Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Merger or Acquisition (November 2013)
28 slides from Outokumpu Oyj's merger presentation, Nov 30, 2013
Slide 1: Comprehensive measures to strengthen balance sheet and divest Terni and VDM
Outokumpu Comprehensive measures to strengthen balance sheet and divest Terni and VDM Mika Seitovirta, CEO Reinhard Florey, CFO Outokumpu November 30, 2013
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. This presentation does not constitute or form part of and should not be constructed as, an offer to sell, or the solicitation or invitation
Slide 3: Today's attendees of Outokumpu
Today‘s attendees of Outokumpu Mika Seitovirta Reinhard Florey CEO CFO Nov. 30, 2013 3
Slide 4: Contents
Contents 1. Strategy roadmap update and announcement overview 2. Financial plan in detail 3. Outokumpu offering and summary Nov. 30, 2013 4
Slide 5: Outokumpu Strategy Roadmap
Outokumpu Strategy Roadmap Today’s announcement focuses on financial stability Restructuring + Growth = Perfor- mance New Transform Ensure Full integration Deliver on Ramp-up Expand Leverage Develop efficiency company financial and new synergies US presence Ferrochrome HPSA APAC programs structure s
Slide 6: Strong progress in key strategic priorities during the first 11 months since acquisition
Strong progress in key strategic priorities during the first 11 months since acquisition New Deliver on Ensure financial Ramp-ups for future efficiency synergies stability growth programs • Krefeld meltshop • P150 program: • Capex reduction to • Ramp-up of Ferro- closure as planned in Savings of mor
Slide 7: Summary of the announcement
Summary of the announcement Strengthening of the balance sheet Divestment of Terni and VDM Financial plan to further strengthen to ThyssenKrupp balance sheet • EUR 1,269 million TK loan note as • New EUR 500 million committed syndicated consideration loan facility with maturity of 3 years. • Reduces
Slide 8: Contents
Contents 1. Strategy roadmap update and announcement overview 2. Financial plan in detail 3. Outokumpu offering and summary Nov. 30, 2013 8
Slide 9: Terni divesture to ThyssenKrupp details
Terni divesture to ThyssenKrupp details Terni divesture package includes following units: • Terni (Acciai Speciali Terni) integrated mill (CR capacity of 525 kt and melting capacity of 1.5 mt) and associated units in Italy: o Societa delle Fucine (AST forging unit) o Terninox (AST service center in
Slide 10: Streamlining of European coil service center network ready
Streamlining of European coil service center network ready Planned European coil service Outokumpu to continue with 8 coil center network service centers in Europe • Sachsenheim, Germany • Wilnsdorf, Germany • Castelleone, Italy Eskilstuna • Sheffield, UK • Alfortville, France • Batonyterenye, Hunga
Slide 11: VDM divesture concluded as best option in the strategic review
VDM divesture concluded as best option in the strategic review • Conclusions from the strategic review: • Limited synergies between VDM and Outokumpu’s core stainless business Significant positive impact • Little possibilities for shared production or R&D on balance sheet • Independent customer base
Slide 12: Comprehensive financial package to strengthen liquidity and balance sheet
Comprehensive financial package to strengthen liquidity and balance sheet Debt maturities September 30, 2013, MEUR • Overall liquidity reserves of >EUR 900 1 600 million (Sep 31, 2013). 1 400 • New EUR 500 million committed loan facility with maturity of 3 years to 1 200 enhance liquidity at closing
Slide 13: Preliminary rights issue details
Preliminary rights issue details • Size: EUR 650 million Size & price • Price: To be defined at launch of rights issue • Rights issue of new ordinary shares with pre-emptive rights for existing shareholders. Transaction structure • Existing shareholders and other investors may subscribe for other sh
Slide 14: Divestitures and planned rights issue to strengthen Outokumpu balance sheet
Divestitures and planned rights issue to strengthen Outokumpu balance sheet Illustrative gearing impact of VDM and Terni divestment: EUR million VDM and Terni divestment: Q3/13 Pro-Forma Q3/13 - Net debt expected to decrease by approximately EUR 650 million 633 2 981 1.269 Further influencing factor
Slide 15: Expected timeline
