Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Investor Presentation (September 2023)
22 slides from Outokumpu Oyj's investor presentation, Sep 20, 2023
Slide 1: Strengthening Outokumpu's position in the U.S.
Strengthening Outokumpu’s position in the U.S. Tamara Weinert, President, business area Americas Pia Aaltonen-Forsell, CFO S e p t e mbe r 2 0 , 2 0 2 3
Slide 2: Diligent strategy execution and strong balance sheet enable strengthening our U.S. position
2 Diligent strategy execution combined with industry-leading strong balance sheet enables us to strengthen our position in the U.S. Pia Aaltonen-Forsell, CFO
Slide 3: Focus on growth in strategy phase 3
3 Focus on growth in strategy phase 3 Phase 3: Strong sustained performance 2026– Phase 2: Strengthen the core 2023–2025 Americas expansion, Phase 1: European Strengthen the balance sheet competitiveness, value- OUR VISION 2021–2022 Targeted productivity chain integration and Customer’s first invest
Slide 4: Our strong balance sheet will allow us to start investing in growth
4 Our strong balance sheet will allow us to start investing in growth while we remain committed to our dividend policy Strong balance sheet and Significant EBITDA Core of the company reduced risk profile run-rate improvement strengthened Net debt EUR -9 million Strategy phase 1 Successful exit from
Slide 5: As part of strategy phase 3, we are evaluating options to develop our business
5 • Stainless steel is a cyclical industry, and we As part of our strategy are now in a weaker part of the cycle phase 3 considerations, • We are looking beyond the cycle when we are evaluating options evaluating long-term strategic options to develop our business to develop our business in • Our re
Slide 6: Deglobalization is under way – strengthening our position in the U.S.
6 Deglobalization is under way – strengthening our position in the U.S. gives us a more geopolitically diverse asset portfolio China EU U.S. Mexico ＋ Growth ＋ Energy ＋ Inflation ＋ Nearshoring (slowing down) transition reduction act ＋ Recent tariffs ＋ Supportive − Population − Ukrainian war trade pol
Slide 7: We are in a good position to grow in the undersupplied North American market
7 We are in a good position to grow and capture our share of the favorable and undersupplied North American market Tamara Weinert, President, business area Americas
Slide 8: USMCA stainless steel market is highly attractive and increasingly undersupplied
8 USMCA stainless steel market is highly attractive and an increasingly undersupplied market… USMCA cold rolled stainless steel demand (Mt) • Supply shortage in USMCA of ~400kt in a normalized market currently, expected to +2% p.a. increase in the next decade to ~720kt* 2.2 2.2 2.1 1.9 1.9 1.9 1.9 •
Slide 9: Favorable regulatory environment and future growth opportunities
9 … with a favorable regulatory environment and future growth opportunities Build America, Buy Inflation Reduction Act Chips and Science Act America Act The United States- US Infrastructure Bill Mexico-Canada Section 232 tariffs Agreement (USMCA)
Slide 10: Mexico is the leader in nearshoring for the U.S.
10 Mexico is the leader in nearshoring for the U.S. – we are in a unique position as the only stainless producer in Mexico Mexico surpassed China as the #1 trade Geographical and trade advantages partner of the U.S. at the beginning of 2023* • Favorable regulatory environment; section 232 tariff fre
Slide 11: We are well placed to invest in growth
11 We are well placed to invest in growth
Slide 12: Second largest stainless steel producer in the U.S. with two production facilities
12 Outokumpu is the second largest stainless steel producer in the U.S. with two production facilities in North America Outokumpu production sites in North America Calvert, Alabama, U.S. • Comprehensive product portfolio • Most technically advanced mill in the U.S. • Feeds hot rolled and cold rolled
Slide 13: Calvert is a modern stainless steel site with a competitive cost structure
13 Calvert is a modern stainless steel site with a competitive cost structure Trusted supplier Efficient, reliable Secured and High performing and in one of the and cost competitive sustainable flexible work force strongest markets production supply chain in the world incl. scrap
Slide 14: Our Calvert mill is the most technically advanced mill in the U.S.
14 Our Calvert stainless steel mill is the most technically advanced mill in the U.S. Passive Annealing Cold River Slab Hot Strip Melt Scrap Hot Annealing Cold Annealing Head- Furnace & Hot Finishing Rolling Terminal Yard* Mill* Shop Yard & Pickling Line & Pickling Line quarter Black Band Slitter Mi
Slide 15: Business area Americas' development
15 Business area Americas’ development As a result of successful H1/ operational and 2018 2019 2020 2021 2022 2023 commercial 297 384 improvements, we have EBITDA Normalized annual EBITDA $200 million 178 created a base for (€ million) 55 sustainable profits in -5 -27 business area Americas Deliveri
Slide 16: Outokumpu is a strong #2 in North America serving distributor and end-user customers
16 Outokumpu is a strong #2 in North America and well positioned to serve distributor and end-user customers • Distributor focused market U.S. flat stainless steel cold rolled Business area Americas in the U.S complements production volumes (Mt) sales split per customer Outokumpu’s asset segment (kt
Slide 17: In strategy phase 2, we increase cold rolling capacity by 80kt
17 In strategy phase 2, we increase our cold rolling capacity by 80kt with small investments Phase 2 productivity improvements 2022 2023 2024 2025 30kt 50kt 80kt Cumulative volume increase Calvert investments De-bottleneck Calvert with productivity investments Increase Mexinox cold rolling capacity
Slide 18: We are ready to shift our focus towards growth
18 We are ready to shift our focus towards growth
Slide 19: Feasibility study ongoing: hot rolling arrangements and cold rolling expansion
19 Feasibility study ongoing: we are exploring options for our hot rolling arrangements and cold rolling capacity expansion to achieve our commercial ambitions in North America Hot rolling Cold rolling • Outokumpu is exploring different options to reorganize its • We are seeking to increase our hot
Slide 20: Building our own hot rolling mill would enable long-term growth
Building our own hot rolling mill would enable long-term growth, provide flexibility, and generate efficiencies and cost savings Criteria Current set-up, hot rolling contract Investing in our own hot rolling mill with an external service provider Cash conversion cost Fee according to the contract In
Slide 21: Possible investment is about enhancing the current set-up and enabling long-term growth
21 Possible investment is about further enhancing the current set-up and enabling long-term future growth for Outokumpu in North America • Good readiness to • Strong support • Practical preparations proceeding make an investment from our core • Suitable space inside our Calvert site decision banks,
Slide 22: Thank you! Questions & Answers
22 Questions & Answers Thank you! Questions & Answers