Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Investor Presentation (May 2021)
110 slides from Outokumpu Oyj's investor presentation, May 26, 2021
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 May 2021
Slide 2: Table of contents
Table of contents 1. Outokumpu in brief (slide 3) 2. Strategy execution (slide 14) 3. ESG (slide 29) 4. Business areas (slide 48) 5. BA Americas – From turnaround to full potential (slide 57) 6. Market environment (slide 66) 7. Latest financials Q1 2021 (slide 75) 8. Appendix (slide 90) | May 26, 20
Slide 3: Outokumpu in brief
Outokumpu in brief | May 26, 2021
Slide 4: Outokumpu – The leading producer of sustainable stainless steel globally
Outokumpu – The leading producer of sustainable stainless steel globally Outokumpu in 2020 Net sales Stainless steel Adjusted Sales by business area EUR deliveries EBITDA 5.6 2.12 EUR Other 250 Ferrochrome operations 3% 7% billion million tonnes million Long Products 7% Over 90% Operations in over L
Slide 5: Flat stainless steel products and ferrochrome
Flat products Flat stainless Business areas Europe and the Americas produce flat stainless steel products steel products that can be used diversely for different purposes in and ferrochrome different industries. are Outokumpu’s Ferrochrome Ferrochrome is an important raw core businesses material in
Slide 6: Outokumpu has a balanced customer portfolio
Outokumpu has a balanced customer portfolio Sales by destination in 2020 Sales by customer segment in 2020 End-customers 49% • Long term contracts Other • Large quantities countries 7% Consumer goods • Special grades Asia & North America 9% Automotive 9% • Ferritics and duplex Oceania 5% 22% Distrib
Slide 7: A vast product range and extensive offering of specialty grades
A vast product range and extensive offering of specialty grades for demanding circumstances • Standard • Automotive Appliances products 70% • Consumer durables • High-value • Process industry Construction products 30% • Oil and gas industry | May 26, 2021
Slide 8: Stainless steel steers society towards more sustainable consumption
Stainless steel steers society towards more sustainable consumption • Corrosion resistant • Heat resistant • High strength • Hygienic • Aesthetic • Recyclable • Cost efficient • Durable | May 26, 2021
Slide 9: The world needs hygienic, recyclable and durable materials
The world needs hygienic, recyclable and durable materials Population and economic growth Urbanization • Healthcare • Infrastructure and construction • Clean water • Traffic, trains and bridges • Appliances Climate change and limited Stainless steel is sustainable resources • Long-lasting, endlessly
Slide 10: High real demand growth expected, based on a COVID-19 affected lower market size in 2020
High real demand growth expected, based on a COVID-19 affected lower market size in 2020 Global stainless steel real demand in 2020 Expected stainless steel real demand in 2026 Heavy Other Heavy Other industries +59% industries +22% Architecture, Architecture, Building & Building & Construction 42.8
Slide 11: Outokumpu has a solid presence in key regions
Outokumpu has 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 * |
Slide 12: 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 13: Strategy execution
Strategy execution | May 26, 2021
Slide 14: Strategy execution on track
Strategy Headcount reduced as planned execution Significant progress in other cost savings on track Strengthened customer relationships rewarded with strong volumes
Slide 15: Our strategy framework: De-risking remains our priority
Our strategy framework: De-risking remains our priority Phase 3: 2026– Customer’s Phase 2: first choice in 2023–2025 sustainable Phase 1: Investing in growth and sustainability stainless steel 2021–2022 Targeted productivity investments to improve Margin improvement margins. Additional and de-levera
Slide 16: Clear step forward in strategy execution…
Clear step forward in strategy execution… Decisive first steps Successful Q1'21; Realistic program in taken across our strategy execution place to support strategy initiatives. supporting response strategy delivery. • Lean and Agile Organization to strong market. • Cost and Capital Discipline • Comm
Slide 17: …with sustained progress across all businesses
