Slide 1: A historic year for Outokumpu - record earnings and a net debt free balance sheet
A historic year for Outokumpu - record earnings and a net debt free balance sheet Outokumpu Q4 2022 and full year 2022 results Heikki Malinen, President & CEO Pia Aaltonen-Forsell, CFO February 9, 2023
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: Strong market environment combined with prompt strategy execution resulted in record earnings in 2022
Strong market environment combined with prompt strategy execution resulted in record earnings in 2022 Heikki Malinen, President & CEO February 9, 2023
Slide 4: In 2022, we delivered the best result in our history
• Strong market environment in the first half of 2022 In 2022, we • Stainless operations successfully ran throughout the delivered the best year despite energy-related challenges result in our history, • Ferrochrome operations suffered from very high electricity prices adjusted EBITDA • High cost in
Slide 5: Stainless steel prices reached their peak in mid-2022 and have normalized since
Nickel LME cash, USD/tonne Stainless steel prices December 30000 25000 reached their peak in 20000 mid-2022 and have 15000 10000 normalized since 5000 2018 2019 2020 2021 2022 Transaction prices 304 stainless, USD/tonne* Ferrochrome, USD/lb December December 7500 2.5 2 5000 1.5 2500 1 0 0.5 2018 201
Slide 6: In 2022, adjusted EBITDA reached EUR 1,256 million in a strong but exceptionally volatile environment
In 2022, adjusted EBITDA reached EUR 1,256 million in a strong but exceptionally volatile operating environment Adjusted EBITDA year-on-year comparison1, EUR million • Robust market environment in the first half of 2022, clear weakening in the second half Significant cost inflation Deliveries • High
Slide 7: In Q4, adjusted EBITDA amounted to EUR 110 million in a weakening market
In Q4, adjusted EBITDA amounted to EUR 110 million in a weakening market with significant distributor de-stocking Deliveries, kt Adjusted EBITDA quarter-on-quarter comparison1, EUR million 588 605 571 586 560 546 550 523 523 488 491 450 Stainless deliveries decreased by 8% 60% from lower realized pr
Slide 8: Record high recycled content and best safety performance ever strengthened our sustainability leadership
Record high recycled content and best safety performance ever strengthened our sustainability leadership further Safety performance, TRIFR • Safety performance further improved in 8.7 2022 from already a strong level 4.4 4.1 3.2 2.4 2.0 1.8 • All-time high recycled material content of 94% was reache
Slide 9: Strong sustainability performance continued, CO2 emissions reduced in line with SBTi 1.5°C target
Strong sustainability performance continued, CO2 emissions reduced in line with SBTi 1.5°C target 2.5 Roadmap developed to reduce emissions by 30% from 2020 level 2 Upstream CO2 1.5 emission intensity 1 Indirect CO2 emission intensity 0.5 Direct CO2 emission intensity 0 2016 2017 2018 2019 2020 2021
Slide 10: Divestment of the Long Products' business successfully completed - strategic focus reached
Divestment of the • Transaction completed on January 3rd, 2023 Long Products' • The total consideration of the transaction on a debt and cash free basis EUR 228 million business successfully • Estimated net debt impact EUR 100 million completed - strategic • Outokumpu will now focus fully on its cor
Slide 11: Outokumpu is now net debt free and financially stronger than ever before
Outokumpu is now net debt free and financially stronger than ever before Pia Aaltonen-Forsell, CFO February 9, 2023
Slide 12: Strongest balance sheet in the industry
• Outokumpu's net debt was negative by EUR 10 million at year-end Strongest • Liquidity at EUR 1.4 billion balance sheet • EUR 800 million of committed credit facilities fully unutilized in the industry • No commercial paper funding at year-end • Maximum of EUR 100 million share buyback program laun
Slide 13: Strong financial performance
Strong financial performance Key figures Q4 2022 Q4 2021 Q3 2022 2022 2021 • Net result over EUR Continuing operations 1.0 billion Stainless steel deliveries 1,000 tonnes 450 550 491 2,106 2,254 Sales EUR million 1,895 2,083 2,339 9,494 7,243 • Record level earnings Adjusted EBITDA EUR million 110 3
Slide 14: Phase 2 strategy execution: EUR 28 million EBITDA run-rate improvement achieved in H2 2022
Phase 2 strategy execution: EUR 28 million EBITDA run-rate improvement achieved in H2 2022 Gross annualized EBITDA run-rate improvement, EUR million In the second phase, we will Realized further improve our EBITDA Illustrative plan Target run-rate through: 200 • Growth from productivity • Customer-f
Slide 15: BA Europe – Profitability impacted by higher energy costs and stainless steel prices returning to normalized levels
Europe’s stainless steel deliveries, 1,000 tonnes BA Europe – Profitability impacted 480 401 410 414 420 391 370 372 356 356 355 338 360 316 322 by higher energy 300 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 costs and stainless 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 steel prices retur