Expected timeline • Announcement of Terni & VDM sale & financial package November 29, 2013 • Underwriting agreement signed • TK share sale signed December 2013 • Extension process of existing debt facilities • EGM invitation Jan – Feb 2014 • EGM – approval of the rights issue • EU Commission and oth
Slide 16: Contents
Contents 1. Strategy roadmap update and announcement overview 2. Financial plan in detail 3. Outokumpu offering and summary Nov. 30, 2013 16
Slide 17: Strategic merits of the Inoxum acquisition continue to be strong
Strategic merits of the Inoxum acquisition continue to be strong The global leader in stainless steel with 35-40% market share in Europe and Global leader 12% globally. Capacity reduction & Enables reduction of 1.4 Mt. melting capacity and additional cold rolling utilization benefits capacity, signi
Slide 18: VDM divesture impact on Outokumpu sales split by Business Area
VDM divesture impact on Outokumpu sales split by Business Area Reported Group sales 1) Group sales excluding VDM 1) Jan-Sep 2013 Group sales: €6,2 billion Jan-Sep 2013 Group sales: €5,4 billion EMEA 47% Americas 12% EMEA 54% Americas 14% APAC 10% HPSA 32% APAC 11% HPSA 20% 1) Split by BA is based on
Slide 19: Broadest stainless steel product portfolio across standard and specialty grades
Broadest stainless steel product portfolio across standard and specialty grades Sales and volume split by product type Product range by grade Contribution, euros 1) Special grades Specialty 24% High Standard Heat Duplex Performance Martensitic 76% resistant grades Austenitic grades grades grades Sal
Slide 20: Way forward to strengthen balance sheet and to reach sustainable profitability
Way forward to strengthen balance sheet and to reach sustainable profitability Ongoing actions to strengthen November 29st announcement cash flow and profitability Divesture of Terni and VDM to Total annual savings of EUR 380 million ThyssenKrupp (at €1,269 mio) in 2015, EUR 450 million in 2017 Dive
Slide 21: Key milestone enabling Outokumpu to reinforce global stainless steel leadership position
Key milestone enabling Outokumpu to reinforce global stainless steel leadership position • Solution to the EU requirements and securing of company’s balance sheet and liquidity • Attractive valuations for VDM and Terni • Strong support from all Outokumpu stakeholders • Outokumpu’s stainless steel of
Slide 22: Q&A
Q&A
Slide 23: Balanced customer base across industries
Balanced customer base across industries Sales by customer segment 1) Sales by end-customer segment 1) Healthy balance between end-customer segments across both investment and consumer driven industries Consumer Other Distributors goods & 13 % Medical 40% 16 % Heavy Automotive industries 16 % 24 % A
Slide 24: Broadest stainless steel product portfolio across grades, forms and surface finishes
Broadest stainless steel product portfolio across grades, forms and surface finishes Jan – Sep 2013 deliveries by product grade 1) All surface finishes: standard & tailored surfaces Heat Super resistant austenitic Martensitic 2% 1% 1% Duplex 3% Ferritic 18 % Austenitic 57 % All product forms Austeni
Slide 25: New savings of more than EUR 100 million - overall savings to reach EUR 380 million in 2015
New savings of more than EUR 100 million – overall savings expected to reach EUR 380 million in 2015 Original synergy and P150 savings Revised expected savings after new EMEA plan 500 500 Original synergies* EMEA restructuring 450 450 P150 savings Original synergies adjusted** 400 400 P150 savings 3
Slide 26: Balanced stainless production structure
Balanced stainless production structure After the new EMEA industrial plan (planned state end of 2015) thousand tonnes million t Coil EMEA HPSA Coil Americas APAC Total Finland Germany 1) Sweden 2) UK & USA USA Mexico China Melting 3) 1,450 450 450 900 3.3 Hot Rolling 1,450 900 870 3.2 Plate & Long
Slide 27: Outokumpu turnaround agenda
Outokumpu turnaround agenda Extend Debt Maturity Renegotiate terms and extensions and new loans Balance sheet Securing Liquidty Divestment of smaller non-core assets Capital efficiency measures (P300, capex cut) & liquidity Capital market tools (e.g. rights issue) Delevaraging proceeds fro
Slide 28: The forever materials company
The forever materials company We are Customer orientation Outokumpu’s additional Technical expertise differentiators Sustainability Key customer Product Delivery Competitive priorities Quality reliability prices Nov. 30, 2013 28