Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Shareholder Meeting (March 2015)
63 slides from Outokumpu Oyj's shareholder meeting presentation, Mar 26, 2015
Slide 1: Outokumpu Oyj Annual General Meeting 2015
Outokumpu Oyj Annual General Meeting 2015 March 26, 2015
Slide 2: Opening of the Annual General Meeting
Opening of the Annual General Meeting Item 1 on the agenda Jorma Ollila, Chairman of the Board of Directors
Slide 3: Board of Directors in 2014
Board of Directors in 2014 • Outokumpu’s turnaround to profitability meant active Board work o 14 meetings during the past year o Average attendance frequency in Board meetings in 2014 was 99% • Company’s financial position is stronger: less debt, strengthened balance sheet • Turnaround to profitabi
Slide 4: Calling the Meeting to order
Calling the Meeting to order Item 2 on the agenda
Slide 5: Election of persons to scrutinize the minutes and supervise vote counting
Election of persons to scrutinize the minutes and to supervise the counting of the votes Item 3 on the agenda Recording the legality of the meeting Item 4 on the agenda
Slide 6: Notice to the AGM 2015
Notice to the AGM 2015 • Notice published as a stock exchange release on February 12, 2015 • Notice has from February 12, 2015 onwards been available at www.outokumpu.com/en/investors/General- meetings • Announcement of the AGM was published in Helsingin Sanomat on February 18, 2015
Slide 7: Recording the attendance and adoption of the list of votes
Recording the attendance at the meeting and adoption of the list of votes Item 5 on the agenda
Slide 8: Presentation of the annual accounts and review for 2014
Presentation of the annual accounts, Review of the Board of Directors and the auditor’s report for the year 2014 Item 6 on the agenda Review by the Chief Executive Officer Mika Seitovirta, CEO
Slide 9: CEO's review
CEO’s review
Slide 10: Outokumpu's presence across the world
Outokumpu’s presence across the world Finland Sweden Modern fully integrated chrome mine, Production units and ferrochrome works and stainless steel R&D center. production unit and R&D center. USA Group HQ. Cost efficient integrated stainless mill in Calvert. High performance stainless plate, German
Slide 11: Sales by business area
Sales by business area 6% 7% Coil EMEA 6% Coil Americas 6% APAC Quarto Plate 59% Long Products 16% Other operations Sales in 2014
Slide 12: Serving a broad range of customers
Serving a broad range of customers Distributors Other Consumer goods & Medical Heavy industries Automotive Metal processing & Tubes Architecture, End users & Building & processors Chemical, Construction petrochemical and energy
Slide 13: Megatrends driving stainless demand
Megatrends driving stainless demand Economic and Mobility and Climate change and population growth urbanization limited resources
Slide 14: Population growth
Population growth • 9 billion people by 2050 • Majority already living in cities • Raising standard of living • Need for sustainable materials for buildings and infrastructure, domestic appliances, water treatment and all other areas of modern living Outokumpu supplies Miele with ferritic stainless
Slide 15: Mobility
Mobility Trends in car industry: - Weight reduction - Alternative drive systems such as hybrid and LPG - Engine downsizing without compromising performance: smaller engines, higher pressures Most exhaust systems are made from stainless steel.
