Slide 1: Outokumpu 2023 results
Strong cash flow and balance sheet in a subdued market, solid performance in the Americas Outokumpu 2023 results Heikki Malinen, President & CEO Pia Aaltonen-Forsell, CFO February 8, 2024
Slide 2: Disclaimer
2 February 8, 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 av
Slide 3: Solid adjusted EBITDA in 2023 in a weaker stainless steel market
3 February 8, 2024 Solid adjusted EBITDA in 2023 in a weaker stainless steel market Heikki Malinen, President & CEO
Slide 4: Adjusted EBITDA totaled EUR 517 million in 2023
4 February 8, 2024 Strong and immediate profitability improvement measures resulted in solid results in a challenging market environment • Market in the first half of 2023 was solid in both regions, second half challenging in Europe Adjusted EBITDA totaled • Strong actions taken to strengthen compet
Slide 5: European stainless steel prices slowly recovering since summer lows, U.S. prices softening
5 February 8, 2024 European stainless steel prices have been slowly recovering since their lowest point in the summer, prices in the U.S. softening Transaction prices 304 stainless, USD/tonne* Nickel LME cash, USD/tonne December December 30000 6000 25000 4000 20000 15000 2000 10000 0 5000 2019 2020
Slide 6: Profitability burdened by lower stainless steel prices in Europe
6 February 8, 2024 In 2023, we saw a significant shift in the market environment and profitability was burdened by lower stainless steel prices in Europe Adjusted EBITDA year-on-year comparison1, EUR million • Distributor de-stocking came close to Stainless steel deliveries its end in the second qua
Slide 7: Q4/23 results reflect slow market recovery in Europe
7 February 8, 2024 Q4/23 results reflect slow market recovery in Europe, and was negatively impacted by higher maintenance and other one-off costs Deliveries, kt Adjusted EBITDA quarter-on-quarter comparison1, EUR million 605 Higher maintenance 571 586 560 Realized stainless steel prices 546 550 cos
Slide 8: Outokumpu continues to lead the green transition in stainless steel industry
8 February 8, 2024 Outokumpu continues to lead the Safety performance, TRIFR green transition in stainless steel 8.7 industry 4.4 4.1 3.2 2.4 2 1.8 1.5 Highlights 2023 2016 2017 2018 2019 2020 2021 2022 2023 Targeting zero incidents World-class safety performance, TRIFR 1.5 Climate & circularity Rec
Slide 9: Decarbonization strategy aligned with 1.5 degrees
9 February 8, 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
Slide 10: Strong partnerships with customers to drive the green transition
10 February 8, 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 a
Slide 11: Uniquely positioned to capture value from CBAM
11 February 8, 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
Slide 12: New partnerships formed in 2023 for low carbon raw materials
12 February 8, 2024 New partnerships formed in 2023 to ensure a sufficient future supply of critical raw materials with a low carbon footprint • Scrap: 10% share acquired of CRONIMET North- East GmbH in Europe to strengthen partnership and accelerate circularity • Nickel: 9.9% share acquired in FPX
Slide 13: Assessment of cold rolling capacity expansion in the U.S. ongoing
13 February 8, 2024 Assessment of the cold rolling capacity expansion in the U.S. ongoing – decisions foreseen within a year • Long-term hot rolling agreement signed with AM/NS • Aim to strengthen Outokumpu's position in North America • Cold rolling capacity expansion would allow us to grow directly
Slide 14: Increased focus on shareholder returns remains
14 February 8, 2024 Increased focus on shareholder returns remains – strong cash flow enables dividend payments Outokumpu's Board of Directors proposes that a dividend of EUR 0.26 per share be paid for year 2023, with current share price* dividend yield 6.6% • Total dividend amount for year 2023 app
Slide 15: We kept our balance sheet net debt free
15 February 8, 2024 In the midst of changing market conditions, we kept our balance sheet net debt free Pia Aaltonen-Forsell, CFO
Slide 16: Continuous focus on efficient cost and capital management
16 February 8, 2024 Continuous focus on efficient cost and capital management to ensure profitability and keep our balance sheet strong • Net debt improved to EUR -60 million • Cash and cash equivalents EUR 502 million • Liquidity reserves at EUR 1.3 billion • EUR 800 million of outstanding committe
Slide 17: Solid operating cash flow and tight cost control in 2023
17 February 8, 2024 Solid operating cash flow and a tight cost control in 2023 Key figures Q4 2023 Q4 2022 Q3 2023 2023 2022 Continuing operations Stainless steel deliveries 1,000 tonnes 450 450 449 1,906 2,106 2023 financials Sales EUR million 1,513 1,895 1,531 6,961 9,494 Adjusted EBITDA EUR milli
Slide 18: Strategy phase 2 proceeding beyond expectations
