Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Outokumpu Oyj New — Q1 2024 Earnings Presentation
28 slides from Outokumpu Oyj's earnings presentation, May 7, 2024
Slide 1: Well started quarter turned challenging due to the political strike in Finland
Well started quarter turned challenging due to the political strike in Finland Outokumpu Q1 2024 results Heikki Malinen, President & CEO Pia Aaltonen-Forsell, CFO May 7, 2024
Slide 2: Disclaimer
2 May 7, 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 availab
Slide 3: Gradual market recovery continued in Europe, while the political strike burdened results
3 May 7, 2024 Gradual market recovery continued in Europe, while the political strike in Finland burdened results Heikki Malinen, President & CEO
Slide 4: First quarter of 2024 started off relatively well – decisive actions taken
4 May 7, 2024 First quarter of 2024 started off relatively well – decisive actions taken to minimize the negative financial impacts of the political strike in Finland • Gradual market recovery in Europe continued from the lowest point in Q3 2023 as expected • The tightened scrap market burdened prof
Slide 5: European stainless steel prices have picked up but remained at a low level
5 May 7, 2024 European stainless steel prices have picked up but remained at a low level, softening of prices in the U.S. continued Transaction prices 304 stainless, USD/tonne* Nickel LME cash, USD/tonne March March 30000 6000 25000 4000 20000 15000 2000 10000 0 5000 2019 2020 2021 2022 2023 2024 20
Slide 6: Strike related impacts weighted down adjusted EBITDA in Q1 2024
6 May 7, 2024 Strike related impacts weighted down adjusted EBITDA in Q1 2024 Deliveries, kt Adjusted EBITDA quarter-on-quarter comparison1, EUR million 605 571 586 560 The scrap market remained tight throughout the quarter 546 550 491 505 502 450 449 450 444 Positive impact from lower maintenance w
Slide 7: High recycled material content supporting Outokumpu's journey towards decarbonization
7 May 7, 2024 High recycled material content supporting Outokumpu's journey towards decarbonization • Safety performance continued strong Safety performance, TRIFR • Recycled material content remained all-time 8.7 high of 95% 4.4 4.1 3.2 • Energy efficiency initiatives delivering results - 2.4 2 1.8
Slide 8: Strong focus on shareholder returns and a stable and growing dividend
8 February 8, 2024 Strong focus on shareholder returns and a commitment to paying a stable and growing dividend • Dividend of EUR 0.26 per share for the year 2023 was paid in April, in line with our dividend policy • The second share buyback program was competed in February • Considering dividends a
Slide 9: Changes in the Outokumpu leadership team
Changes in the Outokumpu leadership team • CEO Heikki Malinen and CFO Pia Aaltonen- Forsell have decided to leave company to pursue a career opportunity outside Outokumpu • Marc-Simon Schaar appointed as Chief Financial Officer as of June 1, 2024 ◦ Served as a Chief Procurement Officer and a leaders
Slide 10: Balance sheet remains the strongest in the industry
10 May 7, 2024 Balance sheet remains the strongest in the industry Pia Aaltonen-Forsell, CFO
Slide 11: Strong liquidity position, net debt remains negative
11 February 8, 2024 Strong liquidity position, net debt remains negative • Net debt EUR -12 million • Cash and cash equivalents EUR 425 million • Liquidity reserves EUR 1.2 billion, of which EUR 800 million of outstanding committed credit facilities fully unutilized • Annual capex frame EUR 220 mill
Slide 12: Solid progress with strategy phase 2, more performance improvement measures required
12 May 7, 2024 Solid progress with strategy phase 2. However, strike and tough market environment require more performance improvement measures Transformation journey • Cumulative EBITDA run-rate Phase 1 Phase 2 improvement of EUR 233 million achieved by the end of Q1 2024 – EBITDA run-rate initial
Slide 13: BA Europe
13 May 7, 2024 Europe’s stainless steel deliveries, 1,000 tonnes BA Europe 500 Gradual market recovery continued, 401 410 414 profitability negatively impacted by the 400 355 370 372 369 349 322 322 327 political strike and a tighter scrap 316 303 market 300 200 • Most of operations and port in Torn
