Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Investor Presentation (November 2020)
101 slides from Outokumpu Oyj's investor presentation, Nov 27, 2020
Slide 1: De-risking the company for strong returns by the end of 2022
De-risking the company for strong returns by the end of 2022 Investor presentation November 2020 1 | November 27, 2020
Slide 2: Table of contents
Table of contents 1. Outokumpu in brief (slide 3) 2. New strategy (slide 15) 3. Business areas (slide 32) 4. Markets (slide 41) 5. Sustainability (slide 51) 6. R&D (slide 61) 7. Latest financials Q3 2020 (slide 66) 8. Appendix (slide 81) 2 | November 27, 2020
Slide 3: Outokumpu in brief
Outokumpu in brief
Slide 4: Outokumpu – global stainless steel producer
Outokumpu – global stainless steel producer Sustainability Stainless leader with Listed in Adjusted Operations in Net sales steel Personnel EBITDA 90% Nasdaq €6.4bn deliveries >30 10,390 OMX €263m 2.2mt recycled countries Helsinki content Sales by business area* Sales by destination* Sales by custom
Slide 5: We take care of our employees and our customer satisfaction is by far the highest
We take care of our employees and our customer satisfaction is by far the highest in the industry Organizational health index1 Safety development2 Customer satisfaction3 1st Outokumpu quartile 8.7 2nd quartile Competitors 58% 72% Absolutely or 3rd very satisfied quartile 4.4 customers3 4.1 4th 3.2 q
Slide 6: Financial development in 2016–2019
Financial development in 2016–2019 Net debt Cumulative Gearing below adjusted EBITDA improved by €1.1 €1.7 35% billion* billion * At the end of 2019, excluding IFRS16 adjustment; implementation impact on January 1, 2019 6 | November 27, 2020
Slide 7: Flat stainless and ferrochrome core businesses, Long Products in accelerated turnaround
Flat stainless and ferrochrome core businesses, Long Products in accelerated turnaround Core business Turnaround BA Europe BA Americas BA Ferrochrome BA Long Products • #1 in Europe in terms • #2 in the US in terms • Unique integration to • Broad range of bars, of volume of volume stainless steel wi
Slide 8: 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 8 | November 27, 2020
Slide 9: The world needs long lasting, hygienic and sustainable solutions
Economic and Healthcare, clean population growth water, appliances.. The world needs long Infrastructure, mobility Buildings, elevators, trains, bridges,… and urbanization lasting, hygienic and Climate change and Energy investments, sustainable limited resources resource efficiency,… solutions Susta
Slide 10: Expectations for real demand growth lowering
Expectations for real demand growth lowering Global stainless steel real demand in 2019 Expected stainless steel real demand in 2025 Heavy Other industries Heavy Other +34% industries +16% Architecture, Building & Architecture, Construction +21% Building & 53.6 +36% 44.2 Construction million tonnes
Slide 11: We have a balanced customer portfolio
We have a balanced customer portfolio* End-customers • Long term contracts Consumer goods • Large quantities 54% 10% • Special grades Distributors Automotive 12% • Ferritics and duplex 46% • Technical advice Architecture, building & • Develop relationships & receive construction 3% volume discounts
Slide 12: Outokumpu has the broadest product portfolio
Flat products Long products Ferrochrome Outokumpu has the broadest Slab Quarto plate Cast semis Bar product portfolio globally. Chrome is the most important Hot rolled Cold rolled Rolled and Rebar raw material used in stainless black coil white coil forged billet steel production. The use of our Out
Slide 13: 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 * 13 | No
Slide 14: 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 15: New strategy
New strategy
Slide 16: Strong foundations support strategy execution
Strong foundations support strategy execution Megatrends drive High customer Leader in stainless steel satisfaction sustainability demand growth 72% Stable operations Great people and Turnaround in the and continuous strong safety Americas improvement performance culture 16 | November 27, 2020
Slide 17: Margin improvement, cash flow and de-leveraging as main sources of value creation
Margin improvement, cash flow and de-leveraging as main sources of value creation Phase 3: 2026– Customer’s Phase 2: first choice in sustainable 2023–2025 Investing in growth stainless Phase 1: and sustainability steel 2021–2022 Targeted productivity investments to improve margins Margin improvement