Slide 16: BA Americas – De-stocking and seasonally low quarter led to decreased volumes
Americas’ stainless steel deliveries, 1,000 tonnes BA Americas – De-stocking and 240 180 168 134 136 148 176 192 194 180 185 177 167 125 seasonally low quarter 120 60 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 led to decreased 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 volumes Americas adj
Slide 17: BA Ferrochrome – High electricity prices led to a furnace shutdown and production optimization
Ferrochrome production, 1,000 tonnes BA Ferrochrome – High electricity prices 160 136 123 127 131 131 128 125 129 128 112 104 120 led to a furnace 69 80 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 shutdown and 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 production optimization Ferrochrome’s
Slide 18: Strong cash flow resulted in negative net debt
Strong cash flow resulted in negative net debt Q4/22 cash flow, EUR million Annual capex, EUR million -42 €158 million -65 200 in 2022 229 289 225 160 103 EBITDA, Working capital Provisions, Operating cash Net cash from Cash flow before 120 continuing pensions, flow investing financing operations fi
Slide 19: Net debt to adjusted EBITDA ratio declined to 0.0, aim to keep below 1.0
Net debt to adjusted EBITDA ratio declined to 0.0, aim to keep at below 1.0 in normal market conditions Net debt, EUR million Net debt/adjusted EBITDA 8 1,800 1,600 51% 6 1,400 45% 45% 44% 40% 1,200 1,000 4 800 600 13% 2 400 200 -0.3% 1,242 1,091 1,241 1,155 1,028 408 4 1.7 2.6 4.4 4.1 0.4 0.0 0 0 -
Slide 20: Successful refinancing in 2022, strong liquidity at year-end and all commercial papers repaid
Successful refinancing in 2022, strong liquidity at year-end and all commercial papers repaid Debt structure* Debt maturity profile*, EUR million 1,000 9% 18% 2% Total liquidity reserves increased from €0.9 billion 800 to €1.4 billion in 2022 28% 18% 600 400 24% 200 Convertible Bonds Long-term loans
Slide 21: With significantly improved resilience, Outokumpu is able to create value in changing conditions
With significantly improved resilience, Outokumpu is able to create value in changing conditions Heikki Malinen, President & CEO February 9, 2023
Slide 22: Strong strategy execution to strengthen the core, working towards our vision
Strong strategy execution to strengthen the core, working towards our vision to be the customer's first choice in low-carbon stainless steel 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 sus
Slide 23: Outokumpu has an increased focus on shareholder returns
Outokumpu's Board of Directors proposes that Outokumpu has an • a base dividend of EUR 0.25 per share will be paid increased focus on according to dividend policy, plus shareholder returns • an extra dividend of EUR 0.10 per share will be paid due to exceptionally strong financial results - approx.
Slide 24: Market environment has changed for 2023 - various factors might impact EBITDA development
Market environment has changed for 2023 - various factors might impact EBITDA development Possible positive impact Uncertainty ? • Distributor stock replenishment to begin • Timing and impact of China re-opening • Increased demand for ferrochrome • Likelihood of soft vs. hard landing? • Strong deman
Slide 25: Outlook for Q1 2023
Group stainless steel deliveries in the first quarter are expected to increase by 10-20% compared to the fourth quarter. Ferrochrome production continues at 50-60% of its full capacity as a result of the planned optimization due to high electricity prices and recent disruptions in one of the three f
Slide 26: Thank you! Questions & answers
Thank you! Questions & answers 26 February 9, 2023
Slide 27: BA Europe's adjusted EBITDA was EUR 69 million in Q4
BA Europe’s adjusted EBITDA was EUR 69 million in Q4 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million 289 193 161 128 128 69 69 Q3 2022 Deliveries Pricing & mix Net of timing and Costs Other Q4 2022 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 hedging 1) Indicative
Slide 28: BA Americas' adjusted EBITDA was EUR 23 million in Q4
BA Americas’ adjusted EBITDA was EUR 23 million in Q4 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million 136 135 135 95 90 23 23 Q3 2022 Deliveries Pricing & mix Net of timing Costs Other Q4 2022 and hedging Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 1) Indicative
Slide 29: BA Ferrochrome's adjusted EBITDA was EUR 14 million in Q4
BA Ferrochrome’s adjusted EBITDA was EUR 14 million in Q4 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million 93 79 34 73 34 14 14 Q3 2022 Deliveries Ferrochrome price Costs Other Q4 2022 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 1) Indicative columns based on mana
Slide 30: In 2022, imports into Europe and US increased
In 2022, imports into Europe and US 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 40 150 40 30 35 100 18% 28% 20 20 30 50 10 0 25 0 0 2018 2019 2020 2021