Slide 1: Outokumpu Q2 2021 results
Outokumpu Q2 2021 results Heikki Malinen, President & CEO Pia Aaltonen-Forsell, CFO August 5, 2021
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 | August 5, 2021
Slide 4: Adjusted EBITDA reached €223 million
• Improved demand for stainless steel Adjusted EBITDA • Realized prices increased in all regions reached • Strategy execution well on track, clear €223 million benefits extracted in the first half of 2021 in a strong market • Safety performance remained strong environment • In the process of setting
Slide 5: Strong market environment boosted profitability
Strong market environment boosted profitability Group adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Sigfinicant gains in Q1/21 were not repeated Deliveries increased by 3% 223 177 Realized prices for stainless steel increased in all regions 78 45 22 Net of
Slide 6: Well on track to reach EUR 200 million EBITDA run-rate improvement
Lean & agile organization stream has been the main contributor, 80% of initiatives now completed Well on track to reach EUR 200 million EBITDA One of the successes in Cost & capital discipline stream has been the run-rate improvement improvement in raw material efficiency by the end of 2022 Strong f
Slide 7: Long lead times and high raw material costs have increased global stainless steel prices
Long lead times, consumers’ priority to secure supply and high raw material costs have increased global stainless steel prices Transaction prices 304 stainless, USD/tonne Average Ferrochrome nickel price, benchmark price, 4,400 USD/tonne USD/lb. 3,900 3,400 2,900 2,400 1,900 1,400 2014 2015 2016 201
Slide 8: Import penetration into Europe remained at Q1/21 level, but imports from Indonesia reduced
Import penetration into Europe remained at Q1/21 level, but imports from Indonesia reduced Third-country cold rolled imports1 into Europe, Third-country cold rolled imports2 into the US, 1,000 tonnes 1,000 tonnes 50 120 50 30 40 17% 40 80 25% 30 20 30 20 20 40 10 10 10 0 0 0 0 2017 2018 2019 2020 20
Slide 9: The EU is now moving to protect the region from unfair trading practices
The EU is now moving to protect the region from unfair trading practices European Safeguards After one month of a new quota period, • Extended with the same product scope & structure until June 2024 EU cold-rolled quota utilization is at 37%* • Expiry review before the end of June 2023 100% Anti-Dum
Slide 10: The sustainability leader in stainless steel
The sustainability leader in stainless steel Heikki Malinen, President & CEO 10 | August 5, 2021
Slide 11: Safety is our unwavering priority and we aim to continuously improve our performance
Safety is our unwavering priority and we aim to continuously improve our performance Safety performance (TRIFR) 8.7 4.4 4.1 3.2 2.4 1.5 2016 2017 2018 2019 2020 H1/21 TRIFR = Number of total recordable incidents per million working hours 11 | August 5, 2021
Slide 12: SBTi is the highest CO2 standard and Outokumpu has an approved target
SBTi is the highest CO2 standard and Outokumpu is the only stainless steel company with an approved target Previous target of SBTi 2.0 ºC was Outokumpu's value chain emissions tCO2-eq/t stainless steel upgraded with a commitment Business Ambition for 1.5 °C to SBTi 1.5 ºC 1.9 1.5 0.9 0.8 Scope 3 0.5
Slide 13: Outokumpu is the only stainless steel company reporting all three scopes
Outokumpu is the only stainless steel company reporting its emissions from all three scopes Value chain emissions, tCO2-eq/t of stainless steel 7.8 • With all three scopes included, Outokumpu Scope 1 & 2 has the lowest CO2 footprint; only 1.5 Scope 3 5.4 tonnes of CO2 per tonne of stainless steel Sc
Slide 14: Our efforts on sustainability have been globally recognized
Our efforts on sustainability have been globally recognized 14 | August 5, 2021
Slide 15: Financial update
Financial update Pia Aaltonen-Forsell, CFO 15 | August 5, 2021
Slide 16: Key figures Q2/21
Key figures Q2/21 Q2/20 Q1/21 2020 Stainless steel deliveries 1,000 tonnes 626 523 608 2,121 Sales EUR million 1,873 1,420 1,673 5,639 Adjusted EBITDA EUR million 223 45 177 250 Net result EUR million 129 -37 82 -116 Earnings per share EUR 0.30 -0.09 0.20 -0.28 Operating cash flow EUR million 6 72 2
