Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Shareholder Meeting (March 2023)
65 slides from Outokumpu Oyj's shareholder meeting presentation, Mar 30, 2023
Slide 1: Outokumpu Oyj Annual General Meeting 2023
Outokumpu Oyj Annual General Meeting 2023 March 30, 2023
Slide 2: Opening of the meeting
2 Opening of the meeting Item 1 on the agenda Kari Jordan, Chairman of the Board of Directors M a rc h 3 0 , 2 0 2 3
Slide 3: Calling the meeting to order
3 Calling the meeting to order Item 2 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 4: Election of persons to scrutinize the minutes and supervise vote counting
4 Election of persons to scrutinize the minutes and to supervise the counting of votes Item 3 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 5: Recording the legality of the meeting
5 Recording the legality of the meeting Item 4 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 6: Recording the legality of the meeting
6 Recording the legality of the meeting The notice to the Annual General Meeting was published as a stock exchange release and on Outokumpu’s web pages on February 9, 2023. M a rc h 3 0 , 2 0 2 3
Slide 7: Recording attendance and adoption of the list of votes
7 Recording the attendance at the meeting and the adoption of the list of votes Item 5 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 8: Presentation of the annual accounts, board review and auditor's report 2022
8 Presentation of the annual accounts, the review of the Board of Directors and the auditor’s report for the year 2022 Item 6 on the agenda CEO’s and CFO’s review, President and CEO Heikki Malinen and CFO Pia Aaltonen-Forsell M a rc h 3 0 , 2 0 2 3
Slide 9: In 2022, Outokumpu delivered the best result in its history
9 In 2022, Outokumpu delivered the best result in its history Heikki Malinen, President and CEO Marc h 30, 2023
Slide 10: Outokumpu is the leading producer of sustainable stainless steel globally
10 Outokumpu is the leading producer of sustainable stainless steel globally Outokumpu’s successful year 2022* Sales by business area* Net sales Stainless steel Adjusted Other Ferrochrome deliveries EBITDA 2% operations 4% 9.5 2.1 1,256 Americas 28% EUR billion million tonnes EUR million Operations
Slide 11: Core business is stainless steel flat products and ferrochrome
11 Outokumpu’s core business is stainless steel flat products and ferrochrome Stainless steel flat products Ferrochrome Outokumpu divested its Long Business areas Europe and Americas Ferrochrome is an Products produce flat stainless steel products important raw material business in the which can be
Slide 12: Global megatrends support demand for stainless steel
12 Global megatrends move society towards sustainable solutions, supporting the demand for stainless steel Population and Urbanization Climate change and economic growth • Automotive limited resources • Appliances • Infrastructure and • Energy investments • Medicine construction • Hydrogen • Clean w
Slide 13: Wide customer base of end customers and distributors
13 Outokumpu has a wide customer base, which consists of both direct end customers and distributors Net sales split in 2022 End customers 53% Distributors 47% Marc h 30, 2023
Slide 14: Direct versus distributor sales by business area
14 Majority of business area Europe’s sales goes directly to end customers, while the United States is a very distributor dominant market Standard products Advanced products* Direct Indirect sales Direct Indirect sales sales (distributors) sales (distributors) Business area 80% 20% 90% 10% Europe Bu
Slide 15: Competent personnel is our most important asset
15 Competent personnel is our most important asset Safety performance at top level Diversity, equity and inclusion Only 1.8 recordable incidents per million In 2022, we completed our first global working hours in 2022 inclusion survey and set targets for year • Our ultimate target is zero accidents
Slide 16: Sustainability leader with business based on circular economy
16 As the sustainability leader in its industry, Outokumpu’s business is based on circular economy Outokumpu further improved its position in 2022 Recycled materials, % • Recycled material content of Outokumpu’s 94 stainless steel was the highest in the industry, 93 94% • Emission intensity target w
Slide 17: Affordable electricity a competitive advantage in the Nordics
17 Affordable electricity has been a competitive advantage in the Nordics, cost competitive and carbon-free energy is needed also going forward Collaboration between Outokumpu Electricity price development EUR/MWh and Fortum 500 • Outokumpu and Fortum have agreed to explore the use of Small Modular