Slide 16: Energy
Energy Trends in energy industry: - Increase in energy demand - Necessity of emission reduction - Technology innovations in extracting, e.g. shale gas - Growth in renewable energy sources - High quality requirements for materials Example of future renewable energy, StalaWind turbine tower for onshor
Slide 17: Stainless steel is a key building block for a more sustainable future
Stainless steel is a key building block for a more sustainable future Two piers in Progreso, Mexico Stainless steel solution built in 1937-1941, still operating no Carbon steel solution built in major repairs or maintenance. the 1960s, no longer operating Photo credit: Nickel Institute
Slide 18: Sustainability embedded into our operations
Sustainability embedded into our operations • 400 million euros of environmental investments in the past 10 years • CO2 emissions reduced by 25% per tonne in the past 10 years. Target to cut CO2 emissions further by 20% per tonne by 2020 • World-class energy efficiency in energy-intensive industry •
Slide 19: Continued growth for stainless steel globally
Continued growth for stainless steel globally Americas Europe Asia Demand: 3.6 mtons Demand: 7.2 mtons Demand: 26.0 mtons 9 6 6 5 5 3 3 4 4 2 2 0 13 14 15f 16f 13 14 15f 16f 13 14 15f 16f Global Demand: 36.9 mtons 7 6 5 4 13 14 15f 16f Annual growth, percent Real demand for total stainless steel (ro
Slide 20: Stainless base price development
Stainless base price development European base prices 304 stainless steel (EUR) 1) US base prices 304 stainless steel (USD) 1) [€/t] [$/t] 1,300 1,500 Germany USA 1,200 1,400 1,100 1,300 1,000 1,200 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Source: CRU January 2015 1) 2mm sheet cold rolled 3
Slide 21: Stainless market volatility showed in both nickel price and imports
Stainless market volatility showed in both nickel price and imports Nickel price and stocks 1) Third-country imports into Europe 2) 1,000 USD/ton ktons ktons 60 500 100 31% 50 400 80 21% 24% 40 300 60 30 200 40 20 100 20 10 0 0 0 2005 2008 2011 2014 LME stocks (rhs) LME cash price (lhs) Asia Rest of
Slide 22: European commission investigation on antidumping
European comission investigation on antidumping September 25, 2015 May 13, 2014 June 26, 2014 March 25, 2015 latest Eurofer, European European Final decision Association for Comission starts Comission European investigation on announcement producers, files imports from on provisional an antidumping
Slide 23: Continued progress in Outokumpu turnaround
Continued progress in Outokumpu turnaround Unsatisfactory Clear profitability performance in Calvert improvement in all BAs, and Quarto Plate due to except Quarto Plate technical and delivery Underlying EBIT performance issues up by EUR 289 million Solid progress in Negative operating cash efficienc
Slide 24: Performance improvement visible in key figures
Performance improvement visible in key figures Group key figures, EUR million 2013 2014 Change Stainless steel deliveries, kt 2,585 2,554 -31 Sales 6,745 6,844 +99 EBIT -510 -243 +267 Non-recurring items -78 -186 -108 EBIT excl. NRI’s -432 -57 +375 Net result for the period -1,003 -439 +564 The Boar
Slide 25: EBIT excl. NRI's by business area
EBIT excl. NRI’s by business area EUR million +189 100 +43 +180 +1 0 -9 2013 -100 2014 -200 -300 Coil EMEA Coil Americas APAC Quarto Plate Long Products
Slide 26: Balance sheet strengthened significantly
Balance sheet strenthened significantly Key figures of financial position Dec 31, 2013 Dec 31, 2014 Change Net debt, EUR million 3,556 1,974 -1,582 Gearing, % 188.0 92.6 -95,4 Total assets, EUR million 8,823 6,411 -2,412
Slide 27: Business and financial outlook for Q1/2015 unchanged
Business and financial outlook for Q1/2015 unchanged Business outlook • Stainless steel demand has improved from the year-end 2014 lows but outlook for the first quarter varies by region • In both Europe and Americas, distributors are still digesting high stocks partly due to recent high third-count
Slide 28: Turnaround to profitability continues
Turnaround to profitability continues
Slide 29: Levers to improve profitability and cash flow
Levers to improve profitability and cash flow Coil Americas ramp-up Coil EMEA restructuring Step change in Quarto Plate profitability Efficiency programs Debt reduction
Slide 30: Coil Americas