Slide 17: BA Europe – demand driven price increases boost profitability
BA Europe – demand driven price increases boost profitability Europe adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Sigfinicant gains in Q1/21 were not repeated Deliveries increased by 2% 98 78 Realized prices for stainless steel returning to normal level, p
Slide 18: BA Americas – continued upward trend in a strong market
BA Americas – continued upward trend in a strong market, showcasing sustainable improvement measures Americas adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Higher 9% higher freight costs deliveries Realized prices for 65 stainless steel 54 increased 14 18 3
Slide 19: BA Ferrochrome – Profitability improved in a tight ferrochrome market
BA Ferrochrome – Profitability improved in a tight ferrochrome market Ferrochrome adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million 67 Both the European BM price 42 and Chinese spot market 34 prices were at a higher level 24 9 FeCr Q2/20 Q3 Q4 Q1 Q2/21 Q1/21 De
Slide 20: BA Long Products – profitability improved through self-help
BA Long Products – profitability improved through self-help and better capacity utilization Fixed costs increased Long Products adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, on the back of higher EUR million EUR million volumes 11 12 External deliveries increased and internal deli
Slide 21: Strong profitability contributed to positive operating cash flow
Strong profitability contributed to positive operating cash flow despite seasonal increase in net working capital Q2/21 cash flow, Annual Capex, EUR million EUR million Annual Capex limited to Account receivables 240 €180 million, increased by €97 million H1/21 Capex €84 million 200 ~40% of the €96
Slide 22: Update on strategy step 1: €123 million realized EBITDA run-rate impact
Update on strategy step 1: cumulative €123 million realized EBITDA run-rate impact achieved, on track to meet target Gross run-rate EBITDA improvement (€ million) Solid implementation pipeline 200 Realized Illustrative plan 707 Initiatives Target 39 implemented 1,007 84 Initiatives in 283 progress I
Slide 23: Outokumpu raised EUR 209 million with a directed share issue
• Main purpose was to accelerate de-leveraging Outokumpu raised • With the proceeds Outokumpu prepaid EUR EUR 209 million 210 million of its EUR 330 million term loan • Interest costs decreased on an annual run-rate with a directed by EUR 18 million • Subsequently, Moody’s upgraded Outokumpu’s share
Slide 24: Net debt was reduced to EUR 897 million
Net debt was reduced to EUR 897 million with the proceeds of the directed share issue Net debt, EUR million Net debt/LTM adjusted EBITDA 1,800 80% 69% IFRS16 impact* 70% 1,600 51% 60% 1,400 45% 45% 40% 44% 44% 50% 1,200 40% 30% < 3.0 1,000 32% 20% 800 10% 1,610 1,242 1,091 1,241 1,155 1,028 1,073 89
Slide 25: Outokumpu successfully extended maturities of its revolving credit facilities
Outokumpu successfully extended maturities of its revolving credit facilities Debt structure* Debt maturity profile*, EUR million 1000 13% 22% Total liquidity reserves 800 €0.9 million in Q2/21 17% 600 10% 400 19% 18% 200 0 Cash & 2021 2022 2023 2024 2025 2026+ Bonds Convertible bonds cash Long-term
Slide 26: Outlook
Outlook Heikki Malinen, President & CEO 26 | August 5, 2021
Slide 27: Outlook for Q3 2021
Group stainless steel deliveries in the third quarter are expected to decrease by 0–10% compared to the second quarter, in line with the seasonal pattern. The European ferrochrome benchmark price remained stable at USD 1.56/lb for the third quarter. Outlook for Planned maintenance costs in the third
Slide 28: Thank you! Questions & answers
Thank you! Questions & answers 28 | August 5, 2021
Slide 29: More ambitious ESG strategy was launched in May
More ambitious ESG strategy was launched in May Environment Social Governance Reduce emissions and provide Health and safety of our people Ensure transparency solutions for a sustainable future in everything we do and compliant processes GHG emissions Safety Share of local suppliers Scopes 1-3 Fatal