Outokumpu interim report January-March 2025 - Adjusted EBITDA increased to EUR 49 million during times of uncertainty

Highlights in Q1 2025

• Stainless steel deliveries were 470,000 tonnes (444,000 tonnes)*.
• Adjusted EBITDA was EUR 49 million (EUR 38 million).
• EBITDA was EUR 47 million (EUR 37 million).
• ROCE was -0.8% (-5.7%).
• Free cash flow was EUR -62 million (EUR -26 million).
• Earnings per share was EUR -0.04 (EUR -0.05).
• Net debt was EUR 252 million (December 31, 2024: EUR 189 million).
• After the reporting period, on April 3, 2025, the Annual General Meeting approved a dividend of EUR 0.26 per share for the year 2024, to be paid in two installments. The first installment of EUR 0.13 per share was paid in April.

*Figures in parentheses refer to the corresponding period for 2024, unless otherwise stated.

Strategy highlights

• Outokumpu will host its Capital Markets Day on June 11, 2025 in Helsinki.
• During the first quarter, Outokumpu improved its EBITDA run-rate by EUR 26 million, which translates into a cumulative improvement of EUR 313 million since the start of the second phase of the strategy.
• EBITDA run-rate improvements in the first quarter were mainly driven by business area Europe and the successful transfer of precision strip operations from Dahlerbrück to Dillenburg in Germany.
• Kemi chrome mine mineral reserves were increased by 95% based on new underground drilling.
• Outokumpu announced its decision not to invest in cold rolling capacity expansion in the U.S. at this point in time.
• Outokumpu announced it has finalized study on emerging nuclear technology and seeks external investors to complete the project.
• Outokumpu signed a ten-year off-take agreement with Greenland Resources to ensure access to a critical raw material, molybdenum, in Europe.

1. Adjusted EBITDA or EBIT = EBITDA or EBIT - Items affecting comparability.

President & CEO Kati ter Horst

The global economy has been overshadowed by significant uncertainty and increased volatility in 2025. Considering the current geopolitical situation, I am pleased that we have local stainless steel production in both Europe and the U.S. with strong market positions. Additionally, we own the only chrome mine in the EU area. Our geographically diversified footprint and strong balance sheet give us resilience to operate in this uncertain environment.

Our U.S. business has been suffering from high Asian imports putting pressure on stainless steel prices. As the second biggest local producer, the tariffs in general support our business in the U.S. Also, we are the only local stainless steel producer in Mexico, where part of the material melted in the U.S. is cold rolled. Most of that material is sold to the Mexican market and only a small share is shipped directly to the U.S.

As geopolitics and global supply chains have shifted, it is now even more important to ensure access to critical raw materials. I am pleased with all the actions we have taken in this area. As a critical raw material, ferrochrome is excluded from the U.S. tariffs. Moreover, we recently signed a long-term off-take agreement to secure our future supply of low-emission molybdenum, a crucial material in advanced materials production.

During the first quarter, we progressed steadily with our short-term cost saving measures and achieved EUR 11 million of the targeted EUR 50 million for this year. We also proceeded well with our structural EBITDA run-rate improvement program. In the first quarter, we reached an improvement of EUR 26 million, representing a cumulative improvement of EUR 313 million. I am confident that we will achieve our EUR 350 million target by year-end.

In the first quarter, our adjusted EBITDA reached EUR 49 million while stainless steel deliveries seasonally increased by 11% from a very low level we saw in the fourth quarter. Throughout the quarter, stainless steel demand remained muted, and tariffs caused further uncertainty. On the other hand, our business area Ferrochrome again provided stability and delivered its best quarter since the second quarter of 2022.

In business area Europe, our operations in Finland were affected by the unfortunate one-week strike resulting in an adjusted EBITDA impact of approx. EUR -15 million. Adjusted EBITDA reached EUR 6 million and stainless steel deliveries increased by 11% compared to the previous quarter. Despite of an uptick in order intake at the beginning of the year, the "wait and see" mode prevailed in the European market and imports continued to put pressure on stainless steel prices. It is important to have a level playing field also in Europe and therefore, we have been actively participating in the discussions regarding the recent Steel and Metals Action Plan.

In business area Americas, adjusted EBITDA reached EUR 11 million and stainless steel deliveries increased by 13% compared to the previous quarter. However, the U.S. economic outlook is uncertain with low consumer confidence and higher inflation expectations.

In business area Ferrochrome, our operational performance was excellent and adjusted EBITDA reached EUR 43 million. This was a result of a solid demand for our European low-emission ferrochrome and successful cost management through electricity optimization.

As a highlight of the quarter, I would like to emphasize that our recycled material content reached a record high level of 97% and we proceeded well towards our SBTi climate target. Unfortunately, our safety performance slightly weakened compared to last year and TRIFR was 1.9 in the first quarter. We have carefully analyzed the causes of the deterioration and taken swift actions to return to our targeted level.

Finally, I want to thank the entire Outokumpu team for their dedication and resilience amid ongoing geopolitical and trade turbulence. I also extend my appreciation to our customers and suppliers for their continued trust. We look forward to sharing our new strategy at Capital Markets Day on June 11, 2025 - a virtual event open to all. I hope many of you will join us.