Slide 18: Our priority for 2021–2022: De-risking the company for strong returns
Our priority for 2021–2022: De-risking the company for strong returns Strengthen accountability for performance Lean & agile Active performance Financial Strong returns; organization management discipline Reliable partner to stakeholders Profitability improvement €200 <3.0x Europe Continue operation
Slide 19: Strengthened accountability for performance
Strengthened accountability for performance Lean and agile Active performance Financial organization management discipline • Simplified structure • Business Area Boards to • Priority to secure strong • De-layered organization manage performance balance sheet • New management team • Executional certa
Slide 20: Planned headcount reductions will improve cost competitiveness
Planned headcount reductions will improve cost competitiveness Legal headcount, average for the period 10,977 excluding VDM, AST, OSTP transaction in 2013/14 10,645 10,485 10,468 10,118 * < 9,000 ** 2016 2017 2018 2019 2020 Q3 2021 2022 * At the end of the period 20 20 | November 27, 2020 ** Planned
Slide 21: €200 million EBITDA run-rate improvement delivered by end of 2022
€200 million EBITDA run-rate improvement delivered by end of 2022 Customer • Enhanced product mix in all business areas • Growth in selected segments excellence • Leverage specialty grades leadership • Increased raw material efficiency €200 Cost & capital • Maintenance optimization discipline • Stri
Slide 22: New steering model ensures diligent strategy execution
• Concrete initiatives in each business area to deliver bottom-line impact New steering • Disciplined weekly tracking of progress by model ensures Transformation Office led by CFO • Monthly CEO chaired Business Area Boards to diligent strategy address potential deviations execution • External commit
Slide 23: Business area Europe: Customer engagement at the core of the new strategy
Business area Europe: Customer engagement at the core of the new strategy Commercial excellence Cost & capital discipline Lean & agile organization Grow Strengthen Continue Accelerate Personnel De-layered specialty commodity raw material manufacturing measures structures grades sales grades sales co
Slide 24: Business area Americas: From turnaround to continuous improvement and growth
Business area Americas: From turnaround to continuous improvement and growth Commercial excellence Cost & capital discipline Lean & agile organization Strengthen Grow Continue Optimize Personnel measures commercial in automotive, slab cost freight costs in Mexico footprint in the appliances, and opt
Slide 25: Business area Ferrochrome: Strong potential for future value creation
Business area Ferrochrome: Strong potential for future value creation Increase Reduce Improve sales through reliance on spot fine concentrating new product market and plant capabilities development logistics costs and mining efficiencies Deep Mine investment Finalize the €283 million mine expansion
Slide 26: Business area Long Products: Turnaround driven by operational improvements
Business area Long Products: Turnaround driven by operational improvements & commercial excellence Accelerated Reduce Roll-out Align headcount by manufacturing fixed costs to turnaround approximately excellence current volumes program 100 people program launched by the new management will deliver Ex
Slide 27: Improvement plans factor in potentially slow market recovery
Indexed market demand (Index, 2018 = 100) Flat products Flat products Long products1 Improvement Europe NAFTA/USMCA plans factor in potentially 100 97 84 94 98 100 89 78 86 90 100 97 78 93 96 slow market recovery 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Market deman
Slide 28: Significant progress to deleverage the company, but further improvement needed
Significant progress to deleverage the company, but further improvement needed Return to shareholders €0.2 billion Cumulative Net investments €0.2 billion Q3 2020 Target 2022 €0.9 billion CAPEX, €0.7 billion divestitures net debt operating €1.1 billion cash flow <3.0x Net debt / €1.3 billion Net deb
Slide 29: Priority to strengthen balance sheet to create shareholder value
Priority to strengthen balance sheet to create shareholder value Phase 1: 2021–2022 Phase 2: 2023–2025 Improved from low levels driven by Continued focus, supported by higher Operating cash flow €200 million EBITDA improvement and improving margins Following a review of the January-September 2020 fi
Slide 30: Focused capital allocation – annual CAPEX €180 million in 2021-2022
