Sustainable use of
Earth’s natural resources
CEO Pertti Korhonen
SEB Enskilda Nordic Seminar
January 10, 2012
© Outotec - All rights reserved
Outotec – expert in sustainable technology

Outotec develops and delivers leading
technologies enabling sustainable use of
Earth’s natural resources
Sales and operating profit development
EUR million
1600

Outotec guarantees the best ROI to customers’
life cycle solutions in
•
•
•
•

Minerals and Metallurgical processing
Energy production
Industrial Water Treatment
Chemical industry
Technology development and deliveries since
1890s to over 80 countries in all key markets
1400
Guidance 2011
Sales:
EUR 1.35-1.45bn
Ebit%:
approx. 8-9
Operating profit, %
12
10
1200
8
1000
800
6
600
4
400
2
200
**)
0

Strong R&D and IP portfolio
•
•
•
2
2012
© Outotec - All rights reserved
Approx. 5,000 patents or applications
Some EUR 35 million in R&D (2010)
72% of order intake in 2010 is classified as
Environmental Goods and Services (OECD
definition)
SEB Enskilda Nordic Seminar
0
2003 *) 2004 *) 2005 *) 2006 *) 2007
Sales
Operating profit
*) Combined basis
2008
2009
2010
2011e
Operating profit margin
**) from operations, excl. one-time costs and PPAs
• Some 3,700 professionals in 25 locations
• Operating through flexible, scalable and asset
light business model
• Roughly 2/3 of sales (2010) from emerging
markets (Dow Jones emerging market list)
Over a century as a technology leader
Year
2012
VPF, ASH DEC, EPI, KILN SERVICES
2011
MILLTEAM, EDMESTON
2010
2006
AUBURN (2008)
Listing on the NASDAQ OMX Helsinki
OUTOKUMPU TECHNOLOGY
2001
BOLIDEN CONTECH
GRINDING MILLS
1970
AUSMELT
KHD ALUMINIUM
AISCO, SUPAFLO
WENMEC
1990
OUTOKUMPU
LURGI
METALLURGIE
1950
1900
3
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar
LAROX
Life cycle offerings delivered globally
through four business areas
Market Operations
Supply
Business Infrastructure
Strategy
Technology Management
Finance & Control
Legal Affairs
Human Capital
Non-ferrous Solutions
Ferrous Solutions
Energy, Light
Metals & Environmental
Solutions
for the processing of
copper, nickel, zinc,
lead, gold, silver,
platinum group metals,
industrial minerals as
well as valuable minor
metals
for the production of
concentrates, industrial
minerals, pellets, sinter,
pig iron, direct reduced
iron, ferroalloys, and
titanium feedstock
for oil shale, oil sands
and biomass processing,
light metals and sulfuric
acid production, off-gas
handling, and industrial
water treatment
Services
providing
life cycle services
Peers /competitors
Competitive landscape
is fragmented, no
face-to-face competitor
Jacobs (Aker), Andritz,
Bateman Engineering/Litwin,
BGRIMM, CITIC, Delcor,
EPCM, FLS, Krupp Polysius,
Mesco, Metso, PERI,
Siemens, SMS Meer, Thermo
Fisher, WesTech, Xstrata
Jacobs (Aker), Bateman
Engineering, BSIET, Danieli,
Downer, FLS, Kobelco,
Metso, Midrex, Siemens, SMS
Siemag, Tenova Pyromet
Jacobs (Aker), Alcan, Alstom,
Brochot, FLS, Foster Wheeler,
GEA, MECS, Siemens,
Solios, Stultz, Veolia
FLS, Metso, local competitors,
internal maintenance
departments
Engineering: AMEC, Ausenco, Bechtel, Chalieco, Enfi, Fluor, Hatch, MCC, NERIN, NFC, SNC-Lavalin, SRK, Worley Parsons
4
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar
Portfolio of the world’s best technologies covers
the whole value chain from ore to metal
Natural resources (ores, minerals, energy, water)
Metallurgical processing
5
Minerals processing
Sintering and pelletizing
Grinding
Smelting and refining
Flotation
Direct and smelting reduction
Filtration
Calcination
Physical separation
Roasting and off-gas handling
Thickening and clarification
Leaching and solution purification
Analyzers and process automation
Solvent extraction
Industrial minerals/concentrates
Copper
Nickel
Zinc
Cobalt
Precious metals
Aluminum
Electrorefining and electrowinning
Ferroalloys
Process control
Pellets/sinter
Chemicals
Sulfuric acid production
Water treatment
Neutralization, effluent treatment, drinking water
Energy
Combustion and gasification, heat recovery, gas handling, bio energy, oil sand and oil
shale processing
Services
Expert services, spare parts and maintenance, operation, modernization and
expansion, life cycle service contracts
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar
DRI/HBI/ Pig Iron
Sulfuric acid
Water
Shale oil
Char
Energy
Examples of Outotec’s Best Available
Technologies (BAT)
6

