Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Q1 2020 Earnings Presentation
29 slides from Outokumpu Oyj's earnings presentation, May 6, 2020
Slide 1: Outokumpu Q1 2020 results
Outokumpu Q1 2020 results CEO Roeland Baan CFO Pia Aaltonen-Forsell May 6, 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: Speakers
Speakers Roeland Baan Pia Aaltonen-Forsell Reeta Kaukiainen President & CEO CFO EVP, Communications & IR 3 | May 6, 2020
Slide 4: Vision 2020: Best value creator in stainless steel
Vision 2020 Best value creator in stainless steel by 2020 through customer orientation and efficiency 4 | May 6, 2020
Slide 5: Responding to COVID-19
Responding to COVID-19 Securing health and safety of employees and business continuity Safety Operations Sales • Social distancing ensured for all • Shorter working time, temporary • Stainless steel volumes expected shifts at production sites shutdowns and co-determination to decrease by 10-20% in Q
Slide 6: Responding to COVID-19
Responding to COVID-19 Sufficient liquidity and contingency plans will take us through the COVID-19 crisis Solid balance sheet Actions • Scenario-based financial planning implemented → Sufficient liquidity in all tested scenarios Total liquidity €0.9 billion • Overall cost reduction • Eligible for g
Slide 7: Result was driven by seasonally higher volumes and improved productivity
Result was driven by seasonally higher volumes and improved productivity Group adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million 106 91 73 54 45 Net of Pricing Ferro- Q1/19 Q2 Q3 Q4 Q1/20 Q4/19 Deliveries timing and Costs Others Q1/20 & mix chrome hedging 1) In
Slide 8: Nickel price declined during the first quarter
Nickel price declined during the first quarter Transaction prices 304 stainless, Average nickel price, Ferrochrome USD/tonne USD/tonne benchmark price, USD/lb 3,400 2,900 2,400 1,900 1,400 Q4/19 Q1/20 Q4/19 Q1/20 Europe USA China Source: CRU 8 | May 6, 2020
Slide 9: Import pressure in Europe remained high
Import pressure in Europe remained high Third-country cold rolled imports1 into Europe, Third-country cold rolled imports2 into the US, 1,000 tonnes 1,000 tonnes 50 100 50 29% 30 80 40 40 60 30 20 14% 30 40 20 20 10 20 10 10 0 0 0 0 From rest of world From China From rest of world From China From re
Slide 10: The current import quotas must be reduced to reflect the new market reality
The current import quotas must be reduced to reflect the new market reality EU cold-rolled quota utilization* EU hot-rolled quota utilization* 100% 100% 365 74 90 108 179 165 50 42 53 365 30 220 46 32 7 6 32 80% 80% 60% 60% 40% 40% 20% 20% 83 100 13 100 81 97 100 99 87 94 83 2 100 56 77 66 100 0% 0%
Slide 11: Key figures
Key figures Q1/20 Q1/19 Q4/19 2019 Stainless steel deliveries 1,000 tonnes 588 621 458 2,196 Sales EUR million 1,615 1,715 1,398 6,403 Adjusted EBITDA EUR million 106 54 73 263 EBITDA EUR million 106 40 90 266 Net result EUR million 22 -39 -15 -75 Earnings per share EUR 0.05 -0.09 -0.04 -0.18 Operat
Slide 12: BA Europe – positive volume impact was offset by weaker product mix
BA Europe – positive volume impact was offset by weaker product mix Europe adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Weaker product mix 73 68 67 42 33 Net of Q1/19 Q2 Q3 Q4 Q1/20 Pricing Q4/19 Deliveries timing and Costs Others Q1/20 & mix hedging 1) In
Slide 13: BA Americas – best quarterly result since 2017
BA Americas – best quarterly result since 2017 Americas adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, Higher production EUR million EUR million increased costs 20 10 -8 -11 -18 Net of Pricing Q1/19 Q2 Q3 Q4 Q1/20 Q4/19 Deliveries timing and Costs Others Q1/20 & mix hedging 1) Indi
Slide 14: BA Long Products – seasonally higher volumes
BA Long Products – seasonally higher volumes Long Products adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Both the external and internal deliveries increased 6 -1 -2 -3 -9 Net of Q4/19 Deliveries Pricing Costs Q1/20 timing and Q1/19 Q2 Q3 Q4 Q1/20 & mix hedg
Slide 15: Ferrochrome's result supported by lower costs
Ferrochrome’s result supported by lower costs Ferrochrome adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Lower maintenance costs 30 31 25 19 16 FeCr Q1/19 Q2 Q3 Q4 Q1/20 Q4/19 Deliveries Costs Others Q1/20 price 1) Indicative columns based on management esti
Slide 16: First-quarter cash flow followed the seasonal pattern
