Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Shareholder Meeting (April 2024)
80 slides from Outokumpu Oyj's shareholder meeting presentation, Apr 4, 2024
Slide 1: Outokumpu Oyj Annual General Meeting 2024
1 Outokumpu Oyj Annual General Meeting 2024 April 4, 2024 April 4, 2024
Slide 2: Opening of the meeting
2 Opening of the meeting Item 1 on the agenda Kari Jordan, Chairman of the Board of Directors April 4, 2024
Slide 3: Calling the meeting to order
3 Calling the meeting to order Item 2 on the agenda April 4, 2024
Slide 4: Election of persons to scrutinize the minutes and supervise vote counting
4 Election of persons to scrutinize the minutes and to supervise the counting of votes Item 3 on the agenda April 4, 2024
Slide 5: Recording the legality of the meeting
5 Recording the legality of the meeting Item 4 on the agenda April 4, 2024
Slide 6: Recording the legality of the meeting
6 Recording the legality of the meeting The notice to the Annual General Meeting was published as a stock exchange release and on Outokumpu’s web page on February 8, 2024. April 4, 2024
Slide 7: Recording the attendance and adoption of the list of votes
7 Recording the attendance at the meeting and the adoption of the list of votes Item 5 on the agenda April 4, 2024
Slide 8: Presentation of the annual accounts, board review and auditor's report
8 Presentation of the annual accounts, the review by the Board of Directors and the auditor’s report for the year 2023 Item 6 on the agenda CEO’s review, President and CEO Heikki Malinen and CFO Pia Aaltonen-Forsell April 4, 2024
Slide 9: Good result in 2023 in a weaker market reflects improved resilience
9 Good result in 2023 in a weaker market reflects Outokumpu’s improved resilience Heikki Malinen, President & CEO April 4, 2024
Slide 10: Changing operating environment
10 Changing operating environment War in Ukraine Significantly Stainless steel Trade protection and geopolitical lower demand production measures in tensions for stainless steel overcapacity Europe and the U.S. in Asia April 4, 2024
Slide 11: Good result delivered – strong balance sheet and cash flow enable dividend payments
11 Good result delivered – strong balance sheet and cash flow enable dividend payments Net sales Adjusted EBITDA Net debt Dividend proposal 7.0 517 -60 0.26 EUR billion EUR million EUR million EUR per share, 7% dividend yield* April 4, 2024 * closing share price on March 21, 2024
Slide 12: Our extensive offering includes both standard and high-value products
12 Our extensive offering includes both standard and high-value products Strong market position and Sales in 2023 per customer segment geographically diversified assets Wide customer base consisting of both end customers and distributors 8% Appliances #1 in Europe Automotive 13% Architecture, 3% #2
Slide 13: People are our most valuable asset
13 People are our most valuable asset Personnel Increase in Improving diverse leaders pay equity 8,469 +26% from 2022 baseline 0.99 women’s euro with an external verification World-class safety performance, TRIFR* 8,7 4,4 4,1 3,2 2,4 2 1,8 1,5 2016 2017 2018 2019 2020 2021 2022 2023 TRIFR = Number o
Slide 14: Outokumpu is the industry leader in low-emission stainless steel
14 Outokumpu is the industry leader in low-emission stainless steel Lowest Circular economy at the Low-emission ferrochrome carbon footprint core of business production in Finland Carbon footprint up to 75% lower Highest-recycled material Carbon footprint 67% lower than the global average of stainle
Slide 15: Climate ambitions accelerate demand growth for low-emission stainless steel
15 Climate ambitions accelerate demand growth for low-emission stainless steel Regulation such as carbon Clean investments Growing end-customer needs emission trading scheme driving demand for representing opportunities to increasing climate actions low-carbon steel create value Outokumpu uniquely G
Slide 16: Accelerating green transition across the value chain
16 Accelerating green transition across the value chain April 4, 2024
Slide 17: Accelerating green transition across the value chain: supply chain
17 Strengthening supply chain Accelerating 2 million tonnes of recycled steel used as green transition a raw material across the 95% of electricity from value chain low-emission sources, good energy efficiency First successful trials of biomass used to replace fossil coke April 4, 2024
Slide 18: Accelerating green transition: decarbonizing our operations
