Slide 1: Outokumpu Q3 2022 results
Financial performance remained solid in the third quarter, share buyback program announced Outokumpu Q3 2022 results Heikki Malinen, President & CEO Pia Aaltonen-Forsell, CFO November 3, 2022 November 3, 2022
Slide 2: Disclaimer
Disclaimer This presentation contains, or may be deemed to contain, statements that are not historical facts but forward- looking statements. Such forward-looking statements are based on the current plans, estimates and expectations of Outokumpu’s management based on information available to it on t
Slide 3: Best third-quarter result in history delivered in the midst of an unprecedented energy crisis in Europe
Best third-quarter result in history delivered in the midst of an unprecedented energy crisis in Europe Heikki Malinen, President & CEO November 3, 2022
Slide 4: Outokumpu's adjusted EBITDA amounted to EUR 304 million in the third quarter
• Solid performance continued in a softening market environment Outokumpu's • Profitability impacted by significant cost adjusted EBITDA inflation, especially in electricity price amounted to • Successful cost mitigation EUR 304 million • Hourly optimization of ferrochrome production • Recycled mate
Slide 5: Nordic electricity position competitive over Central Europe
Nordic electricity position competitive over Central Europe 4.6 TWh in 2021 1. Central Europe average of DE, NL, BE, FR prices Note: Electricity represents 57% of Outokumpu's total 2021 energy usage. Excluding taxes, transmission costs and other related costs 5 November 3, 2022 Source: Refinitiv Eik
Slide 6: Price difference between Asian and European stainless steel has significantly narrowed
Nickel LME cash, USD/tonne Price difference between September 30000 Asian and European 25000 20000 stainless steel has 15000 significantly narrowed 10000 5000 2018 2019 2020 2021 2022 Transaction prices 304 stainless, USD/tonne* Ferrochrome, USD/lb September September 7500 2.5 2 5000 1.5 2500 1 0 0.
Slide 7: In Q3, adjusted EBITDA amounted to EUR 304 million as a result of decreased volumes and significant timing losses
In Q3, adjusted EBITDA amounted to EUR 304 million as a result of decreased volumes and significant timing losses Deliveries, kt Adjusted EBITDA quarter-on-quarter comparison1, EUR million 586 605 571 560 Stainless deliveries 546 550 Significant timing losses 523 decreased by 12% 491 Significant cos
Slide 8: Recycled material content increased to 93% in Q3
Recycled material content* increased to 93% in Q3 Safety performance, TRIFR 8.7 10 • Weaker safety performance in the third 4.4 4.1 3.2 quarter, decisive actions taken 5 2.4 2 1.9 • Strong material efficiency: further 0 2016 2017 2018 2019 2020 2021 YTD increased recycled material content, 2022 high
Slide 9: We are rapidly ramping up the second phase of our strategy with an increased focus on shareholder returns
We are rapidly ramping up the second phase of our strategy with an increased focus on shareholder returns Phase 3: Strong sustained performance Phase 2: 2026– Strengthen the core Phase 1: 2023–2025 Investing in growth and OUR VISION Strengthen the balance sheet sustainability Targeted productivity C
Slide 10: Outokumpu launches a share buyback program
• Outokumpu's balance sheet is currently Outokumpu stronger than ever before launches a share • This allowed Outokumpu's Board of Directors to approve a share buyback buyback program program of up to EUR 100 million of a maximum of • Through the program we seek to mitigate 20 million shares and mana
Slide 11: Our significantly strengthened balance sheet gives us resilience to withstand the continuing uncertainty
Our significantly strengthened balance sheet gives us resilience to withstand the continuing uncertainty Pia Aaltonen-Forsell, CFO November 3, 2022
Slide 12: Record-low net debt level of EUR 90 million reached - strongest balance sheet in the industry
• Liquidity increased to EUR 1.4 billion Record-low • EUR 800 million of committed credit net debt level of facilities fully unutilized at the end of Q3 EUR 90 million • Share buyback program of up to EUR 100 million launched to prepare for the reached - strongest convertible bond, maturity 2025 bal
Slide 13: Amidst the European energy crisis, we aim to improve our energy efficiency by 8% until the end of 2024
• We will prioritize energy efficiency Amidst the European related investments energy crisis, we aim to • Energy efficiency related annual capital expenditure is increased by EUR 20 improve our energy million for 2023 and 2024 efficiency by 8% until • Total annual capital expenditure the end of 2024
Slide 14: We have concrete measures in place to achieve our new ambitious energy efficiency improvement target
