Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Investor Day (May 2013)
32 slides from Outokumpu Oyj's investor day presentation, May 22, 2013
Slide 1: Outokumpu Capital Markets Days 2013
Outokumpu Capital Markets Days 2013 May 22-23, 2013 Old Billingsgate, London, UK
Slide 2: Disclaimer
Disclaimer The following presentations contain, 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 t
Slide 3: CFO's financial update
CFO’s financial update Outokumpu Experience Esa Lager 2013 CFO Outokumpu May 22-23, 2013 Old Billingsgate, London, UK
Slide 4: The income statement
The income statement CFO's financial update, Esa Lager 5/23/2013 4
Slide 5: EBITDA and EBIT by Business Areas
EBITDA and EBIT by Business Areas EBITDA excl. NRI per Business Area EBIT excl. NRI per Business Area EUR million EUR million 35 20 4 4 14 0 0 ‐2 ‐12 ‐28 ‐27 ‐38 ‐44 ‐58 ‐59 ‐55 EMEA Americas APAC HPSA EMEA Americas APAC HPSA Q4/12 Q1/13 CFO's financial update, Esa Lager 5/23/2013 5
Slide 6: EBITDA / tonne
Profitability and capital employed from a grade perspective1) (excl FeCr oper.) Part of HPSA VDM stainless EMEA stainless assets, Coil Americas and part of and APAC HPSA and APAC High alloyed material Bulk of the Group’s capital that offers better employed is tied in standard corrosion resistance an
Slide 7: Cost analysis FY 2012
Cost analysis FY 2012 Operative cost 1) 2) components Comments • Raw materials account for around 60- 65% of the total operative costs of the Group • Share of Ni from total raw material cost is around 60% Raw materials • Share of Cr from total stainless raw Personnel material cost is around 15-20%,
Slide 8: Currency analysis of costs and revenues
Currency analysis of costs and revenues Currency split of revenues and cost 1) Comments 100 % 4% • On the cost side, raw materials have 11% 4% been excluded from the analysis to 1% 8% 2% show the split of other operative costs 80 % 9% Other • On the revenue side, part of the sales 28% shown here in
Slide 9: Illustration of timing gains and losses
Illustration of timing gains and losses Illustrative example, timing gain on nickel Comments Nickel market Purchasing • Timing gains or losses arise from difference price base between purchase price and invoice price of Invoicing metal components in stainless steel gain base • Purchasing base (perio
Slide 10: LME nickel prices and net timing impacts
LME nickel prices and net timing impacts EUR million Timing gain/loss (EUR million) LME Nickel (USD/tonne) USD/tonne 60 30,000 Total timing effect impacted also by 40 EUR/USD rate and changes in prices of 25,000 other metals 20 20,000 0 15,000 -20 10,000 -40 5,000 Former stand-alone Combined Group O
Slide 11: The balance sheet
The balance sheet CFO's financial update, Esa Lager 5/23/2013 11
Slide 12: Outokumpu balance sheet
Outokumpu balance sheet Assets (MEUR) 31.03.13 31.12.12 • Goodwill is unchanged at EUR 469 Non-current assets million (including the Inoxum transaction goodwill of EUR 7 million). Intangible assets 630 629 Property, plant and equipment 3,694 3,697 • Assets held for sale and liabilities Other receiva
Slide 13: Outokumpu balance sheet
Outokumpu balance sheet Equity and liabilities (MEUR) 31.03.13 31.12.12 • The total non-current interest Total equity 2,799 2,952 bearing liabilities of EUR 3,019 million include the Non-current liabilities ThyssenKrupp loan note of EUR IB1) liabilities 3,019 2,974 1,242 million. Deferred tax liabil
Slide 14: Loan portfolio March 31, 2013
Loan portfolio March 31, 2013 Bonds, EUR 399 million 8 % 0 % 10 % L-t loans from financial institutions, EUR 1,377 5% million Pension loans, EUR 196 million L-t leasing, EUR 214 million 35 % Loans from related parties, EUR 1,242 million 31 % S-t loans from financial institutions, EUR 198 million Com
Slide 15: Liquidity and maturity profile of debt
Liquidity and maturity profile of debt Liquidity and refinancing Debt maturities March 31, 2013, MEUR 1400 • As at March 31, 2013 the amount of liquidity reserves (i.e. cash, available long-term 1200 committed facilities and pension loan capacity) was approximately EUR 1 billion 1000 • Refinancing o
Slide 16: Gearing: drivers and challenges