18 Strengthening Decarbonizing supply chain our operations Accelerating 2 million tonnes of recycled steel used as 390 kilotonnes of ferrochrome produced green transition a raw material with 67% lower carbon footprint* across the 95% of electricity from 1.9 million tonnes of value chain low-emission
Slide 19: Accelerating green transition: reducing customers' emissions
19 Strengthening Decarbonizing Reducing supply chain our operations customers’ emissions Accelerating 2 million tonnes of recycled steel used as 390 kilotonnes of ferrochrome produced 12 million tonnes of customers’ green transition a raw material with 67% lower carbon footprint* CO2 emissions reduc
Slide 20: New partnerships formed in 2023 for critical raw materials
New partnerships formed in 2023 to ensure a sufficient future supply of critical raw materials with a low carbon footprint Scrap Biocarbon 10% share acquired of CRONIMET 20% share will be North-East GmbH in Europe to acquired of Envigas AB, a strengthen partnership and leading European accelerate ci
Slide 21: Partnerships launched across industries in low-emission stainless steel
21 Partnerships launched across industries in low-emission stainless steel Up to 93% lower carbon footprint* Global average CO₂ emissions (2023): 7 kilos of CO₂e per kg of stainless steel (based on data provided by CRU * and worldstainless). Outokumpu Circle Green CO₂ emissions: down to 0.5 kilos of
Slide 22: Creating long-term value through competitiveness, sustainability and capital allocation
22 Creating long-term value through strengthened competitiveness, sustainability and disciplined capital allocation Heikki Malinen, President & CEO April 4, 2024
Slide 23: Outokumpu is on a three-phased strategy journey
23 Outokumpu is on a three-phased strategy journey OUR VISION Customer’s first choice in sustainable stainless steel Phase 3: 2026– Strong sustained performance Phase 2: 2023–2025 Strengthen the core Americas expansion, European competitiveness, Phase 1: 2021–2022 value-chain integration and Targete
Slide 24: Strategy phase 2: strengthening the core, reducing CO2 emissions, shareholder returns
24 Strategy phase 2: strengthening the core of the company, reducing CO2 emissions and focusing on shareholder returns Financial targets EBITDA run-rate Net debt to adjusted CAPEX over the Stable and Emission intensity for 2023-2025 improvement EBITDA next 3 years tCO2/t crude steel growing 200 <1.0
Slide 25: Phase 3: strengthen market position and globally diversified operations
25 Preparations started for strategy phase 3, commencing in 2026 Phase 3: aim to strengthen market position further and develop more globally diversified operations Focus areas Americas European Sustainability Supply chain expansion competitiveness leadership integration April 4, 2024
Slide 26: Renewed hot rolling agreement in the U.S. provides flexibility
26 Renewed hot rolling agreement in the U.S. provides flexibility – risk mitigated the most capital efficient way We evaluated different options for our hot rolling arrangements in the U.S., one option was to build our own hot rolling mill Hot rolling agreement with AM/NS extended until 2051 – Outok
Slide 27: Assessment of cold rolling capacity expansion in the U.S. ongoing
27 Assessment of the cold rolling capacity expansion in the U.S. ongoing – decisions foreseen by February 2025 North-America is an attractive market: cold rolling capacity expansion would allow us to grow directly and strengthen our position in North-America Outokumpu’s current cold colling capacity
Slide 28: The strongest balance sheet in the industry
28 The strongest balance sheet in the industry Pia Aaltonen-Forsell, CFO April 4, 2024
Slide 29: Profitability improvement measures resulted in solid results in 2023
29 Strong profitability improvement measures resulted in solid results in 2023 in a challenging market • Market in the first half of 2023 was solid in both regions, second half challenging in Europe • Strong actions taken to strengthen competitiveness Adjusted • Negative net debt remains as a result
Slide 30: Adjusted EBITDA reached a more normalized level in 2023
30 Adjusted EBITDA reached a more normalized level in 2023, earnings per share negatively impacted by one-off items Adjusted EBITDA, EUR million Earnings per share, EUR 2022 EPS positively impacted by the recognition of the EUR 297 million deferred tax asset, illustrative bar shows EPS without this
Slide 31: Market solid for Americas, weakness impacted Europe and Ferrochrome