Flash smelting and flash converting for copper and nickel

Zinc direct leaching

Electrolytic refining of copper, nickel, zinc

Circored® Direct reduction of iron ore fines

Traveling grate process for iron ore pelletizing

Emission optimized sintering for iron ores

Ferrochrome process

Alumina calcination

Aluminum smelting (rodding plant, green paste plant)

Partial roasting of copper concentrate

Zinc roasting in fluidized bed

Pyrite roasting

Sulfuric acid production (single/double absorption)

Spent acid regeneration

Wet electrostatic precipitator
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar
Outotec delivers a new manganese sinter plant in
Hotazel, for Kalagadi Manganese. The new plant will
be one of the largest manganese sinter plants
(capacity 2.4 million tonnes of manganese sinter p.a.).
Long-term customer relationships with all the
industry’s top companies
Selected reference customers of Outotec
Large global mining
companies (seniors)
Small and medium sized
companies (juniors)
Repeat business
The life-cycle customer approach aims at
servicing its customers over the full life of a
mining site / metallurgical plant
7
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar
Local mining and metallurgical
companies in emerging
regions
Multiple technologies for single companies
Outotec has a strong track record for
delivering multiple technologies to single
companies
Industry drivers
© Outotec - All rights reserved
Emerging market GDP growth is driving
metals demand

Long-term metals demand is expected to continue
healthy as GDP growth is driving the metals
consumption per capita in emerging markets due to
urbanization and investments into infrastructure.
High GDP growth drives continuing growth of
commodities demand in the range of 4 to 7% p.a.
Demand growth for selected commodities 2010-15
(2010=100)
145
140
135
GDP (PPP) growth in BRIC and Emerging vs
Advanced economies
130
125
120
115
170
China
110
105
160
100
India
150
95
2010
140
Russia
2011
2012
2013
2014
Alumina
Aluminium
Copper
Zinc
Nickel
Gold
Iron Ore
S-Acid
2015
130
Brazil
120
Emerging and
developing
economies
110
100
2010
2011
2012
2013
2014
2015
Source: IMF, Sept 2011
9
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar
Advanced economies
DEMAND
Alumina, SGA
Aluminium
Copper
Zinc
Nickel
Gold (10-14)*
Iron ore
Sulpuric acid
*gold in tons
CAGR% 2010-15
6.6 %
7.0 %
4.2 %
5.6 %
5.5 %
2.0 %
4.9 %
4.8 %
Increase, Kt/a
6 309
3 289
880
735
93
66
112 800
10 558
2010 Production, Mt
83.1
41.2
19.3
11.7
1.52
2586
2018
199
Middle class is growing globally

The share of consumers
from emerging markets in
the global population is
expected to double in the
next 20 years which will
push demand for
commodities

