Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Deutsche Bank Global Industrial & Basic Materials Conference 2012
24 slides from Outokumpu Oyj's conference presentation, Jun 13, 2012
Slide 1: Deutsche Bank Global Industrial & Basic Materials Conference in Chicago
Outokumpu Deutsche Bank Global Industrial & Basic Materials Conference in Chicago 13 June 2012 Mika Seitovirta, CEO and Ingela Ulfves, IR www.outokumpu.com
Slide 2: Agenda
1 Stainless steel markets 2 Ongoing efficiency improvement actions and investments 3 Financials and short-term outlook 4 Outokumpu–Inoxum acquisition 2
Slide 3: Not all steel is stainless – but it is the fastest growing of all metals
Not all steel is stainless – but it is the fastest growing of all metals Stainless steel production Indexed growth ~33 MTPA about 2% of all steel 280 260 240 220 200 180 160 140 120 100 80 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Stainless steel Aluminium Copper Carbon steel production
Slide 4: Stainless steel market growth continues – 4% growth expected for 2012
Stainless steel market growth continues – 4% growth expected for 2012 EUROPE AMERICAS CHINA Blue = 2011 Green = 2012f OTHERS OTHER ASIA Data source: SMR, March 2012 TOTAL WORLD 4
Slide 5: Diversified and broad range of end-use segments of stainless steel
Diversified and broad range of end-use segments of stainless steel World end-use consumption Chemical, Petrochemical Others 3% and Energy 11% Catering and Transport 12% Appliances 37% Process and Construction, Building Resources 19% and Architecture 17% Source: SMR, consumption of all stainless fini
Slide 6: Ongoing efficiency improvement actions and investments
1 Stainless steel markets 2 Ongoing efficiency improvement actions and investments 3 Financials and short-term outlook 4 Outokumpu–Inoxum acquisition 6
Slide 7: Outokumpu's strategic priorities
Outokumpu’s strategic priorities Profitability Customer satisfaction Excel in sales and customer service Ferrochrome Loading Tornio with Fast transformation to expansion high volume products special grades and products Growth outside Europe Excel in operations 7
Slide 8: Significant improvements delivered in 2011 and several initiatives ongoing in 2012
Significant improvements delivered in 2011 and several initiatives ongoing in 2012 Impact Delivered Management team • New management team • Focus on implementation • Functional efficiency • Kloster thin strip operations • ~ MEUR 30 p.a. cost savings • Turnaround of loss making During 2012 Cost b
Slide 9: Financials and short-term outlook
1 Stainless steel markets 2 Ongoing efficiency improvement actions and investments 3 Financials and short-term outlook 4 Outokumpu–Inoxum acquisition 9
Slide 10: Key figures Q1 2012
Key figures Q1 2012 EUR million I/2012 IV/2011 I/2011 2011 Sales 1 304 1 125 1 371 5 009 EBITDA 60 -13 93 80 Operating profit 3 -71 33 -260 EPS, € 0.06 -0.62 0.09 -0.99 ROCE, % 0.3 -7.4 3.1 -6.5 External deliveries1), 1 000 tonnes 418 334 395 1 449 Stainless steel external deliveries, 1 000 tonnes 3
Slide 11: Capital structure
Capital structure EUR million I/2012 IV/2011 I/2011 2011 Net cash generated from operating activities 116 132 -10 338 Net interest-bearing debt 1 495 1 720 1 873 1 720 Equity-to-assets ratio, % 40.6 39.8 39.9 39.8 Debt-to-equity ratio (gearing), % *) 78.4 82.5 80.4 82.5 *) Excluding MEUR 148 of righ
Slide 12: Short-term outlook
Short-term outlook • Outokumpu’s average base prices for stainless steel in Q2 expected to be flat or slightly lower than in Q1. • recent decline in the nickel price • a weaker product and geographic mix in the second quarter • Outokumpu’s external delivery volumes (stainless and ferrochrome) in Q2
Slide 13: Outokumpu–Inoxum acquisition
