#Finland #Helsinki #EBITDA #Outokumpu #Stainless Steel

Outokumpu Financial Results for 2024

Outokumpu Oyj has issued its financial results for the year 2024, showcasing a significant challenge for its operations. The company reported a full-year adjusted EBITDA of EUR 177 million, down from EUR 517 million in 2023. Despite this downturn, Outokumpu retained its leading position in the stainless steel market.

Key Highlights

• - Stainless Steel Deliveries: In 2024, stainless steel deliveries reached 1,793,000 tonnes, a decrease from 1,906,000 tonnes in the previous year. Q4 alone saw deliveries of 422,000 tonnes compared to 450,000 tonnes in Q4 2023.
• - Financial Performance: The company reported an adjusted EBITDA of EUR -3 million in Q4 2024, indicating a drop from EUR 72 million in Q4 2023. The total EBITDA for the year also decreased significantly, highlighting the market's ongoing challenges.
• - Impact of External Factors: The political strike in Finland during the first half of 2024 had a substantial impact, contributing to an estimated EUR -60 million in losses. Increased competition from imports further pressured the company's pricing structures, leading to lower realized prices across the board.
• - Leadership Changes: Kati ter Horst officially took office as the new President and CEO on October 1, 2024, amidst these challenging conditions. Under her leadership, the company emphasized a strategic focus on enhancing profitability despite market adversities.

Outlook and Strategies

Outokumpu aims to navigate the ongoing weak stainless steel cycle by concentrating on controllable factors to improve profitability and maintain strong financial health. Noteworthy actions include:

• - Implementation of cost-saving measures expected to generate EUR 50 million in savings throughout 2025.
• - Reduction of planned capital expenditures to EUR 160 million for 2025, reflecting a cautious approach given the current market dynamics.
• - Strategic initiatives to enhance working capital management and liquidity, while maintaining a high level of inventory to mitigate the impact of strikes.

The company maintains a strong commitment to environmental sustainability, having executed a smart decarbonization strategy that includes a goal to reduce emission intensity by 42% by 2030 from a 2016 baseline. In 2024, Outokumpu achieved a 32% reduction in emissions and sustained a recyclable material content of 95%.

Segment Overview

• - Europe: The European business area reflected particularly challenging results with an adjusted EBITDA of EUR -32 million for Q4 2024. The high levels of imports and subdued local demand further complicated the market environment.
• - Americas: The Americas saw a slight improvement with adjusted EBITDA at EUR 9 million for Q4, although stainless steel deliveries dropped by 7% from the previous quarter.
• - Ferrochrome: This segment proved more resilient, posting an adjusted EBITDA of EUR 33 million, signaling ongoing demand for low-emission ferrochrome despite broader market challenges.

Final Thoughts

Looking ahead, Outokumpu anticipates a modest recovery in stainless steel deliveries by 10-20% in Q1 2025, although continued pressure on realized prices is expected. With a focus on managing costs and improving operational efficiency, the company aims to weather the current challenges while also preparing for future market recovery. The Board of Directors has proposed a dividend of EUR 0.26 per share, indicating confidence in strengthening financial conditions amidst difficult circumstances.