As filed with the Securities and Exchange Commission on April 30, 2002
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
DYNEA INTERNATIONAL OY
13 Snellmaninkatu, Helsinki, Finland
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F
Form 20-F [X] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): N/A
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DYNEA INTERNATIONAL OY
/s/ Filip Frankenhaeuser
--------------------------------------
Name: Filip Frankenhaeuser
Title: Executive Vice President and
Chief Financial Officer
Date: April 30, 2002
Dynea Logo
Dynea International Oy
April 30, 2002
Dynea International's earnings release for 2001
Dynea International today released its results for the year 2001. The year was
the first full year of operations for the group in its current form, following
the merger between Neste Chemicals and Dyno in August 2000. Considering the
difficult economic environment, especially during the fourth quarter, Dynea's
result for the year was satisfactory.
o Global sales volumes on a comparable basis* were basically unchanged from
the previous year with resins volumes down 2% and paper overlays volumes up
by 3%.
o The strongly competitive market environment in Europe had a significant
negative effect on both volumes and margins.
o Demand in North America slowed down considerably in the fourth quarter.
o The successful completion of our restructuring plan has improved Dynea's
competitiveness.
o We sold our Polyester business in April 2001, thus completing the planned
streamlining of our business portfolio.
o Rebound in earnings has taken place in the first quarter of 2002. Full year
2002 earnings are expected to show a clear improvement compared with 2001.
* Comparable basis as if Dyno's results for all of 2000 were included.
In year 2001, Dynea faced weakening demand in all of the markets in which we
operate. A downturn in the construction industry increased the competition in
most of our markets. The year was also characterised by volatile raw material
price development. Prices for all main raw materials were generally high for the
first half of the year and dropped considerably in the second half.
Group Results
(euro millions)
Q4 2001 Q4 2000 FY 2001 FY 2000
Sales 229 294 1050 1055
EBITDA 7 1 78 61
Operating profit (loss) (4) (35) 15 (21)
Net profit (loss) (17) (43) (50) (62)
Bonding and Surfacing
Bonding and Surfacing (euro millions)
Q4 2001 Q4 2000 FY 2001 FY 2000
Sales 203 230 916 637
EBITDA 14 6 77 53
Operating profit (loss) 4 (14) 38 7
Sales in Bonding and Surfacing increased to (euro)916.0 million, or by 44%, in
2001 from (euro)637.1 million in 2000. The major reasons for this increase were
the acquisition of Dyno and higher prices than average in 2001 due to higher raw
material prices. Global sales volumes on a comparable basis* were basically
unchanged from the previous year with resins volumes down 2% to 2,230 ktons and
overlays volumes up by 3% to 239 million square meters. Overall, our EBITDA
increased to (euro)77 million, or by 46%, in 2001 from (euro)52.7 million in
2000, also partly as a result of restructuring benefits and streamlining of our
product portfolio.
Bonding and Surfacing sales in the fourth quarter of 2001 decreased 10% compared
to the third quarter of 2001 and 12% compared to the fourth quarter of 2000.
This was due to lower sales prices in the extremely competitive environment in
Europe and North America during the last quarter. Sales volumes decreased in the
fourth quarter of 2001 by 2% compared with the third quarter.
Volumes Quarterly, 2001
Q1 Q2 Q3 Q4 Tot./Full year
B&S excl. overlays (000'tons) 569 556 559 546 2,230
Overlays (million sq.m.) 58 62 63 56 239
Europe:
The market for panelboard resins in Europe deteriorated in 2001. The
construction industry faced a downturn, with a negative effect on all our
markets for Bonding and Surfacing. Our sales in Central Europe were affected by
recession in the construction industry Germany. As a consequence, we faced
increased competition in Europe, resulting in a volume decrease for panelboard
resins of 12% on a comparable basis, and also a decreased margin level.
The market for industrial resins in Europe was mainly stable during 2001, but
with some slow down towards the end of the year leading to decreased sales. The
downturn was due to the close link between demand for industrial resins
applications, such as insulation and impregnation, and the building activity.
The slowness in construction industry also resulted in a lower demand for wood
adhesives for structural wood products in Central Europe.
Equally, our sales for our overlays plant in Finland also decreased due to slow
building activity.
