“Our performance in the second quarter of 2023 was solid in the Americas, albeit overshadowed by a softened market in Europe. Adjusted EBITDA amounted to EUR 190 million, while stainless steel deliveries remained modest as expected. During the first half of the year, we generated EUR 394 million of adjusted EBITDA, which is a strong result in the current market environment. I am proud of the fact that during the weakening market conditions we have kept our balance sheet the strongest in the industry.
We have successfully de-leveraged the company so that it is
better positioned for the downturns that are part of the cyclical stainless
steel business. After two exceptionally strong years, we are now in a weaker
part of the cycle. Today, with our strong balance sheet, Outokumpu has the
resilience to withstand even more challenging market conditions.
The execution of the second phase of our strategy has
progressed well and we have started the preparations for the third phase
commencing in 2026. In the second phase we are making the most out of our
current asset base. In the third phase the focus will be on Americas expansion,
European competitiveness, value-chain integration and sustainability
leadership.
In the second quarter, the market environment in Europe
weakened faster than expected and negatively impacted business area Europe’s
profitability already at the end of the quarter. Stainless steel deliveries
decreased from the previous quarter and adjusted EBITDA amounted EUR 52
million. In business area Ferrochrome, we ramped up our production back to
normal levels in the second quarter and adjusted EBITDA increased to EUR 36
million.
Business area Americas once again delivered very strong
results. This demonstrates the benefit of having a geopolitically diversified
business. Stainless steel deliveries for business area Americas increased from
the previous quarter and adjusted EBITDA reached EUR 110 million. This is a
result to be proud of.
We have successfully turned around our business in the U.S.
and aim to strengthen our position further in this attractive market with a
favorable regulatory environment. We want to capture a fair share of the
increasing demand for the locally produced sustainable stainless steel. As a
result, we are conducting a feasibility study to investigate options to expand
our operations in the U.S. We seek to increase our cold rolling capacity and at
the same time investigate different options for our hot rolling arrangements.
One option is to build our own hot rolling mill and we are in a good state of
readiness to make a final investment decision as need be.
In the second quarter, we also had changes in our management
as Marc-Simon Schaar was appointed Chief Procurement Officer and a member of
Outokumpu Leadership Team. This role is crucial in strategically managing our
cost base, inflationary impacts and sustainability actions, as well as ensuring
effective relationship management. Our supply chain is at the core of our
decarbonization journey and our ethical approach to sourcing. We want to ensure
that Outokumpu’s stainless steel is made of raw materials with the lowest
possible CO2 emissions. In the second quarter, we kept our recycled material
content at a very strong level of 94%.
The market environment, especially in Europe, is expected to be challenging in the third quarter. However, we have great teams in place and a strong balance sheet, and this gives me confidence that we will manage the changing conditions also in the future."