The rise of the middle
class will drive strong
growth of consumer
spending in emerging
markets
10
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar
Ore grade
Energy
Making metals requires a lot of energy and energy costs are constantly
climbing. More energy-efficient processes are needed.
Emissions
Mining and metallurgical industries are major emitters of CO2 and ecotoxic substances. Cleaner solutions must be developed.
Water
Water availability and pollution are critical issues. Advanced solutions
for water cleaning, conservation and recycling are needed.
Peak oil is approaching. Oil is expected to run out by 2050 with current
production rates, thus alternative sources are needed.
Recycling
Ore grades are declining and the demand for metals is increasing. In
order to meet the demand, more ore needs to be processed with more
advanced technology.
Peak oil
Demand for sustainable technology increases
11
2012
© Outotec - All rights reserved
The need for recycling is growing, thus requiring new technologies for
turning scrap and waste into products.
SEB Enskilda Nordic Seminar
Industry’s current and future technology trends
are favorable for Outotec
Current trends

Larger capacities

Continuous processes (vs Batch process)

Safer processes and cleaner working environment

Higher reliability, availability and maintainability

Water, energy and material efficiency

Zero impact extraction technologies

Intelligent automation with remote process control and
monitoring
Future trends

Overall eco-efficiency from mine to metal

Shorter process chains

Bioprocessing

Enhanced leaching technologies with efficient lixiviants

Recycling of novel materials

Renewable energy technologies

Quantum leap technologies
12
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar
Positive development of metal prices and demand
have been the catalyst for new mine developments
Raw Materials Group mine map
Phase status
Number of projects
11/2011
2010
2009
230
190
84
389
259
246
470
243
225
206
190
183
Construction
Feasibility
Prefeasibility
Conceptual
Source: Raw Materials Data. Copyright: Raw Materials Group, 2011
13
2012
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SEB Enskilda Nordic Seminar
Examples of Outotec’s
offerings
Plant, process and solution deliveries
Piloting, bench scale testing, process design
bench scale testing, process design
Laboratory services, process consept designs
Outotec’s strategy in a nutshell
The best return
on a customer’s investment
Global integrated operations and local presence
Increasing value through
life cycle solutions
Applying core
technologies in new
attractive growth areas
Improving
productivity and
scalability
Leadership in technology and innovation
Sustainable use of Earth’s natural resources
14
Q1-Q3/2011
© Outotec - All rights reserved
Company presentation
Increasing value through life cycle solutions
We strengthen our earnings logic by
offering ore-to-metal total solutions and life
cycle services.
Outotec solution
elements
Value
Growing solution scope
Value-based pricing
Services
Project
delivery
System
integration
Proprietary
equipments
Technology
Technology, equipment,
systems integration,
project delivery
Outotec CAPEX solutions
Spare parts
Operation and
maintenance
Upgrades
Outotec service solutions
Maximizing life cycle profitability for
Customer and Outotec
15
Q1-Q3/2011
© Outotec - All rights reserved
Company presentation
Maintenance
shutdown
Research and
analysis
Applying core technologies in attractive new
growth areas
Outotec uses proven technologies and
core capabilities to create innovative
solutions to adjacent industries.
• Entering adjacent industries
•
16
with high technological
synergies and manageable
risks
Opportunities to provide
expert services and
innovative technological
solutions in energy industry
and industrial water
treatment sector
Q1-Q3/2011
© Outotec - All rights reserved
Company presentation
Services
Project
delivery
System
integration
Proprietary
equipments
Technology
Current metals
and minerals
IWT
Energy
Q3 results in brief and
delivering long-term financial targets
© Outotec - All rights reserved
Strong order momentum in Q3