31 Market remained solid for business area Americas, weakness impacted business area Europe’s and Ferrochrome’s results Adjusted EBITDA, EUR million Business area Europe Business area Americas Business area Ferrochrome 680 246 384 220 485 297 285 91 96 142 148 55 2020 2021 2022 2023 2020 2021 2022 2
Slide 32: Solid cash flow and strong balance sheet enable dividend payments
32 Solid cash flow and a strong balance sheet enable dividend payments in line with our dividend policy Net debt, EUR million Net debt to adjusted EBITDA Cash flow from 4 operations 3 325 EUR million 2 4,1 1028 ROCE* 1 408 0,4 0,0 -2.1% 0 -10 -0,1 -60 -1 2020 2021 2022 2023 2020 2021 2022 2023 * Neg
Slide 33: Shareholder returns are a priority
33 Shareholder returns are a priority Heikki Malinen, President and CEO April 4, 2024
Slide 34: Commitment to stable and growing dividend; share buybacks
34 Strong commitment to paying Share buybacks are another tool to a stable and growing dividend return capital to the shareholders Outokumpu's Board of Directors proposes that a 31 million shares repurchased in 2022–2024 to dividend of EUR 0.26 per share be paid for year 2023 manage the dilutive imp
Slide 35: Creating value for the shareholders
35 Creating value for the shareholders EUR 0.15 EUR 0.25 EUR 0.26 Total shareholder return, TSR %* dividend per base dividend dividend share paid for per share plus proposal per year 2021 EUR 0.10 share for year 2023 Total extra dividend per share paid shareholder return* for year 2022 180% 130% 80%
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Slide 37: Presentation of the auditors' report
37 Presentation of the annual accounts, the review of the Board of Directors and the auditor’s report for the year 2023 Item 6 on the agenda Presentation of the auditors’ report, Janne Rajalahti, Authorised Public Accountant (APA), auditor in charge, PricewaterhouseCoopers Oy April 4, 2024
Slide 38: Auditor's Report 2023
Auditor’s Report 2023 Outokumpu Oyj’s Annual General Meeting PricewaterhouseCoopers Oy Authorised Public Accountants Janne Rajalahti Authorised Public Accountant (KHT), auditor in charge
Slide 39: Audit 2023
Audit 2023 What we have audited Group financial statements Key audit matters ● Group financial statements audit scope ● Valuation of goodwill ● Parent company financial ● 10 group companies in 7 countries ● Valuation of Property, Plant and statements ● Covers the vast majority of the Equipment Group
Slide 40: To the Annual General Meeting of Outokumpu Corporation
To the Annual General Meeting of Outokumpu Corporation In our opinion • the consolidated financial statements give a true and fair view of the group’s financial position and financial performance and cash flows in accordance with IFRS Accounting Standards as adopted by the EU • the financial stateme
Slide 41: Adoption of the annual accounts
41 Adoption of the annual accounts Item 7 on the agenda April 4, 2024
Slide 42: Resolution on the use of the profit and payment of dividend
42 Resolution on the use of the profit shown on the balance sheet and the payment of dividend Item 8 on the agenda April 4, 2024
Slide 43: Dividend proposal by the Board of Directors
43 Dividend proposal by the Board of Directors The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.26 per share be paid based on the balance sheet to be adopted for the financial year ended on December 31, 2023. • The dividend will be paid in a single instalment to
Slide 44: Resolution on the discharge of Board members and the CEO from liability
44 Resolution on the discharge of the members of the Board of Directors and the CEO from liability Item 9 on the agenda April 4, 2024
Slide 45: Resolution on the discharge from liability for 2023
45 Resolution on the discharge of the members of the Board of Directors and the CEO from liability for the financial year January 1–December 31, 2023 The Board of Directors • Vesa-Pekka Takala, Board member until • Kari Jordan, Chairman of the Board March 30, 2023 • Kati ter Horst, Vice Chairman of
Slide 46: Consideration of the remuneration report
46 Consideration of the remuneration report for the governing bodies Item 10 on the agenda April 4, 2024
Slide 47: Consideration of the remuneration report
47 Consideration of the remuneration report for the governing bodies The Board of Directors proposes that the remuneration report for the governing bodies for 2023 be approved. The resolution of the Annual General Meeting on the approval of the remuneration report is advisory. The remuneration repor
