United States

Analyst Research Report Snapshot






Edison Investment Research


03 May 2013





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Outotec has a market-leading position in the global mining equipment sector. However, the four major mining companies have announced plans to reduce total capex from $50bn in 2012 to $35bn in 2014. Outotec is addressing this by growing services (spare parts/maintenance) and investing into high growth areas such as energy and water treatment. With this comes a new operating structure comprising two business divisions (Metals, Energy & Water and Minerals Processing) feeding into three geographical regions (the Americas, EMEA, Asia-Pac). Outotec has laid the groundwork to evolve from an equipment supplier to a local partner offering solutions that cover the full life cycle of a mine site. Sales and order growth delivered in Q1 was ahead of market expectations, although margins declined y-o-y due to product mix. The stock trades at a premium to peers (2013 P/E is 13.9x) and there may be a risk to 2013 consensus earnings.

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