14	IV/14	2014	I/15	II/15	III/15	IV/15	2015
Europe total	1,198	1,203	1,190	1,095	4,685	1,163	1,140	1,019	995	4,316
of which intra-group	96	77	80	61	314	36	40	49	40	165
Americas total	284	323	347	337	1,290	337	284	301	292	1,214
of which intra-group	4	13	1	6	25	7	5	21	4	37
Long Products total	149	203	171	129	651	149	159	142	100	551
of which intra-group	41	77	51	19	188	36	46	56	23	162
Other operations total	201	269	294	273	1,037	274	273	231	201	979
of which intra-group	73	77	69	72	292	75	71	79	86	311
Group total sales	1,617	1,753	1,799	1,674	6,844	1,768	1,694	1,487	1,435	6,384

EBIT
EUR million	I/14	II/14	III/14	IV/14	2014	I/15	II/15	III/15	IV/15	2015
Europe	-138	-2	22	4	-114	46	57	-19	0	84
Americas	-36	-16	-28	-19	-99	-48	-65	-49	-54	-216
Long Products	0	14	8	11	33	4	5	1	-8	2
Other operations and intra-group items	-14	-6	-11	-32	-63	-12	-23	-9	403	359
Group total EBIT	-188	-10	-9	-36	-243	-10	-26	-77	341	228

Underlying EBIT
EUR million	I/14	II/14	III/14	IV/14	2014	I/15	II/15	III/15	IV/15	2015
Europe	3	8	7	15	33	27	41	-15	33	85
Americas	-40	-24	-35	8	-91	-28	-50	-44	-41	-163
Long Products	2	11	6	12	32	3	4	3	-3	7
Other operations and intra-group items	-11	1	-6	-45	-61	0	-20	-11	1	-30
Group total underlying EBIT	-45	-6	-28	-9	-88	2	-25	-67	-11	-101

Adjustments to EBIT
EUR million	I/14	II/14	III/14	IV/14	2014	I/15	II/15	III/15	IV/15	2015
Europe	-142	-10	15	-11	-147	20	16	-4	-33	-1
Americas	3	9	7	-27	-8	-21	-15	-5	-12	-54
Long Products	-1	3	2	-2	2	1	1	-3	-4	-5
Other operations and intra-group items	-3	-7	-5	13	-2	-12	-3	2	402	389
Group total adjustments to EBIT	-143	-5	19	-27	-155	-12	-1	-10	352	330

EBITDA
EUR million	I/14	II/14	III/14	IV/14	2014	I/15	II/15	III/15	IV/15	2015
Europe	-54	53	74	58	131	98	108	32	47	286
Americas	-18	2	-11	1	-25	-26	-43	-27	-40	-136
Long Products	2	16	10	12	40	5	8	3	-6	10
Other operations and intra-group items	-8	-1	-6	-26	-41	-12	-18	-5	407	372
Group total EBITDA	-78	70	67	45	104	65	55	3	408	531

Underlying EBITDA
EUR million	I/14	II/14	III/14	IV/14	2014	I/15	II/15	III/15	IV/15	2015
Europe	60	63	59	69	251	78	92	36	74	280
Americas	-21	-6	-17	28	-17	-5	-27	-22	-28	-83
Long Products	4	13	8	14	38	5	7	5	-1	15
Other operations and intra-group items	-5	6	-1	-39	-40	-1	-15	-6	5	-17
Group total underlying EBITDA	37	75	48	72	232	77	57	13	50	196

Depreciation and amortization
EUR million	I/14	II/14	III/14	IV/14	2014	I/15	II/15	III/15	IV/15	2015
Europe	-57	-55	-51	-54	-218	-51	-51	-51	-41	-196
Americas	-18	-18	-18	-20	-74	-22	-22	-22	-14	-80
Long Products	-2	-2	-1	-2	-6	-2	-2	-2	-2	-8
Other operations	-5	-5	-5	-6	-22	-5	-5	-4	-4	-18
Group total depreciation and amortization	-82	-80	-76	-81	-320	-80	-81	-80	-61	-302

Capital expenditure
EUR million	I/14	II/14	III/14	IV/14	2014	I/15	II/15	III/15	IV/15	2015
Europe	11	23	20	29	83	20	16	19	41	96
Americas	2	2	3	8	15	1	4	2	12	19
Long Products	1	2	2	2	6	1	0	1	5	7
Other operations	1	6	0	16	22	4	14	6	7	32
Group total capital expenditure	15	33	25	54	127	26	35	29	65	154

Operating capital
EUR million	I/14	II/14	III/14	IV/14	2014	I/15	II/15	III/15	IV/15	2015
Europe	3,003	3,107	3,065	2,945	2,945	2,894	2,894	2,800	2,680	2,680
Americas	1,040	1,157	1,229	1,262	1,262	1,405	1,346	1,249	1,279	1,279
Long Products	155	185	185	162	162	176	167	166	151	151
Other operations and intra-group items	48	66	-9	-46	-46	12	48	34	22	22
Group total operating capital	4,246	4,515	4,471	4,324	4,324	4,486	4,455	4,248	4,133	4,133

Other operations include divested SKS operations.

Group financial key figures by quarters

EUR million	I/15	II/15	III/15	IV/15	2015
Capital employed at the end of period	4,503	4,479	4,271	4,133	4,133
Return on capital employed, %	-1.5	-1.8	-3.4	5.3	5.3
Return on equity, %	-10.7	-11.0	-12.9	3.9	3.9
Net debt to underlying EBITDA	7.5	8.3	9.2	8.2	8.2

Definitions of financial key figures

Underlying EBIT	=	EBIT excluding items classified adjustments

Capital employed	=	Total equity + net debt + net defined benefit and other long-term employee
		benefit obligations + net interest rate derivative liabilities + net accrued
		interest expenses – net assets held for sale – loans receivable
		– available-for-sale financial assets – investments at fair value through
		profit or loss – investments in associated companies and joint ventures

Operating capital	=	Capital employed + net deferred tax liability

Return on capital employed (ROCE)	=	EBIT (4-quarter rolling)	× 100
		Capital employed (4-quarter rolling average)

Return on equity (ROE)	=	Net result for the financial period (4-quarter rolling)	× 100
		Total equity (4-quarter rolling average)

Net debt to underlying EBITDA	=	Net debt
		Underlying EBITDA (4-quarter rolling)

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