Slide 48: Consideration of the Remuneration policy
48 Consideration of the Remuneration policy for the governing bodies Item 11 on the agenda April 4, 2024
Slide 49: Consideration of the Remuneration policy
49 Consideration of the Remuneration policy • The Board of Directors proposes to the Annual General Meeting that the remuneration policy of the governing bodies be supported. The resolution of the Annual General Meeting on this matter is advisory. • The proposed changes to the remuneration policy fo
Slide 50: Updated Remuneration Policy
50 Updated PRINCIPLES OF Transparency Fairness Remuneration Policy MANAGEMENT REMUNERATION Employees can verify Employees in equally that their own demanding roles, remuneration is with comparable level equitable and know of experience, Compared to the 2020 version: what they can do to qualification
Slide 51: Resolution on the remuneration of Board members
51 Resolution on the remuneration of the members of the Board of Directors Item 12 on the agenda Reima Rytsölä, Chair of the Nomination Board introduces the work of the Nomination Board and presents the proposals by the Nomination Board for the items 12, 13 and 14 on the agenda April 4, 2024
Slide 52: The Shareholders' Nomination Board 2023
52 The Shareholders’ Nomination Board 2023 • Reima Rytsölä, CEO of Solidium Oy • Pekka Pajamo, CFO of Varma Mutual Pension Insurance Company • Jouko Pölönen, President and CEO of Ilmarinen Mutual Pension Insurance Company • Outi Antila, Director General of The Social Insurance Institution of Finland
Slide 53: Nomination Board's proposal on Board remuneration
53 The Nomination Board’s proposal on the remuneration of the members of the Board of Directors • The Shareholders’ Nomination Board proposes that the • 40% of the annual remuneration would be paid in the annual remuneration would be increased as follows and Company’s own shares using treasury share
Slide 54: Resolution on the number of Board members
54 Resolution on the number of the members of the Board of Directors Item 13 on the agenda April 4, 2024
Slide 55: Proposal for the Board composition
55 Proposal for the Board composition The Shareholders’ Nomination Board proposes that the Board of Directors would consist of eight (8) members. April 4, 2024
Slide 56: Election of the members of the Board of Directors
56 Election of the members of the Board of Directors Item 14 on the agenda April 4, 2024
Slide 57: Election of the members of Board of Directors
57 Election of the members of Board of Directors The Shareholders’ Nomination Board proposes that • the current members of the Board of Directors, Heinz Jörg Fuhrmann, Kati ter Horst, Kari Jordan, Päivi Luostarinen, Jyrki Mäki-Kala, Petter Söderström, Pierre Vareille and Julia Woodhouse be re-electe
Slide 58: Proposed Board members 1/2
58 Proposed Board members 1/2 Kari Jordan, b. 1956, Kati ter Horst, b. 1968, Heinz Jörg Fuhrmann, Päivi Luostarinen, M.Sc. (Econ.) M.Sc. (Econ.), MBA b. 1956, PhD, Metallurgy b. 1955, LL.M., Ambassador Outokumpu Board member Outokumpu Board member Outokumpu Board member and Chairman of the Board 201
Slide 59: Proposed Board members 2/2
59 Proposed Board members 2/2 Jyrki Mäki-Kala, Petter Söderström, Pierre Vareille, Julia Woodhouse, b. 1961, M.Sc. (Econ.) b. 1976, M.Sc. (Econ.) b. 1957, M.Sc. b. 1958, BA (hons), History Outokumpu Board member Outokumpu Board member Outokumpu Board member Outokumpu Board member 2023– 2022– 2018– 2
Slide 60: Election of the Chairman and Vice Chairman of the Board
60 Proposal for the election of the Chairman and Vice Chairman of the Board of Directors • The Nomination Board also proposes that Kari Jordan would be re-elected as the Chairman and Kati ter Horst as the Vice Chairman of the Board of Directors. April 4, 2024
Slide 61: Resolution on the remuneration of the auditor
61 Resolution on the remuneration of the auditor Item 15 on the agenda April 4, 2024
Slide 62: Remuneration of the auditor
62 Remuneration of the auditor The Board of Directors proposes to the Annual General Meeting, on the recommendation of the Audit Committee, that the elected auditor be reimbursed in accordance with the respective invoice approved by the Board of Directors. April 4, 2024
Slide 63: Election of auditor
63 Election of auditor Item 16 on the agenda April 4, 2024
Slide 64: Election of the auditor