Focused capital allocation – annual CAPEX €180 million in 2021-2022 Annual capital expenditure • In 2021-2022 CAPEX focused on 250 ongoing strategic investments and retaining maintenance on a 200 sustainable level • Maintenance CAPEX optimized to 150 support the current operational level • Deep Mine
Slide 31: Actions to strengthen sustainability leadership
Actions to strengthen sustainability leadership Current sustainability performance Targets Safety and • >50% reduction on incidents1 since 2015 • Ultimate goal zero accidents wellbeing • Organizational health index (OHI) in 2nd quartile • Ensure industry leader position Circular • >85% recycled cont
Slide 32: Business areas
Business areas
Slide 33: Outokumpu's assets work as one integrated system
Outokumpu’s assets work as one integrated system Sales by business area in 2019 Avesta € 6,403 million Fagersta Tornio Degerfors Kemi Sheffield Nyby Krefeld Richburg Dillenburg Calvert Dahlerbrück San Luis Potosí Europe Americas Long Products Ferrochrome 33 | November 27, 2020
Slide 34: #1 stainless steel producer in Europe, #2 in the US
#1 stainless steel producer in Europe, #2 in the US Business EUROPE AMERICAS LONG PRODUCTS FERROCHROME area 28% 21% US Europe 4% Market share #1 #2 11% 10% #6 Production Finland, Sweden & US & Mexico UK, Sweden & US Finland facilities Germany Largest Distributors Distributors Distributors Automotive
Slide 35: State-of-the-art production facilities – Europe
State-of-the-art production facilities – Europe Outokumpu’s assets work as one integrated system with large integrated sites in Tornio, Finland and Avesta, Sweden feeding rest of the mills Europe. Outputs include a wide range of austenitic and ferritic standard stailess steel grades and tailored and
Slide 36: State-of-the-art production facilities – Americas
State-of-the-art production facilities – Americas The Americas’ production units are located in Alabama, US and San Luis Potosí, Mexico. The production sites are supported by distribution centers in Illinois, Pennsylvania and California, US and a service center in Argentina. The business area produc
Slide 37: State-of-the-art production facilities – Long Products
State-of-the-art production facilities – Long Products The integrated mill in Sheffield, UK feeds semi-finished products to finishing facilities in Sweden and US. Long Products’ product offering consists of a broad range of bars, wire-rod, wire, rebar and semi-finished products in standard and tailo
Slide 38: State-of-the-art production facilities – Ferrochrome
State-of-the-art production facilities – Ferrochrome Ferrochrome is an integral part of Outokumpu’s operations, and supported by our Kemi mine. It is a clear competitive advantage to us. Majority of the produced ferrochrome is consumed internally by our own mills, and approximately 25% is sold to ot
Slide 39: We secure future long-term ore supply by deepening of Kemi mine
We secure future long-term ore supply by deepening of Kemi mine EUR 283 million CO2 investment in vertical footprint of our mine expansion ferrochrome only New main level at 1,000 42% meters depth: new ore of the industry handling and hoisting average system 39 | November 27, 2020
Slide 40: We extract significant value through integrated ownership of mines and smelters
We extract significant value through integrated ownership of mines and smelters Competitive Predictable Fast response Efficient inventory cost base cost and quality to changes management 40 | November 27, 2020
Slide 41: Markets
Markets
Slide 42: Current market requires decisive actions
Current market requires decisive actions COVID-19 impacting Low priced imports take Prices historically low stainless demand market share Stainless flat consumption, kt Market shares in Europe, % EU base price development, €/t Outokumpu vs. imports 1200 4000 30 800 28 3000 26 400 2000 24 0 2016 2017
Slide 43: High import penetration, price pressure and low demand have changed market dynamics
High import penetration, price pressure and low demand have changed the market dynamics • Unfair trade practices • Trade wars have led and growing competition to market disruption from Asian producers • New pricing mechanisms: • Shift towards NPI leads from alloy surcharge to a change in scrap prici
Slide 44: Trade defense actions by EU insufficient
Trade defense actions by EU insufficient – Urgent need to address unfair market practices and carbon leakage CO² footprint (per ton) 7.6 Imports have 5.4 European safeguards need to be renewed significantly and improved higher carbon 1.6 footprint Full potential of trade defense measures (anti-dumpi
