Outokumpu President & CEO Heikki Malinen commented on the company's results in the interim report January-September 2021:
“High realized prices and continuous progress on our margin improvement actions supported our profitability in the third quarter. We increased our adjusted EBITDA to EUR 295 million, which is the best quarter in Outokumpu’s recent history. Stainless steel deliveries decreased by 8% from the second quarter, which is in line with the expected seasonal pattern.
I am proud that we have achieved EUR 695 million of adjusted EBITDA in the first three quarters of the year. The result is supported by a combination of strong market environment and our own decisive actions in strategy execution.
All business areas provided solid results in the third quarter. In Europe, the remarkable recovery from COVID-19 lows continued. Demand was strong in distributor business, domestic appliances and automotive. Business area Europe’s adjusted EBITDA reached EUR 149 million, while deliveries seasonally decreased by 13%. The turnaround in Americas continues to be successful. The business area has improved its performance now for five consecutive quarters, and the adjusted EBITDA reached EUR 84 million in a strong market environment. Deliveries remained flat compared to the second quarter. Ferrochrome operations performed well, contributing EUR 64 million to the Group’s adjusted EBITDA. Also, the turnaround in business area Long Product has progressed well.
Sustainability is at the core of our operations, and we are continuously taking steps towards our ambitious Science-Based Targets initiative (SBTi) of 1.5 ºC emission reduction target. In the third quarter, our energy efficiency was at a good level due to high volumes and development projects. We also announced that we are increasing the share of wind power in our electricity procurement, which is again an important step on our sustainability journey.
In July, the European Commission provided a proposal for the Carbon Border Adjustment Mechanism (CBAM). The proposal currently includes only scope 1 emissions and therefore, it does not create sufficient protection for carbon leakage. For stainless steel, it would be crucial that CBAM is applied to the whole carbon footprint (scope 1, scope 2 and scope 3).
In safety, there has been an unfortunate increase in the total recordable injury frequency rate from the previous quarters’ all-time low levels. Actions to get back on track with our best-in-class safety performance have been taken across sites. In terms of the big picture, we have taken a massive leap in safety during the past five years, and it continues to be of the highest priority.
We are well on track with our strategy execution, targeting a EUR 200 million EBITDA run-rate improvement by the end of 2022. We have now reached a cumulative run-rate impact of EUR 163 million. Given the strong momentum, we decided to increase the target by EUR 50 million to EUR 250 million by the end of 2022. So far, over 500 initiatives have been executed across the company and I am very proud of our progress. I want to thank our dedicated employees for making this happen.”