Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Q3 2020 Earnings Presentation
22 slides from Outokumpu Oyj's earnings presentation, Nov 5, 2020
Slide 1: Outokumpu Q3 2020 results
Outokumpu Q3 2020 results Heikki Malinen, President & CEO Pia Aaltonen-Forsell, CFO November 5, 2020
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 th
Slide 3: Business & market update
Business & market update Heikki Malinen, President & CEO 3 | November 5, 2020
Slide 4: Highlights during Q3
• Result negatively impacted by lower demand due Highlights to COVID-19 and typical seasonality in Europe • Safety performance remained strong during Q3 • Strong performance in Americas • Import penetration spiked in Europe • Long Products’ strategic review concluded, accelerated turnaround program
Slide 5: Rigorous safety measures in place; focus on cash preservation and tight cost control continues
Rigorous safety measures in place; focus on cash preservation and tight cost control continues in order to mitigate the COVID-19 impacts Safety Financials • Protecting the health and safety of employees • Financial position stable, liquidity improved in Q3 • Almost all office workers working remotel
Slide 6: Planned restructuring measures to improve cost competitiveness in order to de-risk the company
Planned restructuring measures to improve cost competitiveness in order to de-risk the company • Planned headcount reduction of approx. 1,000 The planned employee reductions include: • The employee negotiations will start immediately 270 in Finland • The planned personnel reductions are expected to
Slide 7: Strong cost mitigation actions in the third quarter
Strong cost mitigation actions in the third quarter Group adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Deliveries 7% lower Fixed cost compressions Planned maintenance Prices declined work in Europe 106 73 45 45 22 Net of Pricing Ferro- Q2/20 Deliveries tim
Slide 8: Nickel price climbed higher during the third quarter
Nickel price climbed higher during the third quarter Transaction prices 304 stainless, USD/tonne Average nickel price, Ferrochrome USD/tonne benchmark price, 3,400 USD/lb. 2,900 +0% 2,400 1,900 1,400 Q2/20 Q3/20 Q2/20 Q3/20 Europe USA China Source: CRU & Metal Bulletin 8 | November 5, 2020
Slide 9: Imports into Europe spiked in July as the new quarterly import quota period started
Imports into Europe spiked in July as the new quarterly import quota period started Third-country cold rolled imports1 into Europe, Third-country cold rolled imports2 into the US, 1,000 tonnes 1,000 tonnes 100 50 50 31% 30 40 80 40 60 30 20 30 14% 40 20 20 10 20 10 10 0 0 0 0 From rest of world From
Slide 10: New import quota period started in October, quota for other countries already fully utilized
New import quota period started in October, quota for other countries already fully utilized EU cold-rolled quota utilization* EU hot-rolled quota utilization* 100% 100% kt 91 19 44 29 50 49 15 11 33 91 168 80% 80% 60% 60% 40% 40% 20% 20% % 32 51 2 30 25 79 100 15 16 32 4 0% 0% Days in Turkey United
Slide 11: Financial update
Financial update Pia Aaltonen-Forsell, CFO 11 | November 5, 2020
Slide 12: Key figures Q3/20
Key figures Q3/20 Q3/19 Q2/20 Stainless steel deliveries 1,000 tonnes 488 533 523 Sales EUR million 1,254 1,590 1,420 Adjusted EBITDA EUR million 22 45 45 Net result EUR million -63 -27 -37 Earnings per share EUR -0.15 -0.06 -0.09 Operating cash flow EUR million 170 12 72 Net debt EUR million 1,105
Slide 13: BA Europe – high import pressure, typical seasonality and lower prices resulted in a challenging quarter
BA Europe – high import pressure, typical seasonality and lower prices resulted in a challenging quarter Europe adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Lower prices and weaker product mix 68 67 33 30 Various cost saving actions 9 Net of Q3 Q4 Q1/20 Q2
Slide 14: BA Americas – solid performance and cost compression actions improved the result
BA Americas – solid performance and cost compression actions improved the result Americas adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Lower fixed costs supported profitability 20 14 10 3 -11 Net of Pricing Q3 Q4 Q1/20 Q2 Q3 Q2/20 Deliveries timing and Cos
Slide 15: BA Long Products – weak performance continued, accelerated turnaround program starts
BA Long Products – weak performance continued, accelerated turnaround program starts Long Products adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Deliveries 22% lower -1 -2 -3 -4 -9 Net of Q2/20 Pricing Costs Q3/20 Deliveries timing and Other Q3 Q4 Q1/20 Q2
Slide 16: BA Ferrochrome – planned maintenance work completed, start-up successful
BA Ferrochrome – planned maintenance work completed, start-up successful Ferrochrome adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Cost increase in line with guidance 25 24 19 16 9 FeCr Q3 Q4 Q1/20 Q2 Q3 Q2/20 Deliveries Costs Others Q3/20 price 1) Indicati
Slide 17: Decisive working capital management and EUR 72 million VAT deferral boosted cash flow
Decisive working capital management and EUR 72 million VAT deferral boosted cash flow Q3/20 cash flow, Annual Capex, EUR million EUR million 240 2020 Capex EUR 180 million 200 160 EBITDA Working Provisions, Operating Net cash from Cash flow before capital pensions, financial cash flow investing fina
Slide 18: Net debt reduced to EUR 1.1 billion, gearing at 45%
Net debt reduced to EUR 1.1 billion, gearing at 45% Net debt, EUR million Net debt/LTM adjusted EBITDA 1,800 80% 69% IFRS16 impact* EUR 131 million 70% 1,600 51% 60% 1,400 48% 49% 45% 45% 45% 40% 50% 1,200 40% 30% < 3.0 1,000 20% 800 10% 1,610 1,242 1,091 1,241 1,155 1,249 1,243 1,105 9.8 4.0 1.7 2.
Slide 19: Total liquidity reserves amounted to EUR 0.9 billion at the end of September
Total liquidity reserves amounted to EUR 0.9 billion at the end of September Debt structure* Debt maturity profile*, EUR million New 800 EUR 125 million 18% 16% convertible issued in July 600 7% 13% 400 13% 32% 200 0 Cash & 2020 2021 2022 2023 2024 2025+ Bonds Convertible bonds cash Long-term loans
Slide 20: Outlook
Outlook Heikki Malinen, President & CEO 20 | November 5, 2020
Slide 21: Outlook for Q4 2020
Outlook for Q4 2020 As communicated previously, the COVID-19 pandemic is expected to have a significant impact on the stainless steel industry throughout 2020, and increases uncertainty. Outokumpu expects its stainless steel deliveries for the whole Group to remain stable in the fourth quarter compa
Slide 22: Thank you! Questions & answers
Thank you! Questions & answers 22 | November 5, 2020