Slide 45: Scrap is a competitive advantage and driver for sustainability
Scrap is a competitive advantage and driver for sustainability Global Abundance Scrap and Scrap and competitiveness of scrap the importance correlation to vs. other forms of for carbon neutrality LME nickel nickel Scrap is the most Both Europe and Realization of Market moving competitive traded Amer
Slide 46: Nickel price climbed higher during Q3/20
Nickel price climbed higher during Q3/20 Transaction prices 304 stainless, USD/tonne Average nickel price, Ferrochrome USD/tonne benchmark price, 3,400 USD/lb. 2,900 +0% 2,400 1,900 1,400 Q2/20 Q3/20 Q2/20 Q3/20 Europe USA China Source: CRU & Metal Bulletin 46 | November 27, 2020
Slide 47: Imports into Europe spiked in July as new quota period started
Imports into Europe spiked in July as the new quarterly import quota period started Third-country cold rolled imports1 into Europe, Third-country cold rolled imports2 into the US, 1,000 tonnes 1,000 tonnes 100 50 50 31% 30 40 80 40 60 30 20 30 14% 40 20 20 10 20 10 10 0 0 0 0 From rest of world From
Slide 48: New import quota period started in October
New import quota period started in October, quota for other countries already fully utilized EU cold-rolled quota utilization* EU hot-rolled quota utilization* 100% 100% kt 91 19 44 29 50 49 15 11 33 91 168 80% 80% 60% 60% 40% 40% 20% 20% % 32 51 2 30 25 79 100 15 16 32 4 0% 0% Days in Turkey United
Slide 49: Raw materials - price development
Raw materials - price development Nickel1, USD / tonne Ferrochrome2, USD / lb. 21,000 1.5 Q3/20 19,000 1.14 USD/lb. 1.3 17,000 15,000 1.1 13,000 0.9 Oct 19, 2020 11,000 European contract price 0.75 USD/lb. Oct 19, 2020 0.7 9,000 15,653 USD/t European spot price 7,000 0.5 Jan'18 Feb Mar Apr May Jun J
Slide 50: Stainless steel market
Stainless steel market Major stainless steel producers Outokumpu’s market share Million tonnes 2019 2018 2019 Tsingshan 9.8 10.2 Europe 28% TISCO 4.5 5.5 NAFTA 21% POSCO (incl. ZPSS) 3.3 3.3 Globally ~6% Acerinox 3.3 3.2 Outokumpu 3.2 3.3 Aperam 3.0 2.1 50 | November 27, 2020 Source: Global crude st
Slide 51: Sustainability
Sustainability
Slide 52: 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 53: Leading producer of sustainable stainless steel with lowest carbon footprint
We are the leading producer of sustainable stainless steel globally and we have the lowest carbon footprint in the industry Carbon footprint Industry leading Low ferrochrome High usage of less than recycled content carbon footprint: carbon neutral globally electricity in Europe 30% 90% 42% +80% of t
Slide 54: 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 55: On track to reach science based target 20% lower carbon footprint
We are on track to reach our science based target 20% lower carbon footprint by 2023 Outokumpu CO2 emissions intensity 1 Outokumpu CO2 footprint by category (2019) 2.0 Tonne of CO2 per tonne crude steel 1.5 28% 1.0 47% 0.5 18% 0.0 7% 2014- 2019 2023 2016 target Direct Indirect Transport Raw material
Slide 56: Our sustainability work has been recognised…
Our sustainability work has been recognised… Outokumpu is included in the Outokumpu is rated “Prime” Sustainability Yearbook 2020 by ISS ESG indicating that indicating we are in the top our sustainability performance Gold rating – top 5% performer – 15% sustainability performers is above the sector-
Slide 57: …and we have clear priorities to do more
…and we have clear priorities to do more Carbon neutral Sustainability Lobbying to achieve a roadmap credentials level playing field • Energy efficiency • Customer engagement • Secure legislation that improvements of industry • Develop average sustainability supports our business • Selected capex ce
Slide 58: We focus on UN Sustainable Development Goals
We focus on 6 UN Sustainable Development Goals Outokumpu business is based on recycling and is a part of circular economy. Company focuses on resource efficiency as recycled content, the use of by- products to replace natural resources, as well as increasing the energy efficiency in production proce
Slide 59: Safety of our employees is our undisputed priority
Safety of our employees is our undisputed priority Total recordable injury frequency rate (TRIFR) TRIFR target 8.7 for 2020 <3.0 4.4 4.1 We aim to be among the 3.2 3.0 industry leaders in safety with the ultimate goal of zero accidents. 2016 2017 2018 2019 2020 target 59 | November 27, 2020
Slide 60: R&D
