Outokumpu (OUT1V) Q3 2024 earnings summary

Executive summary

• Adjusted EBITDA for Q3 2024 rose to EUR 86 million, up from EUR 56 million in Q2 and EUR 51 million year-over-year, driven by strong performance in Europe and Ferrochrome segments.

• Stainless steel deliveries in Q3 were 459,000 tonnes, down 2% sequentially but up 2% year-over-year, reflecting stable but weak demand, with Americas impacted by deteriorating market conditions.

• New CEO Kati ter Horst emphasized a smooth leadership transition, operational performance, and focus on delivering Strategy Phase Two targets by end of 2025.

• Maintained strong market positions in Europe and the U.S., progressing toward a EUR 350 million profitability improvement target by end of 2025.

• Sustainability leadership continued, with 95% recycled content and progress toward 2030 SBTi carbon reduction targets.

Financial highlights

• Q3 2024 sales were EUR 1,518 million, adjusted EBITDA EUR 86 million, and net result EUR 20 million; earnings per share EUR 0.05.

• Adjusted EBITDA increased by EUR 30 million quarter-on-quarter, mainly due to Europe and Ferrochrome.

• Free cash flow was negative at EUR -113 million, mainly due to increased net working capital and inventory build-up after the H1 political strike.

• Net debt increased to EUR 212 million at the end of Q3 2024, up from EUR 97 million at the end of Q2.

• ROCE (rolling 12 months) at -7.1%, impacted by a significant impairment in Americas at the end of 2023.

Outlook and guidance

• Q4 2024 stainless steel deliveries expected to decrease 0–10% from Q3 due to weaker markets in both Europe and Americas.

• Adjusted EBITDA in Q4 2024 expected to be lower than Q3, with a EUR -10 million impact from planned maintenance in Tornio and higher energy costs in Europe.

• Raw material-related inventory and derivative losses anticipated in Q4.