18 February 8, 2024 Strategy phase 2 proceeding beyond expectations: EBITDA run-rate improvement target almost reached at the end of 2023 Transformation journey • 475 projects towards the Phase 1 Phase 2 200 EBITDA run-rate improvement completed in 2023 EBITDA run-rate • In business area Europe, in
Slide 19: Ambitious energy efficiency improvement program progressing well
19 February 8, 2024 Ambitious energy efficiency improvement program progressing well Ambitious aim to improve energy Energy efficiency improvement, efficiency by 8% until end of 2024* GWh 600 • It is clear that we will exceed our 8% energy efficiency improvement target over time, but not yet in 2024
Slide 20: Long-term structural cost advantage within electricity price in the Nordics
20 February 8, 2024 Long-term structural cost advantage within electricity price in the Nordics Outokumpu electricity usage Electricity price per region €/MWh 3.7 TWh in 2023 1. Central Europe average of DE, NL, BE, FR prices
Slide 21: BA Europe
21 February 8, 2024 Europe’s stainless steel deliveries, 1,000 tonnes BA Europe 450 Slow market recovery since the low 401 410 414 point in Q3/23 400 370 372 369 356 355 349 350 322 322 327 316 • Strong cost reductions and decisive 300 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 actions to strengthen com
Slide 22: BA Americas
22 February 8, 2024 Americas’ stainless steel deliveries, 1,000 tonnes BA Americas 192 194 200 185 Solid result delivered in 2023, market 176 180 177 167 softened at the end of the year 148 147 142 150 132 130 125 • Market conditions remained relatively solid 100 throughout the year Q4 Q1 Q2 Q3 Q4 Q
Slide 23: BA Ferrochrome
23 February 8, 2024 Ferrochrome production, 1,000 tonnes BA Ferrochrome Weaker market conditions and higher 150 127 131 131 128 125 129 128 125 118 maintenance work resulted in lower 104 profitability in 2023 100 76 69 70 50 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 • Ferrochrome market weakened in the
Slide 24: Capex discipline and solid cash flow resulted in negative net debt
24 February 8, 2024 Capex discipline continued throughout the year, efficient net working capital management and solid cash flow resulted in a negative net debt Q4/23 cash flow Net working capital decreased in Annual capex, EUR million line with the seasonal pattern EUR million Total capex in 2022:
Slide 25: With our strong financial position, we are preparing for the next upturn
25 February 8, 2024 With our strong financial position, we are preparing for the next upturn Heikki Malinen, President & CEO
Slide 26: Risk and opportunity outlook
February 8, 2024 Risk and opportunity outlook Positives • Peak rates in U.S., China and Europe • Macrocycle will start to improve in 2024 • Global trade should accelerate in 2024 • Inventories in the whole supply chain are low • Structural advantage in electricity prices in the Nordics Uncertainties
Slide 27: Outlook for Q1 2024
27 February 8, 2024 Outlook for Q1 2024 Group stainless steel deliveries in the first quarter are expected to increase by 5–15% compared to the fourth quarter. Market environment started to weaken at the end of the fourth quarter for business area Americas, and in Europe, a slow recovery is expected
Slide 28: Thank you! Questions & answers
28 February 8, 2024 Thank you! Questions & answers Our ambition in sustainability has been globally recognized
Slide 29: Strong liquidity position and limited debt maturities
29 February 8, 2024 Strong liquidity position and limited debt maturities in the following years Total liquidity reserves Debt structure at the end of 2023 Debt maturity profile at the end of 2023, decreased from €1.4 billion to €1.3 billion in 2023 EUR million 9% 1,000 2% 27% Revolving credit facil
Slide 30: BA Europe's adjusted EBITDA was EUR 4 million in Q4
30 February 8, 2024 BA Europe’s adjusted EBITDA was EUR 4 million in Q4 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million 122 Maintenance break Slightly increased realized prices in Q4/23 for stainless steel reflect moderate 69 market recovery 52 4 4 -29 -29 Q4
Slide 31: BA Americas' adjusted EBITDA was EUR 54 million in Q4
31 February 8, 2024 BA Americas’ adjusted EBITDA was EUR 54 million in Q4 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million Negative raw material impacts 110 68 53 54 53 54 23 Q4/2022 Q1/2023 Q2/2023 Q3/2023 Q4/2023 Q3/23 Deliveries Pricing & mix Net of timing
Slide 32: BA Ferrochrome's adjusted EBITDA was EUR 23 million in Q4
32 February 8, 2024 BA Ferrochrome’s adjusted EBITDA was EUR 23 million in Q4 Adjusted EBITDA, EUR million Adjusted EBITDA quarter-on-quarter comparison1, EUR million 23 21 Higher maintenance costs 36 21 23 14 16 Q4/2022 Q1/2023 Q2/2023 Q3/2023 Q4/2023 Q3/23 Deliveries Costs Ferrochrome price Other
Slide 33: In 2023, imports into Europe and the U.S. decreased from 2022
33 February 8, 2024 In 2023, imports into Europe and the U.S. decreased from 2022 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 26% 100 25 20 20