…with sustained progress across all businesses Group-wide • New organization with 479 lower headcount (1,000 headcount negotiated) • Program for 2021 – 2022 to support strategy delivery BA Europe BA Americas BA Ferrochrome BA Long Products • Strong Q1 volumes • Strong Q1 in • Efficient mining and •
Slide 18: Lean & agile organization: Step change in competitiveness
Lean & agile organization: Step change in competitiveness Headcount1 10,977 10,485 10,468 10,645 1,000 headcount 10,310 2 10,118 9,915 2 9,639 2 reduction by the end of 3 < 9,0003 2022 progressing as 3 3 planned. 3 Legal headcount trailing due to notice periods. Creating a de-layered and more agile
Slide 19: Business area Europe: Strategic initiatives contributing to a strong quarter
Business area Europe: Strategic initiatives contributing to a strong quarter • Focus on mix optimization Commercial excellence • Mix optimization enables higher margins 391 401 356 338 356 • Manufacturing excellence & digitalization: High Q1 deliveries with lower headcount Cost and capital • Mainten
Slide 20: Business area Americas: Successful turnaround over last 2 years
Business area Americas: Successful turnaround over last 2 years • Profitability focused commercial strategy – starting to deliver Commercial excellence • Ferritics investment completed to Full potential for strengthen business resilience business area Americas*: $150–200 million adjusted EBITDA Cost
Slide 21: Business area Ferrochrome: Invest for long-term competitiveness and sustainability
Business area Ferrochrome: Invest for long-term competitiveness and sustainability • Q1 focus on maximizing value creation in strong market 136 • Strategy implementation progressing with commercial 123 127 131 112 excellence and operational efficiency improvement 42 • Strategic investments for long-
Slide 22: Business area Long Products: Turnaround program progressing as planned
Business area Long Products: Turnaround program progressing as planned • First step to lower fixed costs: Headcount reductions of 100 FTEs (~12%) • Manufacturing excellence: Focus on improving availability & fixed cost reduction, shift models & maintenance optimization • First steps taken to expand
Slide 23: On track to meet financial targets
On track to Successful start to strategy implementation aiming at de-risking the company. meet financial Reaching targets builds confidence on targets execution success. Updated sustainability strategy important step to becoming customer’s first choice. | May 26, 2021
Slide 24: Recap: Target to deliver €200 million EBITDA run-rate improvement
Recap: Target to deliver €200 million EBITDA run-rate improvement • Enhanced product mix in all business areas Commercial • Growth in selected segments excellence • Leverage specialty grades leadership Cost and • • Increased raw material efficiency Maintenance optimization €200 million capital • Str
Slide 25: Realistic program in place to support strategy delivery
Realistic program in place to support strategy delivery 2050 initiatives in 2021 – 2022 All business agendas focused on three key areas: • Lean and Agile Organization • Cost and Capital Discipline • Commercial Excellence 540 655 Initiatives Initiatives in implemented progress Increased accountabilit
Slide 26: €84 million realized impact, on-track to meet target
€84 million realized impact, on-track to meet target Gross run-rate EBITDA improvement (€ million) • Strategy on track to meet Q4'22 target of 200 €200 million annualized run-rate impact. Realized • Majority of improvement from Lean & agile Illustrative plan organization and Cost & capital disciplin
Slide 27: Program on track to meet our financial targets
Program on track to meet our financial targets Financial target Outcome after Q1 €200 million EBITDA run-rate improvement €84 • • On track to meet target Measured as gross-run rate impacts from strategy million implementation actions by end of 2022 • Current net debt €1,073 million • Capital discipl
Slide 28: ESG
ESG | May 26, 2021
Slide 29: Updated sustainability strategy
Updated • Our holistic sustainability strategy will set a new benchmark for the industry. sustainability • Our commitment to the Business Ambition strategy for 1.5°C and we are ramping-up towards that. launched "Customer’s first choice in sustainable stainless steel" | May 26, 2021
Slide 30: We are the leading producer of sustainable stainless steel globally