R&D
Slide 61: Using R&D and technology to increase customers' competitiveness
We are using R&D and technology to increase our customers’ competitiveness Our R&D vision 2023 Our unmatched technical competence creates extraordinary value and attracts new talents Being the industry benchmark in profitable stainless Current and Product New Ensuring Digital tools steel solutions a
Slide 62: Automotive applications for major OEMs
Automotive applications for major OEMs Enabler for battery packs • Qualified by major OEMs • H-Series stainless steel • Higher passenger protection Fuel cell technology • New design by Outokumpu • Close collaboration with a German OEM Weldable Sandwich • Sound dampening • High strength • Formable 63
Slide 63: Marine applications for demanding environments
Marine applications for demanding environments Exhaust cleaning (Scrubbers) • Excellent corrosion performance • Long lifetime in harsh conditions • Close collaboration with market leaders Ocean thermal energy • Heat exchanger with superior corrosion resistance • Improved heat transfer Oil, Gas & Off
Slide 64: Process development for higher efficiency
Process development for higher efficiency Inclusion Reduction Surface quality Digital Manufacturing • Smart melt shop • Substantial scratch • Connected quality treatment to reduce defect reduction in inspection along inclusions German operations process route • Excellent results with up • Frequency
Slide 65: Latest financials Q3 2020
Latest financials Q3 2020
Slide 66: Highlights during Q3
• Result negatively impacted by lower demand due Highlights to COVID-19 and typical seasonality in Europe • Safety performance remained strong during Q3 • Strong performance in Americas • Import penetration spiked in Europe • Long Products’ strategic review concluded, accelerated turnaround program
Slide 67: Strong cost mitigation actions in the third quarter
Strong cost mitigation actions in the third quarter Group adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Deliveries 7% lower Fixed cost compressions Planned maintenance Prices declined work in Europe 106 73 45 45 22 Net of Pricing Ferro- Q2/20 Deliveries tim
Slide 68: Key figures Q3/20
Key figures Q3/20 Q3/19 Q2/20 Stainless steel deliveries 1,000 tonnes 488 533 523 Sales EUR million 1,254 1,590 1,420 Adjusted EBITDA EUR million 22 45 45 Net result EUR million -63 -27 -37 Earnings per share EUR -0.15 -0.06 -0.09 Operating cash flow EUR million 170 12 72 Net debt EUR million 1,105
Slide 69: BA Europe – challenging quarter
BA Europe – high import pressure, typical seasonality and lower prices resulted in a challenging quarter Europe adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Lower prices and weaker product mix 68 67 33 30 Various cost saving actions 9 Net of Q3 Q4 Q1/20 Q2
Slide 70: BA Americas – solid performance and cost compression actions
BA Americas – solid performance and cost compression actions improved the result Americas adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Lower fixed costs supported profitability 20 14 10 3 -11 Net of Pricing Q3 Q4 Q1/20 Q2 Q3 Q2/20 Deliveries timing and Cos
Slide 71: BA Long Products – accelerated turnaround program starts
BA Long Products – weak performance continued, accelerated turnaround program starts Long Products adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Deliveries 22% lower -1 -2 -3 -4 -9 Net of Q2/20 Pricing Costs Q3/20 Deliveries timing and Other Q3 Q4 Q1/20 Q2
Slide 72: BA Ferrochrome – planned maintenance completed, start-up successful
BA Ferrochrome – planned maintenance work completed, start-up successful Ferrochrome adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Cost increase in line with guidance 25 24 19 16 9 FeCr Q3 Q4 Q1/20 Q2 Q3 Q2/20 Deliveries Costs Others Q3/20 price 1) Indicati
Slide 73: Working capital management and VAT deferral boosted cash flow
Decisive working capital management and EUR 72 million VAT deferral boosted cash flow Q3/20 cash flow, Annual Capex, EUR million EUR million 240 2020 Capex EUR 180 million 200 160 EBITDA Working Provisions, Operating Net cash from Cash flow before capital pensions, financial cash flow investing fina
Slide 74: Net debt reduced to EUR 1.1 billion, gearing at 45%
Net debt reduced to EUR 1.1 billion, gearing at 45% Net debt, EUR million Net debt/LTM adjusted EBITDA 1,800 80% 69% IFRS16 impact* EUR 131 million 70% 1,600 51% 60% 1,400 48% 49% 45% 45% 45% 40% 50% 1,200 40% 30% < 3.0 1,000 20% 800 10% 1,610 1,242 1,091 1,241 1,155 1,249 1,243 1,105 9.8 4.0 1.7 2.
