Outokumpu (OUT1V) Pre-Silent Call summary

Executive summary

• Gradual market recovery in Europe continues, with the lowest point in the cycle reached in Q3 last year and slow improvement since then.

• Political strikes in Finland significantly impacted results in H1, with a €30 million negative effect in Q2, similar to Q1.

• Stainless steel demand remains subdued in construction, automotive, and white goods, but renewables and hydrogen sectors show positive trends.

• Order book remains at an acceptable level despite ongoing market challenges.

Trading performance and revenue trends

• Stainless steel deliveries in Q2 expected to increase 5%-15% over Q1, but likely at the lower end of the range.

• Q2 volumes in Americas impacted by ongoing maintenance and operational challenges.

• Imports into Europe increased in Q2, returning to normal levels after lows in Q4 last year and Q1 this year.

• Distributor inventories in Europe at lowest levels since end of last year due to strikes and extended lead times.

Profitability and margins

• Adjusted EBITDA for Q2 expected to be similar or higher than Q1, in line with previous guidance.

• Q2 guidance includes expected losses from raw material-related inventory and metal derivatives.

• Maintenance costs in Americas increased in Q2, but only by a single-digit percentage.