Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Shareholder Meeting (April 2014)
60 slides from Outokumpu Oyj's shareholder meeting presentation, Apr 14, 2014
Slide 1: Outokumpu Oyj Annual General Meeting 2014
Outokumpu Oyj Annual General Meeting 2014 April 14, 2014
Slide 2: Opening of the Annual General Meeting
Opening of the Annual General Meeting Item 1 on the agenda Jorma Ollila, Chairman of the Board of Directors 4/14/2014 2
Slide 3: Board of Directors in 2013
Board of Directors in 2013 • 640 million rights offering was oversubscribed by 23% • Outokumpu’s transformation meant active Board of Directors’ work o 20 meetings during the past year o Average attendance frequency in Board meetings in 2013 was 93% • Company is in a stronger financial position: les
Slide 4: Calling the Meeting to order
Calling the Meeting to order Item 2 on the agenda 4/14/2014 4
Slide 5: Election of persons to scrutinize the minutes
Election of persons to scrutinize the minutes and to supervise the counting of the votes Item 3 on the agenda Recording the legality of the meeting Item 4 on the agenda 4/14/2014 5
Slide 6: Notice to the AGM 2014
Notice to the AGM 2014 • Notice published as a stock exchange release on February 13, 2014 • Notice has been available at www.outokumpu.com/en/investors/General-meetings • Announcement of the AGM was published in Helsingin Sanomat on March 14, 2014 4/14/2014 6
Slide 7: Recording the attendance and adoption of the list of votes
Recording the attendance at the meeting and adoption of the list of votes Item 5 on the agenda 4/14/2014 7
Slide 8: Presentation of the annual accounts and CEO review
Presentation of the annual accounts, the report of the Board of Directors and the auditor’s report for the year 2013 Item 6 on the agenda Review by the Chief Executive Officer Mika Seitovirta, CEO 4/14/2014 8
Slide 9: CEO's review
CEO’s review
Slide 10: Contents
Contents 1. Stainless steel market 2. Year 2013 and financial review 3. Strategy and action plan 4. Summary 4/14/2014 10
Slide 11: Outokumpu - Global leader in stainless steel
Outokumpu - Global leader in stainless steel Outokumpu profile Outokumpu global footprint • Creates advanced materials that are USA Sweden Finland Cost efficient integrated Specialty stainless Modern fully integrated chrome efficient, long lasting and recyclable – mill (Calvert). High production uni
Slide 12: Stainless steel is a key enabler of sustainable, modern society
Stainless steel is a key enabler of sustainable, modern society Megatrends driving demand Quarto Plate to Stolt Tankers • Economic and population growth • Mobility and urbanization • Climate change and limited resources Key customer industries Laser surface to One World Trade Center • Consumer goods
Slide 13: Continued growth for stainless steel globally
Continued growth for stainless steel globally Europe +8% +6% +6% +5% +7%+7% +6% APAC +7%+7% +0% +4% +3% Middle-East Africa Other Americas +6% +5% +5% +4% Actual 2012 Forecast 2014 Actual 2013 Forecast 2015 Data source: SMR, February 2014 Real demand for total stainless steel (rolled & forged, excl.