Slide 14: BA Americas
14 May 7, 2024 Americas’ stainless steel deliveries, 1,000 tonnes BA Americas 192 194 200 185 Profitability negatively driven by tighter 176 180 177 167 scrap market, lower realized stainless 147 150 steel prices, especially in Mexico, and 150 142 132 130 125 some temporary operational challenges 10
Slide 15: BA Ferrochrome
15 May 7, 2024 Ferrochrome production, 1,000 tonnes BA Ferrochrome Profitability driven by higher 150 131 131 128 125 129 128 125 118 ferrochrome production, lower costs and 104 a lower ferrochrome sales price 100 76 89 69 70 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 • Ferrochrome market started to
Slide 16: Prudent net working capital management continued in Q1 2024, capex frame EUR 220 million
16 May 7, 2024 Prudent net working capital management continued in Q1 2024, annual capex frame for 2024 is EUR 220 million Q1/24 cash flow Capex frame EUR 600 million for years 2023–2025 EUR million The typical seasonality was muted by the impacts of the political strike 10% acquisition of 2024: EUR
Slide 17: Strong shareholder returns and long-term value creation remain at the center of our strategy
17 May 7, 2024 Strong shareholder returns and long-term value creation remain at the center of our strategy Heikki Malinen, President & CEO
Slide 18: Opportunities and uncertainties
May 7, 2024 Opportunities and uncertainties Opportunities • Very strong U.S. fiscal stimulus • German PMIs bottoming • Strengthened order book in Europe and U.S. • Distributor inventories remain low, re-stocking? • Green transition investments in the horizon Uncertainties • Possible postponement of
Slide 19: Outlook for Q2 2024
19 May 7, 2024 Outlook for Q2 2024 Group stainless steel deliveries in the second quarter are expected to increase by 5–15% compared to the first quarter. The recent political strike in Finland is expected to have approximately EUR 30 million negative financial impact in the second quarter. The scra
Slide 20: Thank you! Questions & answers
20 May 7, 2024 Thank you! Questions & answers Our ambition in sustainability has been globally recognized
Slide 21: Political strike in Finland burdened results in Q1 2024
21 May 7, 2024 Political strike in Finland burdened results in Q1 2024 Key figures Q1 2024 Q1 2023 Q4 2023 2023 Sales EUR million 1,479 2,006 1,513 6,961 EBITDA EUR million 37 198 15 416 Adjusted EBITDA EUR million 38 204 72 517 EBIT EUR million -19 135 -314 -100 Q1 2024 financials Adjusted EBIT EUR
Slide 22: BA Europe's adjusted EBITDA was EUR 4 million in Q1
22 May 7, 2024 BA Europe’s adjusted EBITDA was EUR 4 million in Q1 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million Higher realized prices for stainless steel lncludes various impacts, such as the electrification aid received in Q4/23 122 52 4 4 4 4 -29 Q1/202
Slide 23: BA Americas' adjusted EBITDA was EUR 24 million in Q1
23 May 7, 2024 BA Americas’ adjusted EBITDA was EUR 24 million in Q1 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million Tighter scrap market and lower stainless steel prices, especially in Mexico 110 54 68 53 54 24 24 Q1/2023 Q2/2023 Q3/2023 Q4/2023 Q1/2024 Q4/2
Slide 24: BA Ferrochrome's adjusted EBITDA was EUR 22 million in Q1
24 May 7, 2024 BA Ferrochrome’s adjusted EBITDA was EUR 22 million in Q1 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million Less maintenance work and lower variable costs 36 23 22 21 23 22 16 Q1/2023 Q2/2023 Q3/2023 Q4/2023 Q1/2024 Q4/23 Deliveries Costs Ferroch
Slide 25: Imports into Europe remained at a low level in Q1 2024
25 May 7, 2024 Imports into Europe remained at a low level in Q1 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 40 150 35 40 30 30 23% 100 25 20 20 20 50 13% 1
Slide 26: Outokumpu uniquely positioned to capture value from Carbon Border Adjustment Mechanism
26 May 7, 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 2023
Slide 27: Outokumpu committed in the decarbonization strategy aligned with 1.5 degrees
27 May 7, 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 coke
Slide 28: Up to 93% lower carbon footprint compared to the industry average
28 May 7, 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 and wo