1 Stainless steel markets 2 Ongoing efficiency improvement actions and investments 3 Financials and short-term outlook 4 Outokumpu–Inoxum acquisition 13
Slide 14: Creating a new global leader in stainless steel – Overview
Creating a new global leader in stainless steel – Overview • Acquisition of Inoxum, ThyssenKrupp’s stainless steel business, announced in January 2012 • Three integrated production facilities as well as a broad service centre and sales office presence globally • Leading position in Europe with signi
Slide 15: The combined Outokumpu creates significant value for all stakeholders
The combined Outokumpu creates significant value for all stakeholders Optimised • Highly integrated production base with best-in-class assets on three continents Optimisation of global in Europe, the Americas and Asia asset base production • Increased cost efficiency through higher capacity utilisat
Slide 16: The combination creates the world's largest stainless steel company
The combination of Outokumpu and Inoxum creates the world’s largest stainless steel company Annual cold rolling capacity – kt 3 445 2 490 2 225 2 063 1 710 1 510 1 350 1 260 955 801 Outokumpu Inoxum¹ Posco Acerinox Aperam Tisco Yusco Baosteel Outokumpu ATI + Inoxum¹ Source: CRU as of November 2011 ¹
Slide 17: Diversified product range, end customer exposure and routes to market
The combined Outokumpu benefits from a diversified product range, end customer exposure and routes to market Outokumpu Combined stainless steel deliveries by grade Outokumpu Combined stainless steel deliveries by end-market² Other Transport Other Duplex ~10% ~5% Chemicals, petrochemicals ~3% ~1% Arc
Slide 18: The combined Outokumpu offers substantial synergy potential
The combined Outokumpu offers substantial synergy potential Total estimated synergy cash cost savings of MEUR 225–250 p.a. • Estimated cash cost synergies of MEUR 225–250 per year, ~45% expected by end of 2014, ~70% by end of 2015, full run-rate by 2017 at the latest • Total expected implementation
Slide 19: Well balanced production footprint for high volume standard grades
The combined Outokumpu is going to have a state- of-the-art, well balanced production footprint for high volume standard grades… Well balanced global production footprint (annual capacity – kt) Europe Americas Asia San Luis Tornio Bochum Krefeld Dillenburg Terni Calvert Shanghai Potosí 2016 2013 Mel
Slide 20: Specialty products and high performance alloys platform
… and an optimised, highly capable specialty products and high performance alloys platform to serve global customers “Made to order” specialty and high performance alloys production platform (annual production capacity – kt) Specialty High Performance Alloys Sweden USA UK Europe USA New Altena, Esse
Slide 21: Unique range of growth opportunities driving value creation
Unique range of growth opportunities driving value creation Actions ongoing Profitability impact 1 Ferrochrome • Double ferrochrome production capacity from 265 kt to Estimated MEUR 150 EBIT 530 kt p.a. by 2015 impact by 2015¹ 2 Americas • Start ramp-up of Calvert, US, meltshop in end of 2012 Ta
Slide 22: Planned Outokumpu–Inoxum organisation structure post closing
Planned Outokumpu–Inoxum organisation structure post closing CEO Mika Seitovirta HR & EHSQ CFO To be appointed Esa Lager Marketing, Integration & Strategy Communications & IR Reinhard Florey Kari Tuutti Stainless Coil Stainless Coil Specialty Stainless Stainless Asia Ferrochrome Americas EMEA and Al
Slide 23: Q&A
Q&A www.outokumpu.com
Slide 24: Deutsche Bank Global Industrial & Basic Materials Conference in Chicago
Outokumpu Deutsche Bank Global Industrial & Basic Materials Conference in Chicago 13 June 2012 Mika Seitovirta, CEO and Ingela Ulfves, IR www.outokumpu.com
Outokumpu — Deutsche Bank Global Industrial & Basic Materials Conference 2012 on 6ix