Outokumpu (OUT1V) Pre-Silent Call summary

Executive summary

• Issued a profit warning for Q4 due to adverse developments in the European business area, with adjusted EBITDA expected to be close to break-even or negative, mainly driven by a weaker-than-expected stainless steel market, prolonged maintenance, and negative inventory impacts.

• European market weakness attributed to high interest rates, economic and political uncertainties, low consumer confidence, and persistent high imports from Asia, resulting in reduced industrial investments and demand.

• Americas and Ferrochrome business areas did not experience similar adverse developments; Americas market remains weak with low demand and high imports, while Ferrochrome delivered a solid Q3 and maintained stable performance.

Trading performance and revenue trends

• Stainless steel deliveries in Q4 are expected to decrease by 0%-10% compared to Q3, with volumes closer to the lower end of the range.

• European distributor inventories are below average, but days of inventory outstanding are high due to low demand; some restocking observed in order intake.

• U.S. and Mexico markets continue to see high import levels, with buyers cautious and waiting for post-election clarity.

Profitability and margins

• Prolonged maintenance at the Tornio site is expected to increase costs by an additional EUR 5-10 million, on top of the previously estimated EUR 10 million negative impact on adjusted EBITDA.

• Negative inventory value impacts, mainly from raw material price changes, are expected to further pressure Q4 profitability.

• Timing and hedging losses are anticipated in Q4, but the full magnitude will be disclosed with Q4 results.