North America:
In North America, although housing starts remained relatively unchanged for the
third consecutive year since 1998, the overall economy entered into recession
and demand for our products generally declined compared with year 2000. Also
restructuring in customer industries created imbalances on the market. However,
due to regional differences and in addition some new customers we managed to
increase our market share and our sales volumes in panelboard resins in North
America. The effects of September 11 were strong and lead to sharply decreased
demands in the fourth quarter.
Activities to further promote our industrial resins and wood adhesive products
in the North American market continued. The woodworking industry was affected by
the same trends as the panelboard industry, with lower demand for beams and
other woodworking products.
North American sales of overlays grew during the first three quarters of 2001
and a decline in the fourth quarter, due to a strong fall in demand in the
United States. The construction of our facility in Welcome, North Carolina, was
completed, but sales from that facility have been lower than anticipated due to
the slow market situation.
Asia Pacific:
The market for panelboard resins in the Asia Pacific region was affected by
developments in Japan and China, which are the main consuming countries for
panelboard resins in the Asia Pacific region. Japan recently enacted
formaldehyde emission requirements that increased the demand for certain zero
emission resins that we produce in New Zealand. Growth in China was less than
predicted during the year, but the overall growth in Chinese economy remains
strong and demand for our products remained buoyant.
In Asia, the ongoing recession in Japan's economy has had a negative impact on
the demand for our products, in particular woodworking products and industrial
resins. Especially the demand for laminated beams imported from Europe has been
lower.
In general, the sales of wood and specialty adhesives in Asia remained stable.
Oil Field Chemicals
Oil Field Chemicals ((euro)millions)
Q4 2001 Q4 2000 FY 2001 FY 2000
Sales 20 16 67 24
EBITDA 2 0.4 7 1
Operating profit (loss) 1 0.2 0.3 6
Oil Field Chemicals consist of operations from the Dyno acquisition in August
2000 and the results are therefore not directly comparable. On a comparable
level, sales in 2001 increased by 12%.
Demand for our oil field products in Europe was negatively affected by two major
accidents at customer sites during the first half of 2001, the rupture of a
pipeline in the United Kingdom and a gas explosion in Denmark. These accidents
caused standstill at those customer sites.
Dynea started production of oil field chemicals in November 2001 for the
American market at our plant in Durango, Mexico. The initial customer response
has been positive.
In Asia, the sale of oil field chemicals remained stable with a slight increase
towards the end of the year despite delays in several major projects in the
Middle East and a less favourable product mix than in year 2000 due to a
competitive situation as well as a lower demand for the desired products.
Methanor
For Methanor, the methanol-production partnership of which our share is 40%, the
market suffered a downswing with methanol prices decreasing by 50% during the
year. During 2000, high methanol prices contributed to Methanor's strong
results. However, in the second half of 2001, decreased world-wide methanol
consumption and sharply reduced methanol prices drove down Methanor profits. In
spite of lower prices for natural gas feedstock, which is the primary raw
material in methanol, Methanor v.o.f. recorded losses in the last quarter of
2001.
Raw materials
Within Bonding and Surfacing operations, the year was marked by variation in raw
material prices. At the beginning of 2001, the prices of our key raw materials
(methanol, phenol, melamine, urea) were approximately 80 to 100% higher than at
the same time previous year. During 2001, their prices declined considerably,
e.g. methanol and phenol prices decreased by over 50% from the beginning of the
year. In the fourth quarter of 2000, methanol was quoted at (euro)255/ton and
phenol at (euro)965/ton, and during the fourth quarter of 2001 they were at
(euro)150/ton respective (euro)600/ton.
This decline in raw material prices has not directly led to increased
profitability. In fact, we often had to reduce our product prices due to raw
material price decreases and increased competition among panelboard resins
producers, especially in Central Europe.
Restructuring
Our restructuring plan included the divestiture of our Polyester business in
order to streamline our business portfolio. The Polyester business was sold in
April 2001 to Ashland Inc. Other disposals during 2001 were the sale of the
Dynomer coating resins business in Malaysia to Cray Valley, the sale of our
Scandinavian distribution business and the disposal of our minority interests in
Hekza-Neste Chemicals Sdn Bhd, Malaysia (30%) and LP Pacific Sdn Bhd, Malaysia
(30%).