Coil Americas Coil Americas In brief kt Calvert Mexinox Melting 900 • Established market presence with long-term customer Hot rolling 870 relationships 150 350 250 • Experienced sales team Cold rolling • Ramp-up of Calvert essential • Market share of approx. 22% in NAFTA region • Strong brand in the
Slide 31: Coil Americas ramp-up into full potential continues
Coil Americas ramp-up into full potential continues Current status Next steps Targets • Technical ramp up in • Focus on quality and • Full capacity available Calvert completed delivery reliability by the end of 2016 • Cold rolling issues • 15% delivery growth • Strong market share solved target for
Slide 32: Coil EMEA
Coil EMEA Coil EMEA kt Tornio Avesta Krefeld Nyby Melting 1,450 450 In brief Hot rolling 1,450 900 • Market leader in stainless steel in Europe Cold rolling 900 170 500 80 • Restructurings progressing well: aiming for higher utilization • Integrated production, chrome Mills mine in Kemi and ferrochr
Slide 33: EMEA restructuring progressing
EMEA restructuring progressing Current status Next steps Targets • Krefeld melt shop • Bochum melt shop • Higher capacity closure in 2013 and Benrath cold utilization • Focus on higher rolling mill closure • Clear roles for the margin products • Investment in cold mills in production rolling in Kref
Slide 34: Quarto Plate
Quarto Plate Americas Mill Plate & service center In brief Added value services • Global leader in tailored quarto plate material EMEA APAC • Standard and special stainless steel grades Kunshan • Used in projects and by the process industry and construction • Targeting clear improvement in profitabi
Slide 35: Step change in Quarto Plate profitability
Step change in Quarto Plate profitability Current status Next steps Targets • Investment of EUR • Increase sales in • Degerfors towards 100m in Degerfors both standard and full capacity within completed custom made plate 2 years • Unsatisfactory • Higher volumes in • Improvement in financial Degerfo
Slide 36: Good progress in efficiency programs, full benefits visible in 2017
Good progress in efficiency programs, full benefits visible in 2017 EUR million 600 550 530 470 385 400 199 200 0 2013 2014 2015e 2016e 2017e P250 Synergy savings EMEA restructuring
Slide 37: Further potential in net working capital efficiency
Further potential in net working capital efficiency EUR million 400 400 351 351 Actions 300 • Inventory turnover improvement 200 • Accounts payable and accounts receivable 100 management 0 2013 2014 2015 target
Slide 38: Debt reduction is a key priority
Debt reduction is a key priority Net interest-bearing debt and gearing • Net debt to below EUR 2 billion in 2014 Gearing Net debt (EURm) o Divestment of Terni and VDM 188% o Rights issue of EUR ~640 million 93% • Refinancing and diversification of funding 3,556 ongoing 1,974 o EUR 250 million high y
Slide 39: Summary
Summary Outokumpu is a global leader in stainless steel which has good long-term growth outlook Outokumpu turned towards the right direction in 2014: profitability improved and balance sheet strengthened Actions to profitability turnaround continue
Slide 40: Adoption of the annual accounts
Adoption of the annual accounts Item 7 on the agenda
Slide 41: Resolution on the use of the profit and payment of dividend
Resolution on the use of the profit shown on the balance sheet and the payment of dividend Item 8 on the agenda
Slide 42: Proposal by the Board of Directors for a dividend
Proposal by the Board of Directors for a dividend • The Board of Directors proposes that no dividend shall be paid for the financial year 2014
Slide 43: Resolution on the discharge of Board members and CEO from liability
Resolution on the discharge of the members of the Board of Directors and the CEO from liability Item 9 on the agenda
Slide 44: Discharge from liability of the Board of Directors and the CEO
Discharge from liability of the members of the Board of Directors and the CEO Board of Directors • Jorma Ollila, Chairman of the Board • Olli Vaartimo, Vice Chairman of the Board • Markus Akermann, Board member • Roberto Gualdoni, from April 14, 2014 onwards • Stig Gustavson, from April 14, 2014 onw
Slide 45: Resolution on the remuneration of the members of the Board
Resolution on the remuneration of the members of the Board of Directors Item 10 on the agenda
Slide 46: Proposed Board members (1)
