Outokumpu (OUT1V) Pre-Silent Call summary

Executive summary

• Stainless steel deliveries expected to increase 10-20% over Q4, but at the lower end of the range, with continued price pressure as previously guided.

• Higher volumes seen in both Europe and Americas, but demand remains soft and market uncertainty persists due to economic and political factors.

• Labor strikes in Finland caused a one-week shutdown, impacting adjusted EBITDA by EUR 15 million, but a new three-year labor agreement ensures future stability.

• Cost-saving measures are on track, targeting an additional EUR 50 million in savings by year-end.

Trading performance and revenue trends

• Group deliveries are at the lower end of the 10-20% growth guidance, with both Europe and Americas contributing.

• Restocking by European distributors observed, but inventories remain below average and days of inventory are high.

• U.S. demand is soft, with distributor inventories below average but high days of inventory; oil and gas segment is performing better.

• Imports into Europe increased in January, with Taiwan's quota for cold-rolled flat stainless steel quickly filled.

Profitability and margins

• Labor strike in Finland negatively impacted adjusted EBITDA by EUR 15 million.

• Maintenance costs are expected to decrease by EUR 10 million in Q1 compared to Q4 due to fewer maintenance activities.

• Europe could return to break-even at EBITDA level in Q1, helped by volume uptick and lower maintenance costs.

• Metal effects in Q1 are expected to be minor, with only single-digit million euro losses.