Our restructuring plan following the Dyno Acquistion has been completed
successfully. The benefits from this program exceeded plans and were up to
(euro)35 million. Dynea continue to further develop our operations through
initiatives to increase our efficiency.
Liquidity & Debt
31.12.2001 (euro millions)
Gross Debt 639.2
Cash 59.5
Marketable securities 1.7
Net Debt 578.0
Gross debt is at carrying value, net of capitalised loan arrangement fees. Gross
debt included (euro)85.1 million short-term loans raised from our short-term
revolving credit facility of (euro)100 million. Guarantees and letters of credit
issued from the revolving credit facility totalled (euro)11.0 million, meaning
that we had (euro) 3.9 million undrawn from the facility.
During the year, we sold our Polyester business, Dynomer in Malaysia, our
Scandinavian distribution business and our shares in LP Pacific Films and
Hexza-Neste. From these sales proceeds (euro)48 million has been used to prepay
long-term senior bank loans during 2001 and a further (euro)12 million was
prepaid at the end of March 2002. We also made scheduled repayments around
(euro)15 million under the senior loans during 2001. Net interest costs for the
year amounted to (euro)73.7 million.
In 2001, we received a capital contribution totalling (euro)34.5 million from
our owners and a further (euro)8.1 million paid in the beginning of 2002.
First Quarter and Outlook
The North American market shows some positive signs and the Asia Pacific market
remains stable, but no improvement is yet to be seen in the European market.
However, our first quarter of 2002 showed clear improvement from the last
quarter of 2001. Sales volumes have increased compared to the last quarter of
2001 and are on the same level as the first quarter of 2001. Overall, our
profitability has increased due to benefits from the restructuring program as
well as our improved product mix. Compared to 2001, we expect a clearly improved
result in 2002.
Liquidity also improved during the first quarter of 2002 and we have reduced the
outstanding short-term loans. Consequently, we have around (euro)10 million
available from our revolving credit facility at the end of April 2002. We have
also received an equity contribution of (euro)7 million from our owners in
addition to the (euro)8.1 million referred above.
Forward Looking Statements
Certain statements in this report are not historical facts and are
"forward-looking." Words such as "believes", "expects," "estimates," "may,"
"intends," "will," "should" or "anticipate" and similar expressions or their
negatives frequently identify forward-looking statements. Forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results, performance or achievements or industry results to
be materially different from those expressed or implied by such forward-looking
statements. From time to time, we have made or may make forward-looking
statements orally or in writing. Such forwards-looking statements may be
included in, among other things, press releases, filings with or submissions to
the U.S. Securities and Exchange Commission, reports to shareholders and
noteholders and other communications, or oral statements made by or with the
approval of an authorized executive officer.
We have filed our 2001 Annual Report with the SEC on April 30, 2002. Our 2001
Annual Report is also available on our website www.dynea.com, Investor Center.
Here you can also find the details on:
- - the conference call held on May 2, 2002, 14.00 UK time,
- - as well as the simultaneous PowerPoint presentation on the web.
Dynea International's first quarter report 2002 will be published on May 30,
2002.