Outlook for Q2 2025

Group stainless steel deliveries in the second quarter are expected to increase by 0-10% compared to the first quarter, which was impacted by the strike in Finland.

Maintenance break in business area Ferrochrome is expected to have up to EUR -10 million impact on adjusted EBITDA in the second quarter. Also, opportunities for electricity optimization are more limited during the summer months.

With the current raw material prices, some raw material-related inventory and metal derivative gains are forecasted to be realized in the second quarter.

Geopolitics and other significant uncertainties related to tariffs, might impact the global economy and consequently, Outokumpu's operating environment, deliveries, metal prices, and foreign exchange rates.

Guidance for Q2 2025:

Adjusted EBITDA in the second quarter of 2025 is expected to be at a similar or higher level compared to the first quarter.

Results

Q1 2025 compared to Q1 2024

Adjusted EBITDA in the first quarter of 2025 was EUR 49 million (EUR 38 million). Total stainless steel deliveries were 6% higher compared to the previous year as deliveries increased in both business areas, Europe and Americas. Realized prices for stainless steel were lower especially in business area Americas. This resulted in sales of EUR 1,524 million (EUR 1,479 million).

Profitability was supported by lower raw material and maintenance costs in business area Europe, partly offset by higher raw material costs in business area Americas. Variable and fixed costs remained relatively stable and were supported by EUR 11 million short-term cost-saving measures. Additionally, the solid performance of business area Ferrochrome was one of the main drivers for the improvement in group profitability. Raw material-related inventory and metal derivative gains were EUR 0 million (losses of EUR 4 million).

The impact of the union strike in Finland was approximately EUR -15 million in the first quarter of 2025, as local operations were down for one week in January. In comparison, the first quarter of 2024 was affected by the political strike in Finland with an impact of approximately EUR -30 million. The strike also impacted indirectly the company's operations in other countries through the disruption to internal material flows in  business areas Europe and Americas.

Adjusted EBITDA for other operations and intra-group items remained stable at EUR -11 million (EUR -11 million). The group's EBITDA was EUR 47 million (EUR 37 million), impacted by items affecting comparability of EUR -2 million (EUR -2 million).

EBIT was EUR -7 million (EUR -19 million). ROCE for rolling 12 months was -0.8% (-5.7%). The comparison period for ROCE was affected by the significant impairment booking related to the renegotiated hot rolling contract in business area Americas at the end of 2023. Net result was EUR -18 million (EUR -23 million) and earnings per share was EUR -0.04 (EUR -0.05). Net financial expenses were EUR 17 million (EUR 11 million) and interest expenses EUR 16 million (EUR 16 million). Net finance expenses were mainly impacted by interest income and foreign exchange rates.
 

Q1 2025 compared to Q4 2024

Adjusted EBITDA in the first quarter of 2025 was EUR 49 million (Q4/2024: EUR -3 million). Total stainless steel deliveries were 11% higher compared to the previous quarter as deliveries seasonally increased in both business areas, Europe and Americas. Realized prices for stainless steel were lower especially in business area Americas. This resulted in sales of EUR 1,524 million (Q4/2024: EUR 1,405 million).

Profitability was supported by lower raw material and maintenance costs in business area Europe, higher fixed cost absorption in business area Americas and EUR 11 million short-term cost saving measures. In addition, improved profitability of business area Ferrochrome supported the development in the first quarter. The impact of the union strike in Finland was approximately EUR -15 million in the first quarter as Outokumpu's local operations were down for one week in January. Raw material-related inventory and metal derivative gains were EUR 0 million (Q4/2024: gains of EUR 4 million).

Adjusted EBITDA for other operations and intra-group items was EUR -11 million (EUR -13 million). The group's EBITDA was EUR 47 million (Q4/2024: EUR -12 million), impacted by items affecting comparability of EUR -2 million (Q4/2024: EUR -8 million).

EBIT was EUR -7 million (Q4/2024: EUR -65 million). ROCE for the rolling 12 months was -0.8% (Q4/2024: -1.2%), as the profitability in the last 12-month remained relatively stable. Net result was EUR -18 million (Q4/2024: EUR -32 million) and earnings per share was EUR -0.04 (Q4/2024: EUR -0.07). Net financial expenses were EUR 17 million (Q4/2024: EUR 10 million) and interest expenses EUR 16 million (Q4/2024: EUR 16 million).
 

Adjusted EBITDA by segment

A live webcast and conference call today, May 8, at 3.00pm EEST

A live webcast and conference call to analysts, investors and representatives of media will be arranged today at 3.00 pm EEST at https://outokumpu.events.inderes.com/q1-2025/register hosted by President and CEO Kati ter Horst and CFO Marc-Simon Schaar.

To ask questions, please participate in the conference call by registering at https://events.inderes.com/outokumpu/q1-2025/dial-in. After registration you will receive phone number and a conference ID to access the conference call. If you wish to ask a question, please dial *5 on your telephone keypad to enter the queue.

All the interim report materials, a link to the webcast and later its recording will be available at www.outokumpu.com/en/investors.

For more information:

Investors: Linda Häkkilä, Head of Investor Relations, tel. +358 400 719 669

Media: Päivi Allenius, SVP - Communications and Brand, tel. +358 40 753 7374, or Outokumpu media desk, tel. +358 40 351 9840, e-mail media(at)outokumpu.com

Outokumpu Corporation