Order intake in Q1-Q3/2011 EUR 1,678.4 million (Q1-Q3/2010: EUR 1,038.2 million), +62%
Order intake in Q3/2011 EUR 802.7 million (Q3/2010: EUR 269.1 million), +198%
 Orders from EMEA (including CIS) represented 52%, Americas 34% and Asia Pacific 14%
Gas cleaning and
sulfuric acid plant for
OJSC Almalyk Mining
& Metallurgical
Company, Uzbekistan
approx. € 30 million
High Gradient Magnetic
Separators (iron) for
London Mining Plc,
Sierra Leone
over € 10 million
Concentrator
technology for Codelco,
Chile
approx. € 24 million (half
in Q2 and the rest in Q3)
Copper
concentrator for
ZAO Miheevsky
GOK, Russia
€ 60 million
Iron ore pelletizing
plant for Novolipetsk
Metallurgisk
Kombinat, Russia
€ 150 million
Aluminum smelter
technology for Emirates
Aluminium PJSC (EMAL),
Abu Dhabi
over € 100 million
Ferrochrome plant
for Mintal Group Co.
Ltd, China
value not disclosed
2 Calciners for Ma'aden
Bauxite Aluminium
Company, Saudi Arabia
€ 62 million (roughly € 50
million in Q3 order intake)
Outotec offices
18
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar
Concentrator
technology (gold) for
the Petropavlovsk
Group, Russia
€ 25 million
Record-high order intake in Q3 resulting in
order backlog over EUR 2bn
EUR million
2200
 Order backlog at the end of
Q3/2011 was EUR 2,052.5
(1,332.2) million, 54%
higher than at the end of
Q3/2010
2000
1800
1600
 35 projects with value in
excess of EUR 10 million,
accounting for 68% of the
backlog
1400
1200
 Roughly 25% (or approx.
1000
803
800
600
493
371
400
200
186
240
235
532
475
418 384
299
168
419
260
120 139 106
350
269
202
357 344
EUR 510 million) of the
backlog is estimated to be
delivered in 2011 and the
rest in 2012 and beyond
 Strong quarterly fluctuations
in order intake
111
0
 Announced orders in
Q4/2011: approx EUR 100
million
Order backlog at the end of the period
19
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar
Order intake by quarter
Share of unannounced orders
Solid organic sales growth and improved profitability
Q1-Q3
2011
Q1-Q3
2010
Change
%
Last 12
months
2010
Q3
2011
Q3
2010
Change
%
888.8
639.4
+39.0
1,219.1
969.6
352.8
228.5
+54.4
Gross margin, %
24.0
25.8
24.8
26.2
24.9
27.3
Operating profit from business
operations
66.6
41.2
100.1
74.7
34.3
26.4
-22.3
-4.2
-26.5
-3.6
-7.6
-5.4
-9.4
-1.2
-2.0
+ revaluation of Ausmelt shares
-
+2.2
-
+2.2
-
-
+ Other
-
-
+0.6
+0.6
-
-
Reported operating profit
63.0
13.5
91.1
41.6
33.2
18.1
FX impact (unrealized, realized)
+2.3
+3.3
+0.9
+1.9
-2.5
+4.7
7.1
2.1
7.5
4.3
9.4
7.9
EUR million
Sales
- one-time restructuring cost
- PPA amortization
Operating profit margin, %
- from business operations, %
20
2012
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SEB Enskilda Nordic Seminar
+61.6
+367.4
+30.0
-6.2
+83.0
Services – very strong organic growth

Sales of the Service business in Q1Q3 were EUR 234.4 million (Q1Q3/2010: 182.0 million), up 29%

In the reporting period, Service
business represents 26% of sales
(Q1-Q3/2010: 28%)

Sales of the Service business in
Q3/2011 were EUR 87.7 million,
representing 25% of sales (Q3/2010:
69.5 million, 30% of sales)