Proposed Board members (1) Jorma Ollila b. 1950, M.Sc. (Pol.), M.Sc. (Econ.), M.Sc. (Eng.) Chairman of the Board: Outokumpu 2013– Outokumpu Board member 2013– Chairman of the Board: Royal Dutch Shell Plc 2006– Vice Chairman of the Board: Otava Books and Magazines Group 1996– Chairman of the Board: N
Slide 47: Proposed Board members (2)
Proposed Board members (2) Markus Akermann b. 1947, M.Econ. Outokumpu Board member 2013– Chief Executive Officer: Holcim Group 2002–2012 Chairman of the Board: Holcim Group Support Ltd 2002–2012 Member of the Board: Holcim Ltd 2002–2013 Member of the Board: Votorantim Cimentos S.A. 2013– Member of t
Slide 48: Proposed Board members (3)
Proposed Board members (3) Stig Gustavson b. 1945, M.Sc. (Eng.), Dr.Tech. (hon.) Honorary title Vuorineuvos Outokumpu Board member 2014– Chairman of the Board: Ahlstrom Capital Oy 2011– Chairman of the Board and Executive Committee: Technology Academy, 2007– Chairman of the Board: Konecranes Plc 200
Slide 49: Proposed Board members (4)
Proposed Board members (4) Elisabeth Nilsson b. 1953, M.Sc. (Tech.) Outokumpu Board member 2011– Governor: Östergötlands län 2010– President: Jernkontoret (Swedish Steel Producers Association) 2005–2010 Chairman of the Board: Göta Kanalbolaget 2011– Chairman of the Board: Risbergska donationsfonden
Slide 50: The proposed new Board member has a long and distinguished career
The proposed new Board member has a long and distinguished career Saila Miettinen-Lähde b. 1962, M.Sc. (Eng.) Chief Financial Officer: F-Secure Corporation February 2015– Deputy CEO 2012–2014 and CFO 2005–January 2015: Talvivaara Mining Company Plc Founding Partner: SIDOS Partners Oy 2004–2005 Direc
Slide 51: Proposal for the Chairman and Vice Chairman of the Board
Proposal for the Chairman and Vice Chairman of the Board • Mr. Jorma Ollila to be elected as Chairman of the Board • Mr. Olli Vaartimo to be elected as Vice Chairman of the Board
Slide 52: Proposal by the Nomination Board for remuneration to the Board
Proposal by the Nomination Board for remuneration to the Board of Directors • Remuneration levels proposed by the Nomination Board o Chairman EUR 140,000 annual fee o Vice Chairman EUR 80,000 annual fee o Board members EUR 60,000 annual fee • Proposal that 40% of the annual remuneration would be pai
Slide 53: Election of the Chairman, Vice Chairman and members of the Board
Election of the Chairman, Vice Chairman and the members of the Board of Directors Item 11 on the agenda
Slide 54: Resolution on the remuneration of the auditor
Resolution on the remuneration of the auditor Item 12 on the agenda
Slide 55: Remuneration of the auditor
Remuneration of the auditor • The Board Audit Committee proposes that the elected auditor be reimbursed in accordance with the auditor’s invoice approved by the Board of Directors
Slide 56: Election of auditor
Election of auditor Item 13 on the agenda
Slide 57: Election of the Auditor
Election of the Auditor • The Board Audit Committee proposes that KPMG Oy Ab be elected as the auditor for Outokumpu for the following term
Slide 58: Authorizing the Board to decide on repurchase of the company's own shares
Authorizing the Board of Directors to decide on the repurchase of the company’s own shares Item 14 on the agenda
Slide 59: Authorizing the Board to decide on repurchase of the company's own shares
Authorizing the Board of Directors to decide on the repurchase of the company’s own shares • Maximum number of shares to be re-purchased is 40,000,000 o The aggregate number of shares held by the company may not exceed 10% of the company’s total number of registered shares o 40,000,000 shares repres
Slide 60: Authorizing the Board to decide on issuance of shares and special rights
Authorizing the Board of Directors to decide on the issuance of shares as well as special rights entitling to shares Item 15 on the agenda
Slide 61: Authorizing the Board to decide on issuance of shares and special rights
Authorizing the Board of Directors to decide on the issuance of shares as well as special rights entitling to shares • New shares can be issued, own shares can be transferred (share issue) and share entitlements (excl. option rights to the company’s management and personnel under an incentive plan)
Slide 62: Closing of the meeting
Closing of the meeting Item 16 on the agenda
Slide 63: outokumpu
outokumpu working towards a world that lasts forever