Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Outokumpu Oyj New — Q3 2024 Earnings Presentation
28 slides from Outokumpu Oyj's earnings presentation, Oct 30, 2024
Slide 1: Strong focus on cash generation during challenging market conditions
Strong focus on cash generation during challenging market conditions Outokumpu Q3 2024 results Kati ter Horst, President & CEO Marc-Simon Schaar, CFO October 30, 2024
Slide 2: Disclaimer
2 October 30, 2024 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 av
Slide 3: Honored to lead Outokumpu to its next strategy phase
Honored to lead Outokumpu to its next strategy phase Kati ter Horst - President and CEO of Outokumpu • Joined Outokumpu from Aliaxis, S.A (Divisional CEO EMEA) • Long career at Stora Enso, EVP Paper Division • Member of Outokumpu Board of Directors since 2016 Ensuring smooth transition Building futu
Slide 4: Solid third-quarter EBITDA driven by business areas Europe and Ferrochrome
4 October 30, 2024 Solid third-quarter EBITDA driven by business areas Europe and Ferrochrome Kati ter Horst, President & CEO
Slide 5: Solid performance in challenging market conditions
5 October 30, 2024 Solid performance in challenging market conditions • Stainless steel deliveries were stable, in line with guidance Adjusted EBITDA totaled • BA Americas' result reflects deteriorated market conditions EUR 86 million • BA Europe's profitability improved due to good margin managemen
Slide 6: Stainless steel prices under pressure in both Europe and the U.S.
6 October 30, 2024 Stainless steel prices under pressure in both Europe and the U.S. Transaction prices 304 stainless, USD/tonne* Nickel LME cash, USD/tonne September September 30000 6000 25000 4000 20000 15000 2000 10000 0 5000 2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023 2024 Europe USA
Slide 7: Improved profitability driven by business areas Europe and Ferrochrome
7 October 30, 2024 Improved profitability driven by business areas Europe and Ferrochrome Deliveries, kt Adjusted EBITDA quarter-on-quarter comparison1, EUR million 605 560 Excellent operational 546 550 performance in 491 505 502 BA Ferrochrome 450 449 450 444 468 459 Driven by positive metal hedgin
Slide 8: Undisputed sustainability leader in the industry - strong progress with emission reductions
8 October 30, 2024 Undisputed sustainability leader in the industry - strong progress with emission reductions Safety performance, TRIFR 8.7 • Safety performance at world-class level • Recycled material content remained at 95%, 4.4 4.1 3.2 2.4 2 1.8 highest in the industry 1.5 1.5 • Good progress to
Slide 9: Focus on cash flow and financial discipline
9 October 30, 2024 Focus on cash flow and financial discipline Marc-Simon Schaar, CFO
Slide 10: Resilience in challenging market conditions
10 February 8, 2024 Resilience in challenging market conditions • Net debt EUR 212 million, driven by an increase in net working capital • Cash and cash equivalents EUR 241 million, total liquidity reserves EUR 1.0 billion • Planned 2024 annual capex EUR 210 million • 2023-2025 capex frame remains a
Slide 11: On track to reach EUR 350 million EBITDA run-rate improvement by the end of 2025
11 October 30, 2024 On track to reach EUR 350 million EBITDA run-rate improvement by the end of 2025 Cumulative gross annualized EBITDA run-rate improvement, EUR million Phase 2 EUR 24 million EBITDA run-rate improvement reached in Q3 2024, mainly driven by actions in business area Europe • Improved
Slide 12: BA Europe
12 October 30, 2024 Europe’s stainless steel deliveries, 1,000 tonnes BA Europe 500 Stable stainless steel deliveries, 414 significant improvement in profitability 400 355 370 372 322 369 349 322 327 316 303 316 316 300 • Recovery from the political strike in Finland 200 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 13: BA Americas
13 October 30, 2024 Americas’ stainless steel deliveries, 1,000 tonnes BA Americas Result reflects deteriorated market, long- 194 185 200 180 term view remains positive 177 167 161 147 150 148 142 150 132 130 125 • Stainless steel deliveries in Q3 impacted by 100 the flooding in Mexico, postponement
Slide 14: BA Ferrochrome
14 October 30, 2024 Ferrochrome, 1,000 tonnes BA Ferrochrome Solid result delivered through efficient 200 127 operational performance 122 123 120 90 95 100 104 104 87 85 87 100 128 125 129 128 70 125 118 116 104 89 79 69 70 76 • Demand for our low emission ferrochrome 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 15: Temporarily higher net working capital led to an increase in net debt