We are the leading producer of sustainable stainless steel globally with 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 30% 90% 42% 76% of the global of industry
Slide 31: We are committed to reaching carbon neutrality by 2050
We are committed to reaching carbon neutrality by 2050 – in-line with EU Green Deal targets Current 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 t
Slide 32: We are on track to meet our target of reducing our carbon footprint by 20% by 2023
We are on track to meet our target of reducing our carbon footprint by 20% by 2023 Outokumpu CO2 footprint by category (2020) Outokumpu CO2 emissions intensity 1 2.0 Tonne of CO2 per tonne crude steel 1.5 49% 30% 1.0 0.5 17% 4% 0.0 2014- 2017 2018 2019 2020 2023 2016 target Direct Indirect Transport
Slide 33: Recycled content at a record-breaking level in 2020
Recycled content at a record-breaking level in 2020 – the highest recycled content in the industry Outokumpu’s recycled content in production (%) A Yale study reveals comparative recycled content of stainless steels by region 100 93% 90 80 70 Global average is only 44% 2016 2017 2018 2019 2020 *Othe
Slide 34: TRIFR at 1.4 in Q1 2021
TRIFR at 1.4 in Q1 2021 – Best first-quarter safety results in years Safety performance (TRIFR) Sustainability highlights in Q1 • Total recordables improved 6x since 2016 8.7 • CO2 emissions well aligned with current Science Based Targets (SBTi) • Energy efficiency improved significantly, 4.4 result
Slide 35: Updated sustainability strategy reinforces our leadership position
Updated sustainability strategy reinforces our leadership position Strong demand for sustainable stainless steel driven both by customers and stakeholders. Outokumpu is the sustainability leader in stainless steel driven by our heritage, people and operations. We will further strengthen this leaders
Slide 36: Increasing demand for sustainable stainless steel
Increasing demand for sustainable stainless steel Customers Stakeholders • 18x increase in number of companies • Regulators: Outokumpu is well aligned with SBTi targets in the past 4 years. with EU Taxonomy requirements for • 60% of consumer durable OEMs high alloy steel in EAF with >70% scrap. comm
Slide 37: Strong current performance as a result of our heritage
Strong current performance as a result of our heritage Our heritage Our performance Focus on employee 70% reduction in TRIFR since 2016 Safety safety and well-being due to systematic improvements Own FeCr supply chain integrated 58% lower emissions from FeCr Supply chain with Tornio stainless steel
Slide 38: Outokumpu is the industry benchmark for stainless steel carbon footprint
Outokumpu is the industry benchmark for stainless steel carbon footprint Value chain emissions, tCO2-eq/t of stainless steel 7.8 5.4 2.8 1.5 2.0 0.8 0.8 0.7 China & Indonesia Industry mean Estimated European Outokumpu peer average Outokumpu scope 1 & 2 also includes FeCr, unlike peers Scope 1 & 2 Sc
Slide 39: Our Environmental, Social and Governance foundation
Our Environmental, Social and Governance foundation Customer’s first choice in sustainable stainless steel Environment Social Governance Reduce emissions and provide Health and safety of our people Ensure transparency solutions for a sustainable future in everything we do and compliant processes Sus
Slide 40: Our SBTi ambition raises the bar in green stainless steel…
Our SBTi ambition raises the bar in green stainless steel… Outokumpu's value chain emissions, tCO2-eq/t stainless steel • Commitment to the Business Ambition for 1.5 °C campaign Business Ambition for 1.5 °C of SBTi and partners 1.9 • Reporting emissions in 1.5 all scopes 1, 2 & 3 0.9 0.8 Scope 3 0.5
Slide 41: …on our roadmap towards carbon neutrality
…on our roadmap towards carbon neutrality Outokumpu’s greenhouse gas emission reduction roadmap 20% GHG reduction Emission reduction Targeted investments Commitment to the Commitment towards from 2014-2016 with technologically to low emission Business Ambition carbon neutrality baseline will be prov
Slide 42: Tracking & transparency is a part of our ESG strategy
Tracking & transparency is a part of our ESG strategy Environment Social Governance GHG emissions Safety Share of local suppliers Scopes 1-3 Fatalities, LTIFR, restricted work injuries, Share of suppliers in countries with medically treated injuries, first-aid treated significant production sites Me