We have concrete measures in place to achieve our new ambitious energy efficiency improvement target Outokumpu's energy efficiency* We aim to improve our energy efficiency by: MWh/ton of stainless steel • Investing into furnace improvements of heat 3.15 treatment lines 3.11 • Optimizing our energy c
Slide 15: Third quarter ended with solid financials
Third quarter ended with solid financials Key figures Q3 2022 Q3 2021 Q2 2022 2022 2021 Continuing operations Stainless steel deliveries 1,000 tonnes 491 546 560 1,656 2,254 Due to divestment of majority of Sales EUR million 2,339 1,845 2,686 7,598 7,243 the Long products business, Adjusted EBITDA E
Slide 16: BA Europe – Good result despite challenging operating environment
Europe’s stainless steel deliveries, 1,000 tonnes BA Europe – Good result despite 480 401 410 414 420 370 372 356 355 360 challenging operating 316 300 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 environment 2020 2021 2021 2021 2021 2022 2022 2022 Europe’s adjusted EBITDA, EUR million Key points in Q3 2022 289 300 • Ac
Slide 17: BA Americas – historic result, but clear signs of market weakening
Americas’ stainless steel deliveries, 1,000 tonnes BA Americas – historic result, but 240 176 192 194 180 185 177 167 180 148 120 clear signs of market 60 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 weakening 2020 2021 2021 2021 2021 2022 2022 2022 Americas adjusted EBITDA, EUR million Key points in Q3 2022 150 136 135
Slide 18: BA Ferrochrome – lower FeCr sales price and production optimization led to lower result
Ferrochrome production, 1,000 tonnes BA Ferrochrome – 160 lower FeCr sales 127 131 131 128 125 129 128 120 104 price and production 80 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 optimization led to 2020 2021 2021 2021 2021 2022 2022 2022 lower result Ferrochrome’s adjusted EBITDA, EUR million Key points in Q3 2022 100
Slide 19: Strong cash flow generation in Q3 led to a significant decrease in net debt
Strong cash flow generation in Q3 led to a significant decrease in net debt Q3/22 cash flow, EUR million Annual capex, EUR million 240 Limited to -147 -38 €180 million 80 304 200 238 200 160 EBITDA, Working capital Provisions, Operating cash Net cash from Cash flow before continuing pensions, flow i
Slide 20: Lowest net debt in industry making company more resilient
Lowest net debt in industry making company more resilient Net debt, EUR million Net debt/LTM adjusted EBITDA 8 2,000 70% 51% 60% 6 1,600 45% 45% 44% 50% 40% 1,200 40% 4 800 30% 13% 20% 2 400 2% 10% 1,242 1,091 1,241 1,155 1,028 408 90 4 1.7 2.6 4.4 4.1 0.4 0.1 0 —% 0 2016 2017 2018 2019 2020 2021 Q1
Slide 21: Significant market uncertainty will continue in the fourth quarter and beyond
Significant market uncertainty will continue in the fourth quarter and beyond Heikki Malinen, President & CEO November 3, 2022
Slide 22: Outlook for Q4 2022
Group stainless steel deliveries in the fourth quarter are expected to decrease by 0–10% compared to the third quarter. The European ferrochrome benchmark price decreased to USD 1.49/lb for the fourth quarter. Outlook for Ferrochrome production continues at 50–60% of its full capacity due to a furna
Slide 23: Thank you! Questions & answers
Thank you! Questions & answers 23 November 3, 2022
Slide 24: BA Europe's adjusted EBITDA was EUR 128 million in Q3
BA Europe’s adjusted EBITDA was EUR 128 million in Q3 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million 289 289 193 161 128 149 128 Q2 2022 Deliveries Pricing & mix Net of timing and Costs Other Q3 2022 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 hedging 1) Indicat
Slide 25: BA Americas' adjusted EBITDA was EUR 135 million in Q3
BA Americas’ adjusted EBITDA was EUR 135 million in Q3 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million 136 135 136 135 95 90 84 Q2 2022 Deliveries Pricing & mix Net of timing Costs Other Q3 2022 and hedging Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 1) Indicativ
Slide 26: BA Ferrochrome's adjusted EBITDA was EUR 34 million in Q3
BA Ferrochrome’s adjusted EBITDA was EUR 34 million in Q3 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million 93 93 79 73 64 34 34 Q2 2022 Deliveries Ferrochrome price Costs Other Q3 2022 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 1) Indicative columns based on mana
Slide 27: In 2022, imports into Europe and US have increased
In 2022, imports into Europe and US have increased Third-country cold rolled imports1 into Europe, Third-country cold rolled imports2 into the US, 1,000 tonnes 1,000 tonnes Import penetration Import penetration (in %) (in %) kt kt 39% 40 40 150 40 26% 35 30 100 30 20 20 50 25 10 0 20 0 0 2018 2019 2