Slide 14: Challenge: declining prices
Challenge: declining prices Transaction prices 304 stainless steel (USD) 1 Base prices 304 stainless steel (EUR) 1 5 000 1 300 Europe Eurooppa Eurooppa Europe 4 500 Yhdysvallat USA 1 250 4 000 Kiina China 1 200 3 500 3 000 1 150 2 500 1 100 2 000 1 050 1 500 1 000 1 000 2011 2012 2013 2014 2011 2012
Slide 15: Contents
Contents 1. Stainless steel market 2. Year 2013 and financial review 3. Strategy and action plan 4. Summary 4/14/2014 15
Slide 16: Key achievements and challenges in 2013
Key achievements and challenges in 2013 Ferrochrome Synergies Efficiency programs Financial stability ramp-up • Krefeld melt shop closure in • P150 program: Savings of • Capex reduction to EUR 183 • Ramp-up of Ferrochrome December 2013 EUR 104 million in 2013 million in 2013 production reached 434,0
Slide 17: 2013: heavy losses
2013: heavy losses • Achieved savings almost 2012 EUR million 2013 comparable doubled compared to original targets Stainless steel deliveries 1) 2,585 2,723 • Positive operating cash flow Sales 6,745 7,961 • Deliveries declined 5% and Underlying EBITDA 2) -32 -66 sales 15% EBIT -510 -754 • Reduced l
Slide 18: EBITDA and EBIT by business area
EBITDA and EBIT by business area EBITDA excl. NRI per business area 1) EBIT excl. NRI per business area 1) EUR million EUR million 83 27 28 27 25 19 9 13 9 8 4 3 4 1 0 0 -3 -1 -1 -12 -7 -17 -14 -22 -7 -28 -27 -38 -35 -37 -50 -52 -33 -103 -54 -70 -68 -193 -87 -262 EMEA Americas APAC Specialty EMEA Am
Slide 19: Strengthened balance sheet, enhanced liquidity
Strengthened balance sheet, enhanced liquidity Divestment of Terni and VDM Further strengthening to ThyssenKrupp of balance sheet • EUR 1,283 million (Dec. 31, 2013) TK loan note as • New EUR 500 million committed syndicated secured consideration liquidity facility, maturity in 2017 • Reduced Outoku
Slide 20: Rights offering executed as planned
Rights offering executed as planned • Rights was oversubscribed: 123.5% • Net proceeds of 640 million euros from the rights offering enable Outokumpu to carry out the turnaround plan • Total number of Outokumpu shares increases to 10,386,615,824 • Due to the oversubscription, the underwriting was no
Slide 21: Sale of Terni and VDM and rights offering decreased debt
Sale of Terni and VDM and rights offering decreased Outokumpu’s debt EUR million Gearing effects • The cancellation of the TK loan note of 1.3 billion euros (decreses 1,283 the net debt) 2,578 47 • Net proceeds of approximately 640 640 million euros from the rights 1,891 640 offering (equity increas
Slide 22: Why did ThyssenKrupp have to sell their Outokumpu shares?
Why did ThyssenKrupp have to sell their Outokumpu shares? European Share buyers/ Commission ThyssenKrupp Banks investors As a condition for the Was obliged to find The banks solicited Terni divestment, ThyssenKrupp and buyers to all its by ThyssenKrupp demanded buyers agreed on the shares within the
Slide 23: Business and financial outlook for Q1/2014
Business and financial outlook for Q1/2014 • Market outlook 1) o Modest improvement in the underlying market demand o Sequentially higher delivery volumes and some improvement in base prices o The progress in the cost efficiency initiatives and synergies to be steady • Outokumpu estimates 1) o Under
Slide 24: Contents
Contents 1. Stainless steel market 2. Year 2013 and financial review 3. Strategy and action plan 4. Summary 4/14/2014 24
Slide 25: Outokumpu strengths
Outokumpu strengths Global leader in stainless steel Presence in key Global leader in stainless steel with local presence in key markets. markets Balanced customer base across all key industry sectors. Leading product Broadest product portfolio including both specialty and commodities. portfolio Lea
Slide 26: Levers to improve profitability and cash flow
Levers to improve profitability and cash flow A Calvert ramp-up B Restructuring of European operations C Synergy and P150 cost savings D Optimization of working capital and investments 4/14/2014 26
Slide 27: Stainless Coil Americas – Strong market presence
A Stainless Coil Americas – Strong market presence Total stainless 2013, in thousand tonnes Outokumpu‘s strengths in the Americas Outokumpu’s Americas set up 250 • Established market presence with kt Calvert Mexinox long-term customer relationships and market share of ~approx. 20% Melting 900 in the