Slide 18: Reduced CO2 emissions in line with Science-Based Targets
18 We have successfully reduced our CO2 emissions in line with the Science-Based Targets initiative’s 1.5°C climate target Emission intensity [t CO2 / t crude steel] Outokumpu's CO2 emission intensity 2.5 2.5 22 1.5 1.5 -30% 11 0.5 0.5 0 0 2016 2017 2018 2019 2020 2021* 2022* 2023 2024 2025 2026 202
Slide 19: Record year 2022 and net debt free balance sheet
19 Record year 2022 and net debt free balance sheet Adjusted EBITDA Return on capital Earnings per share EUR 1.3 billion employed 22.6 % EUR 2.40* *Includes EUR 0.67 positive one-off impact from the recognition of the deferred tax asset in BA Americas Marc h 30, 2023
Slide 20: All business areas delivered strong annual results
20 All business areas delivered strong annual results Europe Americas Ferrochrome Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA EUR 680 million EUR 384 million EUR 220 million • Solid profitability • Turnaround of the • Energy usage • Successful business area optimization in customer-focused stren
Slide 21: Three-phase strategy enables strong shareholder returns
21 Outokumpu’s three-phase strategy enables strong shareholder returns Phase 3: Strong sustained performance 2026– Phase 2: Strengthen the core 2023–2025 Investing in growth and Phase 1: sustainability Strengthen the balance sheet OUR VISION 2021–2022 Targeted productivity Customer’s first investmen
Slide 22: Industry leader in green innovations
22 Industry leader in green innovations We introduced Outokumpu Circle Green - stainless steel with up to 92% lower carbon footprint than global average ” Collaboration with Outokumpu is a great example of pioneering design applied at every step of the product’s journey; from innovative, lower emiss
Slide 23: We are financially stronger than ever
23 We are financially stronger than ever Pia Aaltonen-Forsell, CFO Marc h 30, 2023
Slide 24: Record results in 2021 and 2022 in strong market environment
24 Outokumpu delivered record results in 2021 and 2022 in the exceptionally strong market environment • Stainless steel industry is cyclical, and Adjusted EBITDA EUR million this causes volatility in the company’s earnings 1,256 • Strong market environment in the first 980 half of 2022, clear weaken
Slide 25: Both stainless business areas delivered best result in history
25 In 2022, both stainless business areas delivered their best result in history Business area Business area Business area Europe Americas Ferrochrome 680 485 384 297 246 248 210 220 216 142 55 96 91 -5 -27 ´18 ´19 ´20 ´21 ´22 ´18 ´19 ´20 ´21 ´22 ´18 ´19 ´20 ´21 ´22 Marc h 30, 2023
Slide 26: Strongest balance sheet in the industry
26 Strongest balance sheet in the industry • Net debt was negative by EUR 10 million at the end of 2022 • Overall liquidity reserves were EUR 1.4 billion at the end of 2022 • At the end of year 2022 Outokumpu had EUR 800 million of committed credit facilities fully unutilized • No commercial paper f
Slide 27: Net debt free and record earnings per share in 2022
27 We are now net debt free and made record earnings per share in 2022 Net debt, EUR million Earnings per share, EUR 1,241 1,155 1,028 2.40* 1.21 408 0.32 -0.18 -0.28 -10 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 *Includes EUR 0.67 positive one-off impact from the Marc h 30, 2023 recognition
Slide 28: Updated financial targets for 2023-2025
28 In the second phase of the strategy, we strengthen the core, reduce CO2 emissions and focus on shareholder returns Updated financial targets for years 2023-2025 Net debt to EBITDA EBITDA run-rate improvement <1.0x EUR 200 million in normal market conditions CAPEX over the next 3 years Stable and
Slide 29: Outokumpu is now able to create value in changing conditions
29 Outokumpu is now able to create value in changing conditions Heikki Malinen, CEO Marc h 30, 2023
Slide 30: Outokumpu as an investment
30 Outokumpu as an investment Stainless steel is a Well-defined Improved financial healthy market strategy and risk profile Market and cost Industry leader in Stable shareholder leader in stainless sustainability returns sector Marc h 30, 2023
Slide 31: Increased focus on shareholder returns
31 Increased focus on Outokumpu's Board of Directors has proposed to the Annual General meeting that for year 2022 shareholder returns – • a base dividend of EUR 0.25 per share will be paid close to EUR 252 • according to dividend policy, plus an extra dividend of EUR 0.10 per share will be paid mil