64 Election of the auditor The Board of Directors proposes to the Annual General Meeting, on the recommendation of the Audit Committee, that the audit firm PricewaterhouseCoopers Oy be elected as the auditor for the term of office ending at the end of the next Annual General Meeting. The auditor’s a
Slide 65: Election of the sustainability reporting assurance provider
65 Election of the sustainability reporting assurance provider Item 17 on the agenda April 4, 2024
Slide 66: Election of the sustainability reporting assurance provider
66 Election of the sustainability reporting assurance provider The Board of Directors proposes to the Annual General Meeting, on the recommendation of the Audit Committee, that the sustainability audit firm PricewaterhouseCoopers Oy be elected as the sustainability reporting assurance provider for t
Slide 67: Amendment of the Articles of Association
67 Amendment of the Articles of Association Item 18 on the agenda April 4, 2024
Slide 68: Amendment of the Articles of Association 1/5
68 Amendment of the Articles of Association 1/5 1 § | English Trade Name 6 § | Possible Deputy Managing Director The Board of Directors proposes amendments to The Board of Directors further proposes that Article Article 1 of the Company’s Articles of Association 6 of the Company’s Articles of Associ
Slide 69: Amendment of the Articles of Association 2/5
69 Amendment of the Articles of Association 2/5 10 § | Election of Auditor Article 10 of the Articles of Association would thus read as follows: The Board of Directors further proposes that “10 § Auditor Article 10 of the Company’s Articles of Association currently in force concerning the The Compan
Slide 70: Amendment of the Articles of Association 3/5
70 Amendment of the Articles of Association 3/5 12 § | Organization of General Meetings Article 12 of the Articles of Association would thus read as follows: • The Board of Directors further proposes that Article 12 “The Annual General Meeting shall be held annually no later of the Company’s Article
Slide 71: Amendment of the Articles of Association 4/5
71 Amendment of the Articles of Association 4/5 13 § | Matters addressed at the Annual Moreover, Article 13 is proposed to be amended General Meeting to reflect the current practice of the Company, so that the Annual General Meeting shall also decide on the number of the members of the Board of The
Slide 72: Amendment of the Articles of Association 5/5
72 Amendment of the Articles of Association 5/5 Article 13 of the Articles of Association would 6. the remuneration policy, when necessary, thus read as follows: 7. approval of the remuneration report, 8. the remuneration of the Board of Directors and the “The Annual General Meeting shall: auditor,
Slide 73: Authorizing the Board to resolve on repurchase of own shares
73 Authorizing the Board of Directors to resolve on the repurchase of the company’s own shares Item 19 on the agenda April 4, 2024
Slide 74: Authorizing the Board to resolve on repurchase of own shares
74 Authorizing the Board of Directors to resolve on the repurchase of the company’s own shares • The Board of Directors proposes to the Annual General Meeting that the Board of Directors be authorized to resolve to repurchase a maximum of 45,000,000 of Outokumpu’s own shares, currently representing
Slide 75: Authorizing the Board to resolve on issuance of shares
75 Authorizing the Board of Directors to resolve on the issuance of shares as well as special rights entitling to shares Item 20 on the agenda April 4, 2024
Slide 76: Authorizing the Board to resolve on issuance of shares
76 Authorizing the Board of Directors to resolve on the issuance of shares as well as special rights entitling to shares • The Board of Directors proposes to the Annual General Meeting that the Board of Directors be authorized to resolve to issue a maximum of 45,000,000 shares in one or several inst
Slide 77: Amendment of the charter of the Shareholders' Nomination Board
77 Amendment of the charter of the Shareholders’ Nomination Board Item 21 on the agenda April 4, 2024
Slide 78: Amendment of the charter of the Shareholders' Nomination Board
78 Amendment of the charter of the Shareholders’ Nomination Board The charter of the Shareholders’ Nomination • the Shareholders’ Nomination Board is Board, adopted by the Annual General Meeting, proposed to be responsible for preparing regulates the nomination and composition, and proposals to “Gen
Slide 79: Closing of the meeting
79 Closing of the meeting Item 22 on the agenda April 4, 2024
Slide 80: April 4, 2024
80 April 4, 2024