Slide 28: Calvert ramp-up and Stainless Americas turnaround
Calvert ramp-up and A Stainless Americas turnaround Stainless Americas material flow in 2013 Stainless Americas material flow 2014 Calvert Calvert >250 kt/a Terni Mexico Mexico Imports from Europe Cold rolled to market Hot band from Calvert Cold rolled to market Americas deliveries 465,000 tonnes in
Slide 29: Calvert ramp-up and Stainless Americas turnaround
Calvert ramp-up and A Stainless Americas turnaround Stainless Americas EBITDA1) Comments • Challenges in 2013 o Import of hot band from Europe (Terni) due to remedy requirements o Ramp-up related production inefficiencies in broadening of the product portfolio • Profitability levers in 2014 Q1/2013
Slide 30: Restructuring of EMEA operations
B Restructuring of EMEA operations • Bochum closure expected in 2015 Closures Bochum • Volume transfer and higher utilization in Tornio and Avesta • Some of Benrath production moved to Krefeld, Benrath New targeted closed in 2016. Reduction of overall cold rolling capacity annual NIFO project saving
Slide 31: Restructuring the production in Europe
B Restructuring the production in Europe End-2013 state Planned state end of 2015 TORNIO BOCHUM AVESTA TORNIO AVESTA 1,450 800 450 1,450 450 MELTING 2.7 mt 1.9 mt HOT ROLLING TORNIO BOCHUM AVESTA TORNIO AVESTA 1,450 1,260 900 1,450 900 3.6 mt 2.3 mt KREFELD/BENRATH/ KREFELD/ TORNIO AVESTA NYBY TORNI
Slide 32: Synergy and cost savings
C Synergy and cost savings Synergies and P150 2013 performance and Total savings expected savings in 2013 future expectation (incl. EMEA restructuring) EURm P150 Synergies • Good progress in procurement EURm savings, operational costs and 450 €99m administration 440 P150 • Target of 150 million euro
Slide 33: Improving cash flow
D Improving cash flow Cash flow from working capital change 1,2) Group capital expenditure EUR million EUR million 351 2013-2014 target: EUR 300m 763 271 2013 original target: EUR 150m 183 <200 166 -15 -71 Q1 Q2 Q3 Q4 2013 2012 2013 2014F actual • Improvement in inventory days to 88 days in Dec-2013
Slide 34: Ensuring long term requirements for operations – energy as example
Ensuring long term requirements for operations – energy as example • Outokumpu is the biggest energy user in Finland o Operations in Tornio and Kemi use 3.5 TWh of electricity per year • We have made significant investments in industrial operations in Finland o Expansion of the Tornio operations in
Slide 35: Fennovoima is an important part of Outokumpu's energy strategy
Fennovoima is an important part of Outokumpu’s energy strategy • Industrial operations need competitive electricity market. Finland is not self sufficient in energy production and therefore we have higher price of energy compared to other Nordic countries (Q1/2014: +17%) • Fennovoima produces electr
Slide 36: Contents
Contents 1. Stainless steel market 2. Year 2013 and financial review 3. Strategy and action plan 4. Summary 4/14/2014 36
Slide 37: Summary
Summary Outokumpu is a global leader in stainless steel which has good long-term growth outlook Strengthened balance sheet enables the implementation of the restructuring of the company Clear actions ongoing to improve profitability 4/14/2014 37
Slide 38: Adoption of the annual accounts
Adoption of the annual accounts Item 7 on the agenda 4/14/2014 38
Slide 39: Resolution on the use of the profit and payment of dividend
Resolution on the use of the profit shown on the balance sheet and the payment of dividend Item 8 on the agenda 4/14/2014 39
Slide 40: Proposal by the Board of Directors for a dividend
Proposal by the Board of Directors for a dividend • The Board of Directors proposes that no dividend shall be paid for the financial year 2013 4/14/2014 40
Slide 41: Resolution on the discharge of the Board and CEO from liability
Resolution on the discharge of the members of the Board of Directors and the CEO from liability Item 9 on the agenda 4/14/2014 41
Slide 42: Discharge from liability of the members of the Board and the CEO
Discharge from liability of the members of the Board of Directors and the CEO Board of Directors • Jorma Ollila, Chairman of the Board (from March 18, 2013 onwards) • Ole Johansson, former Chairman of the Board (until March 18, 2013) • Olli Vaartimo, Vice Chairman of the Board • Markus Akermann, Boa
