Slide 1: Peak in quarterly earnings, well positioned to face increasing uncertainty
Peak in quarterly earnings, well positioned to face increasing uncertainty Outokumpu Q2 2022 results Heikki Malinen, President & CEO Pia Aaltonen-Forsell, CFO August 4, 2022 1 August 4, 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: Record-level adjusted EBITDA despite significant cost inflation and geopolitical turmoil
Record-level adjusted EBITDA despite significant cost inflation and geopolitical turmoil Heikki Malinen, President & CEO August 4, 2022
Slide 4: Outokumpu's adjusted EBITDA in the second quarter exceeded EUR 0.5 billion
• Strong performance continued Outokumpu's • Realized prices for stainless steel further adjusted EBITDA in strengthened and supported profitability the second quarter • Significant cost inflation and geopolitical exceeded turmoil overshadowed the quarter, multiple mitigation measures in place EUR 0
Slide 5: Strategy phase 1 concluded ahead of time – both financial targets achieved
• Aim to de-risk the company achieved: Strategy phase 1 EBITDA run-rate improved, leverage down • Sustained improvements in ways of concluded ahead working provide a solid foundation for the of time – both latter phases financial targets • Successfully signed deal to divest majority of Long Products
Slide 6: Our three-phase strategy framework now enables a strong focus on shareholder returns
Our three-phase strategy framework now enables a strong 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 Customer’s 2021–2022 i
Slide 7: Another strong quarter in terms of sustainability
Another strong quarter in terms of sustainability Safety performance, TRIFR 10 8.7 • Strong safety performance, TRIFR improved to 1.8 in the first half of 2022 5 4.4 4.1 3.2 2.4 2 1.8 • High material efficiency: recycled 0 material content increased to 92%, 2016 2017 2018 2019 2020 2021 H1 2022 ener
Slide 8: European and US stainless steel prices peaked in the second quarter
Nickel LME cash, USD/tonne June 30000 European and US stainless 25000 steel prices peaked in the 20000 15000 second quarter 10000 5000 2018 2019 2020 2021 2022 Transaction prices 304 stainless, USD/tonne* Ferrochrome, USD/lb June June 7500 2.5 2 5000 1.5 2500 1 0 0.5 2018 2019 2020 2021 2022 2018 20
Slide 9: In Q2, adjusted EBITDA increased to EUR 547 million due to strengthened stainless steel prices
In Q2, adjusted EBITDA increased to EUR 547 million due to strengthened stainless steel prices and positive timing impacts Deliveries, kt Adjusted EBITDA quarter-on-quarter comparison1, EUR million 626 647 608 603 Mainly positive timing 575 586 impacts 523 488 Deliveries decreased by 7% Q3 Q4 Q1 Q2
Slide 10: As a result of successful de-risking in strategy phase 1, Outokumpu is now financially stronger than ever
As a result of successful de-risking in strategy phase 1, Outokumpu is now financially stronger than ever Pia Aaltonen-Forsell, CFO August 4, 2022
Slide 11: Net debt reduced to all-time low level of EUR 289 million
• New EUR 700 million sustainability linked unsecured revolving credit facility signed Net debt reduced • Liquidity improved to EUR 1.3 billion to all-time low level • In July, Outokumpu announced the divestment of of EUR 289 million Long Products with EV of EUR 228 million, closing of the deal expe
Slide 12: Another record quarter in financial terms
Another record quarter in financial terms Key figures Q2 2022 Q2 2021 Q1 2022 2021 Stainless steel deliveries 1,000 tonnes 603 626 647 2,395 • Net result reached a level Sales EUR million 2,951 1,873 2,760 7,709 of EUR 385 million Adjusted EBITDA EUR million 547 223 377 1,021 Net result EUR million
Slide 13: Strategy phase 1 completed: EBITDA run-rate improvement target achieved and exceeded
Strategy phase 1 completed: EBITDA run-rate improvement target achieved, and exceeded ahead of time Gross annualized EBITDA run-rate improvement, Cumulative impact EUR million from different streams Realized cumulative impact EUR 260 million, 250 of which BA Long Products 22 40 approx. EUR 18 millio
Slide 14: BA Europe – eighth consecutive quarter of improved adjusted EBITDA
Europe’s stainless steel deliveries, 1,000 tonnes BA Europe – 480 eighth consecutive 401 410 414 420 370 372 356 355 338 360 quarter of improved 300 Q3 Q4 Thank you! Q1 Q2 Q3 Q4 Q1 Q2 adjusted EBITDA 2020 2020 2021 2021 2021 2021 2022 2022 Europe’s adjusted EBITDA, EUR million 289 Key points in Q2 2
Slide 15: BA Americas – another record level of adjusted EBITDA