Long-term Services sales target: EUR
500 million by the end of 2015
EUR million
1250
1000
750
500
282.5
250
55.3
80.6
141.2
148.6
234.4
0
Service sales
21
2012
© Outotec - All rights reserved
Outotec sales
SEB Enskilda Nordic Seminar
Strong cash flow and further strengthened
financial position
Q1-Q3
2011
Q1-Q3
2010
Last 12
months
225.8
92.3
221.0
87.5
120.1
50.3
-356.7
-206.0
-356.7
-200.9
-356.7
-206.0
351.2
328.0
351.2
357.7
351.2
328.0
39.3
41.9
39.3
41.2
39.3
41.9
Gearing, %*)
-101.6
-62.8
-101.6
-56.2
-101.6
-62.8
Working capital*)
-269.6
-141.3
-269.6
-113.5
-269.6
-141.3
ROI, %
21.8
3.9
24.2
9.2
34.6
18.5
ROE, %
15.9
3.3
17.9
7.6
25.5
14.2
Earnings per share, EUR
0.93
0.18
1.34
0.59
0.48
0.25
EUR million
Net cash from operating
activities
Net interest-bearing debt*)
Equity*)
Equity-to assets ratio, %*)
*) At the end of the period
22
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar
2010
Q3
2011
Q3
2010
Improving EBIT margin towards long-term
target of average 10%
EUR million
Guidance 2011
Sales: EUR 1.35-1.45bn
EBIT%: approx. 8-9
Operating profit margin, %
1600
12
L-T targets:
1400
Sales: 10-20% CAGR
10
EBIT%: avg 10%
1200
Maintain strong balance sheet
8
Div policy: at least 40%
1000
800
6
600
4
400
2
200
**)
0
2003 *) 2004 *) 2005 *) 2006 *) 2007
Sales
Operating profit
*) Combined basis
23
2012
© Outotec - All rights reserved
0
Investment areas in 2011:
• Services business
• Sales and marketing
• Supply and partnering
network development
• R&D
• Shared business processes
• IT platforms
• M&A
Investments today enable
future growth and better salesto-fixed-cost ratio.
2008
2009
2010 2011E
Operating profit margin
**) from operations, excl. one time costs and PPAs
SEB Enskilda Nordic Seminar
2010 EUR 26 million
annualized savings have been
reinvested into future growth
and profitability improvement
Financial Statements Review 2011
will be published on Thursday,
February 9, 2012.
Key factors of operating profit margin
development
Quartely and annual fluctuations
• Project scope & mix (CAPEX vs Service)
• Timing of license fee payments
• Timing and success of project completions
• Percentage of Completion schedules
• Foreign Exchange rates
_
24
2012
© Outotec - All rights reserved
Pricing pressures
Competition
Cost inflation
R&D investments
Selling and marketing
Administration
SEB Enskilda Nordic Seminar
L-T
Target:
average
10%
+
Services sales
Life cycle solutions
Pricing excellence
Supply savings
Engineering productivity
License fee incomes
Global resourcing
Scaling effect
Events after Q3/2011










25
Outotec has agreed with Luossavaara-Kiirunavaara AB (LKAB) on a delivery of technology package for
thickening the tailings in the Svappavaara iron ore mine in Sweden. The contract value is some millions of Euros.
Outotec acquired a furnace refractory demolition business of Kiln Services Australia Pty Ltd. The parties have
agreed not to disclose the purchase price.
Outotec acquired all interests in Energy Products of Idaho Limited Partnership (EPI) in the United States. The
acquisition price consists of two components: a fixed cash element of approx. EUR 43 million and an earn-out
payment of max EUR 25 million based on EPI's financial performance in 2012 and 2013.
Outotec and one of the world's leading sustainability consulting companies, PE International (Germany),
announced a joint development of a new software interface for metals production sustainability and lifecycle
evaluations.
Greenfield copper production plant for Guangxi Jinchuan Non-Ferrous Metals Compay in Fangchenggang,
China. Over EUR 30 million.
Outotec received jury's honorary mention in the competition evaluating the corporate responsibility reporting of
the Finnish companies. Outotec published its first corporate responsibility report, Outotec Sustainability report
2010, this year.
New copper-molybdenum concentrator for Quadra FNX Mining Ltd in Sierra Gorda, Chile. EUR 26 million (the
majority is booked in Q3 order intake with a small part being booked in Q4).
Gold pressure oxidation (POX) technology for Russian Petropavlovsk Group. The contracts complement
contracts disclosed in May and July 2011. EUR 34 million (the majority is booked in Q4 order intake with a small
part being booked in Q3).
New ferrochrome plant based on Outotec's proprietary technology for TISCO, on the to Jinzhong, China. Value
not disclosed.
On October Outotec was featured in CDP’s Nordic Carbon Disclosure Leadership Index. Outotec received 81 out
of 100 points and was ranked among the top 10 percent of the 260 companies.
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar
Our mission:
Sustainable use
of Earth's
natural resources.
26
2012
© Outotec - All rights reserved
SEB Enskilda Nordic Seminar