Slide 75: Total liquidity reserves amounted to EUR 0.9 billion
Total liquidity reserves amounted to EUR 0.9 billion at the end of September Debt structure* Debt maturity profile*, EUR million New 800 EUR 125 million 18% 16% convertible issued in July 600 7% 13% 400 13% 32% 200 0 Cash & 2020 2021 2022 2023 2024 2025+ Bonds Convertible bonds cash Long-term loans
Slide 76: Outlook for Q4 2020
Outlook for Q4 2020 As communicated previously, the COVID-19 pandemic is expected to have a significant impact on the stainless steel industry throughout 2020, and increases uncertainty. Outokumpu expects its stainless steel deliveries for the whole Group to remain stable in the fourth quarter compa
Slide 77: Outokumpu operative cost components
Outokumpu operative cost components* SG&A (excl. personnel D&A total and D&A) • Raw materials 60% Other cost of • Energy and other consumables sales 10–15% Energy and • Personnel expenses 10–15% consumables • Other cost of sales includes e.g. freight, maintenance and rents Personnel and leases Raw m
Slide 78: Over 4% productivity improvement in 2019
Over 4% productivity improvement in 2019 – more to come in 2020 Raw material excellence Reduction of net working capital Productivity improvement Procurement initiatives is based on numerous Continuous debottlenecking of key equipment local projects Moving towards a single operating system Reliabili
Slide 79: For more information, call Outokumpu Investor Relations
For more information, call Outokumpu Investor Relations or visit www.outokumpu.com/investors Linda Häkkilä Q4 result Investor Relations Manager The date to be confirmed Mobile: +358 40 071 9669 E-mail: linda.hakkila@outokumpu.com Päivi Laajaranta Executive Assistant Phone +358 9 421 4070 Mobile +358
Slide 80: Appendix
Appendix
Slide 81: Production steps – cold rolled coil
Production steps – cold rolled coil Ferrochrome Kemi mine Steel melting shop Hot rolling mill Cold rolling plant works Sintering furnace Liquid Recycled Hot annealing and pickling line ferrochrome steel Walking Beam Furnace Underground Hoisting mine Smelter Sendzimir Mill Ferrochrome Electric Arc Ro
Slide 82: Stainless steels can be divided in four groups
Outokumpu is a global leader of advanced solutions and our stainless steels can be divided in four groups Deliveries by product group in 2019 Duplex Other Austenitics Ferritics Duplex Martensitic 8% 5% Ferritic Nickel content No nickel Low nickel content No nickel 18% Non-magnetic Magnetic Magnetic
Slide 83: Stainless steel prices reflect various factors
Stainless steel prices reflect various factors Raw material Short-term and Macro-economic prices and long-term Transport trends currency capacity costs fluctuations utilization Development in Import duties Cost of consumer Competition and other trade capital industries restrictions 84 | November 27,
Slide 84: Traditional stainless steel base price model
Traditional stainless steel base price model consists of three components Alloy surcharge Base price Base price Extras Alloy surcharge Customer-specific, Material-specific Product-specific usually monthly charges for non- instrument to base price standardized pass alloy costs products along the valu
Slide 85: The logics behind our net of timing and hedging
The logics behind our net of timing and hedging Underlying position Exposure Hedging Metal hedging Committed* sales Short 100% Committed** purchases Long 100% Net realizable value Excess stock Long 100% NRV, accounting principle Base stock Long Balance between managing earnings & cash flow volatilit
Slide 86: Corporate Governance
Corporate Governance Outokumpu Oyj, the Group’s parent company, is a public limited liability company, listed on Nasdaq Helsinki and incorporated and domiciled in Finland. In its corporate governance and management, Outokumpu Oyj complies with the laws and regulations applicable to Finnish public co
Slide 87: Outokumpu organization
Outokumpu organization President & CEO Heikki Malinen Finance Human resources Technology & Strategy Sustainability Europe Americas Ferrochrome Long Products 88 | November 27, 2020
Slide 88: Dividend payments