Slide 32: Outokumpu creates value to its shareholders
32 Outokumpu creates value to its shareholders Total shareholder return, %* EUR 0.35 dividend per share 250% EUR 0.15 from year 2022** dividend per share from year 2021 Total shareholder 200% return* +150% 150% 100% 50% (Total return = Share price appreciation and paid dividends**) 0% -50% 15/05/202
Slide 33: Presentation of the auditor's report
33 Presentation of the annual accounts, the review of the Board of Directors and the auditor’s report for the year 2022 Item 6 on the agenda Presentation of the auditors’ report, Janne Rajalahti, Authorised Public Accountant (KHT), auditor in charge, PricewaterhouseCoopers Oy M a rc h 3 0 , 2 0 2 3
Slide 34: Auditor's Report 2022
Auditor’s Report 2022 Outokumpu Oyj Annual General Meeting PricewaterhouseCoopers Oy Authorised Public Accountants Janne Rajalahti Authorised Public Accountant (KHT), auditor in charge
Slide 35: Audit 2022
Audit 2022 Group financial What we have audited Key Audit Matters statements audit scope ● Group financial statements ● 10 group companies in 7 countries ● Valuation of goodwill ● Parent company financial ● Covers the vast majority of the Group’s ● Valuation of Property, Plant and statements sales,
Slide 36: To the Annual General Meeting of Outokumpu Oyj
To the Annual General Meeting of Outokumpu Oyj In our opinion • the consolidated financial statements give a true and fair view of the group’s financial position and financial performance and cash flows in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. • the
Slide 37: Adoption of the annual accounts
37 Adoption of the annual accounts Item 7 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 38: Use of the profit shown on the balance sheet and payment of dividend
38 Resolution on the use of the profit shown on the balance sheet and the payment of dividend Item 8 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 39: Dividend proposal by the Board of Directors
39 Dividend proposal by the Board of Directors The Board of Directors proposes to the Annual General Meeting that a base dividend of EUR 0.25 per share plus an extra dividend of EUR 0.10 per share, totaling EUR 0.35 per share, will be paid for the year 2022. • The amount of the base dividend of EUR
Slide 40: Discharge of Board members and CEO from liability
40 Resolution on the discharge of the members of the Board of Directors and the CEO from liability Item 9 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 41: Discharge of the members of the Board and the CEO
41 Resolution on the discharge of the members of the Board of Directors and the CEO from liability for the financial year January 1–December 31, 2022 The Board of Directors • Vesa Pekka Takala, Board member • Kari Jordan, Chairman of the Board • Pierre Vareille, Board member • Kati ter Horst, Vice C
Slide 42: Remuneration report and advisory resolution
42 Presentation of the remuneration report of the governing bodies and the Annual General Meeting’s advisory resolution on the approval of the remuneration report Item 10 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 43: Remuneration of the members of the Board of Directors
43 Resolution on the remuneration of the members of the Board of Directors Item 11 on the agenda Pekka Pajamo, member of the Nomination Board introduces the work of the Nomination Board and presents the proposals by the Nomination Board for the items 11, 12 and 13 on the agenda Marc h 30, 2023
Slide 44: The Shareholders' Nomination Board 2022
44 The Shareholders’ Nomination Board 2022 • Reima Rytsölä, CEO at Solidium Oy • Pekka Pajamo, CFO at Varma Mutual Pension Insurance Company • Jouko Pölönen, President and CEO at Ilmarinen Mutual Pension Insurance Company • Outi Antila, Director General at The Social Insurance Institution of Finland
Slide 45: Nomination Board's proposal on Board remuneration
45 The Nomination Board’s proposal on the remuneration of the members of the Board of Directors • The Shareholders’ Nomination Board proposes • 40% of the annual remuneration would be paid in following annual remuneration and meeting fees the company’s own shares using treasury shares compared to th
Slide 46: Number of members of the Board of Directors
46 Resolution on the number of the members of the Board of Directors Item 12 on the agenda Marc h 30, 2023
Slide 47: Proposal for the Board composition
47 Proposal for the Board composition The Shareholders’ Nomination Board proposes that the Board of Directors would consist of eight (8) members. Marc h 30, 2023
Slide 48: Election of the members of the Board of Directors