Slide 43: Outokumpu is committed to the UN SDGs
Outokumpu is commited to the UN SDGs Products: Due to its excellent properties stainless steel Products: Stainless steel is the most durable and is a key material in sustainable industrialization and hygienic material for water pipes and treatment. modern infrastructure. Operations: In our productio
Slide 44: | May 26, 2021
NO POVERTY hat 13 cio | May 26, 2021 M @) SNEGOALS X A4 17 GOALS TO TRANSFORM OUR WORLD <I GOOD HEALTH QUALITY 5 GENDER AND WELL-BEING EDUCATION EQUALITY DEGENT WORK AND | REDUCED ECONOMIC GROWTH INEQUALITIES UFE PEACE, JUSTICE BELOW WATER 16 7 PARTNERSHIPS AND STRONG FOR THEGOALS INSTITUTIONS ¥% |
Slide 45: Our efforts on sustainability have been recognized
Our efforts on sustainability have been recognized | May 26, 2021
Slide 46: Business areas
Business areas | May 26, 2021
Slide 47: Outokumpu's assets work as one integrated system
Outokumpu’s assets work as one integrated system Sales by business area in 2020 Avesta € 5,639 million Fagersta Tornio Degerfors Kemi Ferrochrome Other operations Sheffield Nyby 3% 7% Krefeld Long Products Richburg Dillenburg 7% Calvert Dahlerbrück San Luis Potosí Americas 21% Europe 62% | May 26, 2
Slide 48: #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 30% 22% 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 49: 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 50: 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 51: 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 52: 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 | May 26, 2021
Slide 53: 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 | May 26, 2021
Slide 54: 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 55: BA Americas – From turnaround to full potential
BA Americas – From turnaround to full potential | May 26, 2021
Slide 56: Calvert facility: Modern, fully integrated site now with upgraded ferritics capabilities
Calvert facility: Modern, fully integrated site now with upgraded ferritics capabilities What is Calvert Fully integrated, modern site with comprehensive product portfolio. Most technically advanced mill in the USA1 • Stainless melt shop capacity 900kt • CR capacities 350kt in Calvert & 250kt Mexino
Slide 57: Successful 2-year turnaround and strong Q1'21
Successful 2-year turnaround and strong Q1'21 Adjusted EBITDA, € million Already 6 consecutive quarters of 89 positive adjusted EBITDA. Q1 profitability supported by high utilization & favorable grade mix. 55 54 Strong Q1 supported by our own commercial push and improved 21 20 18 cost levels. 10 14
Slide 58: Turnaround actions undertaken
Turnaround Commercial turnaround actions Systematic work to improve raw material undertaken efficiency and lower fixed costs in operations. since 2019 Strengthening resilience with ferritic investment.
Slide 59: Commercial turnaround since 2019…
Commercial turnaround since 2019… • New commercial strategy • Systematic improvement in organizational maturity: targets, processes, steering and accountability • Increased market share driven by appliance, pipe & tube and large distributors • Cold-rolled market share improved from 21% in 2019 to 24
Slide 60: …with significant turnaround in operational efficiency
…with significant turnaround in operational efficiency • Raising operational maturity: Organization, processes, steering, continuous improvement 94 • Holistic slab cost optimization 29 • Fixed costs reduction and -6 -45 variabilization 2017 2018 2019 2020 • Improved planning and forecasting resultin
Slide 61: Investment in ferritic capabilities completed
Investment Improving business resilience from broader presence and product portfolio. in ferritic capabilities More competitive cost position in ferritics in the US. completed Stronger position especially in appliances and automotive. on time & on budget Ferritics market is ~600kt, long-term target
Slide 62: Positive outlook: executing our strategy in a healthy market
Positive outlook: executing our strategy in a healthy market Favorable Good position Strategy to drive market outlook in a healthy market profitable growth • Robust outlook driven by • Section 232 still in force • Commercial excellence: appliances and auto Improve service to key • Strong relationshi