Dividend payments Net income, EUR million Following a review of the January- Dividend per share, EUR September 2020 financial results, Outokumpu's Board of Directors 392 has decided that owing to the importance of strengthening the 86 144 130 Company's balance sheet no -75 dividend will be paid for
Slide 89: Ownership structure & major shareholders
Ownership structure & major shareholders Nominee registered and non-Finnish holders 17% Finnish institutions, companies and foundations 24% Solidium 22% Households 37% 1) Directly registered shareholders on September 30, 2020 90 | November 27, 2020
Slide 90: Solidium and governance
Solidium and governance • Holding company wholly owned by the State of Finland AA • Major shareholder in 12 listed companies including SSAB, Elisa, Sampo, Nokia, Tieto, Metso and Valmet • Mission is to strenghten and stabilize Finnish ownership in nationally important companies and to increase the v
Slide 91: Board of Directors
Board of Directors Chairman of the Board of Directors Members of the Board of Directors Kari Jordan Kati ter Eeva Sipilä Vesa-Pekka Chairman of the Horst Chairman of the Takala Remuneration Audit Committee Member of the Member of the Committee Audit Committee Audit Committee Pierre Julia Vareille Wo
Slide 92: Outokumpu leadership team
Outokumpu leadership team Heikki Malinen Pia Aaltonen-Forsell Thomas Anstots Niklas Wass Tamara Weinert President & CEO CFO EVP, Commercial, EVP, Operations, Acting President, Business Area Europe Business Area Europe Business Area Americas Martti Sassi Johann Steiner Jan Hofmann Stefan Erdmann Pres
Slide 93: Group key financials
Group key financials Key figures 2019 2018 20173) 2016 2015 Stainless steel deliveries 1,000 tonnes 2,196 2,428 2,448 2,444 2,381 Sales € million 6,403 6,872 6,356 5,690 6,384 Adjusted EBITDA € million 263 485 631 309 165 Net result € million -75 130 392 144 86 Return on equity 1) % -2.8 4.8 15.4 6.
Slide 94: Balance sheet
Balance sheet Assets (EUR million) 2019 2018 Equity and liabilities (EUR million) 2019 2018 Non-current assets Equity attributable to the equity holders of the Company 2,562 2,750 Intangible assets 607 585 Non-current liabilities Property, plant and equipment 2,767 2,659 Non-current debt 1,053 798 I
Slide 95: Share-related key figures
Share-related key figures Key figures 2019 2018 2017 2016 2015 Earnings per share 1) 2) € -0.18 0.32 0.95 0.35 0.23 Cash flow per share € 0.90 0.52 0.79 0.94 -0.08 Equity per share 1) 2) € 6.22 6.70 6.59 5.84 5.60 Dividend per share € 0.10 3) 0.15 0.25 0.10 - Dividend yield % 3.6 4.7 3.2 1.2 - Price
Slide 96: Cash flow
Cash flow Key figures 2019 2018 2017 2016 Net result for the financial year € million -75 130 392 144 Total adjustments € million 330 313 259 134 Change in working capital € million 218 -112 -180 307 Provisions, pensions, financial charges and other € million -97 -112 -135 -187 Income taxes paid € m
Slide 97: Business area Europe
Business area Europe Key figures 2019 2018 2017 2016 2015 Stainless steel deliveries 1,000 tonnes 1,459 1,547 1,592 1,625 1,578 Sales € million 4,089 4,267 4,156 3,767 4,156 of which intra-group € million 66 97 81 93 120 Adjusted EBITDA € million 216 248 404 295 203 Adjustments to EBITDA € million 1
Slide 98: Business area Americas
Business area Americas Key figures 2019 2018 2017 2016 2015 Stainless steel deliveries 1,000 tonnes 601 762 742 690 533 Sales € million 1,346 1,715 1,546 1,325 1,214 of which intra-group € million 3 45 33 21 37 Adjusted EBITDA € million -27 -5 21 -27 -120 Adjustments to EBITDA € million - - - 21 -17
Slide 99: Business area Long Products
Business area Long Products Key figures 2019 2018 2017 2016 2015 Stainless steel deliveries 1,000 tonnes 226 285 264 245 213 Sales € million 642 740 591 487 551 of which intra-group € million 137 220 186 153 162 Adjusted EBITDA € million -7 25 16 -1 10 Adjustments to EBITDA € million - - - 19 - EBIT
Slide 100: Business area Ferrochrome
Business area Ferrochrome Key figures 2019 2018 2017 2016 2015 Ferrochrome production 1,000 tonnes 505 497 415 469 457 Sales € million 461 542 610 371 410 of which intra-group € million 293 345 483 269 295 Adjusted EBITDA € million 96 210 217 80 107 Adjustments to EBITDA € million - - - -0 - EBITDA
Slide 101: 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