Outokumpu CEO's review

Outokumpu's President and CEO Heikki Malinen commented company's results in Q3/2023 interim review:
Page last updated: 07.11.2023

The third quarter of 2023 reflects the cyclical nature of the stainless steel business. We experienced a very challenging market environment in Europe, but thanks to our geopolitically diversified asset portfolio and a solid performance in the Americas, we delivered EUR 51 million of adjusted EBITDA in the third quarter. Our stainless steel deliveries decreased by 11% from the second quarter, in line with the seasonal pattern.

For business area Europe, the market environment was even more difficult than during the pandemic. Stainless steel deliveries decreased from the second quarter and adjusted EBITDA amounted to EUR -29 million. We are on a journey to improve our competitiveness in Europe and have taken prompt actions. Today, we announced that we are streamlining our operations in Germany to ensure that we are utilizing our assets in the most efficient way.

For business area Americas, the market environment remained more favorable, and we continued to generate solid results. Adjusted EBITDA amounted to EUR 53 million, while stainless steel deliveries decreased compared to the second quarter. Our strategic plans in Calvert, Alabama are progressing well and the feasibility study to assess both our hot rolling and cold rolling operations is ongoing.

In business area Ferrochrome, third-quarter adjusted EBITDA amounted to EUR 21 million. We reached a great milestone in October when we had the inauguration of the Kemi mine expansion. We have now ensured the supply of chrome ore until at least the end of the 2040s. We are also taking determined steps toward our aim that the Kemi mine will become the first carbon-neutral mine globally by 2025.

Within decarbonization, our focus has been on energy efficiency improvements. These are crucial for energy-intensive industries such as stainless steel as they will reduce both our emissions and costs. We aim to improve our energy efficiency by 8% by the end of 2024 and have now achieved over 20% of that target, resulting in EUR 9 million savings. Our teams have provided innovative solutions to drive this great improvement. It is already now evident that we will overachieve our 8% target but it will take more time.

As part of our long-term ambition to decarbonize the company, we have taken strong actions to support our sustainability leadership. Our business is based on the circular economy and scrap is our most important raw material. 94% of all our raw material is recycled, and this is a critical factor in keeping our carbon footprint the lowest in the industry. Today, we announced we will acquire a 10% share of a large scrap dealer CRONIMET’s Northeastern business. By acquiring a share, we will strengthen our long-term partnership further and ensure access to high quality scrap near our European sites.

Earlier, we signed a letter of intent with Greenland Resources Inc. to strengthen our future supply of low-emission high-quality molybdenum. We have also acquired a share of FPX Nickel to ensure access to low-carbon nickel in the future. All these actions are part of our strategic plans to strengthen our value chain integration to ensure a sufficient future supply of critical raw materials with a low carbon footprint.

The market environment in Europe has been challenging, but it seems that the bottom is now behind us, and we have already seen some positive signals. Market recovery, however, is expected to take time.

I want to thank our employees for their resilience and dedication. Stainless steel is a volatile industry, but I am confident that as a team we will overcome the turbulent times. Our strong balance sheet and good liquidity will carry us through the cycle and ensure that we will create value also in more challenging conditions."