Slide 63: Determined actions to reach full potential of $150–200 million adjusted EBITDA
Determined actions to reach full potential of $150–200 million adjusted EBITDA • Further strengthen and expand customer relationships by consistently improving service. Commercial excellence • Drive growth in selected segments distributors, appliances, auto, pipe & tube and in value added grades. Co
Slide 64: Market environment
Market environment | May 26, 2021
Slide 65: In 2020, the operating environment was exceptionally challenging
In 2020, the operating environment was exceptionally challenging The COVID-19 Low priced Prices were pandemic imports from historically low impacted Asia took in Europe demand market share | May 26, 2021
Slide 66: Ferronickel and stainless steel production in Asia has grown immensely
Ferronickel and stainless steel production in Asia has grown immensely Asia North America Europe • Significant overcapacity • Low level of imports • Import pressure from • Capacity is export- after U.S. import tariffs Asia (Section 232) in 2018 driven and maintained • Import quotas set in by state s
Slide 67: Imports into Europe have remained at a high level
Imports into Europe have remained at a high level Cold-rolled steel imports1 into Europe, Cold-rolled steel imports2 into the United States, 1,000 tonnes 1,000 tonnes (%) (%) 100 50 50 80 40 30 27% 40 60 30 20 14% 30 40 20 20 10 20 10 10 0 0 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 From
Slide 68: All available tools for use to ensure fair competition and a sustainable future
All available tools for use to ensure fair competition and a sustainable future European safeguards Anti-dumping (import quotas) duties Anti-subsidy Carbon border duties adjustment | May 26, 2021
Slide 69: Multiple trade defence investigations ongoing by EU
Multiple trade defence investigations ongoing by EU EU cold-rolled quota utilization at 25%* European safeguards 100% • Current safeguards will expire in June 2021 kt 91 19 83 43 67 59 31 47 • Expiry review started at the end of February 80% 60% Anti-dumping & anti-subsidy investigations 40% • In an
Slide 70: Increase in transaction and raw material prices
Increase in transaction and raw material prices Transaction prices 304 stainless, USD/tonne Average Ferrochrome nickel price, benchmark price, 3,900 USD/tonne USD/lb. 3,400 2,900 2,400 1,900 1,400 2014 2015 2016 2017 2018 2019 2020 2021 Q4/20 Q1/21 Q4/20 Q1/21 Europe USA China Source: CRU & Metal Bu
Slide 71: Raw materials - price development
Raw materials - price development Nickel1, USD / tonne Ferrochrome2, USD / lb. 21,000 1.7 19,000 1.5 17,000 Q2/21 1.3 1.56 USD/lb. 15,000 1.1 13,000 May 13, 2020 0.9 11,000 17,180 USD/t European contract price May 11, 2021 9,000 0.7 European spot price 0.94 USD/lb. 7,000 0.5 Jan'18 Feb Mar Apr May J
Slide 72: Stainless steel market
Stainless steel market Major stainless steel producers Outokumpu’s market share Million tonnes 2020 2019 2020 Tsingshan 9.8 9.8 Europe 30% TISCO 4.5 4.5 USMCA 24% POSCO (incl. ZPSS) 3.3 3.3 Globally ~6% Acerinox 3.3 3.3 Outokumpu 3.2 3.2 Aperam 3.0 3.0 Sources: Stainless steel production capacity of
Slide 73: Latest financials Q1 2021
Latest financials Q1 2021 | May 26, 2021
Slide 74: Adjusted EBITDA increased to €177 million
Adjusted EBITDA • Q1 result supported by higher demand, improved capacity utilization and positive increased to impacts from raw materials €177 million • Strategy execution starting to deliver benefits; structurally lower headcount in the first quarter and improved cost base • Record high safety per
Slide 75: Strong performance in all businesses
Strong performance in all businesses Group adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Deliveries increased by 16% 177 Mainly from positive timing impacts 106 78 45 22 Net of Q4/20 Deliveries Pricing timing and Costs Ferro- Others Q1/21 Q1/20 Q2 Q3 Q4 Q1/
Slide 76: Key figures Q1/21
Key figures Q1/21 Q1/20 Q4/20 2020 Stainless steel deliveries 1,000 tonnes 608 588 523 2,121 Sales EUR million 1,673 1,615 1,350 5,639 Adjusted EBITDA EUR million 177 106 78 250 Net result EUR million 82 22 -39 -116 Earnings per share EUR 0.20 0.05 -0.09 -0.28 Operating cash flow EUR million 27 -32
Slide 77: Adjusted EBITDA development by business area