Gearing: drivers and challenges Q1/13 Q4/12 EUR million comparable Net interest-bearing debt 2,891 2,620 Equity 2,799 2,952 Equity-to-assets ratio, % 28.0 30.6 Debt-to-equity ratio (gearing), % 103.3 88.8 Upside Challenges • Cash release P300 • Continued losses in a weak market environment • Possibl
Slide 17: The cash flow
The cash flow CFO's financial update, Esa Lager 5/23/2013 17
Slide 18: Cash flow a key priority
Cash flow a key priority 2012 Q1 2013 EUR million Net cash generated from operating activities 120 -46 Net cash from investing activities) 821 1) -186 • Cash flow is our key priority. • Stringent control on both working capital and capex • P300 launched in February to reduce working capital by EUR 3
Slide 19: Capital expenditure development
Capital expenditure development 1) 900 821 • Big investment 800 programs largely 700 finalized by 2012 600 566 • Capital expenditure in 500 472 2013 targeted to be 400 350 EUR 350 million 300 • From 2014 onwards 200 target to remain clearly below the 2013 capital 100 expenditure level 0 2010 2011 20
Slide 20: P300: working capital reduction of EUR 300 million by end 2014
P300: working capital reduction of EUR 300 million by end 2014 Cash flow from working capital change • Approx. EUR 150 million to be 300 250 achieved during 2013 through 200 inventory reduction, accounts 300 150 100 receivable and accounts payable 150 50 management 0 -17 ‐50 Q1 2013 2013 2014 Actual
Slide 21: Energy requirements and strategy
Energy requirements and strategy CFO's financial update, Esa Lager 5/23/2013 21
Slide 22: New Outokumpu energy consumption, forecast 2013
New Outokumpu energy consumption Forecast year 2013 Total 10 TWh/annum, Euro 500 million/annum 4 %3 % 4% 12 % Electricity Natural Gas Propane 53 % CO gas Heat Other Fuels 24 % CFO's financial update, Esa Lager 5/23/2013 22
Slide 23: Outokumpu – energy consumption
Outokumpu – energy consumption (main energy sources) 4500 Year 2013 (GWh), forecast 4000 3500 NATURAL GAS / LPG 3000 3,8 TWh 2500 2000 ELECTRICITY 5,5 TWh 1500 1000 500 0 FIN GER SWE UK USA MEX CHI CFO's financial update, Esa Lager 5/23/2013 23
Slide 24: Outokumpu's energy strategy
Outokumpu’s energy strategy Reliable and competitive energy supply for Outokumpu sites globally • Secure stable, predictable and competitive long-term energy supply • Utilize synergies with global and holistic view on energy procurement • Hedge energy procurement by Group’s Financial Risk Policy • P
Slide 25: Outokumpu Chrome and Stainless are global leaders in cost and energy efficiency
Outokumpu Chrome and Stainless are global leaders in cost and energy efficiency Industry leading cost efficiency… …driven by energy efficient production process Cost curve for ferrochrome production(1) Ferrochrome production net energy usage (%)(2) USDc/lbs % 160 120 Outokumpu Chrome Oy 80 40 0 Outo
Slide 26: Risk Management
Risk Management CFO's financial update, Esa Lager 5/23/2013 26
Slide 27: Our risk management process
Our risk management process RM process is implemented on all organizational levels Risk management system will be established throughout the Group during 2013 Risk maps for all Group entities will be prepared with the help of a web-based reporting tool in which Group companies report on the status o
Slide 28: Selected key risks…
Selected key risks… Short term key risks 1) Description Risks related to achieving the synergy benefits - major failures or delays in achieving the anticipated synergy benefits or in cost and working capital reduction programs currently being implemented Stainless steel markets and competitors - the
Slide 29: Business ethics – our compliance statement
Business ethics – our compliance statement • Outokumpu Group is fully committed to highest ethical business practices including strict observation of the laws and regulations of any country it operates in. • The operations of the Group are guided by its ethical principles of human dignity, sustainab
Slide 30: Key targets
Key targets CFO's financial update, Esa Lager 5/23/2013 30
Slide 31: Key targets 2013
Key targets 2013 Stronger performance during the second half of 2013 expected, mainly due to progress Overall in ramp-ups of Calvert and Ferrochrome operations. Capital expenditure is expected to decline to approximately EUR 350 million in 2013 Capex (FY 2012: approximately EUR 821 million). Synergy
Slide 32: Q&A
Q&A Outokumpu Experience 2013 May 22-23, 2013 Old Billingsgate, London, UK