•         Stainless steel deliveries were 444,000 tonnes (505,000 tonnes)*.

•         Adjusted EBITDA amounted to EUR38million (EUR204million).

•         EBITDA was EUR37million (EUR198million).

•         ROCE amounted to -5.7% (18.4%).

•         Free cash flow was EUR-26million (EUR160million incl. discontinued operations).

•         Earnings per share was EUR -0.05 (EUR 0.22).

•         The most recent share buyback program was completed on February 29, 2024, and during the first quarter, Outokumpu repurchased a total of 8,357,545 shares.

•         Due to the political strike in Finland, Outokumpu issued two negative profit warnings during March.

•         After the reporting period, on April 4, 2024, the Annual General Meeting approved a dividend of EUR 0.26 for year 2023 and the dividend was paid in April.

*Figures in parentheses refer to the corresponding period for 2023, unless otherwise stated.

[][][]
Key figures Q1/24 Q1/23 Q4/23 2023
Sales EUR 1,479 2,006 1,513 6,961
million
EBITDA EUR 37 198 15 416
million
Adjusted EBITDA [1)] EUR 38 204 72 517
million
EBIT EUR -19 135 -314 -100
million
Adjusted EBIT [1)] EUR -17 144 13 274
million
Result before taxes EUR -29 128 -320 -133
million
Net result for the period EUR -23 97 -242 -111
million
Earnings per share EUR -0.05 0.22 -0.56 -0.26
Return on capital employed, rolling % -5.7 18.4 -2.1 -2.1
12 months (ROCE) [2)]
Capital expenditure EUR 59 15 86 170
million
Free cash flow EUR -26 160 156 290
million
Stainless steel deliveries 1,000 444 505 450 1,906
tonnes

Net result for the period from all EUR -23 103 -242 -106
operations incl discontinued million
operations

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

2) The balance sheet component in 2022 includes the equity component of discontinued operations.

President & CEO Heikki Malinen
After a weak second half of the year 2023, the new year started off relatively well. However, a wave of unexpected political strikes in Finland impacted Outokumpu. Most of our operations and port in Tornio, Finland were shut down for four weeks. We regret any inconvenience this caused our customers. We have done everything under our control to mitigate the situation in order to limit the negative impacts of the four-week strike to EUR 60 million from the earlier estimated EUR 80 million.
In the first quarter of 2024, Outokumpu's adjusted EBITDA amounted to EUR 38 million. The political strike had negative impact of approximately EUR 30 million and we expect a similar impact in the second quarter. Compared to the previous quarter, our stainless steel deliveries slightly decreased in the first quarter. Our profitability was also burdened by the tightened scrap market, which is due to lower supply of recycled material, resulting from weaker industrial activity and high interest rates.
From a market perspective, we have seen positive signals. Gradual recovery in Europe has continued. The third quarter of 2023 was the lowest point in the cycle. Our realized stainless prices reflect this development.
Due to the above-mentioned challenges, business area Europe's adjusted EBITDA was weak and amounted to EUR 4 million. Stainless steel deliveries were 7% lower compared to the previous quarter, but higher realized stainless steel prices supported our profitability.
In business area Americas, our adjusted EBITDA amounted to EUR 24 million. Stainless steel deliveries seasonally increased by 15%. However, tight scrap supply and weak stainless steel pricing, especially in Mexico burdened the financial result. Americas' situation remains fundamentally strong, and we confirm the normalized annual EBITDA of USD 170 million.
Business area Ferrochrome generated a solid adjusted EBITDA of EUR 22 million. One of the ferrochrome furnaces has been shut down since January as market demand remained modest.
We are now in the midst of the second phase of our strategy. We have met the targets we set for ourselves, but the overall market environment is tough. I want to emphasize that we are determined to push forward and therefore we are now raising our EBITDA run-rate improvement target from EUR 200 million to EUR 350 million. This is also necessary to recover from the losses of the four-week strike.
In April, our Chief Financial Officer, Pia Aaltonen-Forsell announced her decision to leave Outokumpu to pursue a career opportunity outside the company. I want to thank her for the past five years - Outokumpu has truly changed during that time and is today financially much stronger than ever before.
I am pleased that we have found an excellent successor internally. Our new Chief Financial Officer, Marc-Simon Schaar will start in his new position on June 1, 2024. With his strong background in finance, business, and procurement, I am confident that Outokumpu continues to create long-term value.
After 12 years at Outokumpu with four years as Chief Executive Officer following eight years on the Board, I have decided to pursue another opportunity outside the company. During the past four years, we have transformed the company into a leader in sustainable stainless steel with the strongest balance sheet in the industry. I look forward to a smooth transition to my successor.
In the first quarter, we completed our second share buyback program and the Annual General Meeting also decided that a dividend of EUR 0.26 per share was paid for the year 2023. Strong shareholder returns and long-term value creation remain at the center of our strategy.