48 Election of the members of the Board of Directors Item 13 on the agenda Marc h 30, 2023
Slide 49: Election of the members of the Board of Directors
49 Election of the members of Board of Directors The Shareholders’ Nomination Board proposes that • of the current members of the Board of Directors Heinz Jörg Fuhrmann, Kati ter Horst, Kari Jordan, Päivi Luostarinen, Petter Söderström, Pierre Vareille and Julia Woodhouse would be re-elected, and th
Slide 50: Proposed Board members 1/2
50 Proposed Board members 1/2 Kari Jordan, b. 1956, Kati ter Horst, b. 1968, Heinz Jörg Fuhrmann, Päivi Luostarinen, M.Sc. (Econ.) M.Sc. (Econ.), MBA b. 1956, PhD, Metallurgy b. 1955, LL.M. Outokumpu Board Outokumpu Board Outokumpu Board Outokumpu Board member and Chairman of member 2016– and Vice m
Slide 51: Proposed Board members 2/2
51 Proposed Board members 2/2 Petter Söderström, b. Pierre Vareille, b. 1957, Julia Woodhouse, b. More information on the 1976, M.Sc. (Econ.) M.Sc. 1958, BA (hons), History members of the Board of Outokumpu Board Outokumpu Board Outokumpu Board Directors is available on Outokumpu’s website. member 2
Slide 52: Proposed new Board member
52 Proposed new Board member Work experience Positions of trust Chief Financial Officer: Neste Oyj 2013– Member of the Board of Directors: Orthex 2022 2022– Chief Financial Officer: Kemira Oyj 2008– Chairman of the Audit Committee: Anora 2013 (formerly Altia) 2021– Several managerial positions: Kemi
Slide 53: Election of the Chairman and Vice Chairman of the Board
53 Proposal for the election of the Chairman and Vice Chairman of the Board of Directors • The Nomination Board also proposes that Kari Jordan would be re-elected as the Chairman and Kati ter Horst as the Vice Chairman of the Board of Directors. Marc h 30, 2023
Slide 54: Resolution on the remuneration of the auditor
54 Resolution on the remuneration of the auditor Item 14 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 55: Remuneration of the auditor
55 Remuneration of the auditor The Board of Directors proposes to the Annual General Meeting, on the recommendation of the Audit Committee, that the elected auditor be reimbursed in accordance with the auditor’s invoice approved by the Board of Directors. M a rc h 3 0 , 2 0 2 3
Slide 56: Election of auditor
56 Election of auditor Item 15 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 57: Election of the auditor
57 Election of the auditor The Board of Directors proposes to the Annual General Meeting, on the recommendation of the Audit Committee, that the accounting firm PricewaterhouseCoopers Oy be elected as the auditor for the term of office ending at the end of the next Annual General meeting. The audito
Slide 58: Authorizing the Board to repurchase the company's own shares
58 Authorizing the Board of Directors to resolve on the repurchase of the company’s own shares Item 16 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 59: Authorizing the Board to repurchase the company's own shares
59 Authorizing the Board of Directors to resolve on the repurchase of the company’s own shares • The Board of Directors proposes to the Annual General Meeting that the Board of Directors be authorized to resolve to repurchase a maximum of 45,000,000 of Outokumpu’s own shares, currently representing
Slide 60: Authorizing the Board to issue shares and special rights
60 Authorizing the Board of Directors to resolve on the issuance of shares as well as special rights entitling to shares Item 17 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 61: Authorizing the Board to issue shares and special rights
61 Authorizing the Board of Directors to resolve on the issuance of shares as well as special rights entitling to shares • The Board of Directors proposes to the Annual General Meeting that the Board of Directors be authorized to resolve to issue a maximum of 45,000,000 shares in one or several inst
Slide 62: Authorizing the Board to resolve on charitable donations
62 Authorizing the Board of Directors to resolve on donations for charitable purposes Item 18 on the agenda M a rc h 3 0 , 2 0 2 3
Slide 63: Donations for charitable purposes
63 Donations for charitable purposes The Board of Directors proposes that the Board of Directors be authorized to resolve on donations of up to EUR 500,000 in aggregate for relief work undertaken in Ukraine and abroad relating to the war in Ukraine, and to determine the recipients, purposes and othe
Slide 64: Closing of the meeting
64 Closing of the meeting Item 19 on the agenda M a rc h 3 0 , 2 0 2 3
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