Americas’ stainless steel deliveries, 1,000 tonnes BA Americas – another record level 240 176 192 194 180 185 177 180 136 148 120 of adjusted EBITDA 60 Q3 2020 Q4 2020 Thank you! Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Americas adjusted EBITDA, EUR million Key points in Q2 2022 150 136 • Imp
Slide 16: BA Ferrochrome – exceptionally high ferrochrome price boosted profitability
Ferrochrome production, 1,000 tonnes BA Ferrochrome – 160 exceptionally high 127 131 131 128 125 129 128 112 120 ferrochrome sales 80 Q3 Q4 Thank you! Q1 Q2 Q3 Q4 Q1 Q2 price boosted 2020 2020 2021 2021 2021 2021 2022 2022 profitability Ferrochrome’s adjusted EBITDA, EUR million 100 93 Key points in
Slide 17: BA Long Products – divestment represents a successful closing of the turnaround program
Long Products’ stainless steel deliveries, BA Long Products – 1,000 tonnes divestment represents 67 71 69 80 65 65 53 43 a successful closing of 31 40 Thank you! the turnaround 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2020 2020 2021 2021 2021 2021 2022 2022 program Long Products’ adjusted EBITDA, EUR million 80 63
Slide 18: Positive operational cash flow despite increased NWC and contingency measures
Positive operational cash flow despite increased NWC as a result of higher prices and contingency measures due to geopolitical situation Q2/22 cash flow, EUR million Annual capex, EUR million 240 Limited to €180 million -417 547 200 -26 -27 104 76 160 EBITDA Working capital Provisions, Operating cas
Slide 19: We have significantly strengthened our balance sheet and improved our resilience
We have significantly strengthened our balance sheet and improved our resilience for all market conditions Net debt, EUR million Net debt/LTM adjusted EBITDA IFRS16 impact* 8 2,000 70% 51% 60% 6 1,600 45% 45% 44% 50% 40% 1,200 40% 4 800 30% 13% 20% 2 400 7% 10% 1,242 1,091 1,241 1,155 1,028 408 289
Slide 20: In June, we signed a new EUR 700 million sustainability linked unsecured revolving credit facility
In June, we signed a new EUR 700 million sustainability linked unsecured revolving credit facility Debt structure* Debt maturity profile*, EUR million 15% 1,000 22% 800 Total liquidity 2% reserves €1.3 billion 16% at the end of Q2 600 24% 400 22% 200 Convertible Bonds Long-term loans from financial
Slide 21: We are living in exceptionally uncertain times
We are living in exceptionally uncertain times Heikki Malinen, President & CEO August 4, 2022
Slide 22: Outlook for Q3 2022 for continuing operations
Group stainless steel deliveries for continuing operations* in the third quarter are expected to decrease by 10–20% compared to the second quarter. Prices for stainless steel in the already received orders have remained at a high level. The European ferrochrome benchmark price decreased to USD 1.80/
Slide 23: Thank you! Questions & answers
Thank you! Questions & answers 23 August 4, 2022
Slide 24: Our efforts in sustainability have been globally recognized
Our efforts in sustainability have been globally recognized 24 August 4, 2022
Slide 25: BA Europe's adjusted EBITDA was EUR 289 million in Q2
BA Europe’s adjusted EBITDA was EUR 289 million in Q2 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million 289 289 193 193 149 161 98 Q1 2022 Deliveries Pricing & mix Net of timing and Costs Other Q2 2022 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 hedging 1) Indicati
Slide 26: BA Americas' adjusted EBITDA was EUR 136 million in Q2
BA Americas’ adjusted EBITDA was EUR 136 million in Q2 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million 136 136 95 90 84 90 65 Q1 2022 Deliveries Pricing & mix Net of timing Costs Other Q2 2022 and hedging Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 1) Indicative
Slide 27: BA Ferrochrome's adjusted EBITDA was EUR 93 million in Q2
BA Ferrochrome’s adjusted EBITDA was EUR 93 million in Q2 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million 93 79 73 67 64 93 79 Q1 2022 Deliveries Ferrochrome price Costs Other Q2 2022 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 1) Indicative columns based on mana
Slide 28: BA Long products' adjusted EBITDA was EUR 63 million in Q2
BA Long products’ adjusted EBITDA was EUR 63 million in Q2 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million 63 63 24 15 24 12 9 Q1 2022 Deliveries Pricing & mix Net of timing Costs Other Q2 2022 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 and hedging 1) Indicative
Slide 29: 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 40 30% 40 150 35% 40 35 30 100 30 20 20 50 25 10 0 20 0 0 2018 2019 2