Outlook for Q2 2024
Group stainless steel deliveries in the second quarter are expected to increase by 5-15% compared to the first quarter.
The recent political strike in Finland is expected to have approximately EUR 30 million negative financial impact in the second quarter.
The scrap market is expected to remain tight.
With current raw material prices, some raw material-related inventory and metal derivative losses are expected to be realized in the second quarter.
Guidance for Q2 2024: 
Adjusted EBITDA in the second quarter of 2024 is expected to be at a similar or higher level compared to the first quarter. 

Results

Q1 2024 compared to Q1 2023

Outokumpu's sales in the first quarter of 2024 decreased to EUR1,479million compared to the reference period (EUR2,006million). Total stainless steel deliveries were 12% lower as volumes decreased significantly in business area Europe.

Stainless steel deliveries and profitability in the first quarter of 2024 were negatively impacted by the political strike in Finland and a weaker overall market environment. As a result of these, adjusted EBITDA decreased to EUR38million (EUR204million).

Due to the political strike, the majority of Outokumpu's stainless steel and ferrochrome operations in Finland as well as the Port of Tornio in Finland were shut down for three weeks in March. The strike also impacted indirectly the company's operations in other countries through the disruption to internal material flows in both Europe and Americas. Outokumpu was, however, able to partially mitigate the adverse effects and the negative impact on the company's adjusted EBITDA in the first quarter of 2024 was approximately EUR 30 million.

In the first quarter of 2024, realized prices for stainless steel were higher in Europe, while decreased in the Americas compared to the reference period. The tight scrap market impacted the profitability of both stainless steel businesses while costs remained relatively stable. The result for business area Ferrochrome improved, mainly due to lower costs. Raw material-related inventory and metal derivative losses amounted to EUR 4 million (losses of EUR 6 million).

EBIT turned negative in the first quarter 2024 and amounted to EUR -19 million (EUR 135 million). ROCE for the rolling 12 months was -5.7% (18.4%), due to lower profitability and the significant impairment booking related to the renegotiated hot rolling contract in business area Americas at the end of 2023.

Net result decreased to EUR -23 million in the first quarter of 2024 (EUR  97 million) and earnings per share amounted to EUR -0.05 (EUR 0.22). Net financial expenses in the first quarter of 2024 increased to EUR 11 million (EUR 8 million) and interest expenses remained relatively stable at EUR 16 million (EUR 15 million).

Q1 2024 compared to Q4 2023

Outokumpu's sales amounted to EUR1,479million in the first quarter of 2024 (Q4/2023: EUR1,513million). Total stainless steel deliveries decreased slightly compared to the previous quarter (decrease of 1%). At the beginning of 2024, Outokumpu had expected its stainless steel deliveries to increase in the first quarter of 2024 compared to the fourth quarter of 2023, but the political strike in Finland had a negative impact on the company's volume development.

Outokumpu's adjusted EBITDA decreased to EUR 38 million in the first quarter (Q4/2023: EUR 72 million). The total negative impact of the political strikes on adjusted EBITDA was approximately EUR 30 million.

During the first quarter, realized prices for stainless steel continued to increase in Europe, while slightly decreased in the Americas. The scrap market remained tight throughout the quarter. Maintenance costs were lower due to less maintenance work, but the positive impact on profitability was offset by the negative impacts related to the strike. Raw material-related inventory and metal derivative losses amounted to EUR 4 million in the first quarter (Q4/2023: gains of EUR 0 million).

EBIT amounted to EUR  -19 million in the first quarter 2024 (EUR -314 million). The reference period was negatively impacted by the significant impairment booking in business area Americas as well as other notable items affecting comparability. ROCE for the rolling 12 months was -5.7% (Q4/2023: -2.1%), mainly due to lower profitability.

Net result in the first quarter amounted to EUR -23 million (Q4/2023: EUR -242 million) and earnings per share was EUR -0.05 (Q4/2023: -0.56). Net financial expenses amounted to EUR 11 million (Q4/2023: EUR 6 million) and interest expenses EUR 16 million (Q4/2023: EUR 14 million).

Adjusted EBITDA by segment (EUR million) Q1/24 Q1/23 Q4/23 2023
Europe 4 122 4 148
Americas 24 68 54 285
Ferrochrome 22 16 23 96
Other operations and intra-group items -11 -2 -8 -12
Total adjusted EBITDA 38 204 72 517

Items affecting comparability (EUR million) Q1/24 Q1/23 Q4/23 2023
Europe 2 -6 -46 -52
Americas - - -7 -16
Ferrochrome - - -3 -3
Other operations -3 - -1 -31
Total items affecting comparability in EBITDA -2 -6 -58 -102

Total EBITDA 37 198 15 416

A live webcast and conference call today, May 7, 2024, at 3.00 pm EEST

A live webcast and conference call to analysts, investors and representatives of media will be arranged later on the same day, at 3.00 pm EEST at https://outokumpu.videosync.fi/q1-2024 hosted by President and CEO Heikki Malinen and CFO Pia Aaltonen-Forsell.

To ask questions, please participate in the conference call by registering at https://palvelu.flik.fi/teleconference/?id=50049023. 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 result 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, tel. +358 40 753 7374 or Outokumpu media desk, tel. +358 40 351 9840