Outokumpu CEO Roeland Baan commented our Financial Statements 2018 on February 7, 2019:
Outokumpu CEO's review
President & CEO Roeland Baan
“2018 marked an exceptional year for the European steel industry. The unforeseen trade disruption caused by the US steel tariffs led to a surge of low-cost imports into Europe and to heavy price pressure that put a strain on the entire European steel industry.
In the midst of the market turbulence, we kept our focus on areas that were within our control. We made great progress in improving our safety performance, operational reliability and cost efficiency. Furthermore, our organizational health improved for the second year in a row reaching the second quartile.
Full-year adjusted EBITDA amounted to EUR 485 million (EUR 631 million) reflecting the unstable markets and substantially higher input costs. In Europe, we defended our margins through a significantly improved product mix whereas in the Americas, higher costs together with misalignment between commercial and supply chain processes led to disappointing financial results.
In order to improve the business area’s performance, we have made changes to commercial and supply chain processes and we are revamping the Americas’ commercial organization. Furthermore, we are investing in ferritics capabilities in our Calvert mill to expand our product offering into a segment that represents over one third of the US stainless steel market.
Our net debt rose to EUR 1.2 billion mainly due to unsatisfactory inventory management. Hence, strengthening of our balance sheet and reducing net debt are key priorities for 2019.
The EU’s permanent safeguards that are now in force are expected to stabilize the import situation in Europe during 2019. In addition to decisive execution of our must-win battles and improving our profitability in the Americas, a balanced market in Europe is crucial for us to reach our 2020 targets.”