Outotec CEO s review. CMD 2008 May 15-16, Seville, Spain Tapani Järvinen President and CEO

Transcription

1 Outotec CEO s review CMD 2008 May 15-16, Seville, Spain Tapani Järvinen President and CEO

2 2 Content Outotec in brief focus for CMD 2008 Q1 figures in brief Mining and metals market

3 3 Outotec in brief Technology developer and provider for mining, metals and related processing industries Strong market positions across the whole value chain from mine to metal Own R&D some 2,300 patents, 450 patent families investing some EUR 20 million yearly Global operations Some 2,300 employees in 21 countries Flexible use of own global resources and subcontractors Asset light business model Sales and operating profit development million million Sales 1000 Operating profit Q1/

4 4 Divisions and value chain Technology deliveries from single equipment to turnkey plants ORE Minerals Processing Grinding Flotation Thickening Physical separation Concentrate Analyzers Automation & ACT systems Water treatment projects Concentrator process solutions Service and after sales Base Metals Copper Nickel Zinc Precious metals Ferroalloys Service and after sales Metals Processing Ferrous metals Ilmenite Alumina and aluminum Sulfuric acid & off-gas Roasting (sulfidic ores) Service and after sales PURE METAL The entire process chain from mine to metal

5 5 Delivery and project types Services & After Sales EPC / Turnkey Technology package Equipment deliveries Life cycle of the plant Spare part services Maintenance services Process expert services Engineering services & studies Plant audits & automation improvements Customer training Debottlenecking & upgrades million, mths Basic and detail engineering Full supply and erection Training of customers personnel Commissioning of the plant Performance guarantees Many subcontractors and suppliers PRIMA risk assessments million, mths Basic and detail engineering Proprietary key hardware Erection supervision Training of customers personnel Commissioning of the plant Performance guarantees PRIMA risk assessment up to 15 million, 3-30 mths Design and engineering Procurement Installation Training of customers personnel Commissioning Performance guarantees Proprietary technology included in all projects

6 6 Strategy Customers Sustained profitable growth Seek sustainable growth Maintain and improve profitability New technology Flash converting HydroCopper Circoheat, Circored, Circofer Lurec OKTOP Outotec Zinc Cross selling Oil sands (Flotation technology) Fertilizers (Sulfuric acid technology) Water technologies Geographical expansion BRICS (Brazil, Russia, India, China, Southern Africa) Other emerging markets Increase after-sales services Spare parts Technical services Upgrades Consultation On-site services Selected acquisitions Complementing technologies Geographic expansion Resources Business (after sales) Procurement and outsourcing Increasing sourcing e.g. from China and India as well as optimizinglocal supply (e.g. Brazil) Optimise cost efficiency Efficient use of state of the art engineering tools Local task force approach with Outotec supervision (e.g. Brazil) Increase value-added component R&D efforts, testing facilities to guarantee customer ROI Zinc and Nickel leaching technologies; Circoheat Personnel Owners

7 7 Long-term customer relationships Selected reference customers of Outotec Large global mining companies (seniors) Small and medium sized companies (juniors) Local mining and metallurgical companies in emerging regions Repeat business The life-cycle customer approach aims at servicing its customers over the full life of a mining site / metallurgical plant Multiple technologies for single companies Outotec has a strong track record for delivering multiple technologies to single companies

8 8 Q1/2008 performance EUR million Q1/2008 Q1/2007 Change-% Sales Operating profit Profit before taxes Earnings per share, EUR Order intake Order backlog *) 1, Net cash from operating activities Return on investment, % *) At the end of the period

9 9 Order intake and backlog development EUR million Order backlog at the end of the period Order intake by quarter Q1/2005 Q2/2005 Q3/2005 Q4/2005 Q1/2006 Q2/2006 Q3/2006 Q4/2006 Q1/2007 Q2/2007 Q3/2007 Q4/2007 Q1/2008

10 10 Sales and profitability development Sales Operating profit Earnings per share EUR million EUR million % Q1/ Q1/2008 Operating profit Operating profit margin EUR 2 1,85 1,8 1,6 1,4 1,2 1 0,88 0,8 0,6 0,52 0,39 0,39 0,4 0,2 0, Q1/2008

11 11 Capital structure EUR million Q Q Net cash from operating activities Net interest-bearing debt *) Equity *) Equity-to-assets ratio, % *) Gearing, % *) Working capital *) ROI, % ROE, % *) At the end of the period

12 12 Personnel An average of 2,185 employees during the first quarter (Q1/2007: 1,860) Increase due to business growth and active recruitment Workforce planning and resourcing is of top priority in Outotec s human capital roadmap to enable further growth Several actions started to improve performance management, rewarding and employer image in order to ensure expertise for future needs persons Number of employees at the end of the period Q1/ In addition to own employees, Outotec had over 500 full-time equivalent contracted people in project execution during Q1/2008.

13 13 Mining and metals market 1/2 China continues to be the major driver in the commodities bull market together with countries such as India and Russia In 2008, resource markets are set for a fifth straight year of cyclical strength - consumption of metals increases in line with increasing income Despite the US housing market induced financial world uncertainties, the metals prices and market fundamentals have retained resilient and virtually all minerals and metals prices remain significantly above historical trend and many prices have now increased well above start-of-year levels Investments into minerals and metals industry s production capacity will continue on a healthy level because the continuosly increasing metals demand has not been supplied sufficiently by capacity expansions and new project developments

14 14 Mining and metals market 2/2 Existing supply has been constrained by severe production disruptions The major demand driver has been and will be the fast urbanization and industrialization rate of developing countries which has led to unforeseen price surges of energy, steel and other construction-related commodities Sulfuric acid deficit: addition capacity needed for both metallurgical leaching processes and fertilizer industry Consolidation continues

15 15 Industrial Production y-o-y change% (data from Brook Hunt, April 2008) 20,0 15,0 Change % 10,0 5,0 0,0-5, MATURE ECONOMIES DEVELOPING ECONOMIES GLOBAL TOTAL Brazil Russia India China

16 16 Refined Copper Consumption Growth (2000=100, data from Brook Hunt, April 2008) Refined Copper Consumption Growth (2000=100, data from Brook Hunt, April 2008) Growth index Growth index BRIC Global Mature economies China Developing economies Brazil Russia India China BRIC

17 17 Base metals production growth Base Metals Production Growth Index (2007=100, Macquarie Research data Jan-April 2008) Base Metals Production Growth (Macquarie Research Jan-Apr 2008) Growth index ' 000 tons of metal Aluminium Copper Zinc Nickel Aluminium Copper Zinc Nickel

18 18 In summary Consumption of metals is expected to stay on a high level Easy-to-process ore bodies are already being used Environmental regulations become stricter Energy price increases Water and sulfuric acid resources low >> Increased number of technology and process development opportunities for Outotec

19 19 More out of ore!

20 20 Source: Xstrata

21 21 Source: Vale

22 22 Source: BHPB