Outokumpu (OUT1V) Q2 2024 earnings summary

Executive summary

• Adjusted EBITDA improved to EUR 56 million in Q2 2024, rebounding from Q1 and driven by higher volumes and improved European performance, despite a EUR 30 million strike impact and operational challenges in the Americas.

• Stainless steel deliveries increased 5% sequentially in Q2, with both Europe and Americas contributing, but H1 2024 deliveries were 9% lower year-over-year.

• CEO Heikki Malinen’s final webcast, with Kati ter Horst to succeed; CFO transition also announced.

• Dividend of EUR 0.26 per share (EUR 110 million) paid in Q2 2024; share buyback program completed in Q1 2024, repurchasing 8.4 million shares.

• Sustainability leadership highlighted by 95% recycled content in production and ResponsibleSteel certification.

Financial highlights

• Q2 2024 sales were EUR 1,540 million, up from EUR 1,479 million in Q1 2024 but down from EUR 1,911 million in Q2 2023.

• Adjusted EBITDA for Q2 was EUR 56 million (Q2 2023: EUR 190 million; Q1 2024: EUR 38 million).

• Net result was EUR -5 million, with EPS at EUR -0.01; ROCE at -8.7% due to significant impairment in Americas.

• Free cash flow in Q2 2024 was EUR 35 million; net debt increased to EUR 97 million, mainly due to dividend payment and new leasing liabilities.

• Positive cash flow before financing activities was reported, supported by strong liquidity and capital discipline.

Outlook and guidance

• Q3 2024 stainless steel deliveries expected to remain stable versus Q2.

• Adjusted EBITDA for Q3 2024 forecasted to be at a similar or higher level compared to Q2.

• Slow market recovery in Europe anticipated to continue; Americas market expected to remain soft; scrap market tightness persists.

• Raw material-related inventory and metal derivative gains are forecasted for Q3.