OUTOTEC OYJ FINANCIAL STATEMENTS REVIEW FEBRUARY 6, 2020 AT 9:00 AM
                                      
Outotec's Financial Statements Review January-December 2019

A year of many notable achievements

“In 2019, the market remained active for minerals processing and hydrometallurgical technologies in metals refining and our business developed positively. During the year, demand increased in smelting technologies.Demand for the other technologies of the Metals, Energy & Water segment was low.

Our order intake grew 29% from the previous year and 14% in the last quarter. This contributed to a 29% growth in our year-end order backlog. Sales remained at the previous year’s level, due to delays in customers’ decision-making as well as postponements in some projects. Our service sales grew by 16%, exceeding our target of growing by above 10% per year. Profitability improved significantly when compared to the previous year due to improved project execution, a few larger project completions and a higher share of services. Net cash flow from operating activities in 2019 was EUR 68 (70) million. We remain confident that the provision of EUR 110 million that we made in the fourth quarter of 2018 concerning the ilmenite smelter project is adequate.

We continued to strengthen our customer focus, service business, product competitiveness and project capabilities with our must-win battle programs contributing to profitability improvement. We also had good progress in the development of employee engagement and customer satisfaction.

The planned merger with Metso’s Minerals business that we announced in July was a significant milestone in our history. The complementarity of the strengths of these two companies is significant. Metso Outotec will be a leading company in process technology, equipment and services for the minerals, metals and aggregates industries. At the end of October, shareholders of both companies approved the combination. The closing of the transaction is currently expected to take place at the end of June, subject to regulatory approvals.

We announced in December our decision to divest three of our non-core businesses from the Metals, Energy & Water segment. This enables us to focus on our core businesses in minerals processing and metals refining technologies. We renamed the Metals, Energy & Water segment as Metals Refining to reflect this change.

Recently we ranked 18th on the Corporate Knights Global 100 Index of the most sustainable companies, the eighth consecutive year in which we have been included in the Index. Six of our technologies are evaluated against industry baselines on annual basis, and last year enabled our customers to avoid 6.6 million tonnes of CO₂ equivalents. The share of environmental goods and services in our order intake, as measured by criteria defined by the OECD, was 90%. 

We currently expect the market for 2020 in minerals processing and metals refining to remain at the current level, but the timing of large investments remains uncertain. I am looking forward to 2020 and to the creation of Metso Outotec,” concludes President & CEO Markku Teräsvasara.

ALL FIGURES PRESENTED IN THE FINANCIAL STATEMENTS REVIEW ARE FROM CONTINUING OPERATIONS AND THE RENAMING OF THE METALS, ENERGY & WATER SEGMENT TO METALS REFINING

All income statement, order intake and order backlog related figures presented in this financial statement review relate to continuing operations and financial information for the comparison periods has been restated accordingly. Financial information related to the business divestments in the Metals, Energy & Water segment classified as assets held for sale and discontinued operations (December 10, 2019) is presented in note 16. The Metals, Energy & Water segment has been renamed as ‘Metals Refining’ (MR) to reflect the changes in the continuing business.

DIVIDEND PROPOSAL

The Board of Directors of Outotec proposes to the 2020 annual general meeting that a dividend of EUR 0.10 per share be paid from Outotec Oyj’s distributable funds for December 31, 2019, and that any remaining distributable funds be allocated to retained earnings.

THE COMBINATION OF OUTOTEC AND METSO MINERALS

Outotec and Metso have previously communicated that the completion of the combination of Outotec and Metso’s Minerals business is expected to take place in the second quarter of 2020, subject to the receipt of all required regulatory and other approvals, including competition clearances. Considering the progress of the regulatory approval process, Outotec and Metso currently expect the completion of the combination of Outotec and Metso’s Minerals business to take place on June 30, 2020, subject to the receipt of all required regulatory and other approvals, including competition clearances.

Summary of key figures

¹Excluding all amortizations, as well as adjustment items consisting of restructuring and capacity adjustment costs, costs related to mergers and acquisitions, the outcome of material intellectual rights property disputes, gains and losses on business disposals and goodwill impairments. Since the second quarter of 2019, Outotec has added adjusted EBITA to the reported numbers on the Group level to reflect the planned combination.
²Excluding restructuring- and acquisition-related items as well as PPA amortizations.
³Comparison figures related to the income statement, order intake and order backlog have been restated due to business divestments in the Metals, Energy & Water segment being classified as discontinued operations.

OUTLOOK FOR 2020

The market activity in minerals processing and metals refining is currently expected to remain at present level. Copper, gold and nickel projects are expected to continue to be the most active. The timing of large investments is uncertain.

Outotec will not issue Group financial guidance for 2020, as the combination of Outotec and Metso’s Minerals business is currently expected to take place on June 30, 2020. This remains subject to the receipt of all required regulatory and other approvals, including competition clearances.

This text is a summary of Outotec's January-December 2019 Financial Statements review. The full report is available as an attachment to this report.

FURTHER INFORMATION

Outotec Oyj

Markku Teräsvasara, CEO
Tel. +358 20 529 2000

Jari Ålgars, CFO
Tel. +358 20 529 2007

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

Format for e-mail addresses: firstname.lastname@outotec.com

BRIEFING/TELECONFERENCE

Date: February 6, 2020

Time: 2:00 PM EET

Venue: Outotec House, Rauhalanpuisto 9, Espoo, Finland

Joining the teleconference

To register as a participant for the teleconference and Q&A session, please dial in 5 to 10 minutes before the beginning of the event using the confirmation code and numbers below. The teleconference will be recorded and published on Outotec’s website. The contact information is gathered for registration purposes only and it is not used for commercial purposes.

Dial in numbers:

FI: +358 981 710 310
SE: +46 856 642 651
UK: +44 333 300 0804
US: +1 631 913 1422

Confirmation code: 92846691#

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