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Outokumpu Reports EUR 2 Million Underlying EBIT for the First Quarter of 2015

Operating cash flow was negative EUR 62 million.
  • Stainless steel deliveries grew by 9.2% and were 620,000 tonnes1 (IV 2014: 568,000 tonnes).
  • Underlying EBITDA2 was EUR 77 million compared to EUR 72 million in the fourth quarter and underlying EBIT2 was EUR 2 million (IV 2014: EUR -9 million). The improvement was mainly due to higher delivery volumes and benefits from the profitability improvement programs.
  • EBIT was EUR -10 million (IV 2014: EUR -36 million). EBIT includes non-recurring items of EUR -19 million (IV 2014: EUR -27 million), as well as the net effect of raw material-related inventory and metal derivative gains of EUR 7 million (IV 2014: EUR 0 million).
  • Operating cash flow was EUR -62 million (IV 2014: EUR 122 million).
  • Net debt increased to EUR 2,034 million (Dec 31, 2014: EUR 1,974 million) while gearing improved to 91.5% (Dec 31, 2014: 92.6%) mainly due to the positive equity development.
1) Metric ton = 1,000 kg
2) EBIT/EBITDA excluding non-recurring items, raw material-related inventory gains/losses and metal derivative gains/losses

Business and financial outlook for the second quarter of 2015
The market outlook for stainless steel varies by region. In Europe, order intake is improving with distributor stocks gradually normalizing and underlying demand remaining healthy. In the Americas, pressure from Asian imports continues and low nickel price puts constraints on distributor sector buying. Chinese GDP growth is showing some weakness and the markets in the APAC region for stainless steel are under pressure.

Outokumpu estimates flat delivery volumes quarter-on-quarter: deliveries are expected to increase somewhat in Europe and decrease in Americas. Group’s underlying EBIT for the second quarter is estimated to be slightly negative driven by weaker profitability in the business area Coil Americas. With current prices, the net impact of raw material-related inventory and metal derivative gains/losses on profitability is expected to be marginal if any.

Outokumpu’s operating result may be impacted by non-recurring items associated with the ongoing restructuring programs. This outlook reflects the current scope of operations.

CEO Mika Seitovirta:
“In the first quarter, we reached a positive underlying EBIT of EUR 2 million and our delivery volumes were sequentially up by 9%. However, due to very low nickel price there was no typical seasonal uptake in demand. Especially distributor sector remained subdued, and prices under pressure. When compared to the underlying EBIT of EUR -45 million of the first quarter of 2014, we can see the gradual improvement in our profitability.

Coil EMEA continued steady progress, improving its underlying EBIT to EUR 28 million. This was mainly driven by the higher deliveries and production efficiency in Tornio and Avesta. The Bochum melt shop will be closed in June, and its positive impact on the cost savings as well as the capacity utilization will become visible on the second half of the year.  We are also preparing to seize the opportunities the antidumping measures against Chinese and Taiwanese imports in Europe present, but before the final decision on the duties, the impact on the market dynamics is likely to be limited. While we are confident that Coil EMEA’s continues on a positive trajectory, the second-quarter performance will be burdened by the maintenance breaks in the Ferrochrome production.

In Coil Americas, we have seen disappointing developments. The Asian imports into Americas are on the rise, and the demand from distributors remains weak due to low nickel price and elevated stock levels. Combined with the delivery challenges that were caused by the technical issues in Calvert in the second half of 2014, the Coil Americas’ order intake has been clearly lagging even though the technical issues have been resolved. Instead of growing our market position, we have had to fight to hold our ground in the tough competitive environment. The Coil Americas’ underlying EBIT deteriorated to EUR -28 million from the EUR 6 million in the previous quarter, and the full-year delivery volume estimate has been revised down to around 540,000 tonnes. 

In the second quarter, we expect the difficult market environment to continue in Americas. In Europe, the order intake is improving as the stock levels are gradually normalizing and the underlying demand continues to be healthy. Thus, at the Group level we are estimating flat delivery volumes and slightly negative underlying EBIT for the second quarter. 
Our immediate focus is on turning Coil Americas back on track, while continuing the profitability improvements in all business areas. Overall, we intend to reach a clear improvement in profitability this year despite the set-back in Coil Americas.”


Outokumpu is a global leader in stainless steel. We create advanced materials that are efficient, long lasting and recyclable – thus building a world that lasts forever. Stainless steel, invented a century ago, is an ideal material to create lasting solutions in demanding applications from cutlery to bridges, energy and medical equipment: it is 100% recyclable, corrosion-resistant, maintenance-free, durable and hygienic. Outokumpu employs more than 12 000 professionals in more than 30 countries, with headquarters in Espoo, Finland and shares listed in Nasdaq Helsinki. www.outokumpu.com