Adjusted EBITDA development by business area, EUR million Europe Americas Ferrochrome Long Products Downward trend must Profitability improved Successful The turnaround be turned around already significantly maintenance break has started 55 16 25 21 404 217 210 -5 295 248 -27 216 -27 96 91 -1 -7 142
Slide 78: BA Europe – Higher demand and improved capacity utilization boosted result to €78 million
BA Europe – Higher demand and improved capacity utilization boosted result to €78 million Europe adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Deliveries increased by 13% 78 Higher prices 67 supported profitability 36 30 9 Net of Pricing Q4/20 Deliveries ti
Slide 79: BA Americas – Strongest quarter in history
BA Americas – Strongest quarter in history due to higher demand and positive raw material impacts Americas adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Mainly due to positive timing impacts 19% higher deliveries due to strong demand 54 20 18 14 3 Pricing N
Slide 80: BA Ferrochrome – Higher sales price supported result
BA Ferrochrome – Higher sales price supported result Ferrochrome adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Profitability impacted positively by higher 42 ferrochrome sales price 34 Harsh winter conditions 25 impacted production 24 9 FeCr Q1/20 Q2 Q3 Q4
Slide 81: BA Long Products – Turnaround proceeding, result driven by increased volumes
BA Long Products – Turnaround proceeding, result driven by increased volumes Long Products adjusted EBITDA, Adjusted EBITDA quarter-on-quarter comparison1, EUR million EUR million Deliveries increased by 53% 11 Higher share of semi-finished -1 0 products -4 -3 Net of Q1/20 Q2 Q3 Q4 Q1/21 Q4/20 Deliv
Slide 82: Positive operating cash flow despite significant pay-outs for restructuring and VAT deferral
Positive operating cash flow despite significant pay-outs for restructuring and VAT deferral Q1/21 cash flow, Annual Capex, EUR million €10 million of VAT deferral EUR million payments and a typical seasonal 240 Capex limited to increase in working capital €180 million 200 €24 million from 160 restr
Slide 83: Decrease in leverage driven by strong EBITDA
Decrease in leverage driven by strong EBITDA Net debt, EUR million Net debt/LTM adjusted EBITDA 1,800 80% 69% IFRS16 impact* 70% 1,600 51% 60% 1,400 45% 45% 40% 50% 1,200 44% 44% 40% 30% < 3.0 1,000 20% 800 10% 1,610 1,242 1,091 1,241 1,155 1,028 1,073 9.8 4.0 1.7 2.6 4.4 4.1 3.3 600 0% 2015 2016 20
Slide 84: Outokumpu has a balanced debt structure
Outokumpu has a balanced debt structure Debt structure* Debt maturity profile*, EUR million 1000 15% 18% 800 15% 8% 600 400 14% 29% 200 0 Cash & 2021 2022 2023 2024 2025 2026+ Bonds Convertible bonds cash Long-term loans from Pension loans equivalents Current debt financial institutions Commercial p
Slide 85: Successful private placement of new shares - raising EUR 209 million
• Launch May 10, 2021 Successful private • Main purpose to accelerate de-leveraging placement of new • The ABB procedure enabled shares - raising the execution in a rapid and cost-efficient manner EUR 209 million | May 26, 2021
Slide 86: Outlook for Q2 2021
Stainless steel deliveries in the second quarter are expected to increase by 0–5% compared to the first quarter. Outlook for European ferrochrome benchmark price increased to USD 1.56/lb Q2 2021 for the second quarter. Planned maintenance costs are expected to increase by approximately EUR 10 millio
Slide 87: For more information, call Outokumpu Investor Relations
For more information, call Outokumpu Investor Relations or visit www.outokumpu.com/investors Linda Häkkilä Head of Investor Relations Mobile: +358 40 071 9669 E-mail: [email protected] Päivi Laajaranta Executive Assistant Phone +358 9 421 4070 Mobile +358 40 060 7424 E-mail: paivi.laajaran
Slide 88: Appendix
Appendix | May 26, 2021
Slide 89: 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 90: Stainless steels can be divided in four groups
Stainless steels can be divided in four groups Austenitics Ferritics Duplex Martensitic Stainless steels are iron- chromium (Fe-Cr) alloys often Nickel content No nickel Low nickel content No nickel with nickel (Ni) additions that Non-magnetic Magnetic Magnetic Magnetic ”do not rust in sea water”, ”
Slide 91: 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 | May 26, 2021
Slide 92: Traditional stainless steel base price model consists of three components