Dynea International Oy and Subsidiaries
Consolidated Balance Sheet
(all amounts in (euro)millions)
As at As at
December 31, 2001 December 31, 2000
-------------------------------------
Assets
Non-current assets
Property, plant and equipment, net (euro) 457.3 (euro) 500.1
Intangible assets 269.2 277.9
Investments in associates and joint ventures 39.3 43.2
Deferred tax assets -- 10.6
Other non-current assets 3.0 7.7
----- -----
Total non-current assets 768.8 839.5
----- -----
Current assets
Inventories 73.5 102.5
Accounts receivable and prepayments 148.6 195.9
Marketable securities 1.7 61.8
Taxes currently receivable 10.1 14.5
Other current assets 1.2 47.6
Cash and cash equivalents 59.5 40.2
----- -----
Total current assets 294.6 462.5
----- -----
Total assets 1,063.4 1,302.0
======= =======
Equity and liabilities
Capital and reserves
Share capital 281.0 281.0
Group contribution 38.2
Cumulative translation adjustment (25.0) (9.5)
Accumulated loss (121.5) (71.5)
----- -----
Total capital and reserves 172.7 200.0
----- -----
Minority interest 10.0 8.4
Non-current liabilities
Long-term borrowings 517.5 575.5
Pension liabilities 14.2 13.2
Long-term provisions 11.2 13.5
Deferred tax liabilities 54.7 87.4
Other non-current liabilities 6.9 0.4
----- -----
Total non-current liabilities 604.5 690.0
----- -----
Current liabilities
Accounts payable 82.9 113.9
Accrued liabilities 28.0 109.0
Long-term borrowings due
currently and short-term borrowings 121.7 112.7
Taxes currently payable 8.2 37.8
Other current liabilities 35.4 30.2
----- -----
Total current liabilities 276.2 403.6
----- -----
Total liabilities 880.7 1,093.6
----- -------
Commitments and contingencies
Total equity and liabilities (euro) 1,063.4 (euro) 1,302.0
============== ==============
Dynea International Oy and Subsidiaries
Consolidated Income Statement
(all amounts in (euro)millions)
Year Ended Year Ended
December 31, 2001 December 31, 2000
------------------------------------
Sales (euro) 1,049.6 (euro) 1,054.6
Other operating income 11.3 18.2
Changes in inventories of finished goods and
work in progress
8.5 2.7
Raw materials and consumables used 690.0 686.8
Services and rents 27.4 28.1
Staff costs 131.5 142.5
Other operating expense 125.9 151.8
Depreciation and amortization 56.5 50.3
Restructuring and other related items 3.2 25.5
Profit on sale of associates (3.0) --
Loss on sale of discontinued operation 3.3 --
Impairment write-downs 2.3 6.4
----- -----
Operating profit (loss) 15.3 (21.3)
Finance costs (80.2) (75.1)
Share of income in associates and joint ventures 9.7 15.2
--- ----
Loss before income taxes and minority interest (55.2) (81.2)
Income tax benefit (expense) 7.6 19.6
----- -----
Loss from ordinary activities before minority
interest
(47.6) (61.6)
Minority interest income (expense) (2.4) (0.7)
----- -----
Net loss for the year/period (euro) (50.0) (euro) (62.3)
============= =============
Dynea International Oy and Subsidiaries
Consolidated Cash Flow Statement
(all amounts in (euro)millions)
Year Ended Year Ended
December 31, 2001 December 31, 2000
------------------------------------
Cash (used in)/generated from operations 122.7 15.2
----- ----
Interest received 11.4 2.8
Interest paid (87.5) (13.9)
Other financial income and expense (9.4) (11.6)
Income tax refund/(taxes paid) (36.9) (19.0)
------ ------
Net cash (used in)/provided by operating activities 0.3 (26.5)
--- ------
Investing activities
Acquisition of subsidiaries, net of cash acquired of
(euro)31.3 and (euro)24.9 in 2000 and 1999, respectively -- (645.3)
Disposal of businesses, net of cash disposed of (euro)0.6
and (euro)22.5 in 2001 and 2000, respectively 67.2 684.8
Purchase of investments -- --
Maturity of investments -- --
Purchase of property, plant, and equipment and intangibles (28.9) (27.1)
Proceeds from sales of property, plant, and equipment and
intangibles -- 7.1
Proceeds from sales of associates 7.8 3.6
Proceeds from sales of other shares and holdings -- 16.0
---- ----
Cash provided by/(used in) investing activities 46.1 39.1
---- ----
Financing activities
Issuance of share capital/capital contributions 34.5 91.5
Dividends paid -- --
Proceeds from long-term borrowings -- 616.9
Repayments on long-term borrowings (64.5) (836.9)
Net proceeds (payments) from short-term borrowings 3.7 120.8
Net proceeds (payments) on related party borrowings -- --
Net proceeds on related party advance -- 36.4
Debt issuance costs (1.0) (36.6)
----- ------
Cash (used in)/provided by financing activities (27.3) (7.9)
------ -----
Increase in cash and cash equivalents 19.1 4.7
Effects of exchange rate changes 0.2 1.8
Cash and cash equivalents--beginning balance 40.2 33.7
---- ----
Cash and cash equivalents--ending balance (euro) 59.5 (euro) 40.2
=========== ===========