Slide 43: Resolution on the remuneration of the members of the Board
Resolution on the remuneration of the members of the Board of Directors Item 10 on the agenda 4/14/2014 43
Slide 44: Proposed Board members (1)
Proposed Board members (1) *) Jorma Ollila b. 1950, M.Sc. (Pol.), M.Sc. (Econ.), M.Sc. (Eng.) Outokumpu Board member 2013– Chairman of the Board: Outokumpu 2013– Chairman of the Board: Royal Dutch Shell Plc 2006– Chairman of the Board: Nokia Corporation 2006–2012 Chairman of the Board and CEO: Nokia
Slide 45: Proposed Board members (2)
Proposed Board members (2) *) Markus Akermann b. 1947, M.Econ. Outokumpu Board member 2013– Chairman of the Board: Holcim Group Support Ltd 2002-2012 Member of the Board: Holcim Ltd 2002–2013 Chief Executive Officer: Holcim Group 2002–2012 Member of the Board: Votorantim Cimentos S.A. 2013– Heikki M
Slide 46: Proposed Board members (3)
Proposed Board members (3) *) Elisabeth Nilsson b. 1953, M.Sc. (Tech.) Outokumpu Board member 2011– Governor: Östergötlands län 2010– President: Jernkontoret (Swedish Steel Producers Association) 2005–2010 General Manager: SSAB Oxelösund, Metallurgy Division 2003–2005 Chairman of the Board: Göta Kan
Slide 47: The proposed new Board members
The proposed new Board members have a long and distinguished career, short summary below*) Roberto Gualdoni b. 1956, degree in Industrial Engineering, MBA Chief Executive Officer: Styrolution Group 2011– President Styrenics: BASF SE 2010–2011 Senior Vice President, Global Procurement Raw Materials:
Slide 48: Proposal for the Chairman and Vice Chairman of the Board
Proposal for the Chairman and Vice Chairman of the Board • Mr. Jorma Ollila to be elected as Chairman of the Board • Mr. Olli Vaartimo to be elected as Vice Chairman of the Board 4/14/2014 48
Slide 49: Proposal by the Nomination Board for remuneration to the Board
Proposal by the Nomination Board for remuneration to the Board of Directors • Remuneration levels proposed by the Nomination Board o Chairman EUR 140,000 annual fee o Vice Chairman EUR 80,000 annual fee o Board members EUR 60,000 annual fee • Proposal that 40% of the annual remuneration would be pai
Slide 50: Election of the Chairman, Vice Chairman and members of the Board
Election of the Chairman, Vice Chairman and the members of the Board of Directors Item 11 on the agenda 4/14/2014 50
Slide 51: Resolution on the remuneration of the auditor
Resolution on the remuneration of the auditor Item 12 on the agenda 4/14/2014 51
Slide 52: Remuneration of the auditor
Remuneration of the auditor • The Board Audit Committee proposes that the elected auditor be reimbursed in accordance with the auditor’s invoice approved by the Board of Directors 4/14/2014 52
Slide 53: Election of auditor
Election of auditor Item 13 on the agenda 4/14/2014 53
Slide 54: Election of the Auditor
Election of the Auditor • The Board Audit Committee proposes that KPMG Oy Ab be elected as the auditor for Outokumpu for the following term 4/14/2014 54
Slide 55: Authorizing the Board to decide on the repurchase of own shares
Authorizing the Board of Directors to decide on the repurchase of the company’s own shares Item 14 on the agenda 4/14/2014 55
Slide 56: Authorizing the Board to decide on the repurchase of own shares
Authorizing the Board of Directors to decide on the repurchase of the company’s own shares • Maximum number of shares to be re-purchased is 200,000,000 o The aggregate number of shares held by the company may not exceed 10% of the company’s total number of registered shares o 200,000,000 shares repr
Slide 57: Authorizing the Board to decide on the issuance of shares
Authorizing the Board of Directors to decide on the issuance of shares as well as other special rights entitling to shares Item 15 on the agenda 4/14/2014 57
Slide 58: Authorizing the Board to decide on the issuance of shares
Authorizing the Board of Directors to decide on the issuance of shares as well as other special rights entitling to shares • New shares can be issued, own shares can be transferred (share issue) and share entitlements (excl. option rights to the company’s management and personnel under an incentive
Slide 59: Closing of the meeting
Closing of the meeting Item 16 on the agenda 4/14/2014 59
Slide 60: Outokumpu
outokumpu working towards a world that lasts forever 4/14/2014 60