15 October 30, 2024 Temporarily higher net working capital led to an increase in net debt Q3/24 cash flow Capex frame EUR 600 million for years 2023–2025 EUR million 2024: EUR 210 million Inventory build-up after H1 political strike in Finland as well as preparation for annual planned maintenance sh
Slide 16: Strong foundation to create value over the cycle
16 October 30, 2024 Strong foundation to create value over the cycle Kati ter Horst, President & CEO
Slide 17: Outlook for Q4 2024
17 October 30, 2024 Outlook for Q4 2024 Group stainless steel deliveries in the fourth quarter are expected to decrease by 0–10% compared to the third quarter, driven by deteriorating markets for both business areas Europe and Americas. The planned maintenance break in Tornio, Finland is expected to
Slide 18: Ensuring a smooth transition and continuing to deliver on strategy phase 2
18 February 8, 2024 Ensuring a smooth transition and continuing to deliver on strategy phase 2 • Solid EUR 86 million adjusted EBITDA in challenging market conditions • Strong market position maintained in Europe and the U.S. • Good progress towards the EUR 350 million profitability improvement targ
Slide 19: Our way forward
19 October 30, 2024 Our way forward kt Reinforcing operational Strengthening Maintaining financial Sustainability performance competitiveness discipline leadership • World-class safety • Continuous • Acting promptly in a • Reducing emissions in performance improvement of cost changing market line wi
Slide 20: Thank you! Questions & answers
20 October 30, 2024 Thank you! Questions & answers Our ambition in sustainability has been globally recognized
Slide 21: Key financials for Q3 2024
21 October 30, 2024 Key financials for Q3 2024 Key figures Q3 2024 Q3 2023 Q2 2024 2023 Sales EUR million 1,518 1,531 1,540 6,961 • Adj. EBITDA EUR 86 million EBITDA EUR million 81 18 56 416 • Net result EUR 20 million Adjusted EBITDA EUR million 86 51 56 517 EBIT EUR million 32 -45 1 -100 • Earning
Slide 22: BA Europe's adjusted EBITDA increased to EUR 59 million in Q3 2024
22 October 30, 2024 BA Europe’s adjusted EBITDA increased to EUR 59 million in Q3 2024 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million Driven by metal hedging 59 28 Mainly fixed costs, driven by more maintenance work 4 4 59 -29 28 Q3/2023 Q4/2023 Q1/2024 Q2/2
Slide 23: BA Americas' adjusted EBITDA was EUR 5 million in Q3 2024
23 October 30, 2024 BA Americas’ adjusted EBITDA was EUR 5 million in Q3 2024 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million Deliveries negatively impacted by the weak market conditions and the flooding at our mill in Mexico 53 54 21 24 21 5 5 Q3/2023 Q4/202
Slide 24: BA Ferrochrome's adjusted EBITDA was EUR 29 million in Q3 2024
24 October 30, 2024 BA Ferrochrome’s adjusted EBITDA was EUR 29 million in Q3 2024 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million Improved fixed cost absorption and decreased variable costs, mainly due to enhanced mine efficiency and 29 electricity price 29
Slide 25: Imports increased both in Europe and the U.S. in Q3 2024
25 October 30, 2024 Imports increased both in Europe and the U.S. in Q3 2024 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 75 150 35 35 27% 30 50 100 28% 30 25
Slide 26: Outokumpu uniquely positioned to capture value from Carbon Border Adjustment Mechanism
26 October 30, 2024 Outokumpu uniquely positioned to capture value from Carbon Border Adjustment Mechanism – low carbon ferrochrome production a competitive asset for Outokumpu Outokumpu’s CO2 emissions (scopes 1, 2, 3) per tonne • The EU’s Carbon Border Adjustment Mechanism (CBAM) approved in April
Slide 27: Outokumpu committed in the decarbonization strategy aligned with 1.5 degrees
27 October 30, 2024 Outokumpu committed in the decarbonization strategy aligned with 1.5 degrees – circularity and innovation at the core 2016–2023 2023 results High recycled material content, low-emission energy, energy efficiency and incremental process improvements -27% 2023–2030 Replacing fossil
Slide 28: Strong partnerships with customers to drive the green transition forward
28 October 30, 2024 Strong partnerships with customers to drive the green transition forward in stainless steel industry Up to 93% lower carbon footprint compared to the industry average* *Global average CO₂ emissions (2023): 7 kilos of CO₂e per kg of stainless steel (based on data provided by CRU a