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, with market share maintained in both Europe and North America.

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

• Continued focus on cash generation, financial discipline, and sustainability leadership, with 95% recycled content and progress toward 2030 SBTi carbon reduction targets.

• Net result for Q3 was EUR 20 million, compared to a loss of EUR 55 million in Q3 2023.

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 improved results in 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; liquidity reserves at EUR 1.0 billion.

• Dividend of EUR 110 million paid in Q2 2024.

Outlook and guidance

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

• Planned maintenance in Tornio, Finland, to negatively impact Europe Adjusted EBITDA by EUR 10 million; energy costs to rise by EUR 5 million.

• Adjusted EBITDA in Q4 2024 expected to be lower than Q3.

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