Outokumpu CEO Roeland Baan commented our half-year report H1 2019 on August 1, 2019:
Outokumpu CEO's review
President & CEO Roeland Baan
“Outokumpu’s second quarter adjusted EBITDA of EUR 91 million was a satisfactory result in a very tough market environment. I am particularly pleased with our commercial and operational performance in business area Europe – our product mix was strong, and we maintained our market share. In addition, our continued self-help measures including cost-savings and selected development activities yielded tangible results.
Our ongoing focus on working capital resulted in strong operating cash flow, and our net debt decreased to EUR 1.3 billion.
The stainless steel market remains difficult. In Europe, we are still battling with cheap Asian imports despite the permanent safeguards that became effective in February. The import penetration is back at 30% and the start of the new quota period on July 1 has already led to a further jump in imports. The steel industry is in continuous dialogue with the European Commission to improve the effectiveness of the safeguards. Conversely, imports into the US have stayed at relatively low levels, however, due to the continued distributor destocking, we don’t see significant volume upside in the short term in the Americas.
Due to these challenges, coupled with seasonally lower demand, we are facing a tough third quarter, and we expect the challenges to influence the stainless steel market for the rest of 2019.
Despite the unprecedented adverse market circumstances, we have been able to maintain our profitability on a reasonable level, which demonstrates the power of the strategic actions we have executed since 2016. For example, we have improved our customer and product mix substantially in all business areas, and our continued efficiency and productivity gains are bringing us significant cost benefits. We are confident that by pursuing these actions further, we will be able to navigate through the current challenging period and at the same time, secure our competitiveness for the market recovery.”
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