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 93: 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 ma
Slide 94: 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 95: 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 96: Outokumpu organization
Outokumpu organization President & CEO Heikki Malinen Finance Human resources Technology & Sustainability Europe Americas Ferrochrome Long Products | May 26, 2021
Slide 97: Dividend payments
Dividend payments Net income, EUR million Dividend per share, EUR 392 86 144 130 -75 -116 -439 0.10 0.25 0.15 2014 2015 2016 2017 2018 2019 2020 | May 26, 2021
Slide 98: Ownership structure & major shareholders
Ownership structure & major shareholders Nominee registered and non-Finnish holders 36% Finnish institutions, companies and foundations 16% Solidium 19% Households 29% 1) Directly registered shareholders on May 24, 2021 | May 26, 2021
Slide 99: 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 100: Outokumpu Board of Directors
Outokumpu Board of Directors Kari Jordan Eeva Sipilä Chairman of the Board of Directors Vice Chairman of the Board of Directors Kati ter Horst Heinz Jörg Fuhrmann Member of the Board of Directors Member of the Board of Directors Päivi Luostarinen Vesa-Pekka Takala Member of the Board of Directors Me
Slide 101: Outokumpu Leadership Team
Outokumpu Leadership Team Heikki Malinen Pia Aaltonen-Forsell President & CEO CFO Thomas Anstots Niklas Wass Executive Vice President, Commercial, Executive Vice President, Operations, Business Area Europe Business Area Europe Tamara Weinert Martti Sassi Acting President, Business Area Americas Pres
Slide 102: Group key financials
Group key financials Key figures 2020 2019 1) 2018 2017 2016 Stainless steel deliveries 1,000 tonnes 2,121 2,196 2,428 2,448 2,444 Sales € million 5,639 6,403 6,872 6,356 5,690 Adjusted EBITDA € million 250 263 485 631 309 Net result € million -116 -75 130 392 144 Return on equity 2) % -4.7 -2.8 4.8
Slide 103: Balance sheet
Balance sheet Assets (EUR million) 2020 2019 Equity and liabilities (EUR million) 2020 2019 Non-current assets Equity attributable to the equity holders of the Company 2,360 2,562 Intangible assets 610 607 Non-current liabilities Property, plant and equipment 2,631 2,767 Non-current debt 1,153 1,053
Slide 104: Share-related key figures
Share-related key figures Key figures 2020 2019 2018 2017 2016 Earnings per share 1) 2) € -0.28 -0.18 0.32 0.95 0.35 Cash flow per share € 0.78 0.90 0.52 0.79 0.94 Equity per share 1) 2) € 5.73 6.22 6.70 6.59 5.84 Dividend per share € - - 0.15 0.25 0.10 Dividend yield % - - 4.7 3.2 1.2 Price/earning
Slide 105: Cash flow
Cash flow Key figures 2020 2019 2018 2017 2016 Net result for the financial year € million -116 -75 130 392 144 Total adjustments € million 339 330 313 259 134 Change in working capital € million 247 218 -112 -180 307 Provisions, pensions, financial charges € million -138 -97 -112 -135 -187 and othe
Slide 106: Business area Europe
Business area Europe Key figures 2020 2019 2018 2017 2016 Stainless steel deliveries 1,000 tonnes 1,440 1,459 1,547 1,592 1,625 Sales € million 3,568 4,089 4,267 4,156 3,767 of which intra-group € million 83 66 97 81 93 Adjusted EBITDA € million 142 216 248 404 295 Adjustments to EBITDA € million -4
Slide 107: Business area Americas
Business area Americas Key figures 2020 2019 2018 2017 2016 Stainless steel deliveries 1,000 tonnes 588 601 762 742 690 Sales € million 1,195 1,346 1,715 1,546 1,325 of which intra-group € million 1 3 45 33 21 Adjusted EBITDA € million 55 -27 -5 21 -27 Adjustments to EBITDA € million -2 - - - 21 EBI
Slide 108: Business area Ferrochrome
Business area Ferrochrome Key figures 2020 2019 2018 2017 2016 Ferrochrome production 1,000 tonnes 498 505 497 415 469 Sales € million 411 461 542 610 371 of which intra-group € million 260 293 345 483 269 Adjusted EBITDA € million 91 96 210 217 80 Adjustments to EBITDA € million -1 - - - -0 EBITDA
Slide 109: Business area Long Products
Business area Long Products Key figures 2020 2019 2018 2017 2016 Stainless steel deliveries 1,000 tonnes 175 226 285 264 245 Sales € million 493 642 740 591 487 of which intra-group € million 78 137 220 186 153 Adjusted EBITDA € million -8 -7 25 16 -1 Adjustments to EBITDA € million -3 - - - 19 EBIT
Slide 110: 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