First-quarter cash flow followed the seasonal pattern Cash flow, EUR million Capex estimate 2020, EUR million 240 2020 annual Capex reduced by 200 EUR 40 million to EUR 180 million 160 120 80 40 0 EBITDA Working Provisions, Operating Net cash Cash flow capital pensions, cash flow from before Expansi
Slide 17: Net debt reduction continues in 2020
Net debt reduction continues in 2020 Net debt, EUR million Net debt/LTM adjusted EBITDA 1,800 IFRS16 impact* 80% 69% EUR 131 million 70% 1,600 51% 60% 1,400 45% 45% 48% 40% 50% 1,200 40% 30% 1,000 20% 800 <1.0 10% 1,610 1,242 1,091 1,241 1,155 1,249 9.8 4.0 1.7 2.6 4.4 4.0 600 0% 2015 2016 2017 2018
Slide 18: EUR 250 million convertible bond repaid in February
EUR 250 million convertible bond repaid in February Debt structure* Debt maturity profile*, EUR million Total liquidity €0.9 billion 800 20% 15% Cash & cash 600 equivalents €411 million 12% 400 39% 14% 200 0 2020 2021 2022 2023 2024 2025+ Bonds Long term loans Current debt Pension loans Financial le
Slide 19: Outlook for Q2 2020
Outlook for Q2 2020 The preventative measures and lockdowns related to the COVID-19 pandemic are expected to have a Due to the global significant impact on the stainless steel industry during 2020. economic uncertainty caused by the COVID-19 As a result of lower industrial production and diminishing
Slide 20: Appendix
Appendix ~~ AARANRAA CER
Slide 21: Stainless steel is the future for sustainable modern society
Stainless steel is the future for sustainable modern society with its unbeatable features Corrosion Sustainable resistant Heat Hygienic resistant High Aesthetic Heat strength Corrosion resistant resistant Cost Durable efficient 21 | May 6, 2020
Slide 22: The demand for stainless steel keeps on growing
The demand for stainless steel keeps on growing Global stainless steel real demand in 2019 Expected stainless steel real demand in 2025 Heavy Other industries Other +35% Heavy industries +17% Architecture, Building & Architecture, Construction Building & +24% 54.2 43.8 Construction +39% million tonn
Slide 23: We have the lowest carbon footprint in the stainless steel industry
We have the lowest carbon footprint in the stainless steel industry Industry leading Low ferrochrome High usage of carbon recycled content carbon footprint: neutral electricity in globally Europe 90% 42% of industry average +80% Energy and material efficiency 23 | May 6, 2020
Slide 24: Committed to reaching carbon neutrality by 2050
We are committed to reaching carbon neutrality by 2050 in-line with EU Green Deal targets 20% lower Carbon neutral by carbon footprint by 2023 2050 1 1) Our carbon neutrality commitment relates to scope 1+2. Regarding scope 3, we’re working closely with our RM suppliers to ensure that they identify
Slide 25: Stainless steel from China and Indonesia has up to five times higher carbon footprint
Stainless steel from China and Indonesia has up-to five times higher carbon footprint CO2 emissions of stainless steel producers Drivers of high carbon footprint for Chinese and Indonesian 8 stainless steel Tonne of CO2 per tonne crude steel 6 1. Low utilization of recycled material 4 2. Low nickel
Slide 26: We have a balanced customer portfolio
We have a balanced customer portfolio End-customers • Long-term contracts Consumer goods • Large quantities & medical 10% Distributors 46% Automotive 12% 54% • • Special grades Ferritics and duplex • Technical advice Architecture, building & • Develop relationships & receive construction 3% volume d
Slide 27: We have a solid presence in key regions
We have a solid presence in key regions Avesta* Fagersta Tornio* Integrated melt shop, hot and cold rolling Degerfors Kemi Sheffield Nyby Other mills Krefeld* Helsinki Mine Richburg Dillenburg Dahlerbrück Service centers Calvert San Luis Potosí Headquarters in Helsinki, Finland R&D centers * 27 | Ma
Slide 28: Fully integrated production asset base
Fully integrated production asset base Europe Americas Long Products Total Tornio Avesta + Krefeld + Degerfors Calvert Mexinox Sheffield Richburg Degerfors Fagersta 1,000 tonnes Nyby Dillenburg Finland Sweden Germany Sweden USA Mexico UK USA Sweden Sweden Melting 1,450 450 900 450 3,250 Hot rolling
Slide 29: For more information, call Outokumpu Investor Relations
For more information, call Outokumpu Investor Relations or visit www.outokumpu.com/investors Reeta Kaukiainen EVP – Communications & IR Q2 result Mobile +358 50 522 0924 August 7, 2020 E-mail: reeta.kaukiainen@outokumpu.com Linda Häkkilä Investor Relations Manager Mobile: +358 40 071 9669 E-mail: li